June 10, 2016 – Jake Winebaum (https://en.wikipedia.org/wiki/Jake_Winebaum), founder & CEO of Brighter (www.brighter.com), a Saas-enabled dental marketplace, has been a serial entrepreneur for 35 years and throughout his career has been responsible for many successful companies. Along the way, there have been many pivots and adventures.
On this first episode of Season 2 of Chat with Champions, Jake takes us on a journey from his first startup in college to his big idea to disrupt the healthcare industry as Brighter delivers on its mission to provide transparent access to dental benefits for consumers. Brighter’s investors include Navin Chaddha/ Mayfield, Bill Gurley/Benchmark, Stewart Gollmer/Tenaya and Gabe Ling/General Catalyst. Jake is a self-proclaimed accidental entrepreneur who co-founded LA-based incubator ecompanies, which resulted in successful startups such as Jamdat, Boingo Wireless, and Business.com, where he served as CEO. In this podcast, Jake shares his key learnings, how hiring the right people is critical and why it’s necessary to have three careers.
The full transcript is below.
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Jake on how to define an entrepreneur:
You can be an entrepreneur for yourself or you can be an entrepreneur for someone else and I’ve sort of looked at every job I’ve had as kind of an entrepreneur, whether I’m working for a big company, which I have for a good part of my career, or working on my own.
That’s the other part about serial entrepreneurs. One would get the impression from that term that it’s a constant and repetitive series of companies. What I’ve found in each company, the learnings are completely different. It doesn’t get easier with each successive.
Jake on what it takes to start a company:
Starting companies is really hard, it definitely takes a lot of persistence. Most of the time it’s not really fun. It’s a lot of hard work so you’ve really got to have it something that’s interesting, that’s a novelty that keeps you learning. I think life should just be one long learning exercise.
I learned a lot about preserving cash, learned a lot about persistence, learned a lot about patience. If you can outlast your competition you can have success.
Jake on knowing when it’s necessary to pivot:
There’s never been a company that I’ve been involved with that hasn’t had several pivots that have occurred at near death moments. At those moments you really have to be able to have everyone believe in the direction you’re setting for the company.
Jake on the importance of culture:
What I’ll try to do is by example, by the types of people we hire, by the types of projects we do to set that example and that culture without really ever having to really truly communicate, “This is our culture. This is what we stand for.” My assumption is that if we’re doing the right things, we’re consistent, we’re transparent, we’re communicating clearly.
|Navin:||Welcome back to Chat With Champions. I have the pleasure of hosting Jake Winebaum who is a serial entrepreneur, founder and CEO of Brighter. Jake has been an entrepreneur for 35 years. He started his first company while in college called Same Day Fish. After a successful career in publishing, he started and ran all of Disney’s internet properties. In 1999, he founded e-Companies, an LA based incubator that was responsible for many successful companies including Jamdat, Boingo Wireless, and Business.com where he served as CEO.|
|We partnered with Jake in 2011 to support his big idea of disrupting the health care industry and have been through many pivots and adventures which I’m sure he’s going to talk more about. Jake, welcome to the podcast.|
|Jake:||Thank you, Navin.|
|Navin:||Let’s start by you sharing your entrepreneurial journey. It has been a long career, 35 years, once an entrepreneur, always an entrepreneur. I’m very sure our audience would love to hear what that journey has been like.|
|Jake:||Oh yeah, sure. It started, I think, with my dad running his own company. I kind of got the impression it was really nice to be your own boss. Pretty early on I knew I wanted to run my own companies. I first got started with Same Day Fish which was a company I started when I was working on some commercial fishing boats off the coast of New England. This was when I was still in college, during the summers. I saw that the fish that we caught, that was brought into this fisherman’s cooperative, took four days to get back to the restaurant that was at the edge of the harbor.|
|I said, “Wow, that’s a perishable. That’s taking too long. We could fillet the fish and deliver it straight to the restaurant.” That began a one year journey. I left college for a year to do that. It was exhausting. I learned a lot about cash flow, I learned a lot about supply chain. Ultimately, I went back to school, got my degree at Dartmouth and started in the publishing industry. First, at Fortune Magazine, then at Time Magazine, then at US News and started my first magazine called Family Fun in 1992. Sold the magazine to the Walt Disney Company, and then in 1994 started their internet group.|
|That was a big start-up within a very big company, but it was surprisingly entrepreneurial. You can be an entrepreneur for yourself or you can be an entrepreneur for someone else and I’ve looked at every job I’ve had as an entrepreneur, whether I’m working for a big company, which I have for a good part of my career, or working on my own. In 1999, I partnered with Sky Dayton, founder of Earthlink, to start one of the early internet incubators. We did that right before the markets crashed. We got a number of companies started and a number of them survived and were very successful; Jamdat, Boingo, Business.com which I ran, and I learned a lot during that period. That was sort of the nuclear winter of Web 1.0.|
