Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy where I interview entrepreneurs about how they built their businesses. Joining me today is Nathaniel Pearlman. Nathaniel, good to have you on here.
Nathaniel: Happy to be with you.
Andrew: Nathaniel, you’ve watched some of my interviews so you know I like to be super prepared. We’ve had someone talk to you before the interview, I’ve researched you, I’ve gone to your site. Here’s the part that I have to admit. Before I even tell you who my sponsors are, before I give you proper intro, I don’t fully understand what your business did. I get it conceptually. I admire the people who work with it, but the big one that you’ve got is NGP-VAN, right? What I have here from my notes is it’s a company that helps progressive campaigns in organizations leverage technology to meet their goals.
I’ve gone on the site. You have Obama on the website. He’s used you. I just can’t fully see it because to see it I need to get a demo. Anyway, I need to be fully honest here with you and understand how you built it and what the business is and also find out about your other projects, which are Lever Fund and Graphicacy, which is what you’re working on. As long as this is kind of an intro, I’ll also say my two sponsors, which I’ll talk about later are Convert Kit, I’ll tell everyone later about them and Toptal. How do you feel about the way that I just introduced you, Nathaniel?
Nathaniel: I’ve had better introductions, to be honest.
Andrew: Have you had a worse one? Probably not.
Nathaniel: I don’t get introduced too often so this is fine.
Andrew: How do you explain it to an 11-year-old, which is the way I’m feeling this moment. Actually, I feel like a little bit like I hurt your feelings because we were off to a good start before we started with the intro, we were having a good conversation. And I could see as I was giving the intro, you were like, “What am I doing here? This is disrespectful.” Do you feel that?
Nathaniel: No, not at all. I think it’s actually not hard at to grasp at all what NGP-VAN does, although the suite of products and services has grown a lot over the years. But basically, it is fundraising, it’s like compliance, which is like Turbo Tax for political campaigns, it is websites, it’s distributed campaign tools and voter file management. It’s everything that you need if you’re running for office to manage the lists that you use to track your volunteers, your contributors, your donors, etc, the type of website, to process contributions, to have a presence online. That’s become quite an industry over the time that I’ve been in that world.
Andrew: I see here on the sign-up page, build your list, get a custom website and so on. Why aren’t campaigns just using the standard email systems and website builders? Why do they need one that’s made just for them?
Nathaniel: Well, there’s a lot of very specialized things that campaigns do that aren’t part of a standard CRM package that you might use or blast email tool or something. Those include you have to file, if you run for a federal office, you have to file a Federal Election Commission report. That’s all the spending that you make in a campaign and all the money in a particular format. Like a tax return. If you run in a state-level contest, you have to do that with state reports and city reports. They all have different formats. That’s quite different. There are also things like canvassing, going door-to-door, managing your relationship with people out in the field. It’s a broad range of very specialized tasks that all have to be centered together in one piece of technology.
Andrew: I see.
Nathaniel: We’ve been in that niche for something like 18 years, we know it very well, we do a lot of particular things for our target market.
Andrew: And you learned about this when you were working at a different political software company. What did that software company do?
Nathaniel: I worked at a competitor to this before graduate school, a long time ago, in the early 1990s. In 1990, approximately, I left that firm. At the time, they had a database that did a tiny fraction of the sort of things that we do now. It basically was a contact management program.
Andrew: What’s the opportunity that you saw?
Nathaniel: The opportunity I saw was to do things for one party, the one that I want to refer, the Democratic party, to help the fundraising consultants in that, who at the time when I started, which was back in ’97, to help them . . . they were managing lists and things like Word, Word Perfect, Word documents, Excel. They didn’t have a relational database; they certainly weren’t connected to the Internet. So it started out with client-server software before software as a service really took off in that area. I built the first version of that in the attic. I ran the company for two and a half years by myself . . .
Andrew: Literally in the attic?
Nathaniel: Literally in the attic of my house and served a lot of Democratic fundraising firms and big congregational campaigns and senate campaigns until I had a reasonable client base that I was doing the tech support for, that I was doing all the different pieces, doing the sales, doing the support and I wrote a written program until we had maybe 60, 70 clients paying a subscription and then I hired my first employee.
Andrew: You said that you were using lean startup techniques before lean startup was even invented to do this. And so I’m wondering that very first lean piece of software that you created, what did it do?
Nathaniel: It was a custom database, like many people have built in many arenas that allowed a fundraiser to track all of their clients in one place and produce call sheets. Congressmen come in, the have to call donors. So they had to have all the information in front of them in a particular format and they all typically had different formats. It just provided the tracking for that kind of operation. That was the first application that I built and it grew from there. It was quite modest at first.
Andrew: What was the business originally called?
Nathaniel: NGP Software.
Andrew: NGP Software, I see. I’m looking at the first version the Internet Archive has of the site and it says this is from December 2010 is when you were launching this site, no?
Nathaniel: No, no. It was long before 2010.
Andrew: Right and it says check out voteractivationnetwork.com. That wasn’t you, then?
Nathaniel: No, that sounds like a . . . no. Voter activation network, that was a website probably for VAN, which is a company we merged with along the way.
Andrew: I see, okay.
Nathaniel: You’d have to go back to 1997, ’98, ’99 to see the first versions of NGP software.
Andrew: At ngpsoftware.com?
Nathaniel: Yes. You’ll probably be amused by the classiness of that website. Very homegrown.
Andrew: I love looking at those old sites.
Nathaniel: I designed our first business card. It looked like I’d had. The first websites were very modest like a brochure without any funding to do any of this.
