Reuben Pressman, Founder of Presence
Culture, money and fun - take a deep dive into the St Pete start-up world with entrepreneur Reuben Pressman.
On this episode of SPX, Reuben Pressman, founder and CEO of Presence, talks all things start-up, construction of company culture, and the role of investment/money in a start-up's mission. The embodiment of a millennial entrepreneur, Reuben sports a laid back, shorts and t-shirt vibe, complete with an asymmetrical hair-cut and flip-flops. But as a serial entrepreneur, he's serious about building big things in his native city, for the right reasons. In the last three years, Reuben and his crew have successfully taken on one of higher ed's biggest problems, grown to 22 full-time employees, and raised millions of investment dollars.
- A self-described compulsive problem solver, Reuben has always approached problem solving through technology. He began coding at the age of 10, and worked for his first client at the age of 11.
- As an active leader in student government, Reuben began to see the gaps in data that were necessary to measure retention rates, as well as the interworkings of Student Life budgets.
- Combining his knowledge of the problem with an understanding of available resources allowed Reuben to see that the gap could be filled with data, data that could be easily collected through methods already built into the culture.
- The four factors of higher education retention are academic, psychological, financial, and involvement. As a strong mitigating factor, a "make it or break it" variable, Presence focuses on involvement.
- On money: "For me, you approach it with well, how do we do this without money? And then if we had money, how much quicker can we put that same plan into action? But solving problems is my number one...You don’t get out of bed in the morning and go to do something every day because you’re getting paid, you do it because you enjoy it and you love it."
- Pricing: Presence quickly learned a lesson about their customers: their payment schedules. Working primarily with institutions who operate on yearly budgets posed an interesting challenge to Presence's initial monthly price structure.
- Millennial words of wisdom: "Everything is fun." and "Don't be a dick." (Actually written on the white board in the Presence office for a time.)
- With the intent of creating a space that employees enjoyed more than their home, Presence features a full kitchen, washer & dryer, and showers for employee use. Other perks include flexible hours and unlimited PTO.
- Local angel investors helped make Presence a reality. Leaders in the Gazelle group and 500 Start-ups, as well as community leaders like Jeff Vinik invested in Presence.
- Building St. Pete's renaissance with care: "You have these layers of the culture here and you start messing with those deep layers and everything else gets screwed up. So to me, a red flag is just making sure everyone is doing it for the right reasons."
Money actually hurts creativity and makes it harder to solve problems, because you look at really large organizations and companies that get destroyed by startups and new innovations, teams of a few, it’s because when you have money you just throw money at the problem."
As soon as Reuben Pressman graduated from college, he was looking to make a name for himself in his hometown of St. Petersburg. In doing so, he got involved in everything. Taking the concept he knows best, the factor he built his business on – involvement – and transferring it from student government to civic life was a natural progression. In the months after graduation, he became a part of ten different non-profit boards, everything from community development to the arts, to other software and tech groups, and beyond. With such expansive engagement in the community, Reuben became the go-to guy for just about everything. His involvement built him a natural network, and from that network came natural investors. One such investor is now making major waves in Tampa Bay.
Former hedge fund manager and current owner of the Tampa Bay Lightning, Jeff Vinik in the process of aggressively changing the climate for businesses in Tampa Bay. Vinik is partnering with Bill Gates’ Cascade Investments to develop Tampa, St. Pete, and surrounding cities’ potentials without ruining what makes them so special to begin with. As a young CEO and tech entrepreneur deeply involved in his city, Reuben has a pulse on St. Pete’s start-up scene. Looking for some insight into the entrepreneurial ecosystem, Vinik sought some advice from Reuben early on, and ended up investing in Presence.
Now Vinik is in the process of a multi-phase investment in Tampa Bay, one part of that investment being an accelerator-incubator. Providing “unparalleled access to coaching, customers, and capital, Vinik is teaming up with Cascade Investments to support Dreamit UrbanTech. This initiative will provide hands-on coaching, a network of customers, and a network of investors to help support and scale start-ups, to build the kind of business ecosystem that preserves the most-loved parts of the community, while making space for innovation and growth in business. The Dreamit venture supports tech and healthcare related start-ups and transplants already thriving ideas from other areas in Florida, to garner resources from these sleeper cities. Read more from Forbes, here.
To me trial and error is one way, I’m much more a fan of iterative experiments. So it’s like an MVP of a product, you’re going to develop the minimum viable product you can to solve a solution as simply as possible, and then see how it goes and get the feedback and go from there."
Table of Contents
(0:00 – 0:30) Introduction
(1:39 – 7:03) Background and Early Experience
(7:03 – 10:33) Relationship with Money
(10:33 – 12:53) Products Pricing
(12:53 – 14:40) Starting the Business
(14:40 – 18:19) Company Culture Pt.1: Building Company Culture
(18:19 – 20:53) Company Culture Pt.2: Quality of Life at the Office
(20:53 – 21:48) Company Culture Pt.3: Scalability
(21:48 – 23:51) Company Culture Pt.4: Permeating People’s Mindsets
(23:51– 25:15) Company Culture Pt.5: Permeating the Product
(25:15 – 32:11) Attracting Investors Pt.1: Networking
(32:11 – 35:01) Attracting Investors Pt.2: Tips
(35:01 – 37:04) Attracting Investors Pt.3: Fundraising for the Future
(37:04 – 38:20) Education Component to Sales
(38:20 – 42:05) St. Petersburg Business Environment/Culturification
(42:05 – 43:46) Shout-outs
(43:46 – 44:3 6) Final thoughts
(44:36 – 45:12) Conclusion
Joe: It’s Joe Hamilton and I’m here with Reuben Pressman of Presence. This is SPX, St. Pete X for some of you – who actually ever said the name – and Reuben literally got up out of the seat and did a cartwheel when he heard the name for the first time. Not really, he just kinda looked at me. That’s okay.
