The Unsure Entrepreneur

David Sinkinson
The Unsure Entrepreneur Podcast

SUMMARY KEYWORDS
AppArmor acquisition, campus safety, emergency response, bootstrapped company, market validation, tech debt, empathetic leadership, startup myths, venture capital, lean startup, customer feedback, sales process, entrepreneurial journey, podcast insights, mentorship programs

SPEAKERS
Dave Sinkinson, Roger Pierce

Intro 00:00
You're listening to the unsure entrepreneur podcast with Roger Pierce, whether you're scribbling business ideas on a napkin or wrestling with the should I shouldn't I question. Get ready to explore the realities, the risks and the rewards of entrepreneurship as we share the stories, scars and successes of small business owners.

Roger Pierce 00:22
Hi, there, and welcome to the Unsure Entrepreneur podcast today you're going to hear the fascinating startup and exit story of a very successful Canadian entrepreneur. Dave Sinkinson is a SaaS entrepreneur and co founder of app armor, a bootstrap public safety software company he led with his brother Chris, together, they grew app armor into a recognized leader in campus safety and emergency response tools supporting institutions across North America. Their startup success culminated in app armors multi million dollar acquisition by brave mobile safety in early 2022 followed by both companies being acquired by a Motorola Solutions later that year. Today, Dave continues to share his expertise as co author of the book startup different and host of the startup different podcast, which I've been enjoying, where he helps entrepreneurs build successful businesses without the hype through practical frameworks, myth busting, advice and straightforward approach startup different gives founders a proven path to sustainable success, one that isn't focused on unicorns or 10 times returns, but on building a resilient business from the ground up.

Dave Sinkinson 01:33
Welcome. Hey. Thanks so much for having me. It's great to be here.

Roger Pierce 01:37
So thrilled to have you here, and you know, we met a few weeks ago at the Canadian Small Business Summit. I heard you and your brother speak, and I said, I got to get those guys on the podcast.

Dave Sinkinson 01:48
I'm flattered,

Roger Pierce 01:49
Because what you talked about was like, Oh, this is such gold for new entrepreneurs, and that's what our show is all about. Is for nascent entrepreneurs. It's for aspiring entrepreneurs, for very new entrepreneurs were on the fence about becoming an entrepreneur and starting a small business. As you know, there's lots of hesitation, lots of fear and uncertainty that goes with I want to poke and prod you a bit into some of your own experiences to share with other people, if you would. But that's what the show is all about. We want to help people understand what they're getting into so they can make a choice, right, whether go for it, if you've got an idea or stay on the safety of a job. Nothing wrong with that, too. So let's, you know, paint the picture beyond my my bio, tell me about the journey of app armor, and how did you come up with the idea, and how did you get it going the very beginning?,

Dave Sinkinson 02:34
Yeah so it's kind of a crazy story. Well, maybe not so much. We'll see. But basically what it is I was working at my album matter, so higher education institution in Canada, and because of my job there, I was part of a committee called the Campus Safety Working Group. And on the committee was a bunch of different stakeholders from different departments at the university. And naturally, they were interested in the safety, sort of posture of the campus. And one of the things that we did as a committee, it was part of, sort of like, I think they did it every couple of years, but they had done an audit of the blue light pole infrastructure on campus. And at that time, this was over a decade ago now, but at that time, they had determined that 30% of those blue light poles, so those emergency assistance area sort of poles on campus, were broken. And this was everything from, you know, the light bulb is burnt out to, like, literally, the box doesn't work anymore. And just for anybody who doesn't know the way these things work, is you go up to the poll, you press the button, and it starts a phone call to campus security from like, the polls, like little device, and you're supposed to go to the next poll. You can always see one poll from the next one, and you're supposed to walk to the next one, keep pressing the buttons so that campus security or campus police can come and assist you. And so with these polls not working, it was kind of a scary moment. And the strategy was, okay, how are we going to deal with this? And I just being in the right place at the right time, I said, Well, what if you had a mobile app or you could just, like, press a button and it would call Campus Security, very simple. Surprisingly, the people in the room were kind of like, oh, that's actually an interesting idea. And so then immediately I had future sold something, and was terrified, and then I said, Okay, I'll see if I can find some sort of proof of concept or something. So sort of was on me to go and figure out how we're going to build this thing. And fortunately, I have a brother who's 10 years older than me, who's named Chris, as you alluded to, and he is very technical, and at that time, actually been dabbling in a couple of different mobile app products. So we actually had a few side hustles that we had been working on, revenue wise, were probably around 10 to, like $50,000 a year, like absolute best case. So we had, like, a little bit of money, and we just sort of like play money while we were trying to figure out if those products could work. And meanwhile, we sort of added this new one into the mix that was revolving around public safety. We decided to call it app armor, mostly because we could get the domain name. And we'd had a few, we had a few Pepsi's at a bar not far away from the campus, and we decided that was great. And we also thought of it like Under Armor, like, oh, maybe we can make some sort of connection that didn't really, didn't really jive in the end, I'll be honest with you, but it was one of those things we're like. This is what we're gonna go with. We're gonna give it a shot. And yeah, we built it with that first institution, and ended up working pretty quickly with a handful more. And really the start of the journey.