Andrew: I see it. It doesn’t look bad at all. For the time we’re talking about, I was really expecting gifs and bouncing smiley faces. No, no.
Nathaniel: What does it say on it?
Andrew: Let me take a look. 2000 is the first one that I have a snapshot of. Click over. It says National Geographical and Political Software.
Nathaniel: National Geographical.
Andrew: National Geographical, why am I missing so many words here? National Geographic and Political software, that’s where it came from? NGP?
Andrew: “NGP software provides database consulting and political software for Democratic campaigns and Democratic political consulting firms. NGP has created an exceptional fundraising database for Democrats who need to raise money aggressively and operate efficiently.” That is a quote from Matt Angle, Executive Director of DCCC. You were also building a mailing list for them too.
Nathaniel: The DCCC is the Democratic Congressional Campaign Committee and Matt was the Executive Director. All the congressional candidates on the Democratic side would work with that campaign committee and they started to recommend our software more or less officially into campaigns around that time.
Andrew: I see. What was your vision for it? Were you trying to help politicians? To help your side or were you into software to see these guys building incredible software companies and saying, “I’ve got to do that”?
Nathaniel: No. My ambition was never about money or about building an empire or anything like that. It was really about providing myself something to do in an intersection of my interests. I was interested in politics, I was a computer science major, I was a partisan so I wanted to create something in the world of political technology that would provide me a job and help the sort of people that I wanted to help.
Andrew: Okay. We asked you in the pre-interview what was your launch like and the first thing you said was create relationships and ask people what they needed. How did you do that?
Nathaniel: Really? I don’t recall saying exactly that. I think my true answer to what was my launch like was there was no launch. What I did was I built a software for one fundraising firm and then I went to other fundraising firms and I said, “Can I sell you this software too?”
Nathaniel: And I tried to help them in any way I could. Sometimes that involved changing their RAM and their motherboard and upgrading their computer and then selling the fundraising software because I found that they were all doing things so inefficiently and then I had a little expertise to help them with. My long-term vision was that you could create a centralized repository of all campaign information and a very good interface to that that would make a difference in how you conducted the campaign. And that I could provide some kind of electoral advantage to the party by doing that.
Now the company is basically a $30-million company with somewhere near 200 employees and we’ve come closer to that than certainly when it was me alone. I think I’ve had one employee in 2000 when you are looking at the website. But I didn’t know that I would ever hire anybody when I started and I wasn’t one of these business type people that had the “I’m going to raise money, I’m going to build a big enterprise, I have a plan for it.” I did not have a business plan. I didn’t have clear ambitions at the time. I was learning what to do.
Andrew: You went to MIT, but you also before that, as a kid, it seems like a little entrepreneurship experience. We asked you about that and you said that your brother and you would climb into dumpsters. For?
Nathaniel: One way that we found to make money, which I guess was enterprising, was that you could get money for aluminum cans. We lived in Boulder, Colorado. There were a lot of fraternities in our neighborhood. They drank a lot of beer so we would climb in and grab the sack of Olympias or whatever it was and drag it down to the liquor store and get our $1.32 for it and we were quite proud about that. We also lived right near the University of Colorado Folsom Field where the Buffs play. So we would go over there, get people’s extra tickets and sell them in the very short hour and a half market before games. I thought that was entrepreneurial too and learned a lot.
Andrew: You said you learned to negotiate from that. What did you learn about negotiating from doing that?
Nathaniel: I don’t know if I learned to negotiate from that, but I think negotiation is crucial in running a business. I think I learned about what power you might have in a negotiation that you might lose depending on the time. Right before kickoff, the ticket is worth a heck of a lot more than 10 minutes after. So you do your best to get the best value out of something using timing. There were a lot of lessons, honestly, in scalping tickets, but I’m not sure I could enumerate them all at this moment.
Andrew: then you started the business, you had your one client, you went to the next. Am I understanding right that part of your process was to see what people wanted, charge them for it if they really wanted it and then create it for them and integrate into the software that other clients would want. Is that right?
Nathaniel: What I did was I . . . since I was dealing with all the clients myself firsthand and I was the programmer also, I would talk to them and they would say, “I wish it did this.” I could often implement that change in the same day and provide them an update to the software. This pre-Internet world that would be delivered by PC anywhere over a modem, to be honest. But I could make the changes to the software, send it up to them, but I had to make sure that I would manage the client properly. That was I had to say, “Maybe we should design it this way because it would be useful not just to you but to lots of people.” Some types of features I would charge people for because they really needed it in some time frame and I could and in other cases, I would build it for free and make it available to everyone. I always tried to keep the product’s best interest in mind, if you know what I mean.
Andrew: How do you say no to somebody who’s asking you for software changes that you know just don’t make sense to you, but the client wants it and you want to please the client, especially when you’re starting?
Nathaniel: I think it’s trickier the more important the client is and the bigger. If the Democratic National Committee comes to us and says, “We want really complicated joint fundraising processes added to the software,” but they’re the only ones who can use and we only have a certain amount of engineering bandwidth available, it’s a hard call. We try to navigate that on a case-by-case basis. Back early on, I tried to just be persuasive with people or I would use pricing to manage that. I would say, “Well, you could do that but it’s going to be a considerable sum or we could do this other thing in a more inexpensive way and I think that would serve you and other people.”
And I made mistakes along the line. I once took what was for me a fairly big contract with an organizing network that really wanted to change the software a lot and it was a mistake and I had to end up backing out of that arrangement and giving them back money because it really became clear, my employees really made it clear to me that I had made a bad call. Things like that happen.