Reuben: Sorry, I take a second to sit down from my cartwheel. Hey, it’s me.
Joe: So, I guess full disclosure, this is our second go around at this, the first time you said some stuff, I remember it was moving, it was insightful, it was brilliant, it was funny…
Reuben: I can’t remember a word of it.
Joe: …and then none of it recorded, so we’re back a week or so later to try it again. Which means we get to start from the top, which I’m excited about to see if you tell the same story twice. So Presence is doing fantastically well, it’s definitely right up there at the top of successful startups and you certainly deserve it, you’ve been at it while in the craft and living in that world since I’ve known you, which is six…
Reuben: Since I was born, we went to kindergarten together and all of that, right?
Joe: Yeah. I got held back 34 times and to be in kindergarten with you, that’s okay.
Joe: So, I guess first let’s talk about… You used to be called Check I’m Here, you are serial entrepreneur, no doubt about it and this one is stuck for you. Can you tell me in the beginning why it’s stuck?
Reuben: Yeah. So, I guess a little bit of background, I’ve been programming since I was ten, so I’ve always had a real strong background in technology, always loved it. And I really started cause I walked into my dad’s office, who worked out of the home mostly, and was like “How do you build a website?” and he was like “I don’t know, leave me alone.” So I walked out and figured out on my own. And I was pretty much, a lot of my relationship with him, even, is “How do you do this?”, “How would you do it? Figure it out.” And the whole time it was, and that’s been my – talk to any one of my employees, and that’s definitely one of my mottos. So “Okay, how do we do this?” I’m like “I don’t know, figure it out.” So learning technology and building a website and all of that was no different, and one of his friends that had some retail store was one of my first clients, I was building a website for them when I was 11 for them. And so I’ve always approached problems through a technology lens and how do we build something that can run on its own and fix this thing? And part of that goes with me looking at myself as this kind of compulsive problem solver, if it’s broken it must be fixed. So, like you said, a kind of serial, not my first company, but definitely something that I’ve spent the most time invested in and built up and turning into something this size. And that really came from my passion in student government and for student affairs at the institution at USF St. Pete where I went to, and got very involved as a student, had all kinds of very interesting opportunities because of my leadership in student government. I lobbied in Tallahassee for six months for our 30 million dollar student center, I sat on all kinds of campus boards, I got a lot of the backend politics. And for me, I learned ten times what I did through those experiences than I did in the classroom. So I got very passionate about getting more students involved at that level and getting that experiential learning and complementary skills that I knew were actually more important going into what is called the “real world.” So what I basically did is said hey, it’s really hard to get students involved, it’s really hard to increase engagement, it’s really hard to allocate all this funding, and for a lot of people that don’t realize, student governments at most institutions have a ton of funding on their own, they operate completely autonomously and with full authority from the rest of the institution. At a school like the University of Central Florida in Orlando they have a 25 million dollar budget that their students allocate all on their own. For something more like USF St. Pete I think it was about a 1.4 million dollar budget when we were there, and then part of what we lobbied for was to allow ourselves to double that, and it comes out of tuition, when the State has to approve that. And they went to about 2.8 [million] and that’s what helps fund that building and then also gives us funds to go. But we paid the staff salaries in Student Life, we paid for the fitness centers, the recreation, all the intramurals, basically all of the anything under the student life umbrella. And even some pay for their student unions and all of that as well, kind of like what we’re doing. And it’s basically just students that are learning as they go to allocate millions of dollars, so that was interesting. So it was all those problems, along with my experience on the staff side in a roaming marketing, doing things like recruitment and assessment retention, that I realized that whether it’s hardcore, mission critical institutional goals like retention, or allocating 25 million dollars in student government to getting students involved on campus, is all related to a lack of data that the institutions don’t have. And on the academic side, it’s easy, it’s all digital now, the data is there, all of that. But from everything else on campus, which we kind of explain involvement being one of the four main factors of retention, plays a really big role on whether students retain or not. So…
Joe: What are the the others just so…?
Reuben: Yeah, so the four for retention, at least the studying theory that we follow is: academic, so if your grades are good; you know if your financial aid or your financial setup; psychological; and then the last one is the involvement, it’s whether you feel that you belong on campus or not, and whether you are participating and enjoying your time. And we give the examples where, if you’re involved in student government, you’re super involved and you’re loving it, but you have straight Cs, so you’re okay, maybe you’re on financial aid. And because depression is one of the highest in college students, you see the psych for that a little bit here and there. But because of your involvement in student government, you’re not going anywhere, right? Vice versa, you might have a student that gets straight As, parents are paying for school, no problem, completely fine psychologically, but commutes, goes to school for class, leaves, goes to school for class, leaves, goes to school for class… They’re probably going to transfer, potentially drop out, even though their grades and everything else are good, but that’s not the case all the time, but student involvement can play that high of a role to where… We often say, although it’s a high factor, it can also be a deal maker or a deal breaker whether a student retains on campus. And when there’s something that important that can impact an overall institution’s budget and, regardless of that, but even the student’s experience, that can’t go unnoticed. So we really take a focus on solving the data issue and that’s where we started, is let’s let students swipe their IDs that they already have on mobile devices and then couple that with a massive entire platform that helps simplify all the processes and day to day stuff that they do. So we have an event management system, an organization management system, a forms management system, the tracking, the assessment and live reporting, and then we top it all off with engagement tools and marketing tools to reach students. So yeah, we launched that back in May of 2014, so we just hit our three year mark, we’ve also passed 100 institutions in the last few weeks and we’ve raised over two million dollars of funding now to continue growing that, we’re at 22 full time employees. We’re just cruising, just trying to keep up.
Joe: So you talked about, when you were young you had the first website, and you talked about raising money, you talked about allocating money. I’d be curious… It feels like you’re a very much problem solver first, what is your relationship with money? When you were 11 and doing that website, how much of the allure of doing that website was the money? Have you grown to love or hate money based on neediness, fuel to fund your startups? What’s your general relationship with money?