Roger Pierce 05:08
So much to unpack there. And it was Queens campus, right? Queens got universities on the mine because my daughter is about to go, how cool she's shopping universities right now. And so your product and your story is so timely because you know you worry as a father, you worry about absolutely.

Dave Sinkinson 05:24
Well, we worked with over 100 of the 150 institutions in Canada. So chances are you go to a Canadian institution, there will be a safety app product there to help her, should she need it.

Roger Pierce 05:36
So let me get this straight. Your app is going to help keep my teen daughter safe.

Dave Sinkinson 05:40
It's gonna help the people who help her. That's the way to think about it. The funny thing about us, too, that kind of throws people off, is a lot of people here were like, they had an app ID, and they ran with it, and we did. But what was different about us is that it wasn't like one app. Like every single institution that we worked with actually got their own mobile application. And we like to say that we didn't create the mobile app, but we created the assembly line for mobile apps. We had internal processes where we could spin up a new instance of a mobile app for a new college or university in a couple hours, then we could pitch it to them. And that was part of our sales process, really. But then it made it very easy to deploy these things because we had so many internal, automated tools. But at the end of the day, the reason why that mattered is that, especially versus our competitors, we would get 50 to 100 times more downloads because the app, if you went to UBC, it's called UBC safe, right? Versus company name Safe App or whatever, like, we just did a lot better, because the branding and the visual cues were all tied to the university or college we were working with.

Roger Pierce 06:41
How did that decision come about? I'm curious. Is that something the customer brought up? Hey, can you customize it? Or is it something you said, aha.

Dave Sinkinson 06:46
So yes, Queen's University was like, No, you're not going to call it the app AppArmor. You're going to call it Secure with a big Q in the middle, and that's going to be Queen's University safety. So really it was our initial customer, but that was that was important feedback, though, right when you think about and we talk about this all the time on our show, but that MVP, that early product, that iterative process we talked about, or we got that feedback from our customer that this mattered. Their branding was very, very important. It needed to be front and center for them to adopt this idea. And so it was something that we took to every single client after that, knowing that once we had figured out how to scale that problem, because that is a challenge. Is a challenge how to scale that it was something that our competitors were not willing to take on. And actually, I'll say, furthermore, one weird thing that happened to us, too is in the early days, so we were going to have our we had an App Store account, of course. It said AppArmor. So you know, if you were to deploy an app in the app stores, it says safety app by Appar, okay, or whatever you have, like Uber buy Uber Technologies or whatever. So the idea is that we tried to submit a bunch of different schools under that one under our App Store account, and actually Apple said, Oh no, no, no, no, you have to do it under each organization's App Store account. Yeah. I don't know if you've ever worked with an IT group, but it's challenging, especially in those days, when it was so nascent, people didn't really get they weren't comfortable giving us access to their App Store account to submit an app for them. It was a real education of the market. Piece was like, Okay, this is the way we have to do it if you want to have this thing. But the bright side of that was that, again, it actually boosted our downloads. It gave customers a lot of control over the platform in a good way. We kind of put our money where our mouth was. Hey, we're gonna, we're so confident we're gonna put it in your App Store account. You could remove us later if you want it, you know, that kind of thing. So it was kind of an interesting thing. So on the one hand, we had a customer pushing us that had to be branded to them, and so that was what we did going forward, and that was really, really important. And the second thing was, Apple actually said, Oh no, no, you got to put it in their account if you want to do this.

Roger Pierce 08:40
You might have pursued that. At the time as a headache, but as a marketing guy, talk about making the brand sticky, and we know it in the client's ecosystem.

Dave Sinkinson 08:49
Yeah, I think we were pretty upset when it first happened. I think we I love the good people of the Apple Corporation, but they can be challenging to work with on some of these sorts of items. I think that we were just like, oh, another crazy rule, coming down from Apple, but thinking retrospectively, yeah, it was like, serendipitous. It was like, actually a good thing. It didn't feel like when it didn't seem like when it made more work for us, it made the app more costly to deploy. But longer term, you're absolutely right. The product was very sticky. Our churn rates were incredibly low, 1% or less, depending on the year in question, we just didn't turn over customers. People trusted us. We did a good job.