Andrew: What’s one thing people kept asking you for in the beginning that you wouldn’t have thought of if you hadn’t been building it with your customers?
Nathaniel: I certainly would never have guessed that the design of a call sheet for a congressman would be a matter of such pride. What font size, just different custom things, what would appear on that seemed to be really a matter of a lot of fussiness and priority to clients. What we did was we made a library of them so that any new client could pick from dozens and we would customize new ones. I never would have guessed that. I would have thought a standard one that was clean would work great. I never would have guessed that, but that was the selling point.
Andrew: What are some of the things they look for on their call sheets when they’re talking to donors?
Nathaniel: They might look for what the name of that donor’s pet is, they might want to know notes about their children. This is sort of standard fundraising stuff in a lot of ways, but they wanted it in the upper right-hand corner with an asterisk next to it or something like that. Particular information.
Andrew: I get it. I imagine that that’s true partially because they came from a paper world where they were doing it all themselves and got into their own little habits.
Nathaniel: Right. So we’re talking about a long time ago now. It was definitely a lot of political people that were less comfortable with operating completely on computers. This is pre-iPad, this is pre all these things that we now take for granted. It was a different world.
Andrew: I want to ask you about how you got your customers, but let me do a quick sponsorship message and thank Toptal. If you’re out there listening to me and you need a developer, the easiest way to get a really solid, top professional developer is to go to toptal.com. When you go to Toptal, you get a tested, vetted, proven developer who can work on your project.
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Nathaniel: Sounds great, by the way.
Andrew: Thank you. I kept it short. Frankly, to be honest with you, I think because of the way that I started the interview I’m feeling a little bit like I’m second guessing myself, making sure that I don’t say something that’s wrong.
Nathaniel: You’re doing fine, man. You’re doing fine.
Andrew: I feel I’m doing fine too, but I don’t want to go to the edge where I’m suddenly making you think, “What the hell am I doing with this guy?” Or make it too awkward for the audience, which I feel I might have right now. We’re doing okay. That’s what is important.
Nathaniel: Restart, restart.
Andrew: No, I want the audience to feel this. One of the things I really don’t like about television interviews and, frankly, a lot of podcasters is there is no reality in it. They always pretend they know everything, if they’re the interviewer, they always pretend they’re fully comfortable. Sometimes I could pick up on how they don’t know. I wish that they would acknowledge it. If they’re asking the guest to be open, I wish the interviewer would be just as open.
Nathaniel: I’m happy to tell you all the things that I don’t know.
Andrew: Good. Tell me about one thing you do know. How you got your first clients. Not necessarily the very first one that you told us about, but how were you able to get new people when you were a new software developer who was working out of an attic?
Nathaniel: The question I used to get all the time actually was, “What are we going to do when you get hit by a bus?” I thought that was an odd question because I felt like if I got hit by a bus, there were bigger problems for me than these clients, but what I said to them was, “Look, you can have the source code, you can go and take this whatever direction you want after I’m gone.” But after a number of years when we had plenty of employees, no one asked that question anymore.
How I got my first client was basically probably what you call hustling. I called people up, I asked other people to call the up for me, I went and met with them, I met with congressmen in their apartments, I met with fundraisers in their downstairs bedrooms where they did their fundraising work. All these were very small firms. They were all like one, two, three, four-person firms that were using the software in the early days and the campaigns, congressional campaigns, were very small operations also. It was really knocking on doors, write emails and one by one. For a long time, it was to get a new client every month and then it was to get a new client every two weeks and now it’s many new clients every day. It’s just a cycle. It’s speeding up over time.
Andrew: What kind of revenue would you get from a new client that would make it worthwhile for you to go and sit at their homes and go door to door and make endless phone calls?
Nathaniel: The early price of the software was $3,500 plus $1,000 or $1,250 a year for support.
Andrew: I see.
Nathaniel: By the time I had 60, 70 clients and they were all paying me $1,000 a year, it was enough to start hiring and over time, that’s grown to real money.
Andrew: What’s your first hire?
Nathaniel: My first hire was Louis Levine. He still works for the company. He’s senior vice president or some elevated title beyond that. He was about 24, he’d been temping before that and he was a crucial hire, actually. I was always a little worried about biting off more than I can chew, like taking on clients fast and not doing a good enough job with them. But he’s like, “We should own this whole space, Nathaniel, come on.” And that helped me, having a foil. We worked two years together, just the two of us before the next hire.
Andrew: I’m looking at his LinkedIn profile and he said his first job was director of technical services, provide first and second level technical support, programmer on our desktop database application and perform data conversions for new customers to our platform.
Nathaniel: Right. One of the challenges was as we got new customers, some of them would have their data in 80 separate Excel spreadsheets and we had to put order to that. So we’d write programs, I did that for the first few years, but write programs to clean up that data, load it into a standard essentially CRM as you would do it now and help them code it properly. It was a ton of database clean up. It was Louis who helped with that, he helped with the technical support, he helped with some of the programming, he talked to clients all the time. He became a real expert in the compliance side, which I referenced earlier, the filing of FEC reports and state election reports and he still manages that part of the company.
Andrew: It looks like, from his LinkedIn profile and from what you said you pretty much gave him the only job he had.
Nathaniel: I think he repaired some printers before that and I think he might have had an H&R Block job for a short while, but it was really pretty much right out of college. It’s 18 years later, 16 years later for him. He’s well known in the industry now.
Andrew: Do you have any advice for someone who’s starting out and trying to get those early customers based on how you did it?
