At DoubleHorn, we value learning and leadership. We believe the greatest ideas can come from anyone at any level. That’s why we asked our intern, Dusty Lorenz, to sit down with our CEO, Tab Schadt, for an exclusive interview to trade perspectives and gain words of wisdom from our very own Austin business owner.
Dusty: You pursued an education in finance and economics. Was it always about being a CEO or starting your own company?
Tab: You know, I think entrepreneurship was definitely there. I think entrepreneurship was definitely something that was always in me, like being creative or thinking of innovative ways to do small things in a better way. To say I was focused on being a CEO, not so much. That being said, the financial analysis was always my lean. That’s what drove the economics and the corporate finance.
D: You’ve found success with DoubleHorn, but do you have any other ventures in the past that have failed you? What’s your approach to failure?
T: Do not let one failure pass that you don’t learn from because there are more of those than there are wins, undisputed. You really have to look at each failure and understand why, and I think that’s the challenging part for a lot of people because they don’t ask enough questions about the failure. You have to pull something from it, and if you do, you can feed it back into the business. And what I’ve learned is, when you feed those back into the business the right way, they’re invaluable, because you can’t buy them. It’s just wisdom. That becomes the most valuable thing in any business because everyone’s telling you what to do, but it’s what not to do.
D: So trial and error is just part of the process?
T: You’ve got to swing for the fences, or you’ve got to go out and take the chances, take the risks. It’s not for the faint of heart, but sooner or later you’ll get there. You just have to constantly improve the process.
D: What is your approach to business or your theories on business? Coming from your business education background, is there anything you think that’s inhibiting to entrepreneurship?
T: Well there are two things. One, you have to really look and say, “Is there a real opportunity there?” You don’t always have to reinvent the technology. That’s a big misnomer. Those unicorns that everyone talks about, those are the anomalies. The focus should be, how do you take what’s out there, add a little bit of your proprietary technology to it, but then most importantly, build a sound business around it.
The other thing is, there’s a big difference between different types of entrepreneurs. Some focus so critically on the expense side and making sure that profits are there or that expenses are low, but then you have other folks that are all about getting a sell. I think sometimes entrepreneurs get fixed one way or the other. From a financial perspective, and being through several of these startups and advising them, that’s usually the two sides. And I always advise people: it’s not right or wrong. They’re both right, it’s just the timing and when you want to deploy that mentality.
D: What are some of the ways that you motivate a team to foster teamwork in the workplace or even incentivize or reward success?
T: My take on it is, you have to have a blend of the individual performance and you have to tie those to the company’s objectives, and there has to be an agreement that those objectives can change. But you always have to make those very clear. The slippery slope is, you can’t be everything to everyone as you grow too much because then you find yourself where you can’t support it.
D: Where do you see DoubleHorn in five years?
T: Most importantly we want to make sure that we consistently bring to market and grow the product investment we’ve made over the last two years. What I mean is that it is constantly evolving because the technology we’re developing and that we’re integrating with is changing so fast. We have to become excellent at identifying an investment opportunity, our ability to build it, get it to market, monetize it, collect the money and make the customer happy. And we have to consistently do that, or we can’t get over the hump, and it won’t take five years to identify that. We’ve invested, hired, developed, now it’s got to start turning over. So, to be honest, I look at 2018 right now. To look any further out than that, it looks good on paper, but the reality is if you screw up this quarter, these next two months, or you screw up the first quarter of 18, it’s going to change some things for the rest of the year, could drastically change looks in 2019, so I try just to get everyone to focus on shorter stints.
D: In your experience are there any common pitfalls or challenges to growing a business that CEOs can’t overcome?
T: Not to sound Pollyannaish, but I believe all pitfalls can be overcome. But the capacity to manage time and resources becomes a real art. As the CEO, you take on this very broad role, but sometimes you’re expected to go deep into certain roles to fix things, but you have to be very careful that the broader vision, the broader stability, and quality of the deliverable aren’t sacrificed. So, I think the big answer is the people part. You’ve got to have good people because you just can’t do it all. When you figure that out you really start to move forward quickly. If you don’t, you start to ask what cannot be overcome and I would tell you, if you don’t figure out the people part, you can run into a lot of buzz saws.
D: Is there any company that you’ve been keeping an eye on recently, or that you think is doing a lot of really innovative things?
T: [laughs] I constantly do research. If you just take the information that’s there in front of you, and just for what it is, you’re never going to be educated enough and have enough knowledge to get over those humps. You’ve got to be self-driven. Right now, I’m spending a lot of time along the analytical front: the data analysis, big data, predictive analytics and AI. You’ve got to peel it back to the practical piece because you can guess all day long, but you can’t invest right now for five years out. So if it’s financial technology or data analytics oriented, that’s really where my focus is right now.
D: Finances are obviously hugely important for a business. Do you have any important lessons you’ve learned?
T: If you need, or the plan is, to engage with investors, always ask for more. Good investors would agree with that. What you don’t want to do is be underfunded or undercapitalized, because it puts the company under lots of pressure, and it can force you to do a different model than you thought. The other one would be that cash flow is very important. What I mean by that is you don’t always take in all your money, you don’t make a sale and collect it and have all expenses and pay them out just like your models and nice little budgets tell you. It never looks like that. It always comes down to cash flow. It really educates you on the way your company is operating when you understand the cash flow, because you really understand when things are coming in, what customers are paying (or not paying). The third thing is just to be prepared to do what I call financing your expectations. If you’re going to really expect this stuff, you’ve got to finance it because you set yourself up for failure if you don’t.
D: How do you think about, or how do you see this business, fitting into a community?
T: Well I think a lot of it is through education. If you take Austin being nominated as one of the smart cities, you follow how it can benefit the community, the cities, and the government, and there’s a positive impact it can have across the board. I think that cloud services for instance, and IoT, which is the Internet of Things, are clearly reshaping the landscape of the way public and private sector operates. And to the extent that we can share what we know and it’s only going to improve the city and improve a technology company that sits in a technology city, like DoubleHorn.