James Amrijo was the founding member of Smartcare, a startup bringing technology to daycare centers—a sector in dire need of computer management solutions to track children and manage payments.
Though target customers were a challenge to reach, the company was making excellent traction. And then nearly every daycare center in America was forced to close. When they gradually reopened, their enrollments were decimated. Many shuttered permanently. So how do you cater to an industry that’s barely surviving?
In this edition of Founders Journey, James tells the story of how he weathered one of the greatest storms in a century and came out on the other side stronger than ever, positioning the company for a major acquisitions deal by Vanco, a company that offers a nonprofit payment network.
More information: https://www.vancopayments.com/
James Armijo is Senior Vice President of Vanco Childcare. James joined Vanco following Vanco’s acquisition of Smartcare where James was CEO. In James’ role, he oversees the functional integration of Smartcare into Vanco as well as Vanco’s product and go-to-market strategy.show more
Prior to Vanco, James was CEO of SmartCare, the leading cloud platform for childcare providers to modernize the management of their operations and education of young children. In his role, James directed the company’s strategy and manages operations.
James joined Smartcare as President in April 2016. In that role, he led the product management team, moving the product from its beta launch to a product that is widely accepted by thousands of customers.
He also led finance, closing two rounds of funding while providing recurring financial analyst and insights. He also led M&A, integrating the acquisition of Persoft (Childcare Manager and Rapid Tuition) and Preschool2Me (including KidKiosk).
Prior to joining SmartCare, James was the Chief Operating Officer at PatientPop, the first company to provide a single SaaS platform to integrate all aspects of local marketing for healthcare practices. He joined the company in 2015. During his time with the company, he helped the company complete a $13 million Series A, increase bookings and revenue by over 400%, and grew headcount to over 100 people in locations throughout the US.show less
Video Transcription: Surviving 2020 | James Armijo from Vanco
James Armijo 0:00
Start Here started with a really simple idea, which was that the childcare industry is critically important to the country and to many families and to many employers.
Alexander Ferguson 0:16
Welcome to UpTech Report. This is our founders journey series UpTech Report is sponsored by TeraLeap. Learn how to leverage the power of video at Teraleap.io. Today, I’m joined by my guest, James Armijo, who’s based in Salt Lake City, he is the founder of Smart care, formerly smart care, which was acquired by Vanco. And now Senior Vice President of Vanco Child Care. James, I’m excited to have you on today. Thanks so much for joining us.
James Armijo 0:41
Thanks so much for having me. Now, we
Alexander Ferguson 0:43
actually had an interview a little over a year ago, it was December 2019, published in 2020. And a lot has happened since then you got the beginning of this year 2020 2021. You required, though, I would love to hear more about this whole journey. Maybe actually take us back before this recent events. And just kind of give us again, the highlights of what this journey has been like, since you started the smartcare, which is four years ago, if I according to LinkedIn, April 2016. Right. Yeah. So take us through the journey. How did you get to where you are now? Yeah, absolutely.
