Syracuse.com: Venture Capitalist Paul Singh

Syracuse.com: The future belongs to entrepreneurs, says venture capitalist Paul Singh

By Stan Linhorst | slinhorst@syracuse.com

Upstate Venture Connect brought venture capitalist Paul Singh to Central New York, the Mohawk Valley, and the Capital District as part of the Upstate Tech Tour.

Venture Capitalist Paul Singh started his work life as a bricklayer, building patios in the suburbs of Washington, D.C., by day, attending George Mason University in the afternoon, and selling cars in the evening. Eventually, he became a technology entrepreneur.

He learned how to code and during one 12-month period, he started a company every 30 days. Most failed, and the lessons he learned spurred him to start more.

Now, at age 35, he is a venture capitalist and angel investor. He’s on a North American Tech Tour, traveling the nation in an Airstream trailer, telling entrepreneurial stories and looking for investments in small to mid-size cities like Syracuse.

Recently, Upstate Venture Connect brought Singh to Central New York, the Mohawk Valley, and the Capital District. Singh squeezed in a CNY Conversation at Le Moyne’s Madden School of Business. Later, in a blog post from North Carolina, where a presenter talked at length about innovation, Singh wrote:

“Having visited 35 other cities on the tech tour this year, it seems to me that everyone keeps talking about innovation as if it’s some sort of treasure hunt or silver bullet. As if talking about it will get more people to somehow do it.

“Instead of talking about innovation, we should be talking about entrepreneurship. The real question for communities across the country ought to be, ‘Why aren’t more people starting companies?'”

What advice would you want any entrepreneur to know?
Two things come to mind right away.

Prior to the Internet, I think experience was really a function of how many gray hairs you had on your head.

Before the Internet, people would say: I’ve been in this industry for this many years and that’s why you should listen to me. Right?

After the Internet came to places like Syracuse and D.C. and everywhere else, I think experience is a function of the number of things you try.

To anybody thinking about being an entrepreneur: Just go do it. Stop asking for advice.

That leads me to the second thing: Asking for advice is lazy is because you can’t build a business or career or a life on everybody else’s opinions. You shouldn’t ask for advice. Instead, you need to be good at extracting information.

The third thing I would say: Unfortunately, we have Hollywood-ized startups. Somehow, because of like TV shows and Shark Tank and all these things, we have made it so sexy to be an entrepreneur that we’ve kind of overcompensated and made it sound like the only way to be an entrepreneur is to start something. That’s just not true.

When anybody asks you if you’re an entrepreneur, you should always raise your hand.

There was a time when if you had a degree you could probably feel sure that you had a job. The reality is today, we should celebrate being an entrepreneur, entrepreneurial thinking. The future belongs to the entrepreneurs.

I guess maybe the fourth thing I would say is: I have this theory – I drive around in a truck now and fortunately you end up thinking a lot while you’re driving – I have this theory that I’ve come up with. It has no basis in any sort of data. But I have this theory that a thousand years ago, power belonged to those people that owned the dirt. So if you owned the dirt, you could say: Hey you can use this dirt, and I have the power.

Then, a hundred years ago, power belonged to the people that had all the money.

Ten years ago, power belonged to people who knew how to use technology.

And I believe that today, power belongs to people that understand that we live in an attention economy. In an attention economy. When you get a 30-minute meeting with somebody, you don’t get 30 minutes of attention. You have to earn all of your attention every 30 seconds. It’s the unfortunate truth. We’re all busy.

The key to entrepreneurship is to trip and stumble forward.

That leads to failures. Right?
I’ve been fortunate, not only growing up on both sides of the ocean, but also to travel a lot for work in the U.S. and outside the continent. Sometimes, I don’t think people realize how lucky we are in the United States to live in a society where failure is something that our laws allow us to come back from. Not only that, but we’re also lucky to live in the United States where failure is not a stigma.

In the United States, it’s a stepping stone to success.

It’s a unique view in the world.

In Japan, for example, where family respect is important, the most respectable thing you can do is work for a multinational company. Go to places like Australia, where from a cultural standpoint, nobody wants to really stand out in the crowd. You go to some places in the world, where the poverty and the income levels are so low and the laws are so strict, that if you did start something and it failed, not only would you not be able to ever have a job again, but your family might even shun you. Because it was a failure.

We’re lucky in the United States. So for your readers: Whether you’re thinking about starting something or you have started, just be recklessly moving forward, trip and stumble forward. Success really is a function of the number of things you try. There are not silver bullets.

In that statement, there’s hope. Right?