Roger Pierce 09:25
And to add to the layer of bureaucracy, I would imagine are the academic institution itself. I mean, you love them, they're customers, but there had to be a whole lot of hoops you had to jump through there too, right? For compliance, et cetera.

Dave Sinkinson 09:38
Yeah, for sure. So, I mean, the first hoop is just that selling to universities and colleges is kind of like selling to any big organization, that enterprise sale. You have to educate someone on the other side, on the customer side. They become your champion. You arm that champion to the teeth with PowerPoint decks and marketing materials, and we actually would send them a prototype. Application, so we'd send it to their phone and be like, show your boss. And that works really well, by the way. That was, it was Chris's idea, so I can't claim full credit, but once we, once you started doing that, that was really, really good. So that's your first who then, yeah, you kind of got, you have your demos, and you have to convince the committee, but then you have to convince certain stakeholders, big ones, being as you alluded to, especially as time went on, cyber security, information privacy, like the IT group, needed to know that this was something that, you know, everything was above board. And it was like, we never I always used to joke, because the Cambridge Analytica stuff happened kind of in the middle there, and I was used to joke on calls, well, we're not Facebook. We're not going to take your data and do anything else today. It was all just anonymized data, or any data that we did collect was just for the purposes of your mobile mobile app, and deploying it out and making sure it worked, and all that good kind of stuff. But it was a lengthy sales process, I would say, on average, six, seven months. That's a pretty significant sales cycle. Any sales people listening, or CROs, or whatever it's all about that top of your sales funnel, getting as many leads in there as you can. And then, you know, some things will close in two years, and some things will close in three months. You don't really know what it's going to be, but you do know that no matter what, you need a lot of qualified leads, and you need to nurture them over quite a period of time.

Roger Pierce 11:14
Meanwhile, you're surviving on ramen noodles and day old bread and from the supermarket, right?

Dave Sinkinson 11:21
Yeah. I mean, it was pretty lean. So another thing, yeah, I suppose we bootstrapped our company. Okay? So this is another thing that's a depending on, I think people would perceive it as uncommon, but it actually happens more than you think a lot of big companies even have, like, billion dollar companies were effectively bootstrapped. So it's not, it's not like it can't work or anything like that, but it does mean in the start you will have some pretty lean years you're paying yourself, which is the important thing. It's probably not rock star salary, but you're profitable pretty quickly. But if you're doing this right, I always talk about it as like, short term pain for long term game. Yeah, I'm eating ramen noodles now, but maybe I'm what's a Bougie meal? I'm having caviar. Maybe that seems really aggressive, but you know, somewhere, somewhere between noodles and caviar is where we were at steak dinner.

Roger Pierce 12:12
So you're a self professed sales and marketing guy. I could talk to you for hours. I'm curious about two things you said earlier. You went out there, and you sold it. First, you got the first company, the first organization on board, Queens, and then you built it, yeah, which is ass backwards to a way. A lot of entrepreneurs think you have to go about it. They think you got to raise the quarter million, then you can go out and you find some customers, and they Creek, and you refine. It's not true, is it? You've proven there could be the best way to do is with a customer in hand.

