We also cover what sets him apart as an entrepreneur and where founders waste time early in the formation of their company. Without further ado, here’s my interview with Dean Drako.

Dean, thanks for joining us today.

Dean Drako: Hey, great to be here. Thanks for having me.

William Griggs: Yeah, no worries, no worries. Appreciate your time. You have a lot of experience and a lot of knowledge that I’m confident can benefit our listeners so let’s jump right in and do some rapid-fire questions.

Dean Drako: Excellent. I just wanna thank you. This is the biggest thing that’s happened to me since the David Letterman Show so I’m looking forward to it.

William Griggs: Yes, this is the highlight of most people’s careers, especially someone that’s done so many things like you. You gotta get that one more accomplishment of getting on Startup Slingshot Radio is often at the top of people’s bucket list. So I appreciate your time.

Dean Drako: My pleasure.

William Griggs: So we got a lot of founders in the audience together that’re grinding it out. Some of them – for some of them it looks hopeless and others it looks good. Regardless, in an effort to help keep them motivated to the ups and downs of entrepreneurship and starting a company, maybe you could start off by sharing, knowing your experience, what’s the best part of starting a successful company like you have.

Dean Drako: Well, the best part of starting a successful company is when you actually first get to success. And that’s when the customers are enthusiastic about your product. They’re willing to actually write checks for it. You’ve got money coming in and you’re like, okay, we have crossed the threshold. We know we’re gonna be successful. It’s like when you’re crossing that line of going to, I hope this is successful to okay, this is successful. That’s the most exciting part.

William Griggs: Yeah, yeah, so lots of people I’m sure listening; some have gotten their summer, some are itching or hungry for that moment in time. And it’s just something that’ll help keep them going through that. What does that feel like?

Dean Drako: Well, it’s exhilarating, right, because you know you’ve got something that people like and people are giving you compliments. They’re saying, oh my god, this is great or I like it, I love it. Oh, I want this changed and then it’ll be perfect. All in that feedback is just exciting, right. And it doesn’t matter what industry it’s in. It can be in a consumer industry and people love your drop box or your whatnot or it can be in a business-to-business industry like I am doing with Ely Networks. And it’s all good fun.

William Griggs: Yeah, so it sounds like you’re able to have this idea, grind it out, make sure it fits what the market needs and you have that kind of moment where you manifested something into the world that people are actually appreciative of, that they give you compliments on it that solves a real problem, it sounds like what you’re saying.

Dean Drako: Yeah, it’s confirmation of your hypothesis, if you wanna put it in scientific terms, right. At Barracuda Networks I came up with the barracuda as being a firewall. We started selling it and people just went gaga over it because it solved a big problem. And they were willing to write checks for it. And it’s just like, oh my god, I was right.

William Griggs: Yeah, that’s really cool. So we also have a bunch of people in the audience that haven’t quite started their company yet. They’re on the verge. They’re trying to build up some skillsets. If you had to pick maybe one reason or skill that you think kinda sets you apart and this helps you to be so successful for all these different companies, what would you think it – or what would you put your finger on? What do you think it would be?

Dean Drako: Well, so I’ve always attributed it to kinda two things. And they’re really simple words. It’s – one is, first you have to have a good strategy and second you have to execute. So I always say it’s strategy and execution.

Your strategy has to be sound. It has to be one that’s gonna make you money. It has to be one that’s gonna differentiate you. And it has to make sense. It has to be something good. And then you have to execute, execute, execute, relentlessly execute. So –

William Griggs: Yeah, so unpack the relentlessly execute portion of that.

Dean Drako: Well, it means basically you’ve gotta do it. You gotta build it, you gotta sell it, you gotta deliver it. And you gotta do that stuff efficiently and you gotta work hard, okay. And you can’t expect anyone else to do it for you, okay. Most – a lot of entrepreneurs fail because they think that other people are gonna do stuff for them. Nobody else does anything for you. You gotta do it all yourself.

William Griggs: Yeah, so it sounds like – I often hear people trying to outsource early sales or get somebody on so they can kind of take over that piece of the business. You might recommend that they would do it themselves, grind it out.

