Jim Holtzman is a senior operational executive with over three decades of experience as CFO/COO/CAO and CEO, including six successful startups and turnaround experiences. We, at Catapult, are lucky to have him as Entrepreneur in Residence. Jim joined our team in April, and has been advising our startup community ever since - sharing generously his work experiences, insights, and startup life lessons.
Jim's work history has taken him to various companies, in various sectors, around the country. He held roles in several successful early stage businesses that include Fieldglass, Inc., MFS Communications and Cognitive Concepts, Inc. in the Chicago area, iPhotonics, Inc. in Maryland and Prognosis Health Information Systems, Inc. in Texas. Most recently, he was CFO of Kapow Events, Inc. based in Chicago.
This background has given him a unique insight into the challenges that early/mid-stage companies across multiple industries, like those at Catapult, face when developing and scaling their businesses.
We sat down with Jim to discuss his past experiences and benefit from his lessons learned - including "love your customer" and "you won't win on best product alone." What Jim didn't reveal, however, was the secret to how he manages to work tirelessly and still find time to run 2 marathons a year, attend theater and concerts, and travel!
Can you describe your first entrepreneurial experience?
I sold seed packets door to door, but I was only eight at that point. My second experience was additional proof that most of my life has been spent in the status of “better lucky than good...” I fell into a very lucky situation where I had been supporting a guy at MCI who was recruited to MFS Communications back when it was two years old and only $20m in annual revenue. Nobody mentioned to me that there is risk in a startup, but they also didn’t mention that this one was soundly backed by Kiewit Development Group and so the financial risk was minimal. The regulatory/execution risk was another thing entirely. It was a great experience I was a part of as my unit grew organically from $20m to $525m over six years. It was a bumpy, grinding, painful ride. But it was an amazing experience and a terrific learning environment.
Reflecting on your own startup experiences, what does it take to be a successful entrepreneur?
It takes focus, drive, and the willingness to put in whatever it takes (“all it takes is all you got...”). The most important strength though is the ability to identify, assemble and lead excellent people as they bear the load of growing the business through what will always be very “interesting times.”
What is the best startup/entrepreneurial advice you ever received? What was the worst?
Best advice: It really is mostly about the people. I once heard a guy from FBR Ventures give a very good talk. He offered two major pieces of advice I have never forgotten:
1. Always hire smarter than you if you can (it takes courage and self-confidence). If you hire someone with 125% of your ability and (s)he hires someone with 125% and so on, the place will have much higher odds of resounding success. If you hire at 80% of your ability and (s)he hires at 80%, etc., you are guaranteed to fail. Entrepreneurs frequently “get” that. A lot of people don’t.
2. As you move into growth phase and have to add people quickly, you are assured of making bad hires (don’t fit the role, not able to function well in unstructured environments, etc.). There's no way to avoid it. Identify them early and move them out with sensitivity and dignity, but move them out quickly. You don’t have the time to wait and see how things develop.
Worst advice: “It is a land grab! Don’t worry about profit or cost structure yet. We need to add customers ahead of the competition no matter the cost.”
What are the greatest challenges facing growing startups (like the ones at Catapult)?
For most it is immediate and tactical: Money is the lifeblood of an early stage company that allows it to execute on its plans and goals. Initially money is not as critical as everyone pitches in, usually without a paycheck (which is unsustainable). But ultimately, in order to prove out most concepts and, more importantly, to allow them to execute quickly in a competitive environment where new alternative ideas are quick to develop, money is necessary to build a product that will show well in the market and scale. In a competitive money market, even one as frothy as this one is showing signs of, there are plenty of contenders.
Longer term risks are on the execution side - getting too hung up on how good your product is versus how you execute your plans and how you scale effectively in the market. There are many glaring beacons on the dead company/product trash heap that brought a better product to the market and failed to build a solid foundation around it, losing to its poorer performing competitor. Foundation includes appropriate levels of sales, technology, operational processes, brand development and other elements of a business execution strategy in the marketplace. You won’t win on best product alone. Many of today’s innovations have fairly narrow moats at the start and therefore have very important execution tasks ahead of them to ultimately succeed in the market.
What mistakes made and lessons learned you can share to help young founders?
There are so many! The two “risks” above are a big part of my lessons over 25 years of startups, a variety of exits and couple of painful failures and/or turnarounds. Probably the largest lesson was to love your customer. Someone said to me just the other day, I find that those who are most successful are those who are fanatics about their customers versus those who are fanatics about their products.
I learned that lesson in spades in one of my "prior lives." My philosophy (and admittedly very inexperienced) was more “you can provide barely good enough service so long as it costs more to move than to live with it.” If anyone has tried to get customer support for software these days, you have probably lived that experience in all capital letters.
My experience in many prior lives, but one in particular, showed me the benefits of being a customer fanatic and “showering the customer with love." The more they like you, the more they will become your best sales team. That said, try not to forget the old adage: “Make sure that you give the customer everything (s)he needs and then some. But if you try to give the customer everything (s)he wants, you will put yourself out of business.”
What do you do in your spare time?
I attend 25 – 30 theater productions a year (subscribing to 4 theater groups, plus odds and ends) and I go to many concerts each year at both large venues and smaller more intimate settings. I travel extensively, usually on weekend jaunts and occasionally longer. I read like crazy. I run at least two marathons a year. And, I build fine furniture in my spare time in my basement shop...
What attracted you to Catapult?
What a great opportunity to offer support and assistance where it is helpful to a bunch of smart, passionate, fun people.