Dave Sinkinson 12:42
Yeah. I mean, what we're all looking for is validation. And I think entrepreneurs look for validation in various places. And I would argue some of those places are wrong and just kind of as you're alluding to, and some of them are right. The wrong place to look for validation of your business model is with venture capitalists or investment firms, and I'm sure it feels very satisfying. I didn't get millions of dollars of funding. We didn't really try either. But I would imagine it feels like pretty good. You might be like, Yeah, you know, I've obviously, I'm on to something. I just got $2 million in funding for my business. You sort of counter intuitively. And I will actually say too, some businesses do need capital. I like to make this point because I don't want to don't want to be just Mr. Hates venture capital or something. But some businesses need capital, if you have a physical product as an example, but most of the time, especially as a software company, you really don't need that. Instead, the thing you're looking for is validation in the market. You want to find a customer who is experiencing that pain, that is willing to commit some amount of money anything really, your first customer is not going to pay you the same amount as your 100th customer, like you're going to get a very small amount of money from the first one. Because you're unproven. You don't have any market credibility. You're probably building the product with them. So they expect sort of considerations, but in exchange, they will help you build your tool to meet market needs. They will probably refer you to some of their friends. If you do a really good job, you know, it puts you in a much better position to be successful and and heading towards a path of profitability. I was speaking to somebody else earlier today about this, and the idea is important. You need to have an idea. You need to understand that that pain, understand that problem, and then understand how you can can build to improve that. Um, Seth Godin has this thing in, oh, geez, I'm not gonna remember the book right now, because Seth Godin has, like, I don't know, 15 books. It might be free prize inside. It's been a while, but he has something called the fulcrum innovation. Is it doable? Is it worth doing? And is like, why you, Is it doable by you? And those are three really important questions to think about as you attack a new market. And the last, the last one's pretty important, like, for why you it can't just be like, because I'll work hard, or because whatever, usually it's some sort of fundamental experience that you've had, like, you've experienced pain or. So in my case, like I was on the committee, and I was talking to the people who were experiencing the pain or having the problem very urgently, it was very front of mind, and they were very keen to work with someone that would help them solve that problem basically as quickly as possible. So long story short, there is basically just you need to go to the market first to validate your idea and then try to build something and ideally you've got a little bit of revenue behind it. All these things are indicators that you have something credible, and it's worth spending more time on that idea, as opposed to going out and maybe having tepid interests from the market trying to get funding and then somehow. And kudos to you, by the way, if you can convince a venture capitalist or an angel investor to give you, like, half a million dollars or whatever amount of money when you don't have that much market traction, because I would think that that would be difficult, you must have a really good idea. But it to me, the key indicators I'm always looking for, is somebody gonna pay for this thing, and how quickly are they gonna do it?

Roger Pierce 15:57
Minimum viable product is the term that comes to mind, and so key, what you've just said, you know, you don't have to build it, and then hope people will come, go out and sell it first, then prove your model that way and get feedback, and iterate and iterate and iterate, right?

Dave Sinkinson 16:12
Yeah, especially early on, that rapid iteration is going to build your product. You'll have an idea of what you think you should build, but ultimately you just need to stand up something. So you're referring to Eric Reese. I think Eric has this comment of this. It's a half product, not a half assed product. The idea is, build that half product, go to the people who would benefit from it, and then learn from them, and they'll they'll be as long as you condition them that, like, Hey, this is a half product, which obviously you're going to do because you don't want to look stupid. Then you go to new say that, and then they'll help you get to your version one. Then that version one is the thing you're going to take to the rest of the market. And of course, as time goes on, you continue to iterate. And for what it's worth, that Lean Startup approach, that Lean process, that build, measure, learn cycle that you're referring to. That's something that for Chris and I in our company, we didn't just exclusively leave that for product innovation. We did it everywhere. We wanted to do small bets in marketing. So we would try a new marketing channel, put a little bit of money into it, see how it did, tweak it, come back, do a little bit more. Like, you know what I mean? Like we you can take build, measure, learn and apply it to almost any functions of your business. The only one where you maybe you can is HR. It's hard to, like, hire a little bit of a person,

Roger Pierce 17:31
Just the arm, please.

Dave Sinkinson 17:32
Maybe fractional hiring, though might be there's somebody out here who's like, screaming fractional at the at their phone or their computer right now. So maybe there's an exception there, but most of the time I my experience is there's no small bets in HR.

Roger Pierce 17:45
I love it. Fantastic advice, and also important for entrepreneurs, you know, get it out there. Try it out, learn, improve, get feedback. Venture capital is actually on the decline. In Canada, right in 2023 the number of deals decreased by 28% with the dollars decreasing by 55% so to your point, the venture capital is not out there the way it was.