One of the things I say all the time is: You can now build a billion-dollar company wearing a T-shirt. The reason I say that is because there was a long time where what you looked like mattered, what your skin color was mattered, whether you’re a man or woman mattered, whether you’re wearing the right clothes mattered, where you went to school mattered. But today, with the Internet, it’s just the quality of your work that matters.

What advice would you give Central New York’s civic, political and business leaders to improve the entrepreneurial eco-system?
There are three main constituents of an entrepreneurial ecosystem.

There are the entrepreneurs. There are the investors. And then there are the community leaders.

First and foremost, community building and company building are both important, but they’re not the same.

If you want to make your community better, create more events that are inclusive and open. Plain and simple, create more inclusive events. The measure there is going to be people in seats.

On the company-building side, we need to create more curation. Once a company has raised a dollar or gotten a dollar of revenue from somebody they don’t know, they need safe places to meet fellow entrepreneurs that have also found a dollar of revenue from someone they don’t know.

The problems are so different after you’ve found that revenue.

The No. 1 thing entrepreneurs can be doing to make this ecosystem better is to just keep building their company. That’s it. It’s a very unsexy thing. Be a role model for other entrepreneurs. Create some jobs.

Investors? Start writing checks. They don’t have to be inside your neighborhood. Believe it or not, you can make your community better even if you’re investing your money in a company that might be in Albany, or might be in Chicago, or might be in San Francisco. Either way, just start writing checks.

For the community leaders, you gotta make it easy to work. Make it easy to be here.

If you’re a mayor or an elected official here in Syracuse or wherever you’re reading this, shine the spotlight on entrepreneurs. Show up. Go to the events.

A lot of entrepreneurs don’t realize that they’re actually important.

The technology industry has not done itself any favors. We make technology sound like magic or something. The reality is: Every company is a tech company today.
Too many people think entrepreneurs and technology-enabled companies have little income. The stereotype of an entrepreneur is somebody living on ramen noodles. Right?

If you look at the data across all the portfolio companies that I’ve ever invested in, there are two facts, and the data doesn’t lie.

No. 1, technology-enabled companies pay their employees 30 to 40 percent more in whatever geographic region we’re in. That’s true all over the world.

No. 2, for every technology-enabled job we create in any city, in any country, that technology-enabled job will create another four to five local sector jobs. That’s because the higher income that goes to these people gets spent – they’re getting extra haircuts, they’re going out to dinner, they’re buying their kids more books. That’s the basis of economic development.

What happens in the entrepreneurial tech sector here in Syracuse and more broadly in New York and even more broadly in the United States, will determine the outcome for every other industry.

In many ways, what we’re seeing now in the terms of the rise of entrepreneurship in this decade, this is the equivalent of the Industrial Revolution in the 1800s.

On the Internet, it’s just the quality of your work that matters

Tell me about early influences and your entrepreneurial path.
My parents flew into the U.S. and I was born here and had U.S. citizenship right away. But we spent half the year in India and half in America.

Growing up in an immigrant culture helped me. Immigrants tend to be entrepreneurial. When they move to countries like the U.S., they are typically not coming from wealthy nations, and they’re typically moving to countries where there is no support system for their culture.

Up until the mid-90s, I was making patios in the morning, going to George Mason University in the afternoons, and selling cars at CarMax at night.

People would show up at CarMax and buy expensive cars in 15 minutes with cash. I wanted to figure out how they doing that.

It turned out a lot of those people worked at a place called America Online, which happened to be in Ashburn, Va., where I was growing up. I begged and borrowed my way into an internship at AOL and learned a lot about technology. The hardest thing for me to wrap my head around when I worked at AOL was that things that you couldn’t touch had value.

Making a patio for somebody, I would charge them a per-square-foot rate. At the end of the work day you could see a physical thing. You could step on it.

At AOL, at the time, we were selling Internet access, you’d pay X dollars a month to dial into the server. You were paying a monthly fee for something you couldn’t touch.

As I learned more, my side hustle became hosting people’s websites while I was at George Mason University.

I was a computer engineering major. I should have graduated in four years, but I ended up graduating in 2005, after seven years of part-time-ish schooling.

I tried to start little sales companies.

Tell me about that.
It’s almost embarrassing to say what we tried to do in college, a buddy and me. We tried to sell people performance products for their cars. We would go word of mouth through the school system and sell this stuff. We learned a lot. The company eventually failed, because we learned very quickly the cheaper the price the harder the customer service. We ended up doing that for a year and shutting that down.

A key lesson I learned from my earliest failed companies: The cheaper the price is for your product, the more likely your customer-service costs are going to be higher.

I think that’s probably just because when you have a cheaper price on something, you’re attracting very price-sensitive buyers. Those price-sensitive buyers tend to be looking for the cheapest deal, not the best product.

