[REPEAT] Don Smithmier [2]

REPEAT is a special interview series underwritten by CliftonLarsonAllen where we take a deep dive inside the minds of Minnesota’s rare repeat technology entrepreneurs.  Repeat means to start a tech company, exit said company, and return start another one.

Repeat entrepreneur is Don Smithmier, currently leading two tech companies simultaneously: he’s the Cofounder/CEO at GoKart Labs and Founder/CEO of The Big Know; previously, he cofounded two others — BringMeTheNews & Sophia Learning — both subsequently acquired. (Part 1 can be read here).

What was your journey from secretary to VP at Capella like?

When I think back on those 14 years working for Steve Shank at Capella, that was really the best business education I could have asked for. It all changed one day Steve Shank asked me if I knew anything about marketing. I said no, but he basically told me to go learn about it and so I took a class to understand what marketing even was. That really ended up launching the next phase of my career, especially digital marketing.

This was 1995 mind you, the same year that Yahoo started, and I remember calling the VP there directly in Chicago off an 800 number to figure out what this Internet advertising was all about.

“How many of these words can I buy?,” I asked. “All of them,” he said, “we have no other education advertisers.”

So we went with it and it worked out.  Everything we were doing was mostly in newspapers and radio, but we actually found a lot of early adopters that way who also wanted to take advantage of accredited online education when it was brand new. That’s an example of how Steve let me try things and take credit for the outcomes.

I became that kid in a candy store, I absolutely fell in love with Internet marketing from that point forward, and built that group up for seven years before moving into web strategy for many more years making tools and services for students and faculty.

Ultimately, I became a general manager at one of Capella’s three business units and was a Vice President in 2001 with P&L responsibility. Things continued to work out for well us because all of a sudden we were a four hundred million dollar public company in the mid-2000s. We were doubling in size every year, year over year, from 8 to about 1500 in there.

That’s about when I decided that I wanted to get back to the early days…the fun startup days, the speed of things, and the freedom. So I took the best of that ride and ventured on my own for the first time.

What did you start?

Rumble Music is a production company that does custom music for TV advertising and short films and also offers a catalog of licensable music. That company is still alive and actually just turned ten this year. It’s a really fun boutique business that keeps me in touch with my musical side.

Shortly thereafter, in 2008/2009, we also started GoKart Labs, which was focused on complimenting traditional agencies with digital services. But we got that part wrong at first because it was perceived as competitive by agencies, just 100% the wrong premise. So we just started working directly with clients as a consultancy as we still do today – in an expanded capacity.

I think that’s a common scenario in business, being wrong about your original assumptions, that is.

Was GoKart’s product development division part of the plan all along or did that come after the fact?

There was no plan…which is a steady theme in my life…it just happens and I’m very fortunate that way.

Looking back to 2009 when my partner AJ Mejer and I were talking about the state of education over beers and observing how people were using YouTube to learn things while services like Blackboard and Moodle were just becoming outdated. We saw that as the new era.

So within 90 days we were out pitching this new peer to peer learning product called Sophia.

It all happened so fast, we were obsessed with the idea and just couldn’t let it go. I took Steve out to lunch, he had just retired as the CEO, and became an angel investor along with Capella, which ultimately ended up buying it in 2012.

And that marks the beginning of what would be many different products developed from inside GoKart Labs.

So were you managing both GoKart and Sofia at that point?

Yeah…that time was crazy because we also got involved with BringMeTheNews with partner Rick Kupchella, meanwhile my band Rocket Club reached the Billboard charts for the first time.

We essentially launched two product startups from inside GoKart, which itself was still a startup.

So alll four of those things were happening simultaneously during that period it was such a wonderful time. I was also being a husband and father to three daughters which were about 11, 9, and 5 around the time.

What was it like juggling all that, making it happen, and also being a family man.

It was the best yet most challenging time of my life! Rumble was growing, GoKart was growing, we had our startup Sophia tackling education and Bring was changing journalism.

And I was making music throughout it all. Mind you this was all happening during a recessionary period.

How long did you sustain that for?

In about 2012, 2013, we were fortunate enough to have good cash flows and funding to be able to bring the right talented people in from every direction which allowed me to step back on the startup side of things.

When did you exit BringMeTheNews and what did you learn from starting up and selling off two product companies like that?

