Bootstrapping to Inflection: Dan Stewart, CEO of Happy Grasshopper (Part 3)

Sramana Mitra: Your background was in sales training and then construction. Where does CRM come from into this process?

Dan Stewart: Maybe we should go back a little bit further. We all have our gifts and talents. I’ve always been fascinated with learning. I have a very diverse set of interests. Whenever a subject interests me, I obsess about it until I’ve learned as much as I can. My love for computers and technology started in my childhood. I had a Sinclair back in 1981. I was an early Commodore user. I’ve always taken a very active interest in technology trends. When our company had grown to the point where we had solved the issued of acquiring and managing the business profitably, my mind became very focused on how to optimize this. I thus went on to search for some software solutions that were difficult to find.

On a sinkhole job, we would have about 16 places where the project information would need to be entered. If you enter it incorrectly in even one of those places, that might mean that the six months it takes to get a permit might now take 12 months. It can have a huge consequence.

Our first need from a tech perspective was to have a single point of entry for the project information and then to have that populate 16 different forms so that we could properly permit and complete the work. It was that simple. I thought, “We’re already capturing this information. What else can we do with it?” How can we leverage that bit of technology in different ways?” After 30 days, it was up and running. I thought it was really cool so I showed it to friends, contractors, and business owners. Invariably they’d say, “That’s awesome. I want to use that. How do I buy it from you?” That’s what got us thinking that this should probably be another company.

Sramana Mitra: So you spun that out into a separate company?

Dan Stewart: We did. That’s where I made every conceivable mistake. In one of the testimonials I gave you, I talked about how badly I needed what I learned in 1M/1M back in 2007.

Sramana Mitra: You know the 1M/1M methodology. You were in the program for several years. What was the name of the company again?

Dan Stewart: It was Envala.

Sramana Mitra: Talk about the things that you did wrong in Envala that you corrected in Happy Grasshopper.

Dan Stewart: We didn’t validate anything. We built it first and then we assumed that we could sell it. We didn’t really listen to a client base to help us guide the development of the product. As a consequence, we invested a ton of money building a very broad feature set where we might have a viable customer who loves our solution but, maybe, seven-tenths of it, is a functionality they don’t need. That would prevent them from moving forward.

The other mistake that I made was that anytime someone wanted a new feature, I would say, “You’re right. Let’s do it.” Before long, it just became a cumbersome beast that was very difficult to solve and sell. For clarity here and I think I’ve expressed this to you in the past, the exit was not, “Yes! I sold my company. Let’s go buy a private island.” The exit was more like, “Yes! I don’t have to do that anymore.”

Sramana Mitra: You funded this company with some of the proceeds of Geological, right?

Dan Stewart: Yes, it was our profits that funded that company.

Sramana Mitra: Which, to some extent, gave you the luxury of being able to make a lot of these mistakes as well.

Dan Stewart: Exactly. It wasn’t that I wanted to waste money but I had the hubris of success. I felt like I know how to do this. I have proven I can do this.

This segment is part 3 in the series : Bootstrapping to Inflection: Dan Stewart, CEO of Happy Grasshopper
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