Dave Sinkinson 18:08
Yeah, Imean, money is more expensive as part of this. I think the risk tolerance is lower, which is going to be problematic in a market of startup venture capital funding. I would say that generally, it's pretty well known that Canada has a reasonably serious problem around venture capital funding for businesses. I wrote a piece for, I think it was like Canadian online business magazine, and it's just like well known that especially, and we're always compared to the United States, of course. And just even, like, you know, we love to go per capita in Canada. So per capita against the United States level investment. We're not even close, like it's there's just a much healthier, for better or for worse, you know, venture capital ecosystem in the United States. So this can be deflating, right? Because I think a lot of founders, I'll tell you what happened to us too. Maybe this is a helpful story. Early on in the days of AppArmor, we were in a business incubator downtown Toronto, and we were kind of around 200,000 and top line revenue. So, like, something's happening the land of the living dead, if, you know, Crossing the Chasm with Jeffrey Moore. We were just kind of in this zone where, like, we weren't really believing that it was going to keep growing. We didn't really know yet. And we started toying around with like, we started to have crazy thoughts. So one crazy thought was true, we try to do venture capital, and we kind of looked at that. We're like, Well, why would we do that? If we don't think it's going to grow, like, how is that going to really help us? And we kind of acknowledge that the only reason we're thinking about that is because society thinks that us as a startup company, we should have funding, and that's something we should we ought to be doing. Maybe that's what we're missing. And we sort of shot that down. The other thing we thought about doing was just stopping, just closing up. Can you imagine that, like, I I'm like, a little bit rattled even saying this out loud, but we talked to our business incubator mentor, who would talk to all the other businesses that were there. I think there were probably about 1015, businesses in the incubator, and he was just like, No, that's. That keep going. And there's something about when you feel like it's not going fast enough, because there's this societal expectation that startups grow crazy fast. And the reality is that that's just not always true. It's actually true. It's the value of consistency. Working at it for a longer period of time, you might actually get to that hockey stick growth curve, but it may take five or six years. And I think most people expect like, well, if I don't have meaningful attraction after a year, which is crazy, by the way, or like, two years, that I should stop doing this thing. Anybody listening today who's kind of in this hole, they're like, I just can't see if it's going anywhere. I'm not feeling the growth. I'd say, stick with it. Keep innovating, keep iterating, keep improving, keep finding customers. It can get there. It just takes some time. One other fun fact here too, is that, on average, it takes 11 years for a company to reach $1 million in revenue, on average. Now in software, it's faster. I think it's like six or seven years. I don't know exactly, but something like that. But just It's okay. It takes a long time to achieve market credibility. Stick with it, and that's a very good point.

Roger Pierce 21:04
Entrepreneurship is a marathon, not a sprint, as I like to say. And if you're in it for paying the rent, next month ain't gonna happen, necessarily. You gotta be with it for a long term, and that's part of the problem. One of the reasons for this podcast and the book I'm working on is to shed some light the good, the bad and the ugly of entrepreneurship …and the media, unfortunately kind of mispresents a lot of stories of entrepreneurs, Rags to Riches overnight, starting an app today, a billion dollars in a year, doesn't work that way, does it?

Dave Sinkinson 21:33
I was on another interview with someone named Lori Barkman, who's she's actually called the business transition Sherpa, so she takes a lot of focus on people who are transitioning to their business. But she had this great line. People perceive it as any company that's in their lives, as the 10 year overnight sensation. And this is the thing, like most companies, by the time they get mainstream. If your company gets mainstream, they've been working on it for a long time, at least seven or eight years. I don't have any specific hard data here, but it's that kind of like zone where you're going to start seeing big successes happening, where the curve starts getting exponential. But for us, we just perceive it as, oh, that happened one day, or all of a sudden, you're using Uber all the time, or Uber Eats. You just ordered food, you know, whatever. I happen to know one of the people who started Uber Eats, like pre revenue in the United States, and he knows Travis at Uber and all that stuff and but he was, he was funny hearing it. It happened like, way earlier than I thought. It was only like, 2013 2014 and there was only one thing you could order on UberEATS, and that was the thing they were having that day. It was so funny. It was like, wow. By the time it came to Canada, it was just amazing. You know what I mean? Like, it was a much more mature service. But we take that for granted. We just don't see it.

Roger Pierce 22:51
It takes time. It takes time. And you know, my mother, favorite stud, is 50% of small businesses failed in the first five years, right? So the longer you're in it, yeah, you're more likely going to be successful. But that's not your story. Your story ends up on a very, very happy note, and briefly, maybe you can tell us you were acquired by one company that was acquired again by a bigger company, very happy ending.

Dave Sinkinson 23:13
So, we were being courted by a number of different companies. Money was cheap back then, is one thing I'll mention. And then the pandemic hit, so money was super cheap. And then the company we were acquired by a strategic competitor out of Boston called rave mobile safety. They had struggled a bit through the pandemic, where, as we had made a bit of a pivot to introduce some actual healthcare functions into our platform, and we did really well. We had the best quarter in 2021 we had the best quarter in the company's history, bringing in like a million and a half or something like that. And so we're in this incredible, huge we were doing 400% year over year growth. So by that point, the private equity that saw that owned Rave Mobile Safety said, let's buy those guys, because that our numbers are going to look a lot better. And they liked our tech too. We competed with them regularly. We would win fairly often. I'm not going to say every time, but a lot of the time, I think it was kind of this, like, win, win for the private equity group and the company buying us. And so that was interesting. So then I had a boss again, which I worked for a telecom a long time ago. So that was kind of surprising to go back to having a boss, and actually a number of bosses, to be totally frank with you, very short earn out, which was fortunate, but we stayed on even after the earn out for 10 months. And then the whole thing was acquired by Motorola Solutions for about $560 million over half a billion dollars. So big, big numbers. We helped that due diligence process and helped that transition occur. And then about three or four months into working at Motorola, we decided that we were going to close the book on this chapter of our career, and so then we walked away from it, and since then, we've had the podcast and our book.

