Frank Poore has sold his startup three times over. He’s learned a lot about sales skills, raising money and the benefits of thinking differently in the process. Many of us might not know about Frank’s little E-commerce company. But it powers many retail company in today’s date. You may have ordered many products handled by this technology without even realizing it. QVC, Walmart, Costco, Home Depot, Dick’s Sporting Goods, Lowes, Macy’s are all some of his 12,000 customers. They processed around $20 billion of merchandise last year.
Frank Poore recently appeared on the Dealmakers Podcast. There he talked about how he built Commerce Hub from the ground up, how he raised money before running out of cash, and how he was able to get his company acquired three times being the last transaction $1.1 billion in an all-cash deal.
Liquidity & Flipping Your Business for a Billion Dollars
In the beginning Frank knew that he’d have to raise money. He wanted to trade his time for money. Although he never enjoyed that equation. He even says, “If you’re going to be a brain surgeon, maybe you can make the most amount of money for your time, but you still have a limited amount of time.”It wasn’t easy, but it worked since he has taken CommerceHub through three liquidity events. The first was an acquisition to Comcast/QVC. Then, in true Steve Jobs style, they brought Frank back as CEO. When they wanted more value and liquidity, they took the company public. Then again sold the venture to a private equity firm for $1.1 billion.
Marching to Your Own Drumbeat
Frank grew up in a small 900 sq. ft. house in rural upstate New York. He didn’t have the money to go to college. So, he joined the army.He had fun doing tactical communications and jungle training in Panama. It was quickly found that he is more of a free-thinker and an entrepreneur, rather than somebody who likes to be told what to do and follow orders.But through his experience, Frank took away the idea of perseverance and mental strength.When he got out of the Army, he used his $15,000 from the GI bill towards his college education. Frank studied psychology and philosophy at SUNY Plattsburgh and then got his MBA at the University at Albany.
The Art of Selling
Entrepreneurship relies a lot on selling. Everything is selling. From selling yourself on your own idea, and finding co-founders and early talent, to finding an office and raising money to get customers, and every step of growth that comes after that.
When Frank Poore hit the workforce, Apple didn’t have Apple stores. They had what was called Apple Dealerships, which covered certain territories around the country. He worked for the Apple dealership in upstate New York, where he ended up doing exceptionally well as an Apple salesperson, and even got to meet Steve Jobs at MacWorld in Boston one year.
Frank’s tips on selling:
- You’ll be a good salesperson if you really believe in what you are selling, terrible if you don’t
- Listen more than you talk so you can really understand the customer’s needs
- Tailor everything to that customer or company from the presentation to pricing
He dove into entrepreneurship with a video game store. He says his MBA did offer some broad management thinking and knowledge of finance and operations, and how it all fits together. Though most of what he learned in his MBA had little real application.Then on his first day, he discovered the Mosaic browser. Realizing the internet had gone beyond text, to pictures, he knew it was going to be a commerce platform. He knew he would become some kind of online retailer. This discovery even gave him his inspiration for building the online bookstore for the University of Albany while still in school.
Raising Money: The Challenges & Hustle
Frank started getting help with numbers and modeling for his new business. He saw right away he’d need to raise money.He started getting investor meetings. Which at the beginning was really hard and fruitless for the most part. He didn’t really understand how investing worked but realized investors don’t really care what happens in the middle with all the ‘sausage making’. People want to put a dollar in the top, crank the wheel, and have $7 come out the bottom. As long as you can convince them if they give you a dollar, you can give them $7 back, you’ve got a shot at the money.
Being the hustler, Frank says he picked up the phone, sent emails, wrote letters, overnighted things, and would camp outside your office to get an investor meeting.Still, with little leadership experience, and little track record, it wasn’t until CommerceHub won a business plan competition that they received their first $250,000, from a small bank-backed venture fund.He had to ask a friend for $100,000 to make payroll. Then things really started to snowball in terms of funding.
Profitability & Sustainability
Frank wanted to make these investments profitable. Yet, every venture capitalist he talked to told him he was an idiot. They saw the game as market share, and eyeballs, and all kinds of other business metrics. Then 9/11 hit. Frank’s company was profitable when no one else was. They were able to outlast competitors that had raised as much as $130 million. All the customers they lost to these competitors who went bust after promising cheaper pricing, were up for grabs again.His most important piece of advice for those launching their own businesses now – “Hire the absolute best people you can find, and pay them extra. Because the difference between an A player and a B player is dramatic.”