Reuben: Money is kind of like this side thought, I think. It’s more of… So, my degree is in entrepreneurship, so we had a lot of classes on creativity and problem solving, which helped solidify a lot of the things I worked on up until that point, put theories behind them and I was just like “I’ve had experiences my whole life and this is exactly what I thought.” And then it’s like here’s all the theories and the psychological stuff behind that that confirms all these things I’ve been thinking of doing. So to me, and one of the things we teach and I’ve taught that class now a few times at USF, money actually hurts creativity and makes it harder to solve problems, because you look at really large organizations and companies that get destroyed by startups and new innovations of just teams of a few, and it’s because when you have money you just throw money at the problem, right? So yeah, we’ve raised two million, but even if we didn’t raise that, we could potentially be where we are right now, we would just have to work a lot harder and figure things out and it might have been a little bit slower. But the money makes it a little bit faster, and for me, you approach it with well, how do we do this without money? And then if we had money, how much quicker can we put that same plan into action? But solving problems is my number one, that’s what got me… You don’t get out of bed in the morning and go to do something every day because you’re getting paid, you do it because you enjoy it and you love it and I don’t feel…
Reuben: Well, yeah, of course, right? But you don’t get excited to go do that and get out of bed. When I say that, that’s what I mean. And yeah, so for me it’s… When I was 11 it’s like I can build something someone’s going to use, that’s so cool. Oh, they’re going to pay me? Cool, I’ll put that and save it for something later, right? And even now it’s like yeah, we’re raising money, but it’s the goals and the vision and the execution isn’t changing because of that, it’s just speeding up for us.
Joe: You get folks like Gary Vaynerchuk, right? He’s that pretty famous sort of entrepreneur, he built the Wine Library, and I think he’s not… He’s just definitely an entrepreneur, but for him, his upbringing is… Because I bring that up when you said that, and I actually did this as well along the lines of I paid for my first year, couple years of school and my car with baseball card money, a vantage after that as well. But he was a money maker, right? So there is a… I don’t think he’s doing it for the money, I think the money, and they say this about poker as well, money is sort of a way of keeping score, it’s how good are you at being an entrepreneur, right? And yeah, so he was doing different things, that one not necessarily solving problems, he was selling candy to the kids at school, borrowing them balls and making a few cents here or there, whatever. But the money was, I guess, the affirmation or justification or… So it’s like almost different flavors of entrepreneurship.
Reuben: Well yeah, so the money is the measurement of value in our society, right? So to me, if I’ve built something really great, someone using it is only half the win, the other win is that they see enough value into it to trade for it, right? And that’s money. So it’s not like oh, I get money and I get to spend it. It’s more like alright, I’ve built something valuable enough that someone doesn’t expect to just get to use it, they are willing to pay for it. No different for something like art, right? So if you’re creating something beautiful, someone liking is one thing, but someone valuing it to where they are willing to exchange something for that is a whole another level, right?
Joe: So how do you derive your pricing for your products as far as was it tied to backing out of what the retention was worth to the schools? Or where did you determine value to tie it to pricing?
Reuben: Yeah, for us it’s a constant learning experience for us and it’s constantly changed. We started extremely inexpensive and naively monthly for an institution that runs on a yearly budget and spends things yearly. So we actually, very early on, like three and a half years ago we were testing out pricing, the first school was like yeah, we want to pay yearly, the second school was like yeah, we just want to pay yearly, third school is like we only pay yearly. We said alright, we’re getting rid of monthly pricing, that took like a couple of months and we actually doubled it when we went yearly cause we realized how cheap it was, and then as we grow we start to understand the cost of acquisition changes, we start to understand the cost of maintenance and upkeep and service and all of that. And also what the potential is, because we want to be able to fund more innovation, so how much can we take off the top to put back into that to continue building really great things and impressing people, solving their problems? But yeah, we just raised prices again, it was our third time we’ve raised prices because we continue to build really great stuff, people continue to be okay paying that much for it and it only lets us innovate and build even better things.
Joe: Sure. Do you have any kind of feedback or gut feeling on whether you’re stretching the limits on your pricing, or do you feel like you could go again and… When you’re hearing that people say maybe or a no or a yes, how much of that is with where you are in pricing?
Reuben: At this point I don’t think pricing is a huge barrier for people, I think the value we’re creating, and it’s all tied to that, right? Sure we can raise prices again. I wouldn’t do it because I don’t feel like we’ve created more value yet, right? So we tend to time our price raises with big feature releases or additional products and stuff like that. And for us our platform is one piece, it’s all or nothing, because you’re coming to us to solve those problems and you’re going to solve them because you use the whole platform, not because you think you need one or two pieces of it. So when we release a new feature, we push hard and we hope all of our existing customers pick that feature up and start using it, cause they’re going to start paying for it eventually. And any one new coming on is going to pay for it right away. So again, it’s related to art, right? You can look at buying one piece and it’s going to cost so much, or you can look at buying it bigger or a triptych, that’s more complicated. The more value you get out of that, the more ideally you’re willing to trade for that value.
Joe: So as you grew, did you get to a place where… Obviously, you had a good support system coming out of USF, you were very involved there, you knew everybody. And did you get to a place where the growth you felt stretched you, just from business experience? And obviously problems and the administrative and executive pieces of the business are two different things. What was your experience as you grew and entered the fundraising piece of it and starting getting ten, 20 people…?
Reuben: Yeah, I’d say from a hard skill thing, those to me are easier to learn. I think the benefit of the program I went through and my experience in all the other companies I’ve ran and just my personality and work ethic and mentality is adaptive and with problem solving, and with that, I very much follow this iterative process and I just always know I’m constantly learning, so it’s like if I run this thing I haven’t done, I’m just going to do it as if I do, right?
Joe: Were you reading business books, were you…?