James Armijo 1:20
You know, it’s it’s almost funny thinking back to December 2019. That was a it was a different world. It was certainly the calm before the storm. And it feels like in many ways, a different world. But yeah, let’s walk through the story as mark here. So smart here started with a really simple idea, which was that the childcare industry is critically important to the country, and to many families. And to many employers. It’s an incredibly diverse industry. It has over 120,000, facility based childcare providers, and many more hundreds of 1000s of at home childcare providers, millions of kids and the many parents who are obviously engaging and finding childcare services. And at the time, there really wasn’t a unifying technology solution that could help bring the various stakeholders and childcare together. So the caregivers, the parents, in many cases, government agencies, or employers that are providing some level of subsidy or reimbursement and then of course, kids and safety and regulatory agencies, and you knew this
Alexander Ferguson 2:15
from your prior positions as well, just like health care overall. Yeah, I
James Armijor 2:21
mean, this was this was new it was it was an entirely new industry. I do in general, really like industries that have a social impact. And so prior to this, I was in healthcare at a time where we were transitioning into the Affordable Care Act, and the digitization of medical records. There’s a lot of change happening in the healthcare industry. And some of that I thought could really benefit both the providers and the end patients. And I was really excited to see how technology could do that. And when I learned about the challenges in childcare, I thought there was a very similar opportunity, there were caregivers and parents and children who were could all benefit could all have a better system if we could deploy technology. And obviously, we’re a small piece, the biggest piece are the caregivers and the parents themselves. But to the extent that that, that we could bring technology to bear,
Alexander Ferguson 3:07
we thought that that would help you see the end consumer and what you want them to make the impact. But you’re kind of that layer underneath supporting those who are doing exactly you didn’t do this by yourself, your co founders, right? How many co founders? Yeah,
James Armijo 3:21
so there there were, there were a lot of people that were part of the original founding team, about six people total that were all part of the original founding team. In fact, I was one of the later ones to come in, there were a few people who preceded me and really bringing this idea to market, I helped to, you know, sort of lead the charge after we’ve gotten the initial concept, initial product market fit, figured out. And then really focused on how do we bring this to market in
Alexander Ferguson 3:44
a big way. Now, from from that data point, when you when you joined in 2016. What were kind of the highlights of growth today, which led to the acquisition last year.
James Armijo 3:54
Yeah, absolutely. So when I joined in 2016, we only had a handful of paying customers at that point, we had a number of people who were using the product and giving us really important feedback. But it was essentially pre revenue. Where we went from there was through stages of growth that I think most early stage companies go through, we went from the early beta adopters who are giving us feedback. We got some early adopters who were willing to use the product as is and then we transition from that kind of early adopter to early majorities phase and we realized that we really had some hard work to do to make the product better able to scale and meet the needs of a larger swath of the market. So 2016, I would say was kind of the early adopter 2017 was that transition phase where we started to learn, and we iterated really quickly. 2018 we really started to hit our stride and we were squarely in that early majority.
Alexander Ferguson 4:45
And is that because you just knew your target market? You understood them and you can connect with them is that well, I
James Armijo 4:50
think I think it was a number of feedback loops that really started to coalesce together. The most important one in my mind is he said Sit down. And this is a very tactical approach, but it’s one that I really enjoy. Sit down with the the kind of heads of the people who are finding leads for your business who are selling to those leads, who are supporting those needs, and say, what are we hearing? And how does this impact our customers? And it’s, it’s, honestly, it’s just a lot of kind of elbow grease to try to triage those things, you’ll have a list that’s 10 times or 20, or a million times whatever the ratio is bigger than the amount of resources that you have. But what I think is most critical is actually saying no, what are the things you can’t do, rather than trying to do everything and failing at everything, pick 123 to five things that you can do and get them done again, done really well. And then move on to the next one to three to five kind of things. And we that was a process that we went through in 2017. And I think as we got through that process, and got into 2018, and certainly in 2019, we had knocked off enough of the important stuff that that our customers were saying, Yeah, this other stuff, it’s it’s way down the list. But you know what, I really liked the product, right? Like these things are maybe minor nuances, but not important. You know, the example I always like to use is I read a great book about some of the first car manufacturers and they were all very bespoke, right, these guys were built, they were usually like bicycle mechanics, building cars in their, in their garage. And so there are things that we take for granted now that they didn’t know about things like having a steering wheel, some of the early ones had levers and you had to, you know, put more force on one wheel or the other. And that was really complicated. Having brake pedals as opposed to a brake lever, where it was really hard to break and take your hand off the wheel. At the same time. If you wanted to brake you can steer and brake at the same time, or things like blinkers, right? All those things came because of feedback, somebody, you know, maybe missed and hit a tree or whatever along the way. And so I think you go through that phase, and the quicker you can adapt and adopt and do what’s most important, I think the faster you get to a point where customers say, Hey, this is a car, I can drive, and I really like it.
Alexander Ferguson 6:55
And then that leads to a budget for scale. Because more more customers like God, like this is everything I want versus just a couple things.