|I learned a lot about preserving cash, learned a lot about persistence, learned a lot about patience. If you can outlast your competition you can have success. After we sold Business.com, I started looking at the healthcare space. It felt like it was an area that had yet to really have the influence of technology and consumerism that the rest of service industries did. It took us awhile to figure out what the right entry point was. That’s when Navin joined us as an investor, actually in our seed round, and it’s been quite a journey ever since. We’ll talk about that more in a bit.|
|Navin:||Yeah, it really has been, right? In Silicon Valley and as VCs, we name people like you as serial or repeat entrepreneurs. Would you say you’re a serial or a repeat entrepreneur or is there a better term to describe you?|
|Jake:||Serial is more often associated with serial killers which have a repeat pattern of pathological behavior, so maybe there’s some of that. Really, I’m more the accidental entrepreneur, the random walk. I look at the world every day and look at things that maybe could work better. I often play around with those ideas for a while, see if there’s a possibility of a business there. My dad, a big influence on me, said you have to have three careers in your life. As an entrepreneur, it’s a lot easier to do. You can basically create your own careers and that’s what I’ve tried to do, try new things, not necessarily go back to the well and try something in an area that I’ve tried before, try to keep it interesting.|
|Starting companies is really hard, it definitely takes a lot of persistence. Most of the time it’s not really fun. It’s a lot of hard work so you’ve really got to have something that’s interesting, a novelty that keeps you learning. I think life should just be one long learning exercise.|
|Navin:||Right, I completely agree. My feeling is running a start-up is like running a marathon, it’s not a sprint. The difference is it seems like you’ve been running not only a marathon but multiple relay races because you’ve been shifting industries that you go after.|
|Jake:||Well, that’s the other part about serial entrepreneurs. One would get the impression from that term that it’s a constant and repetitive series of companies. What I’ve found in each company, the learnings are completely different. It doesn’t get easier with each successive business. If you go into a new industry you have to learn entirely new things. In healthcare what you learn pretty quickly is, one, it’s hyper-local. You typically will go to a provider within a very close geography of your home or your office, so creating a network of providers requires a lot of density of providers. That’s a challenge in itself.|
|On the patient side, the challenge is getting to patients at their time of need. Reaching them is very difficult to do. You need to create the kind of marketplace that we’ve created in dental. You need to create critical mass. The way we’ve chosen to do that is to partner with the large insurers and basically provide them a software platform that allows them to seamlessly connect patients and providers, give them the transparency and consumerism that these consumers have become accustomed to in every other aspect of their lives.|
|Navin:||One of the beliefs I’ve always had is that companies are all about people because people make products, products don’t make people. Having done this for so long, what do you look for in people?|
|Jake:||I look for someone who’s going to be persistent, who has shown a level of grit in their past experiences. It doesn’t necessarily have to be the industry that we’re attacking, it could be any aspect of their life where they’ve overcome a challenge and ended up succeeding in that challenge. When I interview I like to focus in on those things, those challenges, the hardest things that they’ve had to deal with and how they’ve overcome it.|
|If I’m interviewing a sales person I want to hear about the hardest sale that they’ve made. If I’m interviewing an engineer, the biggest challenge … I’m not looking for a quick win. You hear a lot about companies that have succeeded quickly to a quick exit. Those are by far the exception. The rule is, generally, you’re going to be at this for 6-10 years. You better love what you’re doing, you better be patient and persistent, you better be able to deal with adversity. There’s the trough of sorrow, those moments where everything looks hopeless. Because you’ve persevered in the past, because that’s in your personality and your nature, you’re going to keep at it.|
|Navin:||Got it. What if you get it wrong, what do you do then?|
|Jake:||In terms of the people, generally people know if it’s not a fit. I’ve rarely ever have to fire people because if you’re honest and the fit isn’t there, people will generally recognize that and find a better fit.|
|Navin:||Got it, got it. Another belief I have, having invested in start-ups over the years, is that focus is everything in start-ups because start-ups die of indigestion, they don’t die of starvation. What is your view on focus for a start-up?|
|Jake:||Oh, I agree, that’s my favorite statement actually.|
|Navin:||Did I take it from you or is it mine?|
|Jake:||You might have. There’s another one that goes with that. It’s a lot harder to take something off a list than to put it on a list. Start-ups typically have too long a list of things that they’re trying to accomplish. I’m much more a believer in trying to nail a few items on a list and then move to the next items and not put any attention or focus or discussion on the items that are on that priority list. When you’re a start-up … Really, a start-up can be a company that’s one-year-old, it could be a company that’s eight years old that hasn’t reached that terminal velocity yet. Having everybody in the company know what the most important things that the company’s working on and devoting all the energy of the against those things is really key to maximizing what you can accomplish, on limited resources.|