Reuben: It’s all hands on, it’s trial and error, it’s iterative. To me trial and error is one way, I’m much more a fan of iterative experiments. So it’s like an MVP of a product, you’re going to develop the minimum viable product you can to solve a solution as simply as possible, and then see how it goes and get the feedback and go from there. And I approach every problem that way. So if there is something we need to do or there is a new problem at the company or something, a new challenge or something we need to do that is different than we have done before, it’s like alright, you know what? What’s the smallest thing that’s now going to make a big impact? We try it and if that works we keep doing it, if it doesn’t then we’ll change it. So that’s kind of I think something I’ve learned very much in that program and helped solidify, but is also something I’ve always lived with is adapting, and I think that skill is solid, and that makes solving all kinds of other hard skill things, like business skills, cake.
Joe: Right. And along those lines, how intentional were you at the beginning, and then how much did you have to adapt, and what was the process for building your culture?
Reuben: I think culture always has to be something that’s intentional and the best way that sums it up: it’s fun, and I think everything should be fun. I don’t care what it is, try to give me something that’s not fun, or can’t be made to be fun. And I think as long as everyone around you is having fun, it’s really hard not to. And if you’re the kind of person that cannot have fun when everybody else is, then you probably don’t fit in that culture to begin with, or you have a lot you can learn with that and adapt to it. Or maybe we do.
Joe: How did you do that?
Reuben: You have to embody it. To me it’s like I’m always fun and that’s going to flow in everybody else. And you keep in check. Someone is coming in and they’re going to be a dick, then you’re going to call them out for it. And for a while, in our early days it was written on the white board “don’t be a dick” and that was what our model was, and…
Joe: There’s the next business book right there.
Reuben: Here you go, don’t be a dick. Lessons in whatever from whoever. So yeah, I mean it’s something you’ve got to be intentional about, you’ve got to think about it, it’s something we’re going to be developing a lot more and be even more intentional about, we’re growing beyond, we’re… to keep growing, whatever. So we don’t have company values, we don’t have a mission statement, we don’t have any of that. But if you asked, everyone is going to give you the same answer.
Joe: So you decided not to do written core values?
Reuben: We didn’t decide not to, we just haven’t gotten to it yet.
Joe: Haven’t gotten to it yet.
Reuben: So the plan is to do that later this year and solidify that, because we’re getting to a point where I could potentially go all day without seeing someone that works in the company, or interacting with them. So you start to lose a lot of the intimate connections that you have with a lot of the team, and I think at that point you have to start writing things down. So we’re doing things like building an internal knowledge base and potentially looking at learning management systems for stuff like that, that we can…
Joe: Speaking of fun…
Reuben: Yeah, exactly. Right, yeah. But it’s cool, that’s actually come up with all this and write it down, and what’s fun is we don’t ever have to tell anybody, it’s going to be there now, you know? So fun is a good perspective that you can shift.
Joe: It’s really a secret sauce, and I think especially people on the community look at it… I think Big Sea has done a pretty good job with that, we have a really good office and I credit Andi and Dzuy for that. Andi has been building this brand for ten years and he’s just done an amazing job within, I was happy to plug into that. But I would say that you embody that for sure, it’s probably even more, definitely more than us here because you’re 16 years old or something like that. But that sort of fun, modern, not any of the old corporate environment that a lot of people are chasing. And you’ve got it, so that’s why I ask, just deciding what to write down, what not to write down, and how do you… Do you feel like your leadership presence is enough to enforce the fun?
Reuben: So I think it has been, and I think the initial employees that embodied it very well have continued pushing it, but I think where we’re getting now is how do we describe that to new employees and people? Cause I think we’re at a point now where there is so many… we don’t have a huge hierarchy, but levels between people, that I barely interact with some of our new employees at this point. And it just has to be that way right now, because there’s just so much to get done for everybody, and it’s like even if I’m not busy, they are busy. So there has got to be a way to translate that all the way down, and I think the issue where a lot of companies have is you can’t just overnight say hey, we’re going to be like this.
Reuben: It’s an inside thing, it’s a passionate thing and I think a lot of companies very much underestimate the impact that an important company culture, or a unique company culture is going to have, cause it impacts every single piece of the entire business.
Joe: Yeah, and we did a lot of thinking on this when we were working with the EDC and what would draw corporations to come down here, and one of the big changes has happened probably in the last six years, ten years, is that it used to be corporations were competing with other corporations for employees, and now most corporations are competing with no corporation, because people can go out and do their own thing. The whole infrastructure is built out and so…
Reuben: It’s just so much more accessible now.
Joe: To get someone show up at your office every day, their quality of life has to be there for them, or else they’ll just have their own quality of life at home.
Reuben: Absolutely, yeah. And so for us it’s our office space specifically, I want it to be somewhere where people enjoy being more than their home. And that’s always been my goal. So we have a full kitchen, people can cook breakfast and lunch and they do, we have showers that they can work out during lunch, and they do. And we have a washer and dryer, so people can do their laundry at the office if they don’t have that at home. And it’s sweet because they appreciate it and they stay a couple extra hours in the day and do their laundry, or come in early and do their laundry, right?
Joe: I can see some people in our larger corporations in St. Pete listening to this and going, “Let’s do it, Reuben, let’s do it. We need a washer and a dryer right now.”
Reuben: We need a washer and drier now. But some of those things are so hard to look at, I think, for some of these big corporations and say wow, there’s no way we could do that. But in reality they could and they would have no clue the benefits that come out. So things like that are unlimited PTO and flexible hours. But you look at a company that limits PTO to 14 days a year, which I think it’s typical, I have no clue, I’ve never done it before.
Joe: You should check what our policy is before we start talking about this.
Reuben: What is it? Two weeks?
Joe: I’m going to have to change it now to do what Reuben does, like every other corporation.