James Armijo 7:02
Exactly. And now you’ve gotten that out of the way. So now you got to go build a factory, right? So now you have the right model, how do you roll a million, you know, Model T’s to use the auto analogy off of off an assembly line. And it really predictable and high quality way without losing the touch that you had in that early phase. And that and that’s a really hard transition, maybe even harder than getting it right, getting it right is usually pretty obvious. It’s obvious what you need to do as you get that feedback. The question is, can you execute on it, when you have to transition to scale, that’s really hard, because now you have to empower many people in your organization to have the same passion and the same dedication that that smaller team had in the earlier days of the organization,
Alexander Ferguson 7:42
translating that that concept of the vehicle, and you’re moving on until you until you get in the right place and then create the factory translate that to SAS. World. What what were some key takeaways or tactics that you found work? Well, when you’re like, Alright, we’ve got our we got our product, now. It’s, it’s dialed in now time to scale, what I guess probably comes to people off what what tactics work to scale.
James Armijo 8:06
For me, the most important lesson is empowering your team to have the autonomy to make the decisions that they should be making. So in that very first iteration, you know, let’s there was the head of marketing, the head of sales, the the head of support, and the head of product and myself, we were sitting down literally looking at reports and feedback and making decisions. But at the factory level scale, there’s many more people than five people. And in fact, the five of us are very far removed from that feedback, we don’t have the same amount. So the question and for me, as an organization, it’s really hard to do this, whoever the new five people are now they’re the Director of Sales and the director of marketing, and there’s three directors, right, or whatever the size of the team is, you have to empower them to still be able to make the same decisions and make those as quickly. If not, the organization really starts to slow down. Because you’ve got a kind of single problem of decision making, you can’t make decisions quick enough. But if those aren’t the right people, and they’re not looking at the data and making the same accurate decisions, then you can also go off the rails. And so it’s it’s really it’s hiring the right people and empowering them to make great decisions. And there’s there’s no exact science to that. And I think it’s fluid as the company changes, you have to shift where those boundaries are. But you have to pay really close attention and shift them off. What would you say is one of your your key hires or roles that you were to fill that that played a role in that scale? Yeah, I’ll use an example that hits pretty close to home, which was hiring our first product manager I had. So in those early days, I was actually writing the specs, you know, we were getting feedback. And I was writing the spec sitting down with the development team answering questions as we would go on. The first critical thing I realized was that if I just spent all my time writing specs, I couldn’t spend my time on other parts of the business where I was needed. Somebody needed to do that. I’m making a really, we made, I think, a really good hire in that department. And he was able to come in deal with the fact that it was you know, I had been involved and work closely with me, which was Probably a challenge for him, I’m sure, but ultimately really own it. And we got to a point where we had a high degree of trust, and I could start making decisions about what we should develop, not how we should develop it, or what should be included in that. And that that became a really dangerous deal. We were shipping more product because he could focus 100% of his time on writing specs. And we were shipping the right product, because I could focus 100% of my time on making sure we were shipping the right thing.
Alexander Ferguson 10:24
Hmm. When you were making that that higher, what were the some of the qualities or? Yeah, just when you were hiring, like, what were you looking for in a resume.
James Armijo 10:35
I’ve always used this analogy in hiring, especially early stage companies, and especially for some of these first critical positions that you hire. But sometimes I feel like being a startup is like showing up at the gym, and not knowing what sport you’re gonna play. Um, so you might be swimming that day, you might be playing basketball, it might be powerlifting, you’re not sure. And so what’s most critical is having the best athlete and in this case, it’s the best business athlete, right. So it’s the guy who is capable of problem solving who has really strong, personal interpersonal communication skills. And that is generally self motivated, just likes to win. If you can find somebody that does all three of those things, and has a little bit of experience in the subject matter area that you’re hiring for, I think you’re gonna you’re gonna hit it out of the park, and just have as many of those people I mean, honestly, it’s hard to find those kinds of folks. But if you can find them, I would say just make up a position to hire and just so you have him on the bench, if you can, you know, afford it from a budget standpoint, because ultimately, I think they’ll be really impactful on the business.