Nathaniel: I’m a tremendous fan of bootstrapping a business, of figuring out the market by step by step, organically finding out who will buy what you’re selling. I’ve watched lots of people squander substantial sums building a whole thing imagining that there’s a market for it. I don’t think that’s a great way to go about it for lots of, especially small technology businesses. So I think this lean idea of a minimum viable product and then having a targeted niche that you attack makes a lot of sense. Is that specific enough an answer?
Andrew: I think so, but what about getting people to even open the door for you? When you were a nobody, when people at the time weren’t ready to accept software from just some kid who’s straight out of MIT, who they never heard of before, how do you get them to open doors to you? How do you get them to buy your software, to pay for it, to trust their most important part of their lives to other than their families and in some cases, even more important than their families?
Nathaniel: I can tell you the way that it happened for me was one thing leading to another. So finding that first client, I think, relies a lot on your personal persuasiveness and your interest and passion around what you’re doing. For me, I was an undergrad at Yale in Computer Science and then a grad student at MIT in Political Science. So I really knew something about American politics as a student and almost scholar of it and I knew something about building software. And so when I went to talk to someone in the field, I could converse about it knowledgeably. I spent a lot of time listening and finding out what their problems were.
I don’t think you can bullshit your way into having a company, really. I think I had to create that credibility one step at a time. But once you have one client or two clients, they lead to others. I think the secret to why NGP did well was customer service. Once we had a client, we took care of them. If they had problems that weren’t even our fault, we took care of them. If they had problems in their network, we took care of them. And we answered the phone calls, we had no limit on the technical support that they could receive from us and we worked our butts off to make them happy.
And because we did that, they became our advocates and one client lead to another. When we were reaching out, when it wasn’t just referral business, if we would approach a congressman in Texas and we’d say, “Seven other members of your delegation are using it,” they would then listen and we became a brand name it. If you would look at r?sum?s in the political space on the Democratic side, they will have NGP-VAN as a resume item like you would have Excel, like a skill set.
Andrew: I see. It makes sense. And you said to our producer that there were challenges. One of the challenges was that . . . where was that? I want to say it the way that you said it so that I can get it right here. Where is it? Managing yourself and your mood. Is that how you expressed it?
Nathaniel: I think one of the questions that he asked me was something like, “What was your biggest challenge?” and I said I think that that’s often the biggest challenge for anyone in a leadership position is the management of yourself.
Andrew: It’s not like you had some sort of self-management and mood issues.
Nathaniel: No, I don’t think so.
Andrew: I see.
Nathaniel: Not more than the average person, I don’t think.
Nathaniel: But I think that to convey to your staff on a daily basis what you think is important and to show up as real, as a real person but also as a person enthusiastic about what you’re doing can be challenging. I’ve always heard this thing like entrepreneurs are the most optimistic people, that’s a really critical thing. I think I was a mix. I always worry that the company was having its last year but I always really thought it was going to do fine. I had to convey to staff and to clients the right level of reality, I think, and I had to get myself up like you would for athletics or coaching or something to present myself the right way. I am not a natural at that. Other people are naturals. You see people are sort of natural CEOs. I’m not like that. I had to grow into the job and I’m still growing.
Andrew: It seems like one way that you grew into the job was you got other entrepreneurs around you that you can talk to. What’s the entrepreneurial forum that you were a part of?
Nathaniel: I’ve been a part of a number over the years and I still am. Around about 2003, 2004, the business was probably 15 to 20 people, it was getting a little more complicated. Several friends suggested I join EO and that’s an entrepreneurial organization that comes with a forum, a peer forum. I’ve actually continuously been in that forum since. That means meeting with seven, eight, nine, 10 other business owners talking about problems. I hadn’t had that before.
It was really helpful to me then and since because when you’re running a company, it can be a lonely place. You can’t really share some types of problems with the employees, your wife doesn’t necessarily want to hear about them, but it is helpful to have people, whether they’re running a fire and water restoration company or some other type of company, they have similar problems with employees, with payroll, with vision, with all the things that go into leading an enterprise.
Andrew: I’ve heard really good things about EO. Many interviewees have been a part of it, many of my friends have been a part of it and they’re always amazed at how open you could be there. What did they do that made it so that people like you could be open about your challenges with them?
Nathaniel: There is a confidentiality component to it, which is absolutely crucial. At the beginning of every meeting, you remind everybody that what you say there doesn’t go out of the room and as you bring people in, you have to teach them this sort of way of talking. In EO, you don’t tell other people what to do. Entrepreneurs do not like being told what to do. You make presentations, other people share experiences that they might think are relevant and that methodology of running a forum is very helpful. I’ve also been part of [Inaudible 00:31:47] and other peer forums over the years, but I think it’s really a valuable experience and I often recruit people into my forum and others for that reason now.
Andrew: And it is helpful for you to have people who aren’t in technology, aren’t in politics and just don’t seem to even get either world? It is helpful for you to talk to them.
Nathaniel: It is. I think it is because businesses are incredibly shaped by the person, especially small businesses with single founders or a small number of founders. They’re incredibly shaped by the personalities and the skill sets of those people. I’m certain mine was and I know other members of my forum were. Our weaknesses affect the business and our strengths do. Having a method for upgrading your skills over time, talking about them, talking about your problems and learning how other people do that is really crucial to being a good businessman.
I’ve experimented with coaches, business coaches. That has been helpful too. As the challenges get larger, as your enterprise takes off, sometimes it makes you stretch and sometimes you need help with that. And if you don’t recognize that, lots of businesses get stuck at a particular level because the person running them can’t grow past a certain point. They did not learn to . . .