Reuben: Right, so it’s like we’re unlimited PTO, we have flexible hours and we have not had a single person take advantage of that, right? And the benefits of that is amazing, and it’s almost intangible and for us, I can’t give you stats, cause it’s how we’ve always been, I can’t be like well, since we implemented this… But you have a big company with even hundreds of employees which is still on SMB, you look at those numbers and you’re like if people take off an extra week, then this is this many hours, and you just can’t approach it like that. It’s like if you announce that you’re going to give people this, no one is going to take advantage of that. And if they do, then they might not be a good fit to the company, or some people that do, I’ve read all kinds of stories, people that take 50% of their time off and the other 50% they still kick ass more than the rest of the employees and it’s worth it. Who cares…?
Joe: … It’s about what you do.
Reuben: Right. So it’s like these companies are like you got to be here at nine, if you’re late then you’re at risk of losing your job. It’s like “Why?” It’s all about output.
Joe: Yeah, it’s definitely antiquated.
Reuben: I can rant about all that stuff all day. So to me it’s just doing what you know it’s right and practical, because you’re never going to go wrong if you think that way.
Joe: I think the thinking is sort of… that’s the first step, but the scalability is the hard part, right? Cause I think when you’ve got, like you said, you can always impose, you can always be a figurehead, there’s always a Steve Jobs types who even when he is not interacting, they permeate the culture, but at the end of the day…
Reuben: The Steve Jobs type appears more.
Joe: Yeah. Well, there are figureheads, they’re people. But when you start to scale and you get the 100 employee, or when you start not knowing half the people’s names and things like that, then the fun that you were able to bring through that contact gets dissipated and you’ve got to be able to make that programmatic.
Reuben: Yeah, so I think because we’ve started from day one with it, I mean I feel like I could leave and it would still continue, because I think everyone has very much embodied that and that’s a part of it to begin with.
Joe: The internal influencer, kind of vibe where you are at, as long as you have the seeds there that you throw it out, then…
Reuben: Yeah, I think it may take us a week or two for people to be like oh, this is really cool, and then they’re like…
Joe: They can’t believe they can have that much fun…
Reuben: Exactly. Yeah, and we talked about we have to break people coming in, especially because a lot of the people that we’re hiring, especially for sales and marketing, are coming from our industry in student affairs, which a lot of them have never been outside of an educational institution. They start pre-K or kindergarten and they go to college and then they go to grad school and then they work at the college. And they might witch schools so they get some different experience, but they’ve never been in a corporate environment or business environment or outside of that institution, so a lot of their mindset is so locked on the way that stuff happens. And because they’ve never been trained in typical business communication and processes, the way they work is completely different, and so old and convoluted, and that’s the exact reason there is so much bureaucracy and politics that are there. So they come in to us and we’re like no, screw that, get rid of that, cut this. And there’s a lot of ambiguity that we place on them to figure things out, like we talked about earlier, and really pushing them very quickly into expanding their mindset, thinking more openly and different and being who they really are, which they’ve really never had a chance to do for that long.
Joe: And don’t they ever just freak out with that kind of freedom and just…?
Reuben: We have some people, yeah, it gets stressful and they don’t understand it, but they all come around eventually, we’ve never had an issue. But that’s also very similar to what I am used to doing in my class, when I teach the creativity and innovation in business is… Even in the class I was in my first thing, people cry because it was so unstructured. And it’s like you get spoon fed as a student and hey, this is what is going to be on the test and here’s the test, and we’re just testing you, and here’s a lecture, another test. And it’s like we’re getting this, like alright, your assignment tonight is to find three people in the class and you’re going to make a board game to teach this skill to everybody next week. What? That’s it, thank you. But we have three hours. No, see you later, have fun. And one of the big skills we teach is tolerance of ambiguity, it’s kind of meta, they’re teaching tolerance of ambiguity while experiencing having to be tolerant of ambiguity. Yeah, it’s fun. So it’s all essential skills and it’s what we really push in, and I think that’s what helps permeate the culture and everything too.
Joe: And do you feel like you need to do a little bit of that through your products? Cause I think you’re building into a structure that could benefit from some of that thinking, and so yeah, that’s…
Reuben: So for us, we’re not just selling a product, we’re selling a vision and a solution, right? And part of that solution is one, a great company culture, we have an average zero minute response time on our customer service, it says zero because it’s under minute and they don’t give us seconds, which is lame cause we can’t improve zero. So everything from how fast we respond and how fun we respond, we love GIFs and emojis, to our sales across everything else is you building a relationship with us, not just here’s a product, have fun, go. Right? So the other piece of that is our philosophy and while part of that is not changing behaviors, it’s we feel we’ve built a software product that adapts to the way people do things. But the mindset and the philosophy of all the new things you can do and if you did change, the benefits that could come off that is a lot of what we do in our sales process. By the time they’re using the software, they’re eating it, they love the way we’re thinking about stuff, we’re thinking differently, we’re not sucked into the problems they are because we’re not having them, so we’re able to take a fresh look at the way that they do things and give a full new experience and look at how to solve that. And for the ones that buy into it, get a ton out of the software and for the ones that don’t, also get a ton out of it, just differently.
Joe: Cool. One thing that I think everybody would be interested in talking about or hearing about is the fundraising process for you. You’ve been doing it a while and you had some, I think if memory serves, you had some early local angels that got you started.
Joe: And let it go full time and then I think the big one, the last round was the few some well-known names from Tampa.
Joe: So, how did that connection happen and what was the process that you went through to ultimately end up with that?
