‘Dark tales of Silicon Valley’ from a St. Pete entrepreneur who turned failure into success
December 15, 2017 | Tampa Bay Business Journal
Chad Nuss has missed at least three opportunities to turn startups into billion-dollar ventures, but Nuss, co-founder and chief revenue officer of InsideOut, a sales innovation lab in St. Petersburg, says he has no regrets.
“Innovation is the byproduct of failure,” Nuss said at the Tampa Bay Innovation Center’s Dec. 12 Tech Talk.
It was the misses and failures to seize opportunity early on that ultimately led to the creation of InsideOut, and it was the approach taken by the founders of Airbnb and Netflix, among others, that turned what could have been failures into market leaders.
Nuss and Christina Cherry, InsideOut co-founder and CEO, are Silicon Valley veterans who launched InsideOut in early 2016 with about 20 employees. The company now has more than 100 workers in two offices and is approaching $10 million in revenue.
InsideOut works with teams from technology firms to develop more effective sales tactics.
“A sales innovation lab deals with failure every day,” Nuss said. “We all fail. ...There’s always something that inspires me when I fail, to try to continue forward.”
Nuss said he learned lessons from his Silicon Valley startups.
Evolve. It was the mid-1990s and Nuss was 24 years old when he started Silicon Reef, a web development firm with more than 200 employees that built websites for Fortune 500 companies. As the internet grew, an investor who eventually bought the company wanted to create an app that allowed clients to manage their own websites. Nuss sold the company for $30 million, but he still counts it among his personal fails, because he would not let go of the original product vision, even while other companies and content management tools were being developed.
“Because we stuck to an old product vision of where the money was, we got beat and beat bad,” Nuss said. “One of the biggest fails I had was when you believe in something so much you don’t want to let go of it. ... We could have been a billion-dollar company.”
Embrace the moment. His next company was Launch Project, which beat SalesForce.com to the market with customer relationship management software. The software and services firm, with 100 employees, was acquired by Rainmaker Systems in 2005.
“One of the challenges and one of the fails was I don’t know if I embraced the moment I should have embraced, meaning that maybe I should have said no to Rainmaker and raised money or done a different tactic. My fail was not recognizing the moment,” Nuss said. “Another billion-dollar miss for Chad.”
Get on the same page. Nuss joined Rainmaker, a technology services company, as an executive vice president. The company was growing rapidly, but the CEO wanted to become a software company. The company tried to do too many things for too many people, Nuss said.
“This was a huge fail. When I joined, [the stock] was about $1.50 and it went to $15 and then literally the bottom fell out, because we didn’t get on the same page,” Nuss said.
Nuss also shared what he called "dark tales” about Silicon Valley companies that could have failed but didn’t.
Airbnb. CEO Brian Chesky created an online marketplace for bed-and-breakfasts in 2008, at first compiling information manually and with just 50 customers a day. It wasn’t until he started talking to the customers, both those with places to rent and those looking for places to stay, that he came up with online payments, photos and reviews, “handcrafting” the best experiences for his customers. “Now, he’s a $30 billion experience company, not just a rental company,” Nuss said.
Netflix. Initially a logistics company that mailed movies to customers, CEO Reed Hastings envisioned internet TV as the future. He moved the company forward by stressing culture and employees who fit that culture. “The same people who were the logistics people who were moving things around, turned into content people,” Nuss said. “He made culture so important it became their product.”
Other companies, such as PayPal, Evite and Survey Monkey, “let the fires burn,” Nuss said. When problems such as customer complaints emerged, they didn't get distracted by them, but stayed focused on product development that solved the problems quickly.
All thought creatively about their problems to come up with innovative solutions that turned what could have been disasters into success, Nuss said.