Scaling with Angel Money Only in Canada: Joel Lessem, CEO of Firmex (Part 2)

Sramana Mitra: Very quickly, how long did you work for this entrepreneur?

Joel Lessem: That was a year and a half here and a year for another one. I worked for many of them.

Sramana Mitra: When was the first startup that you did?

Joel Lessem: The first startup I did was in 1999.

Sramana Mitra: What was that?

Joel Lessem: That was in Toronto. It was during the dot-com boom. I had an idea for a piece of software and I partnered with a person who already had a design business. Like a lot of these early companies, you make some revenue off the design business and then you put it into the software. I went out and started licensing this software. That partnership was not an amicable one. That was one of the first lessons. I always tell aspiring entrepreneurs, “Do not be opportunistic with your co-founder.” Two people get together. They have a chat over a few beers and they go, “Let’s start a company.” It’s like a marriage. You don’t get married that way.

Sramana Mitra: Very bad idea.

Joel Lessem: That was a horrible lesson. The relationship was so challenging that I realized it wasn’t going to be sustainable. I moved on after 15 months. That business never went anywhere because I was a sales and marketing person. It eventually just wound down. I took refuge working for another software company as a salesperson, and really selling software. I did that for five years. I learned a lot. I always tell people, “Always learn.” It was about a 50 to 60 person firm that was bootstrapped and had been around for a long time. I learned how to do some things well and I learned some things that you shouldn’t do. Then I got a job with a Silicon Valley company called NetSuite as a Sales Manager. I worked there for seven months. This was when they were only $19 million in trailing revenue. Today, they’re at about $400 million or something. That wasn’t entrepreneurship because they were all from Oracle. It was really run like a big company.

I didn’t enjoy that because I like the intimacy of a smaller business. I had some friends who owned a small web development company. They had been bugging me for several years to come and grow their web development company. They knew me as a really good sales person. They wanted to commercialize some of their projects into commercial software. They’d done it for a client and they wanted to commercialize it. I’m very analytical. I look at the market. I go talk to sales people in that market, see how long the sales cycles are, how big the market is, and what stage the market is in. I decided, “I don’t like it here. These are nice people.”

I went to start working with my current co-founders. They were really excited about a very elegant solution they’d built. I did my research and I said, “This is not going to sell. It’s a beautiful technology, but it’s not going to sell.” They said, “We have this other thing that we’re releasing to a client, but it’s really basic. It’s called Deal Room.” I looked at that and I realized that there was an opportunity, because the incumbents had a very expensive distribution model. The whole business plan was based on a more efficient manner of distributing an existing product into an existing product category. It had nothing to do with invention. I guess it was innovation on the business model side versus on the technology side.

This segment is part 2 in the series : Scaling with Angel Money Only in Canada: Joel Lessem, CEO of Firmex
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