Roger Pierce 24:51
I was going to ask you, what are you doing? You know, spending your time on now, what's, what's, what's coming up on the book and the podcast are, yeah, really well.

Dave Sinkinson 25:00
the book startup different. Find it on Amazon or basically any of the online platforms for book sales. So check it out and podcast wherever get you podcast. That's what we've been doing, mostly, so we can pay it forward. And that's why I'm here today, to just help our entrepreneurial peers maybe avoid some of the biggest mistakes we made a lot of the book is that the book is very much not like us slapping each other's backs, being like, look how great we are. A lot of the time. It's like, so here's where we really blew it. We did have some victories in there too, but it's a surprising tone. It's very honest. So we've been doing that a lot, and some mentorship through different programs in Canada and the United States, around helping entrepreneurs. So that's been really fun. And then the other thing that's happened to me recently is I had my son. Was born a couple weeks ago. I have my daughter. This is the second one. And so, you know, not sleeping a ton.

Roger Pierce 25:50
Busy guy. Well, congratulations. Great to hear. I appreciate that. I'm glad you I would do want to talk about the book, startup, different. It's on Amazon and I'll provide a link in the in the in the show notes, so it's easy for people to get there. But I want to talk a bit more about the book, because I know you talk about myths of entrepreneurship and things people can do differently. It also provides a framework for building a business from it generation to selling for millions and moving on. So can you share, like a couple of your favorite myths, maybe?

Dave Sinkinson 26:19
Yeah, absolutely. I'll say first off that the book actually addresses 33 different startup myths. There is a never ending list a startup myths. These were just the ones like we actively experienced. Just putting it all in context, it was pretty well and these are the biggest ones that we could think of, or we that we thought these would be really meaningful to exist to new, aspiring or, you know, even some veteran entrepreneurs, the three big ones I like to call out, just because the book works chronologically from the start of our company, and the frameworks we use there, like ideation, like, even, like I mentioned, we went to the bar to come up with the name. Like, that's literally where the book starts and it ends with us leaving Motorola Solutions and everything in between involves different ways we scaled our business from a product perspective, or sales efforts or HR stuff. It is, it is packed with hopefully useful pieces of information for aspiring entrepreneurs. In terms of the myths that I like the most to address, there's three that I like to get at, and I'll try not to spend too much time on this, because I can basically talk forever about this, but the first one that we kind of alluded to, which is the get big, fast myth, where once you get venture capital funding, there's this assumption that this is going to be good advice you're going to get, obviously, from venture capitalists. And again, I don't hate venture capital, but the complication here is that a lot of the advice that venture capitalists give is sort of generic in nature. Get big fast, get lots of salespeople go to market quickly, even sometimes, the mentorship you get is either too generic, or in some cases, if those mentors were in your marketing question, while their advice can be helpful, the data does also suggest that they're not great at advising you, because they're advising you on a market that didn't have your product in it. That makes sense, like because you're so new, whatever you're bringing to the table, there's complications there. So the long story short is that actually a lot of businesses end up failing. You mentioned 50% of startups fail. It's all about how you count failure. My number is a little bit higher. It's actually 70% but one fun thing about venture capital, funded supported businesses is about 75% of them fail after the fourth year, and that's usually when the funding rise out, or dries out the first sort of wave of funding. So it's not a silver bullet, but people think this is what I gotta do. I gotta go fast. I gotta get bigger. I gotta do this. Sometimes you actually just have to let your market grow and be educated by you, and over time you will achieve the success you're looking for it just it just needs time. And I think about us, we would have failed absolutely if we had had gone to get big fast. Our market was not ready for it in 2012 secondly is, for any of my product folks out there, I do, even though I'm not the CTO of my former company. I like product stuff a lot. I like getting getting my hands dirty, and I will say that one of these big myths is that if it ain't broke, don't fix it. Is the total misnomer for a lot of businesses. We were talking to a company that makes interesting computer chips the other day, like, that's that's their business, and they have this new legacy issue, which they knew was going to happen, where the board that they were making their chips on is now no longer supported by the company that makes the boards, and this is a huge problem. Yeah, they got a whole bunch of customers out there that have this tool, and now it's, this is a this is what I call legacy issue. We had something similar, where the code platform we used said, we're not going to support this in eight more months, because they got sold, and they said, See you later. And that's a monumental undertaking, like, we had millions of lines of code, and we had to rewrite them all. Actually, what you need to do as a smaller company is be aware of what's called your tech debt. Tech debt is a term for, like, sort of a catch all for where your technology will start to lag behind and you start to age. You need to address it before it becomes a crisis. If you don't, you'll end up always allocating development or. product resources to fixing tech debt issues, as opposed to innovating. And this is what makes small companies turn into crappy big companies, where they're only dealing with these problems over and over again, and they ultimately get disrupted by companies that are able to actually innovate in the market where they could no longer do that. That's one really big thing. And then the last I'm gonna say, and this is probably my favorite, is the alpha myth, and this is how we have this perception that an alpha ought to be this really aggressive type. Bang in their chest. They're fighting a war. They're in the trenches. Insert your war analogy. And the reality is that, in nature, actually, alphas are very, very empathetic and collaborative leaders, even like the chimpanzees where this term was coined, the more effective leaders of the troops were the ones who who actually built bridges and were collaborative and supported. That's hilarious to say, because we're talking about monkeys, but emotionally supporting each other, and as opposed to those who were just big, strong monkeys who ruled by fear. And in fact, the data showed that if you ruled by fear, you're more likely to get outstand as the leader of a troop. So the data is very interesting here, because there's that piece. And then secondly is that people assume that alphas get more done, like they achieve more results, but when you look at the data, it's actually a net negative effect on the business because of how toxic they are. People end up working around them. Don't talk to them, try to avoid them, pay them lip service, and generally, they make people feel worse about their work. The long game on alphas is that they're actually bad for your organization, and instead, we should try to be a modern alpha, which is an empathetic leader who works hard, listens to their employees and is more collaborative in spirit, they do way better. Companies that have empathetic leaders have better output. They tend to perform better from sales perspective. They tend to have higher retention rates. I mean, across the board, being a good alpha, in this case, vastly improves your company.