Andrew: What’s a challenge that you couldn’t grow past on your own? What’s a weakness that you had that you had to . . .
Nathaniel: One of my weaknesses, which continues, is I’m kind of shy. I do not like to make presentations in public. I’m not a natural public speaker so this is kind of an unusual thing for me. I spoke on many panels over the years, but I did it . . . or made other presentations, but I did it more as a duty to my company than through any joy at all. And I didn’t like to toot my horn or herald the company doing great things. That doesn’t always serve the business well. And so that probably slowed us down.
Andrew: How did you get past that, then?
Nathaniel: I worked on it, but I also hired other people around me who were better at that. Ultimately, I brought in a different person to run the company after 12 years. I made different modifications along the way that I thought made sense.
Andrew: Why did you suggest doing this interview then, considering that you’re not the outgoing person who needs my audience? You’ve got your world. Why?
Nathaniel: One of the reasons is I’ve discovered that . . . I’m doing a fair amount of coaching of other small businesses and I’m finding that I enjoy that a lot. Even not charging for it or anything. I think I’ve learned some things about building a business in an honorable way that has employed a lot of good people, that has a really good culture and I kind of want to share that to some degree and then I also have some new projects that could stand to be heard. So if there’s an opportunity in this interview, I’ll talk about that, but that’s the main reason. Also, I’d listened to a few of your interviews, some fairly quirky ones and I thought that might be nice to talk to you about it.
Andrew: What’s a quirky one?
Nathaniel: I’m not sure I would remember the name, but there was a fellow who . . . I actually started walking a lot and I was listening while I was walking to a guy, I can’t even remember the details of it at this point, but it was one of your probably like around your 200th interview. Some guy whose father was a very prominent health guru or something. You’ll probably remember this?
Andrew: Yes. I know whom you’re talking about. I can’t think of his name, but his father was close friends with Deepak Chopra.
Nathaniel: Yes, that’s the guy. I listened to that and I was like, “What an unusual conversation.” I thought I’d have a conversation with you because of that interview perhaps.
Andrew: Good. I’ve been wondering what he’s been up to. He created new software that he emailed me about that allows people to get paid audio programs all together in one package for one subscription fee and I’m curious about how that turned out. As an audio person, I love that. I’d love it all just packaged together. That’s why I started . . .
Nathaniel: Are you seeing me clearly? Because I’m seeing…you’re kind of furry on my screen.
Andrew: Oh really? Do you want me to just hang up and call you back?
Nathaniel: No, we’ll just see. It’s clearing up.
Andrew: I am a little bit furry, but I shaved. Not too bad. You know what, I’ll do a quick sponsorship break right now and tell everyone about Convert Kit. If you haven’t heard of Convert Kit, you’re not unusual. It’s a fairly new software. And what I love about Convert Kit is it really makes it easy for you to talk to your audience via email in a very personalized, very intelligent way.
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We were talking about some of the lessons that you learn that you want to pass on to other entrepreneurs. What’s the big one that you wish that you could pass on to every single person who’s listening to us?
Nathaniel: I think the big one is probably I imagine, echoed by a lot of the people you interview, which is this is very doable. I did not come to this, to building a company, which is nine times on the Inc. 5000 list by knowing a lot about business or by starting with any money or particular assets. I lent the company $10,000 and we got going. I think any journey starts with a single step is really the lesson here. You have to decide, though, to get going in a direction that you want to go and it’s doable if you take it one step at a time.
Andrew: What else? What else would you pass on to, let’s say, your former self? The person who is in the attic trying to build this thing and maybe wasn’t sure?
Nathaniel: I did it probably alone for too long in a lot of ways, I think. Different people would need different messages, but what I probably could have used was more confidence about going faster, about being more aggressive. I was very cautious for a long time and I think it’s okay to take measured risks. If I knew then what I know now, I would have gone a lot quicker.
Andrew: What’s a risk that you didn’t take back then that you would today?
Nathaniel: For example, it was a really important transition from client-server to software as a service. And I was concerned about the investment that it would take to build software as a service. So we sort of bootstrapped that one slowly off the revenue of the client-server application and that took a while and it took a few false starts. I probably should have gone and found better expertise and gone at that much more aggressively. We still ended up conquering the market, but we would have done it quicker and we might have been in a better place.
Andrew: Client-server is you get desktop software on your computer, but it doesn’t . . .
Nathaniel: It links to the local network. That’s the way database software used to work. It was very clear to me for a while that that leap had to be made, but I didn’t go quickly to it. I still beat my competition to it, but I could have done it quicker.
Andrew: And all the software at the time was in your client’s office or on their own networks as opposed to on servers that you own yourself.
Andrew: And that’s the cloud. And when you did that, Howard Dean, who was huge in opening people’s eyes to the power of the Internet, he was one of the first people to use it?
Andrew: How did you get Howard Dean to try this? Was he an experimental person? Is that why?
Nathaniel: He was a client already on the desktop version and his campaign was taking off and the version that we had of the software on the desktop didn’t scale particularly well to that. They had technical people that were smart enough to know that. It was almost like we were forced to deliver something and they would tell you we delivered it prematurely. We delivered what we had, when we could, to them and they worked around it and it grew quite a bit better through that.
Andrew: What didn’t you have? What’s one thing that was painfully missing?
Nathaniel: Integrated emailing.
Andrew: Integrated with what?
Nathaniel: Integrated with the database.