Alexander Ferguson 11:36
You touched on another point, that’s critical. Team is one but actually having the funding to
James Armijo 11:42
you guys went through two rounds of funding
James Armijo 11:44
is that raised a series A Series B in 2016, and 2018, respectively. Okay, um, and so yeah, absolutely. Right. I mean, those two things are interlinked. Your ability to hire good people is a function of your budget and your your ability to raise money is a function of having two people who can help, you know, demonstrate business success. So they’re they’re connected to each other. What would you say is some some lessons learned when it comes to raising funds? Were
Alexander Ferguson 12:08
you involved in the second round, because it happened, you joined probably after around that first,
James Armijo 12:12
I actually joined in conjunction with raising the first round that that was the catalyst. I had been involved on a part time consulting basis with the business from its inception, but hadn’t joined really full time until we brought on the first round of capital, and then certainly led the second round of capital raising as well. Yeah, to answer your question, I think there are a couple of critical items to think through some of which I’ll preface by admitting I have a personal bias toward and against. I have one of my big biases is that I think oftentimes, investors like to state that they really add value to businesses. And I think that they do, but I often think it’s for different reasons than both the investors and the business leaders think. Namely, I think a lot of investors think they add value by thinking about the business and the business strategy and the business’s operations. And the fact of the matter is, especially in early stage companies, it’s pretty rare to to have an unclear strategic problem, generally speaking, like in our mind, it was very simple. We needed to bring technology to childcare, and there was a big long list of features we needed to, to deliver. But there wasn’t a huge strategic question there. And the actual execution is also sort of way down from the strategic level, oftentimes, it’s hiring the right person, it’s settling disputes between people, it’s dealing with administrative overhead kind of stuff, but it’s not particularly strategic. And so I think investors aren’t necessarily well adapted to solve either of those problems, because they can’t be in your business and be your controller. And they’re also, you know, there aren’t so many strategic problems that you’re spending your entire day thinking about strategy. But where investors really can add value is through their network. And so what I always encourage people to do is don’t think about the guy who’s gonna help you, you know, build the the next roadmap or solve your, you know, tax filing problems. Think about the guy that can help you secure a commercial partnership that adds a lot of value to your product and takes it to market or has introductions, if you’re an enterprise sales world introductions to those enterprise prospects that you’re trying to sell to, or who has worked maybe as an executive elsewhere and can help you with talent, right? You can say, hey, you’re looking for that product manager, I’ve got a guy like, I know this guy, and I’ve seen him operate and he can be really good. So that’s how I really think about it. And the advice I would certainly give other people is think about your investors as sort of a bridge to their network. And is their network well aligned with what your needs are either now or in the future. And frankly, I think that we got that really right at smartcare. Our investors were incredibly helpful. doing all the things I said at recruiting, introducing us to sales prospects, it bringing commercial partnerships to bear and then you know, obviously having the dollars to hire the right people and execute against those opportunities. made a big deal as well.
Alexander Ferguson 15:01
connectors that that is the biggest value aside from the money that one could bring. That’s that’s that’s powerful to hear for sure. Money, the right team, the right product, and then to be able to market it well to then scale up your clients, when it comes to marketing. What kind of challenges did you guys encounter? if any? How did you effectively continue that that messaging and and that constant draw of new clients and keep them on? Yeah.
