I Eventually Made Millions Selling My Startup to Salesforce. But It All Started With 1 Desperate Pitch.
I felt positive about the probability of getting a first client for ÄKTA, but there was no telling how long it was going to take, and I was getting shockingly close to being dead broke.
Don’t get me wrong—I was already broke. Very broke. Still six figures in debt. Still using credit cards to pay off credit cards. But this was the first time I could see the end of the rope. When I maxed out this last credit card, there wasn’t another one to use. I only had a few weeks of burn before I was dead in the water. There was no rainy-day fund. I was on the doorstep of what I call “fuck-off broke” — the point at which the entire world is going to tell you to fuck off, and the floor falls out from under your feet.
Thankfully, I was on the right side of good fortune, for once. My break came in April of 2010 as the result of a meeting with a woman named Jennifer.
Jennifer was in a management role at a company called Endeca. Despite its having quickly rejected my job application, we had kept in touch, and she was one of the first people I invited to coffee to talk about my new venture. Though she couldn’t see any potential business between ÄKTA and Endeca, she did have an off-the-cuff suggestion: I should speak with her boyfriend, Robert, who had recently begun a new role as COO of Vosges, a high-end chocolate brand in Chicago. He was in charge of a significant turnaround for the fledgling company, and e-commerce strategy and design were top priorities. Perhaps he needed help?
This was my only promising lead, and though I didn’t know much about e-commerce and hated chocolate, I had to make something happen. I was empowered by the most potent force in the world: desperation.
Vosges was on the outskirts of Chicago, so rather than getting dropped off in a taxi, I borrowed my friend’s Range Rover to add even a hint of credibility. The night before I had run every free search engine optimization test I could find and printed all the results. It was all total bullshit, but pretty-looking charts and graphs make everyone look as if they know what they’re doing.
Vosges HQ was what I’d expected: half strewn-about open-plan offices and desks, with computers and printers and papers and rushed-looking people; half giant, loud factory space with machines and assembly lines and rushed-looking people with hairnets.
Apparently, the company was a big deal, according to the more sugar-inclined friends I had consulted with before the visit. They used fancy French words like “haut” and “couture” to describe their product, which must have justified the eight- to 20-dollar price per bar. I didn’t know then that “couture” means “made-to-measure,” which I would have found hilariously ironic while being given a tour of the robotic assembly line printing out this brown gold. Maybe it should have been an indication of things to come. The owner of Vosges was Katrina Markoff, whom I only knew from her shameless self-promotion in every luxury magazine and on every billboard in the city. She was the queen of chocolate fit for a queen. She was stunningly beautiful, wealthy, and fierce.
Robert, Vosges’ COO, could have been the cover model for Upper-Middle Management Weekly. He attempted to dress down to match his new hip environment, but he only looked as if he had forgotten his tie in his BMW due to balancing his pumpkin spiced latte in one hand and his tennis bag in the other. Apart from his outfit, there were two things I gathered about him within moments of sitting down: he was much, much more experienced than me when it came to business management, and he didn’t know a damned thing about technology. Both of these would play in my favor.
“Look,” he said as soon as we sat down. “I was brought in here to take over and turn this place around. We make the most high-quality, haut chocolate in the world” — he recited from the brand bible — “with the most unique flavors and ingredients. But, we’ve fallen behind on digital. Our website needs a lot of work. We also pay a lot of money to an agency based in London for online advertising, and I have no idea if they are doing a good job or not. We need help sorting all of this out. Is this what your company specializes in?”
This was much more of a test than a question. I knew Jennifer had given him the scoop that I was just getting started. He knew for a fact there was no “company” behind me. He was seeing if I would try to bullshit him.
“Robert” — I smiled — “my company is brand new, so you’re looking at the entire team right here. But truthfully, this is what I specialize in. I’ve been building websites since I was 13, studied computer science, and I founded an online advertising company called TrakLabs. I’d be a perfect fit, and I also have an army of guys at my disposal whom I’ve worked with for years who I can bring in as needed.”
I then produced my impressive-looking stack of papers and carefully paged through them, showing Robert how poorly the Vosges website was functioning from a search perspective, and how much room for improvement there was. Now, I had absolutely no idea if any of these graphs actually told that story, but neither did he. I had other pages in my bag that detailed the return on investment of certain types of internet marketing, which I left snugly packed away, as he was informed enough to have kicked my ass on the subject and killed the meeting. This is why you have to know who you’re talking to.
He was clearly impressed with my presentation. There was no doubt he was stretched thin and alone on an island in this new role, and a potential partner in a hotshot tech kid could clearly bolster his cause.
“John, you know your stuff,” he said. “This is great. As you can imagine, though, we are on a tight budget.” I recalled the photos of Katrina on a private jet on her way to visit her truffle suppliers in France, but only nodded. “So, I would like a proposal from you, but please keep that in mind when you put the financial model together.”