Andrew: Oh, I see. So what would they have to do if they wanted to send an email?
Nathaniel: They used other applications to do that. They had a tech team and they built lots of stuff around what we had and around what other people delivered. That ended up creating competition for us because other members of their tech team came out and started companies because they realized what was missing in the market. I should have been there with a much more complete toolset at the time and just wasn’t.
Andrew: What’s so compelling about this software that got the Dean campaign to use it even though it didn’t have integrated email and didn’t have all these other things? What made it so compelling that they would use it this way?
Nathaniel: One thing was the compliance, which was kind of always the anchor of the software. That’s a very specialized technical thing and we had it and we also had relationships with the Dean fundraisers, with our compliance team. We knew the business. We could solve the problems that they had in that arena and we were good at that. It’s just that we weren’t a full suite that we do everything you needed in every dimension.
Andrew: I remember when I had my lows in business, I would get myself going by dreaming about how big the business could be, how great of an entrepreneur I could be. Since I’m being fully open with you, I’m always that way, I remember one time things were rough and I said, “Oh but this new thing is going to be so good.” I could imagine myself walking down the red carpet in movies with Jennifer Love-Hewitt for some reason in my head. I was in my mid-20s. “This is the future. I’m going to be that big. People are going to want to interview me for having created this software.” Who interviews a software guy outside of Biz Stone? But that carried me forward. What carried you? What was the vision that’s almost a little too embarrassing to admit now when you don’t dream of financial wealth the way I do or even . . . what is it?
Nathaniel: What carried me forward was taking care of my employees, to be honest.
Andrew: That was it? I’m going to take good care . . .
Nathaniel: I did not want to lay people off. I wanted to provide a place for them that was stable and growing and exciting and I wanted to take care of our clients and that was really what carried me forward. I ran the QuickBooks, I knew what was coming in, I enjoyed it when we were profitable, I took money out of the company when it was appropriate, but I was always focused on the team, making the team better, keeping the team, growing the team and keeping people happy.
Andrew: Why growing the team then? If you want to take care of the team, why not say, “We’re going to stay where we are, this is the size of the business we’re going to have, but we’re going to be stable. We’re not going to try to double, we’re not going to try to get into the Inc. 5000 list, but it’ll be safe for our people.”
Nathaniel: I have to confess something that maybe hasn’t been clear in this interview is that I’m a very competitive person.
Nathaniel: Along with other characteristics. I played some sports, I played other games. When I formed the company, I made a list of the things that were my exhortations to myself. They were eight or nine of them and one of them was “win in competition.” So I was definitely also driven by beating existing companies in this space and we sort of defeated a lot of other small companies along the way, consolidating that market. I definitely think competition was one thread that kept me going. And that meant that any particular sale or take away of a client from another software to ours. That energized me and I tried to convey that to my team. We would have meetings like a sales meeting or a leadership meeting, I tried not to say, “Hey, this is how much money we got.” I’d be like, “We got these important public officials now using us and we beat these other companies to it.” I like that.
Andrew: I see. I don’t have that in me. For some reason, maybe I’m too inner-directed and maybe that’s how I could admit things that make me feel a bit awkward because I am very aware of my own feelings. But I don’t have that “I want to beat the competition.” I do have this vision, how do I get to that? To that world?
Nathaniel: You’re not so much zero sum game as I was.
Andrew: It’s true.
Nathaniel: For every Democrat running for senate, it was either they were going to use us or they were going to use someone else. And there were rippling consequences from that. If they used some competitor’s software, that competitor would be strengthened and they would use that client to sell other ones. I really felt like we had to win all the time or we would go away. I think software is a lot like that. You either win a market or you disappear.
Andrew: I get that. That does make sense. Then why not go after the Republicans too?
Nathaniel: I’ve been asked that question a lot including from the early days and one of my competitors worked on both sides of the aisle and that’s a perfectly good business model. I just much prefer Democrats to Republicans. If you watch the presidential campaign now you can probably tell why, the sanity is all on one side in my view. I wanted to work with people that I believed in more than the other sid,e which is not to say that there is a monopoly on any kind of sense among Democrats because there’s a mix. But to me, it was a clear choice.
Andrew: So because you believed in them more you’re willing to give up money and give up this sense of competition? Is that right?
Nathaniel: I really had no interest in creating a company that served a whole bunch of Republicans in their campaigns. I had interest in Democrats and that proved to be plenty of a job. And I think it provided a focus and a mission for the company and relationships with political consultants that work out to be a great thing. And so that early decision made the company in a lot of ways.
Andrew: Can you give me an example of a relationship with an employee or with a client that was strengthened because you only worked with one side?
Nathaniel: Almost every single hiring decision that we make, the people come to work for us because of our mission.
Andrew: I see.
Nathaniel: There is an absolutely strong culture within the company to this day that they’re doing something for the good of the world. That is retaining people that might go elsewhere that wouldn’t be as excited about selling soap feel like they’re providing a difference in the world.
Andrew: So now you’re still with NGP-VAN, I must have something with my eyes that I keep transposing.
Nathaniel: I’m on the board and I still retain some ownership, but I’m not there. That’s not really where I am right now.
Andrew: This is kind of an awkward question. I was going to now transition to the new projects, but this is an awkward question for me to ask a Democrat who is not as concerned with money, but do you remember the day you became a millionaire?
Andrew: What was that day like?
Nathaniel: Money can be very helpful and what’s really nice about having some, more than I imagined I would ever have, is freedom and autonomy. The ability to choose to do with my time what I want on a daily basis is absolutely amazing.