Dean Drako: The CEO should always be the number one sales guy in most every company that’s really successful. And you gotta understand the customer. You gotta understand what the customer wants. You gotta understand why it’s not selling to the customer so you can modify it. So you actually have to sell to the customer.

William Griggs: Gotcha. So, yeah, they’re going out there, they’re selling to the customer and that seems like it’s kinda that feedback loop back into the strategy and adapting that. What about that strategy piece? What – can you unpack that a little bit?

Dean Drako: Sure. So the strategy has to be a strategy that is actually focused on making money, okay, because if you’re a company and when you don’t make money you’re not gonna be around very long. It’s only so long you can raise money, raise money, raise money and spend it, spend it, spend it. At some point you’re gonna think, I’ll make money.

And so the strategy actually has to be really heavily focused on what’s the price point gonna be? How do I make money around that? How am I gonna manufacture? How am I gonna deliver it? How am I gonna get eyeballs? How am I gonna get the leads? What is that whole process of building a business and does that strategy actually work?

William Griggs: Yeah, so it sounds like some of the stuff you’re talking about kinda fits into that business model generation kinda methodology that people are talking about where you’re taking that, you’re breaking it down. It’s – what are the customer relationships you’re gonna have? What are the revenue streams? What are your cost structures so you can know, like you said, how to charge it? You’re going after that type of stuff.

Dean Drako: Exactly. And you gotta keep it simple, right. In the early days it’s gotta be very, very simple. Complicated things usually fail.

William Griggs: Gotcha. And so you talked about execution, you talked about strategy. We unpacked it a little bit. Do you think there’s any specific thing that the people listening to this podcast, either if they’re already started or if they’re about to start, can do to kind of make sure that that’s a focus and be better at that than they currently are?

Dean Drako: Huh, well, so one of the things I often kinda suggest to people is you have to measure and adapt, okay. So one of the advantages that every entrepreneur has is the ability to adapt, okay, and adapt quickly. Larger companies can’t do that. That’s basically one of the biggest advantages the entrepreneur has. And so you wanna use that advantage.

Well, you don’t wanna be willy-nilly just jumping around adapting, changing for no good reason. You wanna adapt to make the product better, the sales process better, the execution better, the sales – whatever it is, you wanna make it better, better, better.

Well, you can do that with opinion and intuition, okay, but it actually is much better if you do it with measurement, okay. So figure out metrics, metrics, metrics, metrics, measure, measure, measure. Measure your sales – your lead generation. Measure your engineering deliveries. Measure everything with some metrics. And they can be simple metrics, but then adapt as you go based on the metrics. That’s the one thing that I strongly recommend to folks.

William Griggs: Yeah, it seems like you’re taking more like the scientific method approach or instead of having an opinion you have a hypothesis and you’re gonna test the hypothesis and you’re gonna make sure you’re tracking all the metrics. So therefore you know whether you’re shooting yourself in the foot in the end with this opinion, or something that started as an opinion, or if it’s actually helping you succeed.

Dean Drako: Exactly. Exactly.

William Griggs: Very cool. So on the flipside you talked about what’s the best park. We talked about what’s kinda setting you apart. What’s the hardest part about starting a company and how can we prepare the audience to let them know that that is on the horizon?

Dean Drako: There are a lot of hard parts but the most important part and maybe one of the hardest parts is getting the money, getting the order, right. You gotta get the order. At the end of the day you’ve gotta get cold hard cash from someone to pay the bills. And if you don’t get the cold hard cash, well, it’s all for naught.

So it’s kinda one of the most important pieces. And some people actually find it the hardest because you’ve gotta ask for the order. And it makes people get squeamish sometimes then. But that’s the part that is key.

William Griggs: Interesting. So it sounds like – and part of the strategy it’s like defining who you’re going after and then part of the execution it’s actually getting in touch with them, adapting the value proposition to them. And then it sounds like the hardest part for lots of people is actually closing or asking for the sale or pushing for the sale, not just continuing to have conversations.

Dean Drako: Right. Right. You’ve gotta get past the conversation to the, hey, this is great. We’ve been talking for a few months. Either you’re gonna order or you’re not. Oh, you’re not? Okay. Well, I gotta move on to the next thing, okay. You are, great. I got success. If you’re not gonna order, why not? What do we gotta do to get you to order, okay, because I’ve already spent a lot of time on this and I’m a startup company? I can’t be sitting here for years trying to sell you.