This was also a bit of a test. Even if his “budget” was tight, there is a truism about money that everyone in business should take advantage of. A billion is more impressive than a million. A $10,000 watch is better than a $1,000 watch. However valid Robert’s claims, Business Psych 101 demanded that I deliver an egregiously expensive proposal just to impress him, and then allow him to negotiate down and “win” the battle.
This proposal would have to be my magnum opus. We ended the meeting and I went home to construct it, equipped with the single most important lesson about design I had learned in my career so far.
An interesting phenomenon had occurred in recent years around design. Apple’s ferocious entrance into the smartphone business had shaken the world. The big question was why a device that functionally didn’t do anything its predecessors didn’t had upended the entire market, knocking out behemoths like Palm and BlackBerry, and changed how we live our lives.
The answer was simple: Apple brought design to the masses. Not design in terms of pretty interfaces and a sleek appliance, but rather, design that got into deep levels of our collective psyche to determine how we wanted to be connected to the world, talk to friends, browse the web, and consume content. They mercilessly dissected the competition’s weaknesses and addressed those seemingly small details in devices that would take us from frustration to love. They didn’t advertise the processing power or the number of pixels in the screen, but rather, all the ways that life would be better with their snazzy apps and beautiful hardware.
Apple designed the device and software specifically for the human beings they intended to sell it to, by understanding us a little better than we understood ourselves.
This approach was a reflection of one of Steve Jobs’ most beloved quotes: “Design is not just what it looks and feels like. Design is how it works.”
I was fascinated by and had exhaustively studied the psychological effects of good design, and I began to notice it (or the lack thereof) obsessively in my daily life. Was it clear whether you were supposed to push or pull a door without a sign’s telling you? Where did an airline position power plugs in relation to the seat? How long did it take to settle an ATM transaction?
This was not only the premise on which ÄKTA was built but also became my personal differentiator. Everything I did was led with design, which sometimes made all the difference in the world. Whether you received a business card or Christmas card from me, it was design-led. I now had to translate that to a convincing proposal.
I stared at a blank screen for what felt like hours, trying to find the inspiration to get started. I tried to imagine what the readers of this document would need to feel to get excited about it.
I began with a personal letter “From the CEO” with a big, impressive-looking signature at the bottom. In the letter I explained how perfect a fit I was to help Vosges catch up to its competitors on the tech side, and how I had no doubt that I could meet Robert’s operational goals. And most important, I suggested how much of a risk they would be taking by not hiring me. This final piece became one of my favorite and most effective sales tactics.
From there the rest of the document started to flow. I knew it was going to end up in Katrina’s hands, so as important as the content was, it needed to be a work of art as well. Creative executives tend to make decisions based on instinct and feeling, while more traditional, business-oriented executives will dig deeper into content and numbers. However, every human being subconsciously makes some degree of judgment about credibility and quality based on presentation alone. It’s why high-end fashion companies spend such an unthinkable amount of money on packaging, retail frontage, and even the scent in their stores.
So, a work of art is what I made — a 20-page-long, pixel-perfect document with attractive type and convincing-looking charts. Millions could be added to their bottom line through a concerted digital effort, and I promised I was the guy to do it, all for the comparatively measly sum of $10,000 per month.
That figure represented the most outlandish number I could bring myself to say without laughing out loud during the negotiation. It felt completely ridiculous as I typed it into the document, but when I considered the potential return on investment I could generate, it was reasonable. At least I hoped so.
The last step was to print my masterpiece on some impressively weighty paper stock and bind it into folders for the big pitch meeting.
Here goes everything.
I wore the wardrobe equivalent of a mullet: a short-sleeve T‑shirt with a blazer. I was doing business but also ready to party.
My confidence was high going in. It had to be. Given this was a crucial fork in the road, it didn’t make sense but to go in bold and strong-spoken, ready to take on the world, and lay down my most convincing performance.
As Mike Tyson said, “Everybody has a plan until they get punched in the mouth,” and this was one of those moments.
I stepped foot inside the factory and felt something was off. There was absolutely no sound but the whirring of belts and clanking of metal, even though at least 100 people were working there. I said a loud, deep “Hello, Robert!” as he approached, only to see him wave his hands frantically and mouth Shhh! He took me by the arm and rushed me to a refrigerated storage area in the back.
“So, I know how weird this sounds,” he said sheepishly, “but no one is allowed to talk in the office today.”
You’ve got to be fucking kidding me.
“Katrina is here,” he said in response to my baffled expression. “She apparently read some business book that talked about one valuable thing the author’s company does is to have a day of silence per week — ‘No Talk Thursdays’ — to enable everyone to focus and work with no verbal distractions. Katrina has now implemented that here at Vosges, starting today.”