So the inverse of that is, somebody paying 5 grand a month for whatever it might be, they still expect a lot, but to get to that price point, in theory you’ve created something that is bullet-proof enough, that you’re not dealing with customer-support issues.

As an adult, what was your first leadership role, and what did you have to learn quickly?
To be honest, I don’t think I actually figured that out until maybe about a year and a half ago. Which is probably a little embarrassing to say. (Laughs)

Figured what out?
The leadership side, what it really means to be a leader. One of the things I tell the people I fund and the founders I fund: The difference between a founder and a CEO is that a CEO understands that she has three core responsibilities.

Don’t run out of money.

Always be selling.

Always be attracting and hiring the best people you can.

Those are the three core functions of any CEO. And if you want to make that transition from being a founder to being a CEO, you’ve got to do those three core functions. And maybe even more importantly than that you’ve got to learn how to communicate and inspire people.

To be a leader, you’re asking people to follow you and they could be following you off a cliff, or, hopefully, to where you build something bigger and create a lot of jobs.

To answer your question directly, I don’t think I figured out the leadership side until a year and a half ago.

How did you turn that corner?
I think I’ve always been a slow learner. (Laughs) This is ridiculous to even admit publicly, but in college, I failed calculus 1 three times. Not that I use calculus everyday today, but it took me three semesters to figure it out, not because I was skipping class. The way I think about stuff it takes me a while to get my head wrapped around all the concepts. I’m a visual thinker. I remember when we were learning Calc 1, I just could not understand how derivatives work.

Once I got it, you couldn’t stop me. I passed the class with flying colors the third time around.

Tell me some stories about your startup companies and how you made money.
Well, I made some money. But I then lost it all.

The earliest one that ended up going anywhere, was a hosting company. This was the early days of the Internet – people didn’t really know what anyone was doing. So back in the late 90s, we started hosting people’s websites for like $8 a month. That was called Info Relay.

We got a ton of customers. It was good timing, and we happened to be in the right place. The buildings that we had jumped into, had something like 50 percent of the world’s internet traffic running through them. We ended up getting a lot of customers just through that. It was pure luck.

You said you lost money?
Yeah. In 2008, I was overexposed personally to the public markets when it all failed.

I wasn’t out on the street or anything like that. But you go from being wealthy and being able to not worry about anything to saying: I have to get a job again.

In 2008, there were two things that happened.

One obviously was the crash. The other thing that year: I committed to learning how to code. There was this language on the Internet called Ruby on Rails.

I decided I was going to learn how to code and figure out this Ruby on Rails that everybody was talking about. Don’t ask me why, but I decided that I was going to release one new product on the Internet every 30 days. And I would do it all with Ruby on Rails. And that’s what I did.

I learned a lot that year. Most things that year failed. One of the things I created for example, was a forum for cyclists. Literally a forum for bicyclists to talk to each other. It failed spectacularly because nobody knew it existed. But the learning experience was interesting.

One of the companies really took off. I started something called MailFinch. I had noticed that whenever real estate agents would sell a house they would mail a flyer to the neighborhood saying, Hey, I sold your neighbor’s house. Think of me when you’re ready to sell.

I called some of these real estate agents and I asked: How do you do that today?

They said: Well, we have an intern just print it out and we just mail it out to everybody on that block.

I said: What if I just gave you a way to upload the PDF, give me the address of the house you sold and I’ll just hit the U.S. Postal Service API, grab all the data, and you just pay me to do it. Within 30 days, we were doing something like 30,000 of these a month. It was crazy.

We ultimately had to shut the thing down, because the margins were terrible. With that one, I learned a lot about margins very quickly. In a world where postage prices increase, your margins are going to get smaller unless you raise the price, which is not the easiest thing to do for customers.

So I ended up shutting that down.

The point is, I did that for an entire year.

So if you can visual this, in 2008, I’m launching something new every 30 days. Writing blog posts about it and getting to know people because people would read it and say: I’m doing something like this, too. Check it out.

This is how I stumbled into becoming an investor. A lot of the products I made would bring people out of the woodwork. For example, when I made MailFinch, anybody working on APIs with the U.S. Postal Service would do a Google query, find my blog post and email me.

I ended up not only picking up a few consulting gigs, but I also ended up finding interesting people to invest in.

CNY Conversations” feature Q&A interviews about leadership, success, and innovation. The conversations are condensed and edited. To suggest a person for CNY Conversations, contact Stan Linhorst at slinhorst@syracuse.com.

No Comments

Post a Comment

Comment
Name
Email
Website