William Griggs: Yeah, do you all use or do you, in your experience, use any of a sales methodology I guess like Bent or any of those types of approaches to help drive to the sale?

Dean Drako: The interesting thing is that in the early days of selling, those process don’t really work, in my opinion because you don’t know exactly what you’re selling and you don’t know exactly who you’re selling it to. And you don’t know exactly what your value proposition is.

William Griggs: Got it, yeah.

Dean Drako: Because you’re figuring it out on the fly which is part of the reason that the entrepreneur needs to be the first sales guy is because it changes. All right? You got into that first sales call, that third sales call, that tenth sales call, you are tweaking, modifying, adjusting, hearing, adapting. After you get it down a few times then you can start to use some of those formulas. But in the early days you can’t.

William Griggs: Gotcha. So as you’re going out and talking to potential prospects or people who you think could be your prospect, you’re trying to hone in on that target message, test it and then eventually get to those methodologies. What – how – but how do you do that? How do you eventually push forward? Are you looking for a theme to help create more about cohesive pitch? Is that [inaudible] [00:11:59] –?

[Crosstalk]
Dean Drako: Oh yeah, absolutely. I mean, you’re looking for some consistency. You got into one customer and you find a strategy to sell them, that’s great. You go into a second customer and it’s completely different, well, you’ve got a problem, okay. You can’t really [inaudible] to fundamentally different strategies for selling and tweaking, etcetera.

You go into a third customer and maybe he lines up with one of your other – one of the first two and then you start to see a pattern. Then you say, oh, 60, 70 percent of the folks I go into this resonates with. This is what they like. These are the four bullet points that they seem to care about. And then you can kinda start to basically build some momentum and a sales strategy. And then you can start to bring in sales people to repeat that.

William Griggs: Gotcha.

Dean Drako: But the sales people, in my experience, can very rarely figure that strategy out. They need that strategy kind of pre-canned and given to them because they just – they’re used to selling the product that they have or the service that they have. Not necessarily adjusting or adapting it or spinning it differently.

William Griggs: Got it. So it sounds like for back at that strategy perspective that we talked about previous or earlier in the episode was you’re looking at the strategy and you have these different target personas or target prospects. As you’re going to them you wanna make sure if you’re going to VPS sales to sell something to him that when you’re comparing and collecting all the feedback from those different pitches or prospecting attempts, that you’re juxtaposing them against maybe a VPM marketing, right.

So you’re comparing them separately but then you’re seeing the overall effectiveness.

Dean Drako: Yeah, but it’s not necessarily different – it’s not only just different roles but it’s different companies, right, different needs and different problems or different potential customers. So, yeah –

William Griggs: Got it. That makes a lot of sense and that’s super helpful as people get started down the sales path. So we talked about –

Dean Drako: Yeah, I mean, so for example, when I started Barracuda Networks I was the first sales guy for – or the only sales guy for the first two or three months. I talked to every customer, talked him through it, explained what we’re doing, why we’re doing it. And then I adjusted the product based on what was going on or what feedback I was getting until it started to ring true for the majority of the customers. And then things could actually really start to take off.

William Griggs: And did you start selling even as the idea was just a little seed in your brain or did you wait until you had more of a product?

Dean Drako: Halfway in between those, to be honest. Kinda started selling a little bit before the product was done and ready to be shipped. But we – I had a pretty clear idea of what the product was gonna be and it was mostly built before we actually kind of aggressively started selling it.

William Griggs: Yeah, very interesting. So knowing what you know now – again going along with the theme of the rapid fire questions, knowing what you know now, if you could give yourself, your younger self some advice when you were first starting your first venture, what do you think some of that advice would be?

Dean Drako: It’s interesting. Times have changed from when I started my first venture. I was in 19 – early ’80s was my very first company. But you gotta believe in your idea. And back in the ’80s and ’90s when I was doing it, there wasn’t a whole lot of entrepreneurial spirit like there is today in the United State. I mean, there was some but most of the advice I got was, oh, get a safe job and get a nice career in a big company. And that was just bad advice

And so if someone gives you that advice, don’t take it. Not so many people giving that advice anymore but there was back then. But you gotta believe in your idea and you gotta be committed to it and you gotta go do it, okay. So that would be my advice to the younger folks. If you think you’re right, you gotta believe you’re right, go prove you’re right, okay. Test your hypothesis and prove it, convince yourself. But once you’re convinced just you gotta believe and go do it.