The book he was referencing was Rework, by Jason Fried and David Heinemeier Hansson. Fried was a Chicago entrepreneur who ran a software company called 37 Signals (now Basecamp). His plan to create a distraction-free environment to boost productivity worked for him because he ran a tiny software company — not a high-end chocolate factory where phones were typically ringing off the hook, people were running around hollering at one another, and dozens of staffers had to communicate verbally to keep the machinery running.
I was about to ask Robert how I was supposed to make a pitch without being able to talk but he was already rushing me back to the main office. On the way, I watched as customer service representatives were whispering into their phones with their heads down, inches from their desks. In every dark corner of every room, hushed conversations were taking place with eyes darting about. A half dozen people were standing outside in the bitter cold, trying to have a meeting.
There are no harder people to negotiate with and pitch business to than those who exist in their own bizarre universe. Like poker, business is a sport. And sports have rules. When everyone is playing by those rules, it works. But just like having an amateur at a professional poker table, the dynamics get thrown off when someone in a business setting does not follow the rules. Similarly, I am sure her antics are what empowered her to create a “leather-wrapped chocolate mask made with aphrodisiac ingredients” and get someone to actually buy it, but it wasn’t going to bode well for me in this meeting.
Robert was peering at his watch, breathing a small sigh of relief that we were perfectly on time, and pushed me into the conference room.
At the small table sat Katrina Markoff. When I stepped toward her to introduce myself, I was stopped in my tracks by a raised hand and another overly dramatic shhhhhhhh, so offered a silent handshake, which she accepted with two fingers and a thumb, like the queen. I panicked as she pulled me in for a European double-cheek kiss, which I executed horribly, and then awkwardly waited for any indication of how to proceed. Great start.
Robert took a seat next to Katrina, uncomfortably close, and waved me toward the other side of her. We were now almost straddling her on each knee, like kids meeting Santa Claus. She seemed oblivious to any of it. Robert leaned to within a few inches of her ear and softly muttered, “Katrina, please meet John Roa. He is the CEO of ÄKTA. He is here to tell us how he can help turn around our digital strategy.”
I took the cue and produced my meticulously designed proposals and handed one to each of them. At this moment, the door opened, and a young, scared-looking girl entered. She paused, unclear on what to do, before coming over to my left side and leaning within a centimeter of my ear. “Can I get you a water or coffee?”
This was beginning to feel more and more like an SNL skit. I turned toward her, and she moved her hair behind her ear, as if that would make it easier to hear me. “A coffee would be lovely,” I said, almost inaudibly. My lips grazed her ear.
I then turned back to Katrina as she began paging through her copy at a frenetic pace, and didn’t seem to pause to read a single word or even stop to consider the visuals. When she reached the last page she registered the “$10,000 per month” figure and loudly said, “Ten thousand fucking dollars? Is this a joke, Robert?”
Half the office heard this, due to the complete silence.
“Katrina,” Robert quietly pleaded. “Please hear him out.” Our heads were still within inches of each other.
Instead of being able to productively walk her through my plan, I would now have to speak directly to the price, which is the worst place to start a negotiation. She was also clearly aggravated with Robert, which undermined his ability to advocate for me.
My options were to talk myself into a deeper hole, or flip the script. So, flip the script I did. Backing up to an appropriate business-discussion distance, I began calmly, in a normal tone of voice to speak. “Katrina, I can only assume that the reason your office is dead silent today is because of the book Rework.” Assumptions are always most effective when you know you’re right. “I can therefore assume you respect tech companies and technology, or else why would you take the author’s advice to this level? You have another tech guy sitting in front of you right now, telling you that, respectfully, Vosges’ digital strategy is an embarrassment, and you’re missing out on millions of dollars in revenue. You’re also holding the door open for a competitor who isn’t ignoring digital to eat your lunch. Frankly, I could care less if that happens. I don’t even like chocolate. But Robert asked me to come in here and explain how I can fix that problem. If you aren’t interested, I’ll gladly take my leave. It’s no sweat off my back.” That last gambit was ironic given that my back was now sweating profusely.
She stared at me irately for a few seconds, clearly not accustomed to being spoken to in such a way. I was readying my defenses in case she attacked. I was pretty sure I could spin out of my chair before she could do any real damage. But after a few more beats, she relented and asked if she could take a moment to read my proposal. She was still whispering, which now felt even more awkward after my little speech. I happily agreed and tried to act nonchalant as she paged at a more appropriate pace through my document. Normally I would have struck up some small talk with Robert, but all we could do was make awkward facial expressions at each other.
After what felt like a quiet lifetime, she whispered something to Robert that I couldn’t hear, got up, gave me another queenly shake, and walked out the door. After we were confident she was outside of whispershot, he relayed her message:
“She loved it.”
* * *
From A Practical Way to Get Rich ... and Die Trying by John Roa, to be published on September 8, 2020 by Viking, an imprint of Penguin Publishing Group, a division of Penguin Random House, LLC. Copyright © 2020 by Roa MediaWorks LLC.