We sold Bring to Go Media in 2016 and both of them operated in some difficult industries…With Bring, I mean I don’t have to tell you about news and media – it’s an extraordinary challenging space to monetize. And with education, in the case Sophia, there’s a lot of regulatory challenges to consider.

So together, looking back I think the takeaway for me was really to learn about operating with certain context of industry while building a team that is capable of working through that.

It’s easy to come up with ideas and get excited about that, I mean that’s the fun part. It’s really a question of commercializing an idea and scaling an idea that takes years of hard work and sacrifice.

Was it easier or harder to do those startups vs. all that was involved with Capella?

Back in my 20’s with Capella, I’ll admit that I worked way more than I needed to only because I didn’t know how to work smart. I think I’m starting to figure that out more now.

What’s an example that comes to mind about working smarter vs working harder?

The most obvious thing is really just relinquishing control around the thinking that I need to be the one to solve everything. My instinctive reaction has become much more one of

‘I don’t know how to solve this problem, but someone does.’

And post-Sophia + Bring, you’re still very involved with GoKart Labs, correct?

Yeah we just had a great year, are growing nicely, and employ around 50 people.

Does that make The Big Know, your current pursuit, the third startup spinout from GoKart Labs?

No, because we actually had two other products that didn’t really make it. One of them was called Kinly, which was a micro networking app for families. We couldn’t solve for the two things that matter most: distribution and revenue. So we killed that one. Another was called SoGo Connect, which was a social governance app for nonprofits. I still think it’s a great idea, but we weren’t able to scale that one either.

Did it affect your psyche or ego at all to shut down two products that didn’t succeed after two previous ones had?

I certainly don’t look at those as failures, it’s natural that not every idea is going to work out.Part of our process includes what I call ‘stage gates’ where ideas that we generate receive little bits of time and money at progressive stages to answer certain questions. Bboth SoGo and Kinly got out of those stages, which could be seen as success to a degree. Many, many ideas never get that far – to be able to answer the next question and so on.

How did you develop and learn this approach?

Once again, it was never a plan…we just intuit our way through these things…constant iteration all the time.

How does home life and family coexist with your professional pursuits?

My daughters are 19,17 and 13, so between them and my wife, they’ve gotten to know me as a consummate entrepreneur for some time now. But I think that everyone with a family and job struggles with their own work-life-balance challenges.

For me though, being in business for myself basically, as compared to working for someone else, you know I’m constantly thinking about my work. I learned to talk about it with my family though, to share what it is that I’m working on, to show them stuff and communicate.

How is that received?

…you know with teenagers, somethings they see are more interesting than others, but I do think that when they grow up and look back that they will remember it. And my wife probably knows more than anyone about all the things.

Do any of them have entrepreneurial interests?

They’re all very creative, you know, we’re a music family and my wife’s dad is an artist. So they are drawn to that side of the world, and some day will face the decision of figuring out where they want to take it or apply those interests. It wouldn’t surprise me if they ended up going into business on their own or creating a business in some way.

How do you manage risk and time as it relates to your family?

I’m fortunate that I had the 14 years at Capella and that I was part of that company from beginning and experienced the upsides. So in a way, I put myself in that position which later allowed me to mak e some choices that involved risking capital because I had earned some.And I was older, 37, when we started Rumble + GoKart and that was a decade ago now. I’ve always liked to work and put in the hours but know how to have a ton of fun with my family and friends. Balance.

It sounds like you achieved a sense of financial stability before going out on your own…how did that shape you?

Anecdotally, I was on a panel with some peer entrepreneurs one time and there was one who said “you aren’t a real entrepreneur until you’ve lost your house!?!?”

Which sounds like a very strong parallel to the music world where you’ll hear things like “you’re not a real musician until you’ve toured the country in a van…”

And I just think…there are many ways to write your own story, and everyone will experience theirs differently. When I left Capella, I had learned so much, that it really paid off for me in more ways than one as I went out on my own.

Do you see entrepreneurship as a creative outlet?

It totally is for me, exactly the same as music or art where you have this thing tickling your brain that you want to manifest. It’s a very similar creative process in terms of bearing the creation.

Everything you’ve done since leaving Capella — Rumble, GoKart, and the product offspring, now with The Big Know — it’s all a choice. Why do you choose these things?