William Griggs: Yeah, that’s interesting. So kind of some of the problems with believing or some people as they believe they go out and they might hit a wall, right. Do you have any advice for those individuals that might hit that first wall and be looking to give up?

Dean Drako: Yeah, knock down the wall and keep going.

William Griggs: Yeah.

Dean Drako: Or if it’s a real wall, well then, change your idea or adjust your idea. You gotta have a decent strategy or a decent idea. It is kinda sad sometimes. I do see people who believe very strongly in an idea and the idea’s just really not that good. And so bounce your idea off of people who you think are insightful and who have no other agenda. And if you get kinda the feedback and you get convinced that it’s a good idea, well, then you should believe in it and go do it.

William Griggs: Yeah, so that makes a lot of sense. So if you’re going into a specific industry maybe you’re bouncing that idea off of people that are a few steps ahead of you, someone that’s kinda gone through the [inaudible] [00:17:36] that you’re currently in and seeing the other side. They could either tell you to persevere or pivot.

Dean Drako: Yes, exactly.

William Griggs: Very interesting. So it sounds like also that what you’re saying is you believe in it but you try to go through this hypothesis so you don’t – so you’re not irrational, right. So you’re basically not going down the wrong path.

Dean Drako: Well, yeah, well, have an idea, okay. And you gotta test it, test it, test it, okay. But then once you’ve tested it if it still tests good you gotta believe in it and you gotta go for it, okay.

William Griggs: Yeah, and it seems like also what you’re saying is knocking down the walls is something that they should expect to have to do, right, in the pursuit.

Dean Drako: Yes, absolutely.

William Griggs: Which is definitely helpful when someone comes upon that wall, then they realize that someone with your success had to knock down walls. It wasn’t just, hey, I had a good idea and everything was easy from there out.

Dean Drako: Yeah – no, it’s never easy.

William Griggs: And it also seems like basically from what you’re saying, you were passionate about this Barracuda Network idea and it was something that – I don’t know, did it solve a real problem and a problem that you had personally?

Dean Drako: Yeah, absolutely. Almost all the companies that I started and solved problems that I personally have had. So my first company was EDA Design Software which was software for helping do chip design. And it was solving problems that I was having doing chip design and so design acceleration.

And I started another company that was in a space where I had problems. Then I started Barracuda. And Barracuda was basically because I was getting too much spam. And I figured everyone else was having this problem. And so, too much kinda junk in the email.

William Griggs: Right.

Dean Drako: So I created the Barracuda spam firewall to solve that problem. I created another company called IC Manage, which was basically design management software for semi connectors. Again, it was a problem that I was intimate with. And now I’m doing Eagle Eye Networks which is doing cloud-based video surveillance cameras. And it was basically the same problem.

I needed surveillance cameras while running some of my companies. I needed surveillance cameras for my house. And all the systems that were out there were traditional and DVRs and these things that look like VCRs. And I’m like, are you kidding me? This is 2012, 2013. It’s time for the cloud. And so I said, I gotta make this a lot easier.

William Griggs: Yeah, and it seems like that’s gonna help keep you motivated, probably has, and keep the – keep our listeners motivated. If they’re really scratching their own itch if they know that there’s a real problem out there and they’re not just doing X for Y, Uber for this or Air B &B for whatever.

Dean Drako: Um-hum. You got it.

William Griggs: Very interesting. So next question is kind of around required skills, skills that you think – we talked about strategy, we talked about sales. What other types of skills do you think startup CEOs, either young or midlevel should really focus on to help increase their likelihood of success?

Dean Drako: Hum, that’s kinda interesting. So there’s a lot of different ways to be a CEO. And so I’ve seen CEOs be successful lacking all kinda of different skills, right. Sometimes they’re not technical but they’re still successful. Sometimes they’re – they don’t know marketing [inaudible] [00:21:07] some of them are financially a mess but they’re still successful. Some of them are good at sales.