Andrew: Like what? What could you do?
Nathaniel: My days right now are diverse and full of only things that I choose, really. I can hang out with my children more. I’m working on a non-profit called Lever Fund that is aiming to fight poverty in the area that I’m in, the DC Metro area. I have a small company called Graphicacy, which keeps my hand in the game of being an entrepreneur. I get to coach other companies. I have my entrepreneurial forums. I do a little bit of investing. My life is full of meeting interesting people, talking to them, trying new projects. I can do things. I’m not super wealthy, but I have enough that, as a fairly frugal person, I can make choices about how to spend my time.
Andrew: I’m on your site, the ones that you mentioned, leverfund.org, what’s that about? How are you helping to fight poverty?
Nathaniel: There is a very successful foundation in Europe called Robin Hood and that I think it’s like $150 million a year, very metrics-based thing that figures out what non-profits are doing the best work in raising the people’s standard of living and grants money to them. A lot of that comes from hedge fund world and so on. We are, I and several other founders, are trying to bring that to the DC area, which really needs it. It’s really an embarrassment that the nation’s capital has this tremendous amount of poverty around us as well as so many people doing well. It’s part of that.
Andrew: How did you pick up that as one of your missions?
Nathaniel: More by happenstance than anything. I was chatting with Ann Marie Habershaw, who happened to be the Obama-Biden COO. She was coming off the campaign, she saw something on 60 Minutes about Robin Hood, we got to talking about it, we brought in some other people and we’ve been working on that. That, by the way, is another startup, it’s difficult trying to find people who want to part with their money to help other people, not easy. I’m still learning about that.
Andrew: And the other one is Graphicacy. I’m on that website too. Beautiful, beautiful designs on that site.
Nathaniel: When I was an undergraduate, one of the courses that I took was one with Edward Tufte who is . . . I don’t know if you’ve heard the name, but he’s kind of the guru of the visual display of quantitative information. And he has a series of four beautiful books, which he talks about the best ways to make truth out of data with graphs and many other things. I was really inspired by that, but I got waylaid with graduate school and NGP and other things. And so when I was thinking about what to do next, I started out actually if you look at timeplots.com, that’s what I started with, which is a number of posters about . . .
Andrew: You turned data into posters.
Nathaniel: Information graphic posters. We have a visual history of the American presidency, we have one for the US House, we have one of the Supreme Court. I started making these posters because I was interested in politics and I was interested in data and I wanted a new company. We sell them online and that’s been really fun. I have Supreme Court justices that have the visual history of the Supreme Court in their office. It’s sold in the Supreme Court gift shop. It’s a totally different business.
Andrew: And you designed that yourself or you supervised?
Nathaniel: I designed it. I’ve employed people who’ve helped me and brought other skills to that. And then what we did after doing that for a little while, I decided that with my team that we could provide this as a service. Telling stories with data to other enterprises, non-profits and so on and that’s Graphicacy as in literacy, numeracy and graphics. I hired Jeff Osborn, who is my creative director, he had worked for National Geographic for 10 years and been a designer and Josh Korenblat is our art director and brought together a team that can really bring a lot of skills that I don’t have to taking people’s data and creating displays around it. A lot of time, it’s interactives or motion graphics or could be static graphics like you see with the posters. That’s actually an exploding field, data visualization information graphics and something that I’m enjoying being a part of.
Andrew: All right. Actually, there is one other thing that you mentioned that I didn’t get to ask you about, which is you said you also are helping in advising other entrepreneurs. How do you do that?
Nathaniel: How do I do that?
Andrew: Yeah, how are you finding entrepreneurs to do it?
Nathaniel: One of the ways is through forums. There is a member of one of my forums who runs a payment processing company and they were trying to figure out what gateway to buy or build. And so he brought me in as an adviser to help them create an advisory committee and evaluate the technology. I’ve done that. I’ve also helped neighbors who are running catering companies or I’ve worked at 1776 as a coach. That’s sort of almost an incubator, but a place, a co-working facility really in DC that’s entrepreneurial. I found people there just around and about whenever I need to, whenever I feel I can be helpful, I guess.
Andrew: Cool. Before I end it, as someone who’s not eager to go and get the limelight, as someone who’s not doing a ton of podcasts, I started this out in a very unconventional way and probably let it that way too. Now that we’re at the end of it, how does it feel for you to have come to gone through this interview? Be open.
Nathaniel: Be open?
Andrew: Be open.
Nathaniel: I guess the truth is I wish it would go longer. It’s been fun.
Nathaniel: Yeah, it’s been fine. If I could program it completely, I would do it a little differently.
Andrew: How would you do it differently?
Nathaniel: I think there’s so much and I’m not sure I could organize my thoughts on that immediately, but there’s so much to say about building a business and it’s such an interesting project. It’s like having an organism and you can shape this organism over time and there are so many ways to do that. It’s a fascinating thing. I didn’t know anything about business starting out, but now I can see why people get addicted to it. It’s just . . .
Andrew: I know what you mean that I want to see more of the details of how you built it. My wife’s dad is a sculptor.
Nathaniel: Not yet.
Andrew: No. And it’s so interesting to see how he creates tools that allow him then to create the art that he puts out in the world. And I see the tools and he’s shown me a little of how he does it, but I still don’t get to see the whole thing and the only way to really get to understand it is, not the only way, but one way is to actually watch him do it from beginning to end and watching every detail unfold, including the creation of a new tool that he needs just for one little corner that otherwise couldn’t be created without it. I try to do that in these interviews, but I feel like it adds too much . . . it can’t be done in an hour. How do I pull out little pieces that together with all the other interviews create this big story, big experience? That’s a challenge.