Reuben: Yeah, so we had a couple local angels that invested in us initially, and I very much follow as philosophy, and of the things I want to do after exiting this at some point is investing in startups and everything myself. So I’m always thinking about my philosophy and why I would invest in certain things and how I talk about things from that angle, and very much, especially on the East coast and everything here, that’s outside of a main huge tech city like the Valley, or like Boston or Austin is that you need to have a product built and ideally some revenue before you can even expect anyone to give you some cash. So with that you should start talking to people as soon as you can. So that’s one of the biggest advice I give to people that are looking at raising money, is why aren’t you talking to someone already? Start talking to people, don’t ask them for money, talk to them about advice, tell them you might be raising money in the future but you want to keep them updated, and if it’s something that they’re interested later then perfect. Because the interesting thing is, this is somewhat tangential, is that no matter when you go to an investor or whenever you’re ready to raise money, they’re always going to want to see the next step. So if you’re going to someone and saying hey, we just finished our product, they’re going to be cool, let me know when you get a customer. But if you go them when you get a customer, they’re cool, let me know when you get the next one. Right? So there’s always, they really want to see and feel the traction to raise. Yeah, exactly. And it can never be too early cause worst case is you go through three steps and they go wow, this has been impressive, I’m going to invest. And that’s typically what happens. So I interned with Gazelle Lab, which was a TechStars light technology accelerator that funded six companies and put them through a 90 day curriculum and Demo Day, similar to Y Combinator, or 500 Startups.
Joe: So who was involved with Gazelle?
Reuben: So it’s five awesome dudes, so there is Daniel James Scott, who was one of the professors at USF St. Pete. There was Dr. Jackson, who had started the entrepreneurship program at USF St. Pete. Which was cool because they brought this connection to the school to where they actually implemented some of the curriculum in the classes and we actually… I took a practicum class where I helped consult and learn at the same time with one of the companies in the Labs. Marvin Scaff, who is with Adjoy, now is a CTO there, and Bran Britain, who is a great friend and is also our general council, and then John Marrow who is the entrepreneurship in a residence for USF St. Pete at the time, but is also a very seasoned entrepreneur himself. So I interned with them in my last year of school and also pitched at this student pitch competition during their Demo Day, so there were six companies pitch and they had six students pitch for cash as a competition, and I won for this idea. And there I developed through the internship some relationships with some of the investors in Gazelle Lab and some of the angels there, and they saw my pitch and me win and all of that. So I moved on and decided to get a team together to build it, and we built it. And I got back in touch with one of the guys that I was close with during the internship that was a investor and he was interested how to sway to that next milestone and stay in touch and we finally closed our first school – shout-out to St. Leo – and went back to him and he was like “Cool, well I’ll give you some cash”. And then we went and used that leverage to go to somebody else that was local at the time that was interested and they invested as well. It was basically like… it was under 100K that we had raised, and that put me and four others full time into basically going all the way into creating this, and it worked out. And then yeah, late last year I raised another 1.3 and then we’ve since raised a bridge around to add on to that, just recently here, so now it’s over two million. And that round last year, kind of our late seed round, depending on where you live and what you call, whatever, we had three main investors that were really important for us to get on board. We had 500 Startups, which is, again, one of those technology accelerators, they are the top three in the world and they are very cool because they have a lot of side funds, we didn’t have to go through their curriculum or their programs, we were invested in by their mobile collective. And they have international reach, they have ten extra funds, they’re huge on supporting diversity in technology and they have some funds solely focused on that, so that was awesome. They bring a lot of technology and the connections to investors and business practices for startups. Ron Schlosser also invested, he is the former CEO and president of McGraw-Hill Education, so he brings the entire education knowledge and market and a lot of MNA experience in that world. And then Jeff Vinik, who is obviously working with Bill Gates’ cascade venture partners for a three billion dollar project in Channelside, and that’s a cool story, we can get into it another time. But he actually reached out to me about a few other things and we ended up connecting and he was interested in what we were building and ended up investing in that round two.
Joe: What few other things?
Reuben: So he reached out to me for feedback and insight into the entrepreneurship ecosystem here, and for some advice and thoughts on the projects he was building and other people that might want to get involved and problems that needed to be solved.
Joe: How was it to talk with him and hear his vision for…
Reuben: Super cool, I mean he’s obviously brilliant and just cares so much about the area. And for me growing up here I feel the same way, and from an investment standpoint that we were talking about, a lot of my connections and network just came from me getting involved, even though I’ve grown up here, the second I graduated and even before I graduated, like a few months after graduating I was on ten different non-profit boards, everything from community development to economic development, to the arts, to other software and technology stuff, like everything, I was on it. And I knew everybody there was to know, if there’s someone that pops up they’re like oh, you got to meet with Reuben, he’s involved with everything. And that was huge, I’ve spent over a year doing that. I’m still involved in some things, but my head is pretty much down on the company at this point.
Reuben: So for someone like me that’s invested a lot, even so far in the community and care so much about it, it’s awesome to have a conversation with someone that’s put billions of dollars into that, and bringing some amazing opportunities together. And he’s putting out free art shows, world class art shows now just for fun, he just invested in the Tampa Bay Times, which is awesome, and he just seems to just be doing it all and everything. It’s pretty cool.
Joe: Yeah. He was interesting, he’s got a box at the Lightning and he just sits in it on his own. And I went with J.P. [Dubuque] to the box and we were right across the lane, and I said that box is empty, it’s just one person is sitting there, and it’s Jeff. He just comes and watches every game by himself in his box. And occasionally his wife will come and sit with him, and he says that when every game is over there is never seen anybody else in there, he just likes that focus and that concentration, I find it very interesting.
Reuben: Yeah, he is the sole owner of that team, so it’s like, I guess, a way of seeing it all happen without being in the commotion, to manage it.
Joe: Yeah. So, one thing I definitely think some of our listeners would find interesting, you’ve mentioned talking early and often to potential investors. What were some of your experiences as far as what do you look for in a potential investor, and the red flags, or their must have’s. What is your own philosophy, or any tips you have on that?