Anyway, just – there’s all different kinds. What you gotta do is basically know what you know and figure out how you’re gonna cover the things that you’re not gonna be able to cover. That’s really the trick, right. And so if you can understand say how to do sales, understand enough about engineering and manufacturing, understand how to do marketing, understand how to do the financial side then great. You can kinda keep your eyes on all of it and do it all and you’ll probably be a little bit more effective than the guy who’s missing one of those areas. But just because you’re missing one doesn’t mean you can’t find a different way to kinda get it covered and still be successful.

William Griggs: Gotcha. Do you think it equates to – I think some people talk about marketing this way where it’s the philosophy of a T-shaped marketer where you have someone that’s really wide at the top with a lot of different skills but then very specific and very deep in a few set of skills. Do you think that also applies to CEOs, knowing operations, marketing, sales and then knowing certain – maybe finance way better or sales way better?

Dean Drako: Yeah. Yeah, yeah. I mean, that’s generally true of most people. You can’t know everything really deeply. It’s just not humanly possible.

William Griggs: So we said sales, marketing, operations, finance. Are there any other kind of skillsets that people maybe should think about having an overview or a base-level knowledge in, in addition to their more specific industry experience?

Dean Drako: Some – the fifth one is support, often support, a significant thing that becomes important, not in the early days but pretty quickly.

William Griggs: So that means customer support, account management, that type of stuff?

Dean Drako: Yep, yeah.

William Griggs: Got it. And what do people – that’s a set of experiences that I don’t really have any experience, if you will, in. So where do people start if they were gonna dig into support, like even ask specific questions? I don’t know enough about it.

Dean Drako: Well, there are folks who specialize in doing support and doing it really well. There’s a lot of process, a lot of procedure, a lot of training that needs to be done. What normally happens is you kinda get by in the early days. But there’s books written about how to do support. And one of the key things is that really great support really, really, in my experience, affects the bottom line in a huge way.

I’ve been vehement, in all of my companies, that we will give support to the ends of the earth for any and all customers no matter what it is any time of the day or night, any location, any language. We do whatever’s necessary to get support for our customers.

And customers come back and buy more when you do that, in a big way when they have that really good experience and support. Even if your product has some issues and you’re on it and get it fixed for them and responsive, they come back and buy more. And so it is really good for the business.

But it’s just it’s a set of skills just like marketing or sales. And there’s a whole doctrine of knowledge around it and a whole set of professionals who do it. And you learn it like any other one.

William Griggs: Yeah – no, that makes a lot of sense because as I’m trying to think about this, a lot of the support to make how management level services lead to higher retention rates, which is also – which is great for recurring revenue businesses or any type of business really.

Dean Drako: Exactly. Exactly. Yeah, so at Eagle Eye, Barracuda, IC Manage, all my companies support is paramount.

William Griggs: But it also seems like if you’re selling $100 a month SAS product you can’t necessarily have that one-to-one service. So, like you said, it has to be built into the strategy of the business model so you can set an appropriate expectation for the level of service based on the amount of money that they’re spending. And then potentially have additional services for additional fees, right?

Dean Drako: Well, there are different philosophies on that. In the early days of the company I think you do need to get out one-on-one level of service to each and every customer. And you may discover that, oh my god, this is too much. But that just basically means that your product needs help. And so you gotta figure out how to tune, tweak, adjust, improve the product and get the support folks into that loop so that you actually focus on adjusting the product to reduce the support load, okay.

And that’s something that actually very rarely happens in larger companies. But I think I’ve actually been pretty successful in all of my companies doing is basically closing the loop between support and engineering or product management such that we actually started adjusting the product, tweaking the product, enhancing the product to reduce the support load. Because A. it makes for a better customer experience and B. it reduces the cost of your support and makes for happier customers.

William Griggs: Yeah, I actually had a friend recently that was telling me about their company and specifically that they had engineering do customer service every once in a while. And there’s this one bug that people kept complaining about. And they kept complaining about it and the engineer goes, I didn’t even know this was a bug. I could solve this in about three minutes.

And so he went in there and he fixed it and they’ve been having – over the last six months they had like 300 tickets or bug tickets or support tickets for that one issue. So, like you said, closing the loop is super important and definitely something our listeners should be thinking about.

Dean Drako: Yep.