|Navin:||Got it. We talked about people, we talked about focus. What do you think is a role of setting a culture early on in the company? How important is that for the eventual success and the values you create?|
|Jake:||I’m not a big person in defining a culture and talking about a culture. I’m much more about letting that culture establish itself and having everybody basically be true to that culture. I’m not a guy who will stand up and say, “The culture of my company is X, Y, and Z.” What I’ll try to do is by example, by the types of people we hire, by the types of projects we do to set that example and that culture without really ever having to really truly communicate, “This is our culture. This is what we stand for.” My assumption is that if we’re doing the right things, then we’re consistent, we’re transparent, and we’re communicating clearly. Often people understand what that culture is and they embrace it, and I’ve had really good luck with teams that have been together for years, they can they inculcate that culture into the folks they hire.|
|Navin:||What would you say is the importance of nimbleness in the culture? My belief is dinosaurs never survive and when you’ve gone through ups and downs, you go through pivots, how important is a culture of nimbleness?|
|Jake:||I think it’s critically important. There’s never been a company that I’ve been involved with that hasn’t had several pivots that have occurred at near death moments. At those moments you really have to be able to have everyone believe in the direction you’re setting for the company. Usually those occur after something you’ve tried didn’t succeed and you now need to try something else or a portion of what you tried didn’t succeed. Being able to move a company, not like a battleship but like a super nimble boat, into that direction that you as the leader of the company, with your team, have determined, that is our only hope of success in this thing that we’re now doing.|
|Those pivots, if you read … I’ve just finished Elon Musk’s book, they’re part of almost every successful company. It’s very rare that a company’s ultimate success is the product that they originally set out to build.|
|Navin:||Got it. Given how long you’ve been at the entrepreneurial side of things, what would you say has been the best piece of advice you’ve received over the years? Does it keep changing or does it come down to a few basic rules that apply all the time?|
|Jake:||I think it goes back to that thing my dad said about having at least three careers. The reason that’s so important is that the only way to be able to maintain the intensity required to be successful in business or as an entrepreneur is to keep learning, and to have that appetite to keep learning and discovering new things. As long as you are intellectually stimulated, as long as you are challenged by what you’re doing every day, it’s possible to keep going through those tough moments, it’s possible to keep the company moving forward.|
|I’ve found that for me the money that you make or the public acclaim or any of that is completely incidental to the fact that you’re learning new things and you’re changing things through your learnings for the better.|
|Navin:||Got it. Switching gears, you’ve been involved with so many companies and a lot of VCs and investors, what would you say is the ideal role of an investor board member for somebody as seasoned and successful like you?|
|Jake:||That one is very simple for me. Investors really show their colors when times are bad. As I said before, it’s inevitable that a company is going to go through some very rough patches, patches where I think Horowitz put it in his book, “The WFIO moments, We’re F*cked It’s Over,” moments. If your company doesn’t go through three or four of those it’s not really a company. That’s when your investor’s true colors and true worth comes through. What I’ve found is a great investor keeps a steady hand, keeps your confidence up, helps you through those moments and stays with you and helps you through those moments. That’s really where I’ve gotten the most value for my investors.|
|Navin:||That’s great. In parting, what would be the piece of advice you would have for the entrepreneurs who will listen to this podcast?|
|Jake:||The first is have reasonable expectations in terms of the time frame. It’s going to be highly unlikely that whatever it is you start is going to yield a successful result in anything under five years. You better love what it is you’re doing; you better be prepared financially. Particularly if you’re a young entrepreneur and you’re doing it with your own money, what people often don’t realize is it’s a double drain on your finances. First is the money that you and your friends and your family put in. The second is the foregone salary because you’re not going to get paid for a while.|
|People don’t really realize the true cost of a start-up personally. The second part is, in terms of the persistence, you will be questioning yourself more often than you’ll be patting yourself on the back for doing it. You better have the confidence and more importantly just the persistence to just see it through, see it through to the end. Whatever that end is. It could be a successful end. It could not … Too often people give up right before there’s an opportunity for success. That’s because they really haven’t prepared themselves for how long a journey it’s going to be.|
|Navin:||Got it. Jake, I know you’re very busy at a board meeting today and are just going to head back. I really want to thank you for the time. It’s been a pleasure speaking with you.|
|Jake:||Thank you, Navin, I really enjoyed it.|