Roger Pierce 31:59
So the exact opposite of Alec Baldwin and the Glengarry Glen Ross movie. So, so dated now, but I think you talked about the alpha male and leadership roles in your talk too, that I caught a Small Business Summit, fascinating stuff, and this is the kind of stuff you're sharing in your podcast on an ongoing basis, because you're also interviewing people and talking about marketing and tech and innovation. Tell us more about what's happening in the podcast.

Dave Sinkinson 32:28
Yeah. So we like to bring on entrepreneurs. We have, like our studio, we like to have people come in person, if they can. Those, those tend to be very fun, very quick, rapid fire interviews. We've had some really great people. One Canadian great is a man named Mark Organ, who's had multiple successful businesses. He sold for hundreds of millions dollars, that kind of stuff, like very, very successful. We've had Massi Basiri from ApplyBoard, and they're one of Canada's unicorns, a $4 billion company. We have the entrepreneurs, come on, we talk to them. We try to hear about their journey, but we also try to challenge some assumptions about the startup journey and tackle some startup myths, and it's been quite a bit of fun. If anybody's interested in this sort of thing, I absolutely encourage you to tune in. Listen to a couple episodes. Listen to the newer stuff, though. Man, we did not know what we were doing in the in the early days.

Roger Pierce 33:12
It's fascinating. Yes, the startup different podcast. You can find it on a street and streaming platform near you, and make it part of your regular rotations. You're doing so many great things. I gotta ask you, though, are you investing in any companies? Are you mentoring officially, other other people? You doing that?

Dave Sinkinson 33:28
I do do some mentorship. I'm part of something called Startup Rotman. So through U of T, which is a university Toronto, it's been good for some other programs that I'm doing as well. Some stuff actually giving back at Queen's University. Will be at the Queen's entrepreneurship conference in January as well, keynoting that. So that'll be very that. So that'll be very fun. And in terms of investment, honestly, because I'm kind of skeptical of venture capital, I'm not, I'm not a great candidate for it, but we, we are doing a little bit of work with a company out west that does some tank measurement. They're called, has track there. I love it, because it's like, one of the most boring companies you could imagine. Like, the product is like, about measuring the levels of fluids into fluids and tanks, which you think, who cares about that? Wow, big business. It's a big deal, and it's very interesting. And that's been really fun because they have a big enterprise software component as well as, like, a hardware component, which I have almost no exposure to. So it is kind of fun to weigh in where I can and learn otherwise from the people I'm working with.