Nathaniel: One thing that we have in common, actually, is this interest in interviewing entrepreneurs. One of the things I started to do when I sold the company was I started to make a documentary film, which followed me interviewing entrepreneurs in their places of business. I did that in cooperation with a film production company in DC and it was really fascinating because we got to see . . . speaking of sculptors, we went to a bronze foundry in Chester, Pennsylvania where two brothers had taken an abandoned warehouse and they were pouring bronze into forms and we interviewed them about how they did this and remade an area of the city. Lots of different interviews like that, organic farm outside of Boston, a furniture marker in Vermont with footage of what they were doing.
It was part of me trying to figure out what do I want to do? What do I think is exciting out there? Who has put together lives that I’m envious of or that amaze me in different ways? I think there’s something. I haven’t figured out how to turn it into a film because a documentary, you need a plot, you need a story arc. It’s been much more episodic, but maybe I’ll find a way to purpose those, the footage that I have from that over the next few years. Who knows?
Andrew: I know what you mean. You do want to hear a story of a person who’s got this new . . . kind of see it, but I don’t know if it could be done, of you starting out new in life, trying to figure out what to do next, interviewing all these people to get excited about what they’re doing, finding your passion from it. It seems like that’s what happened. Were you able to discover what you were going to do?
Nathaniel: I think what the interesting thing is I’m 50-years-old, I’ve had a great run, a lot of good fortune in my life, nothing to complain about, but like any 22-year-old, I’m also still trying to figure out what do I want to be? I have lots of things I like doing, but I don’t think I want to do any particular thing for the rest of the way. I want to be still discovering and learning and maybe I’ll find something that gets me really psyched a year from now. I think it’s part of . . . that’s life. I’m searching.
Andrew: And searching after you’re 21 years old because I feel like it’s okay to do it when you’re right out of college, but afterward it seems like you have to know what you’re doing and what you’re about. That’s the way it feels from the outside, but that’s just not true. That’s the way it feels, frankly, when I see people who do interview shows about what career path you could take, what job, what opportunities are, they’re aiming at people who are in college or right after college and it’s not the only time you make that decision.
Nathaniel: It isn’t. In fact, many middle aged people I know are in jobs that aren’t inspiring and yet they have something, some project that they really want to do, that they are afraid to do. If they could see that it’s doable, they could transform their life. It doesn’t have to be . . .
Andrew: And do they know that there are some people who are listening to us who might be in their late 20s, I could think of one or two people specifically who don’t love their jobs, but they don’t have that passion that you found, that vision where you believed so much in the politics, you believed so much in your ability as a developer that you would go and do this and they’re dying for that. The question is how do you find that thing that you’re so passionate about that you’re willing to live in an attic for? That’s a challenge.
Nathaniel: I don’t think that searching your head for that will work.
Andrew: So what does work?
Nathaniel: I think what does work is knowing intersections of interests and then trying things. I think the only way to find out whether something is going to work from you is to go down that road and take one step at a time and see how you respond to it.
Andrew: Did you do anything . . . I’m looking at a LinkedIn profile that had a typo when we copied it into my noted before, but otherwise, it’s very clean, very organized. It looks like you went from, I guess the British say from strength to strength. It looks like everything just kind of flowed nicely here including being the CTO of Hillary Clinton for President. Everything is just beautiful in here together. It all fits into one clear, cohesive path. Were there any false starts? Did you try a couple of things that didn’t work out that you didn’t even put in your LinkedIn profile?
Nathaniel: Nothing that I’ve done has come easy or been a clear follower to the last thing. Whenever you look at a career and you go backward through time, sure, you can create a thread where it makes sense. Being Hillary’s CTO, I was not at all sure that that was the right thing for me to do. I was running a thriving business, they asked me to come in and help them with technology. I tried to think, “Which plot is more interesting for me in my life? Is it going to be more interesting to have tried this for a year and a half or to not? So I tried it. I didn’t seek that. So sometimes it’s being opportunistic and seeing what comes your way and it’s also often saying no to stuff that you don’t want to do.
Andrew: I get that. It’s hard. Once you have a lot of opportunities, it’s really hard to say no to great opportunities. How do people follow up with you? Beyond looking at your businesses, what’s a good way for them to just stay in touch and see what you’re up to?
Nathaniel: I’m certainly happy if anybody emails me, firstname.lastname@example.org or graphicacy.com or leverfund.org, any of those will get to me. I read all of my email. I think that’s probably the best way. I’m on Facebook, I’m on LinkedIn, but I am very open. If you are in the DC area, take a walk with me. I’m a fanatical walker. I do lots of walking meetings and so on. Happy to talk to people.
Andrew: I miss living in DC. I would have loved to have done it when I was living in DC.
Nathaniel: Come by when you’re visiting.
Andrew: I’d love it. I miss running there too. Thank you so much. Thanks for doing this interview, Nathaniel.
Nathaniel: You’re welcome.
Andrew: Thank you all for being a part of Mixergy. I kind of did a short spot for both of my sponsors so I’ll repeat their URLs again. If you need somebody to send out your email and allow you to do it in a very responsive way, so if someone clicks a link you can follow up with email sequence that makes sense to that person based on what they clicked. Anyway, go check out convertkit.com/Mixergy. Of course, if you need a developer, go to toptal.com/mixergy. Thank you for doing this interview. Thank you all of you for being a part of it. Bye, everyone.