William Griggs: And then it talks – and then you talked a little bit about as you do that kinda white glove one off service in the immediate or the early stage of the company, it sounds like eventually you’re kinda getting to that automated portion where you potentially have that feedback loop. I know Zindesk offers support so you can start to see some of the tickets and bubble them up and try to tackle those so you can relieve some of the issues.

And so then potentially if you have your support team, your account management team dealing with less of those fixable issues, they can deal with more kinda white glove maybe strategic support issues that really make your customers love you.

Dean Drako: Exactly. Exactly.

William Griggs: Really cool. So with the last question, we all know that there’s a lot that needs to be done when starting a company. We’ve talked about it. We’ve talked about strategy. We’ve talked about sales. We’ve talked about all these essential pieces of the business. What do you see – maybe as you mentor other companies or as you advise other companies or sit on the board or as you start your own, where do you see CEOs or founders or other executives that you work with wasting time?

Dean Drako: Interesting. There’s a lot of places that CEOs waste time. The one place they don’t spend enough time is with customers. But raising money, marketing and pitching can be a huge, huge time sink. It’s necessary if you need the money but you can just, I mean, waste a tremendous amount of time pitching, pitching, pitching to the wrong audience and selling to the wrong audience rather than pitching and selling to customers.

Time with potential customers, time with customers is very rarely wasted, okay. Time pitching your company, explaining your company, articulating your company to a whole bunch of people who are interested but are not customers can be a huge time sink.

William Griggs: Yeah, is it – people that are raising money and they’re wasting time doing that, are they not targeting the right venture capitalists or [inaudible] [00:29:29] investors based on their previous investment history? Are they not having enough – or not building enough social proof or proof in their businesses, gotta work to actually get someone to invest?

Dean Drako: Yeah, I think that people go out and actually often will start trying to raise money too early when they haven’t proven their concept. And sometimes they’re lucky and they can raise money but if you look at a lot of the really great companies, they go and get proof or launch or they figure it out and then they try and go raise money.

William Griggs: Yeah, so it’s like you get as far as you can. On the flipside there’s – there are venture capitalists like Mark Suster with Upfront Ventures who talks about trying to build that line. So instead of being a dot to venture capitalist you try to be a line. So you’re a set of dots and experiences. So he would probably say on the flipside, start earlier but don’t do it at the risk or at the cost of kinda validating your business. Is that how you feel as well?

Dean Drako: Yeah, I mean, I think that you’re better off if you’ve got your two or three guys or your one guy, start going as if you’re just gonna go build the business and get as far as you can without raising the money. Because the raising the money’s gonna take a long time and it’s gonna take even longer if you don’t have anything. So –

William Griggs: So it’s kind of a two-part mission, right. You’re going forward, you’re acting as if you don’t need to raise the money so you’re gonna go as far and as fast as you can to validate the business, build up some impressive metrics. But at the same time it seems you might have to – well, maybe not. You tell me. Do you have to, at the same time, build a relationship with a VC but don’t spend – or [inaudible] [00:31:21] investors but just don’t spend nearly as much time trying to convince them?

Dean Drako: Yeah, exactly. You may just – instead of begging you may just kinda do a, hey, here’s some info. We’re not ready to raise money yet but here’s a little info on what we’re working on.

William Griggs: Gotcha. Yeah, what were you gonna say?

Dean Drako: You can’t spend a lot of time on it though, right, because it’s not productive, right.

William Griggs: Right. It seems like you’re saying, they’re not gonna save your business. The sales and the validation of the business model is gonna make or break your business.

Dean Drako: Correct.

William Griggs: And if you’re able to validate that and get that going then it sounds like the investors will wanna be a part of that.

Dean Drako: Exactly. Exactly.

William Griggs: Very cool. So, if people wanna learn more about your company and – where should they go online?

Dean Drako: So www.EagleEyeNetworks.com is where we do the cloud-based video surveillance. And if you wanna learn, that’s where to go.

William Griggs: Perfect. I really appreciate your time today and thanks for coming on the show.

Dean Drako: Oh, thank you very, very much. It’s been great fun, William. And I look forward to doing it again sometime. Take care.

William Griggs: Thanks.

Dean Drako: Okay. Bye-bye.