Investors rejected this guy's company 70 times - now it's worth more than $1 billion
If anyone knows what he's talking about, it would be Hull. He was rejected 70 times by venture capitalists in the company's early years, and weathered the 2008 financial crisis on his way to building a $1 billion financial software company that's raised over $170 million so far.
"We were met with a host of concerns from investors early on," Hull tells Business Insider. "We had people telling us why we would fail."Hull has proven a lot of those investors wrong. Since its founding in 2003, Adaptive Insights has established itself as one of the leaders in the financial planning software space, commonly known as corporate performance management (CPM). It now has over 3,000 customers across 85 countries, and was even named as the only all-cloud-based software in the Gartner Magic Quadrant survey this year.
"The investment market always goes through cycles. So you're better off focusing on what you can control well, and that's building your business," Hull says.
No salary for a while
Hull's success didn't come easy.
Investors were skeptical of his vision that CFOs and financial departments would eventually store their data in the cloud. They didn't think it would survive competition from the big guys like Oracle and Microsoft. It wasn't clear how Adaptive Insights would turn profitable by focusing on mid-size businesses that tend to start with smaller contracts.
Especially in the early to mid-2000s, when Adaptive Insights raised its first two rounds of funding, investor sentiment was rock-bottom. The industry was just coming off the dot-com bust and everyone was wary of startups not making money.
In fact, at one point Hull even had to suspend his salary and consider the sale of the company as it couldn't find a Series B investor. It was only after he connected with Monitor Ventures' Jerry Engel, a former CFO, that he was able to raise $7 million and keep the company going."It's important to find investors who can really personally identify with the business problems you're trying to solve," Hull says.
Hull also used the 2008 financial crisis to his advantage. His sales pitch was how Adaptive Insights' software could help companies manage their finances better and control costs more effectively. That message eventually caught on by 2012, and the company's been able to raise over $130 million since then.
Be frugal and stay focused
Hull is no longer the company's CEO, deferring most of the day-to-day operations work to current CEO Tom Bogan. Still, he remains the company's chairman and helps spread the word for his company.
Hull acknowledges the current funding environment resembles what it looked like back in 2003 when he raised seed investment. That could make life tough for some of the startup founders today, but Hull tells them to stick to their guns and not give up.
"Make sure that you're really solving a problem that people are willing to pay you for and trust your intuition," Hull says.
He also offered the following advice to any startup founder that may be struggling with their business:
- Trust your conviction: It could get very lonely when everyone says you're going to fail. You just got to trust the power of your own conviction. "You really got to dig deep to figure out what you truly believe in, what you truly are passionate about, and really stick to that," he says.
- Be practical: Be frugal and practical with your spend. And really understand your business and cost structure, and how you could eventually turn profitable. "Make sure you're very focused on your cash flow so that you're in control of your own destiny," he says.
- Stay focused: Know what you're trying to solve and stay focused. For Adaptive Insights, it first started with SMB financial planning software, but has now expanded to analytics and enterprise services. "Don't get distracted by trying to solve too big a problem until you've proven you've done one thing really well," he says.