Roger Pierce 34:21
Good for you. You're giving so much back. I know you are, and we appreciate you. We appreciate you. That's great.

Dave Sinkinson 34:28
Honestly, it's fun, and I get a lot of satisfaction out of it. I think here's a fun myth that maybe, if we have a minute, is that a lot of people assume, after you sell your company, right, that you're going to feel incredibly spiritually fulfilled and satisfied. And I think that's partially true, but I would say, I would say that it kind of reminds me of, there's an analogy for athletes that they die twice. They die when they retire from their sport, and they die when they die. There's something about retiring or “ish,” however you want to put it, put in. Votes. I'm not retired. I still work and still do things, but that moving away from your business, baby, let's put it that way, was a very conflicting thing. On the one hand, I was absolutely delighted that we had reached this outcome, but on the other hand, I was totally devastated because I didn't get to spend time with the people that we had worked with, the people that we had helped us build our company, all the customers that we made over the years, and those great connections. Moving away from that was really, really really challenging. After I was done, I definitely had, like a void where I needed to fill it with something that was going to be definitely satisfying on a day to day basis. And so that's really where the mentorship piece comes in. And every time I get to talk to an entrepreneur, I find myself pretty fired up, just like this conversation today.

Roger Pierce 35:38
No, there you go. Absolutely. Entrepreneurs are inspiring. On that note. As we wind down, Dave, maybe you can tell me it's hard to pick one piece of advice, I'm sure. But for someone who's way back where you were years ago, starting out, or even thinking about getting into a business, but on the fence, not so sure, full of doubt and fear, confidence issues, maybe no money. What would you say to someone in that situation?

Dave Sinkinson 36:03
Do it. Try, just, try, just get out there. A lot of people have great ideas, and they sit on it and they go, I don't know if I'm the guy to do this or gal to do this. I don't know if I want to take this on or, you know, maybe it's too complicated. Look, if you can, if you believe in the thing you want to do, and you really want to have your own business, you need to get out there. And this kind of ties back to one of the early things I said in this conversation, where you don't want to pursue validation amongst your peers. You want to pursue validation in the market. And the only way to do that is by taking your idea and going out there and trying it put something together. I'd like to joke with aspiring software entrepreneurs, you need to talk to the people that have the problem, but maybe instead of actually building a full product out, show them a PowerPoint deck where you jump around or hyperlink stuff, make it look like a piece of software, just give them the idea of what's going on and see if that's worth it. And if there's interest there, then you should be continuing to pursue that. So my advice, get out there. Do it. You've got very little to lose, except for your time. But that's okay. That's kind of table stakes in this sort of arrangement.

Roger Pierce 37:07
Fantastic advice. I appreciate that very much, very much. Thank you. That's all the time we have today, but I want to thank you very much, Dave for sharing your entrepreneurial journey and experiences with us. But before you go, if a listener wants to get in touch, what's the best way to connect with you?

Dave Sinkinson 37:24
Yeah, absolutely. So you can, first off, our website, StartupDifferent.com, easy enough to find us. And then for the book, obviously Amazon or any other major online retailer. You can also find our podcast wherever you go your podcast. And lastly, if you're just looking to hang out with us on social, you can find us on Instagram, LinkedIn and YouTube. That's That's where we do the most.

Roger Pierce 37:42
I encourage you to go and check out the website. It's this beautiful, sort of animated, cartoonish.

Dave Sinkinson 37:47
That was Chris's idea, and he killed it. So, you know, kudos to Chris.

Roger Pierce 37:51
I wanted to ask you, how do you prepare all those podcast tiles with a custom animation, custom look?

Dave Sinkinson 37:58
Yeah, we have some tools. You know, honestly, this is kind of like one of like one of those scale things. How do you scale a podcast? Well, we have a few tools that we that are free tools that we found online, or that we, you know, you gotta be scrappy, especially when you have very limited revenue first for the podcast, like I would love to have, you know, a Tim Ferriss level if you want to advertise on us, to cost 100k an episode, or something like that. But I don't think that's gonna happen for a little while. So, you know, for now, it's you just get scrappy, you find ways to make it work. And for us, yeah, we've just got a couple tools that we use that make it real quick.

Roger Pierce 38:28
True to form. I love it. Well, thanks again, Dave, that's a wrap for this episode of The unsure entrepreneur thanks for listening, and we'll see you next time.

Outro 38:37
That's it for this episode of The unsure entrepreneur podcast. Thanks for listening. Be sure to subscribe so you don't miss other candid conversations with small business owners, and be sure to check us out at unsure entrepreneur.com you.