I think it’s about fulfillment, and I was really wrestling with that early on as I left Capalla. I reached out to a mentor of mine, it was my uncle actually, who diagnosed things for me by saying people can generally do four things in business: invent, build, optimize, and maintain.

Which of those are you? He asked….and I realized that I am an invent-build kind of person. I can do optimize, and maintain, but it’s hard…I have to manufacture it. Thankfully, there are people in the world who are different from me and who love those phases and excel in them.

I think that for me I’m going to continue doing it this ways because it’s what excites me and what I think I’m good it.

How has your risk tolerance changed over the years?

At this point, I would be more terrified of not being an entrepreneur…at least my hands are on the wheel! I’m ask risk tolerant as I’ve ever been and I like to think that I’ve gotten better at risk assessment.

What has it been like in terms of hiring and employing others, assuming a sense responsibility for other people in that way?

I think this is an unsung part of the startup experience. There’s a lot of attention put on the founders and investors in the business but not a lot put on the employees. I think that it takes a lot of guts to work for a startup, especially in an economy like this with low unemployment.  These people may not be the ideator, or the leader, but they are critical to the success.

For those who take it on, I feel that they deserve to be rewarded and I’m obliged to them. I aspire to build businesses that create a lasting return for founders, investors/shareholders, and the team of employees involved. That to me is important because startups can create wealth for a broad group of people involved along the way.

How do you think music influences your professional pursuits, or vice-versa?

The more active I am musically, the better I am at my job. I think creativity is like a muscle and if you don’t flex that muscle, then it will atrophy. If you keep it strong, that will serve you in all kinds of ways. Also too, music helps from a relationship standpoint because people love music and they love to talk about music. I think that gives my life another dimension to meet and share other interests.

Is it hard being an entrepreneur?

Harder than what? Being a teacher, a doctor, or doing construction? I don’t think you would do this if you’re not oriented to it, just like anything else. For example, it would be really hard for me to be an accountant, but for someone else that comes super easy. Or any profession, career, job. Everything is relatively challenging, you just have to consider for yourself what’s worth doing.

What’s the most challenged you’ve ever felt?

When Capella was in that initial hockey stick phase, doubling in size every year, year over year, it was intense. I mean it was just a crippling amount of work, the sheer hours to keep up with it while holding on to the rocketship was definitely challenging, especially as a new father I was at the time.

And then it happened again in 2009/2010 when everything was cooking, as I talked about earlier, was pretty much 24/7 touch and go for a while there.

How did you keep up?

Well my favorite Abraham Lincoln quote is: “The best thing about the future is that it comes one day at a time.” And I think if you’re able to put yourself into a position of passion and truly enjoy what you’re doing, then that helps tap and replenish the energy reserves.

What relationship does energy share with entrepreneurship?

I think energy is…wow we could talk for hours about this. Let me just say that I believe thoughts become things and that metaphysical energy is contagious. Convince yourself first, then those around you, then customers, and so on. And you have to maintain that mindset that every day, even through the downsides, those internal thoughts matter even more.

People are going to call your baby ugly and it’s important to have enough emotional energy to get over that time and time again.

What are some of your energy techniques?

I practice meditation consistently; I actually just came back from a three day spiritual retreat, so I think that prayer is important. I also journal on paper to empty my brain. I find that helpful to go back and read notes from years back because it gives me perspective that this too shall pass.

Making music…if I can sit down and play the piano for 20 minutes I will automatically feel better. Lastly, part of the routine includes physical exercise.

How do you compare or contrast your newest venture against previous ones?

I think there’s some common themes that I think are important. Education, media/journalism, and even music. Learning is very important so there’s that consistency and The Big Know stepping into the role of employer or brand as teacher is early. There’s always that function of timing, for a market to mature and meld with an idea. There’s also a heavy emphasis on technology of course and creative. I think I came into this one with a wiser perspective, smarter from those prior experiences.

But like everything, I’m always learning.

Where do you see yourself on the entrepreneurial lifespan?

You know, there’s times when I tell my wife, “I’m not doing another investor-backed startup!?” but she doesn’t believe me.

It’s also nice to have GoKart humming along as a service business with a lot of blue chip clients. We continue to create and invest into new startups – and I’m not necessarily running them either, part of that process of relinquishing control I touched on earlier.

I do think there is a chapter ahead that involves helping younger founders find their way.

Somewhere between start and finish?

Ha, yeah, I’m somewhere in there…