Reuben: I think it’s a very trendy thing to be in right now, there’s HBO TV shows about it, everyone’s got someone that’s making an app or knows how to build something. So from the investors standpoint, when you can put on this persona of “I’ve got money, you need something from me”, bla bla. There’s a lot of that and there’s a lot of time that can be wasted, there’s a lot of hopes that can be made or not made. And any time you’re dealing with wanting or needing money from someone or viewing it that way versus having an opportunity for them to put money into, you can get in this path of uselessness, and also get yourself down pretty hard, I think. And I think a lot of people experience that. So I think I’ve got a pretty good BS meter and can pick up on red flags pretty easily, and it’s basically if you have to ask. But if you’re feeling anything about a conversation, it’s probably not worth getting into, it’s probably… something’s wrong there. So to me it’s like I never went out to raise money, I always find that most of my time is better worth closing sales and building a great product and company, then sitting there and just taking investor meeting after investor meeting. So we waited for the right relationships and opportunities to come along and we put a round together and made it happen. Ten percent of the people I met with never invested, and so I really only ended up taking meetings or putting meetings together with people I knew I either really wanted and that it made sense for, or something just made sense basically. So those are all super subjective and very hard to spell out from that, but it’s basically look, if you’re feeling something about it that’s off, it probably is.
Joe: Yeah, that makes sense, because we actually had a discussion before we started recording and I asked you about someone and you said that and then you followed up with and obviously, you knew that because you actually had to ask me that.
Reuben: Sure. Exactly, yeah.
Joe: Yeah, that is true.
Reuben: Yeah, if you have to ask.
Joe: So I think the one take away you could have there is, and I think getting in early and often with people is that you… It’s essentially a warm lead, and people either know you and… But if you’re able to walk into investor meetings within a 90% closure rate, you know something going in. And you can either do it by quantity, just taking meeting after meeting and having those cold connections where you can cultivate the warmer connections and yeah. So it sounds like that’s the path you took.
Reuben: Yeah. Investors are not hard to close if you build them something great, right? I think, whereas a lot of people that complain about the availability of money here and the possibility of raising it, and the experience and the knowledge. But the reality is if you’re building a great solution – and remember, to have a solution you’ve got to have a problem – if you’re building something great there and you’ve got some traction and something is happening, these people would be dumb not to put the money into it.
Joe: Sure. And then the next phase of that is what are you giving away for…
Reuben: Of course, the terms are a whole other deal.
Joe: Absolutely. So, and you just… What’s the future look like, then you said you just did a quick bridge round, were those new people, or existing people, or…
Reuben: Almost all of them were existing people that, for us our plan is to raise a much larger round next year and we were thinking about doing it now-ish, but when we started looking at the company, a lot of it still depends on just a few people and it’s really core to that, and we want to build the team out just enough to where, if we were to raise more money next year and say triple our team size in two months, we could do that. And we’d have the training stuff in place, we’d have the delegations in place, we’d have people ramped up and knowledgeable and have a much more bigger core team that could support growth like that. So we basically said alright, what’s the minimum amount of money we need to raise now to be prepared to do that later? So we went on to that.
Joe: Of course, the general philosophy is always wait as long as you possibly can, because your value continues to go up and your money is better.
Reuben: Sure. To me it’s like if someone is going to invest money, I’ve got to spend it as quick as I can, I got to put it into action and to me, I didn’t feel like I’d be able to do that if we would raise more.
Joe: Cool. And what would that bigger round bring? As basically just super charging what you’re already doing, or is it leading you to some new realms?
Reuben: New realm is as far as I’ll go with that.
Joe: Okay, alright, just leave everybody hanging, that’s fine.
Reuben: There you go. Yeah, you’ve got the other way down and see.
Joe: So, it’s new realms.
Reuben: Some of it is new realms, some of it is continuing what we’re doing now, but the direction we’re going with our product right now is co-curricular and complementative and competency based learning. So we’re starting to map, quantify, and qualify the essential skills students are learning by participating in the things that we already track, also things like leadership and creativity and communication and collaboration, all of those soft core, although we hate saying that, it’s more essential skills cause to me those are more important, is what we’re focused on. And a lot of that is because institutions are starting to be judged based on the learning and the jobs students are getting, and the salaries they’re making, and those are the skills employers care to hire based on. So institutions are now looking for co-curriculars and ability to show off the skills that the students are learning so they can go into the work force more prepared.
Joe: And so is there a big education component to your sales process? Sounds like people maybe in theory know that this stuff would be great, but the idea of actually implementing it…
Reuben: Sure. So, part of building solutions to problems is that people have those problems. So we come in and say you have these problems and this is the best way we think it is to solve them. So there is some education, of course. There is some technology competency, of course. There is some philosophy building, of course. But generally it’s people click and understand that what we’re building totally solves the problems they have, it’s just figuring out the logistics and how it all works.
Joe: And then I’m assuming there’s a pretty good cascade effect, that once you got 100, then it’s a lot easier to say “Hey, look, we’ve got these other hundred here, we’ve got case studies and…”
Reuben: Oh, yeah, it was. Our first one was, obviously, the hardest. I would group the next ten into there, and then from there it was like 25, 30 and after that it got really easy. And now that we’ve had 100 it’s like wow, it wasn’t even easy compared to what it is now. And some of that is yeah, we can point to the other hundred, but it’s also we’ve been doing this for a while, we have a massive pipeline of conversations we’ve had. So anyone that was like “I’m not ready for this yet” would come back around at some point. So now that we hit 100 in three years a few weeks ago, and we’re already I think at 108 now, so the snowball has already started to get bigger and bigger.
Joe: Yeah, nice. Alright, well we don’t have a ton of time left, I would love to hear your thoughts on St. Petersburg, we’re in a pretty cool renaissance that has been for a while, going strong, it’s been here forever.
Reuben: Yeah, I’ve seen it all.
Joe: It feels like you’ve grown pretty organically, it feels good and it feels sustainable, I think there’s some building that may not be sustainable or whatever. What are your general thoughts on…?
Reuben: Talking about relation to culture, right? It’s organic, it’s natural, right? I think it’s different than a lot of cities that are deliberately putting in infrastructure and things to make it work when, again, you’re trying to solve problems you don’t have. And for us, if people want a solution it’s because they have a problem and that’s what they’re doing here. So now it’s cool, I can look any direction and see multiple cranes going up with massive buildings, I know there’s more people that are really cool and skilled workers and talented people moving here to make it even better, and I think most of the people here are very much on the same page, even developers that are building stuff, I talk with… They reach out to me, they talk with people like me and they are really interested in seeing what’s necessary to build here and helping cultivate what is already being built here. So, it’s cool. And the thing that makes, I think, us super unique is our people and the people that we have here, and everything being built around those people versus for a certain person. It’s diverse, it’s interesting, obviously you can’t beat the weather everyone talks about and… But I think the city was designed even infrastructural ahead of time with where the highway stop and with gridded streets and easy numbering and space and…
Joe: Gridded space on the water.
Reuben: Yeah, the whole thing is just perfect and it’s happening and it’s not slowing down at all.
Joe: Some red flags?
Reuben: Yeah, I think we’re always running the line, you always got to be careful with people that aren’t here to cultivate and are focused on, like we talked about earlier, the money. Period. Right? And that some of them are here to make a bunch of money, but that’s not going to last. And you might have wanted people to get really lucky, but if they come in and do that, we look at the main block where Jannus and all of that stuff is, and the developer I read about trying to talk about demolishing that building and new building and put all the businesses back, and they will come back in and they’ll be there. But that’s not the case, they’re going to be out of business, you’re going to kick them out for a few years, that rent surrounding it is obviously going to go up, otherwise you wouldn’t need to build.
Joe: Loss of character.
Reuben: Yeah, right? So you run that fine line of losing that culture that people want to move here for in the first place, and then you start removing that so that they can, and you lose it. And then you just turn into Sarasota, shout out. So to me it’s you have to start to be deliberate at some point, protect some of that stuff. You can do it smart, when you think about it it’s all political, when you start getting involved in regulating things or making decisions you start impacting other things and other people. So you got to be smart about it, but to me it’s like that block is super interesting because it’s like… Look, my parents just bought into one building and they read about it and were like this is so cool, developers are going to come in to get rid of that and build a bunch of cool stuff. I’m like that’s not cool, because everything you’re moving here for… You might not go to anything on that block cause it’s bars and interesting restaurants and clubs and Jannus and all that, but the people that are making all the cool stuff you’re moving here for and enjoying, love that! Right? So you have these layers of the culture here and you start messing with those deep layers and everything else gets screwed up. So to me, a red flag is just making sure everyone is doing it for the right reason.
Joe: That’s sort of a high speed gentrification, forced gentrification.
Reuben: Sure. Culturification.
Joe: Culturification. I had Mitzi Jo Gordon on and she was talking about art washing, which was yeah, I believe we’ve talked about it a little bit, it’s a new term for me and it sounds good on paper, they’re paying some artists to do some art, but in the reality is they’re just pricing out the artist…
Reuben: Yeah, it’s kind of those catch-22s, yeah.
Joe: Yeah. It’s good to know we’ve got some people guarding against that.
Joe: It’s that time for the shout-out and I think people are very interested to see who you’ve chosen to give your shout-out.
Reuben: I was looking to do for everybody, it’s the thing.
Joe: It’s the thing, definitely.
Reuben: Do you go to them and have them come on the podcast next, is it like a Punk’D “pass it”?
Joe: It is not, it’s like pay it forward to Starbucks. It’s… But we’ve surprisingly had some crossover on there, we had one person get shouted out to by three guests, I’ve really done maybe 12-15, so that’s a pretty high percentage. And we have had a couple little bit of cross pollination of people shouting out to each other without knowing it. So, that would be interesting.
Reuben: Okay, here we go. Yeah, cool, I guess my shout-out is for the Iron Yard and what they’re building, to me it hits a whole other different pieces. It’s non-traditional education, it’s giving people a new job, career, life, knowledge and the type of people that they’re working with are extremely diverse, very interesting, and they’re solving both an educational issue, both a personal life issue for people, but also a huge issue on the job side of things. We have a 4% unemployment rate, Florida alone has something like 280,000 open jobs, but at the same time 80,000 unemployed and the skills don’t line up. Right? So Iron Yard is solving issues for everybody, it’s a quadruple win you might want to say, and I think they’re doing a great job doing it, their cohorts are growing, we’re pumped to have them here in St. Pete, we’ve just made our first hire of one, he starts Monday, I’m on the advisory board and there’s no conflict of interest… But I wouldn’t be doing that if I wouldn’t think they were doing something amazing, right?
Joe: Andi is too.
Reuben: Yeah, Andi is too, exactly. So yeah, I think to me that’s… the stuff they’re doing and the reasons they’re doing it, is perfect.
Joe: Love it. That’s a good one. Alright, any final thoughts on life, anything that the world needs to know that they don’t know already?
Reuben: Well, that’s a question I’ve got to prepare for. No, I’d say it’s never too late and nobody else knows what they’re doing either, so just do it.
Joe: That’s right. I’d say the more we’ve worked with bigger and bigger companies, when you think that… when you go from small to big it’s they have it together more? Opposite, totally the opposite. So nobody really has it together, you keep plugging and have fun, I think, to your point.
Reuben: Exactly, fun is what it is.
Joe: Cool. Alright, been a pleasure, appreciate it, thanks for coming back again, sorry about the first time.
Reuben: Yeah, it has been okay, (laughs). Yeah, dude, this has been fun and I appreciate it. I’ll have to go back and listen to all the other ones and subscribe now, so I definitely appreciated you hosting me here and hopefully I didn’t bore anybody.
Joe: I don’t think so.
Joe: Alright, thanks, Reuben.
Reuben: See you.
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About the host
Joe Hamilton is the CEO of Big Sea and a founding Insight Board member at the St. Petersburg Group. Joe brings a strong acumen for strategy and positioning businesses. He serves on several local boards, including TEDx Tampa Bay, which grew his desire to build a platform where the area’s thought leaders could share their valuable insight with the community at large.