James Armijo 15:36
So it’s interesting, you know, we started, like most companies that start in a, in a nascent market with a market education and outreach problem, we had a very diverse market 120,000 prospective customers, in our even and that’s a subset of all the prospective daycare customers, we were trying to even narrow it down even more. We don’t have a list, there’s no list of those 120,000 customers that we could just email, there’s no Facebook group we could go post to. So the first problem was, how do you just find these people? Like how do you use different tools? You know, for us, I think social media was important using their tools to create things like look alike audiences, and that was really advantageous for us. But even, you know, more old school methods, like, you know, showing up at trade shows and doing those kinds of things. And certainly plugging into the small groups that do exist were really important. But then it was really about education. Why Why was it that you a childcare provider needed software? What was the value to you? And so we had to spend a lot of time just educating the market about why you needed software in the first place, as that matures, and I think most companies go through this and people start to realize they need it, and you have competitors entering the market, then the question becomes, why are you better than the competition, and that’s a much different answer and a much different challenge, you’re not trying to market to 120,000 people to tell them, they need software, you’re trying to market to a single person to tell them why you’re better than two or three other competitors. And it’s, I think, it’s really difficult to make that transition. Um, especially just for the same people like the same people who got really good at educating the market may not be really good at at having the, you know, the slug it out, fight with your competitors. And you need to also communicate that to your organization that you’ve made this shift. And it’s not always clear that you’ve made that shift, because, you know, sometimes you may get and you go back and forth. And and, you know, like, for us, there was a probably a year period where we were like, on both sides of that argument. So in any case, I think that was a really big transition for us, and making sure that we retooled the team and the tools that we used from educating the market to competing well against other competitors and sales opportunities. And, frankly, that probably took us three years to go from start to finish. But once we got there, you know, now we’re clearly in grow mode, we’re clearly in how do we compete against our other competitors in the market? And that certainly benefits our overall growth.
Alexander Ferguson 18:00
And is that would you say a typical scenario for a tech solution, that software solution in an industry where there’s not really there hasn’t been a solution there before? So you’re having Yeah, first? And that that transition? You said it took three years approximately, to go from?
James Armijo 18:17
Yeah, I would say I mean, I think, you know, it followed in many ways, our product development. So if you think 2016 was the year of education, as it was the year of kind of discovering our product, 2017 was kind of the year refinement, that was the year we were fluctuating back and forth. And 2018 was clearly the year of we’re competing against two or three other people. And here’s why we’re better than they are than they are for you know, your specific names.
Alexander Ferguson 18:39
Do you think that’s maybe a leading question, of course, but COVID affected then how the usage and and thought of using software technology,
James Armijo 18:49
you know, COVID was, um, and I suspect, it always will be probably the single most challenging period of my professional career. To give you some sense, q1 of 2020, right after we did our first interview, was our company’s best quarter in history by far. We, I was so incredibly proud of the success we were having at that point. And, of course, March 15, two weeks before the end of the quarter, everything shut down.
James Armijo 19:25
we went from our best to almost our worst quarter, from q1 to q2. And we had some really dark moments. You know, we had we were fortunate enough to have investors who backed the business, and to have raised some PPP funding. We didn’t have to do substantial layoffs. But we did pay cuts we did. We did a lot of other things that we had those conversations about doing that you’ve got doing layoffs, and doing all these other things. And ultimately, what we said was, we’re gonna keep the team together as best as we can. And while we’re in these dark mode, Words of trying to survive and say, April, kind of the April timeframe, April 2020. I pushed the team to say, let’s find out where there’s an opportunity for us to succeed. And in fact, there was, what happened is you’re kind of you know, you said it’s a leading question, but it was absolutely spot on. The needs of the industry shifted. And we were able to retool our roadmap to deliver things in our industry, like contact, free check in and integrated health checks, when you’re dropping your kids off, you want to make sure that they’re safe, and that it’s safe to have them in childcare. But you want them separated from other kids. So we rethought that process in conjunction with our customers. In many ways, the end of q2 and early q3 was was almost like restarting the business. It was going back to this war room, five guys sitting down and listening to customer feedback and iterating really, really quickly to get new functionality out new functionality out. And as we did that, we came into q3. And we beat our q1 numbers. So we had this, you know, huge swing. But we had a really successful I think q3 and q4, we still had a lag of revenue from existing customers. But we were able to get back into market, I think, in a really competitive way. And so, you know, I do think it had an impact, both negative and positive. But I think we were able to really navigate and if there’s one thing I look back at it with, with a high degree of pride, for us as an organization, it’s probably less q1 of 2020, even though that was by far our kind of high watermark. And it’s really q3 of 2021. we bounced back because we because q1 we didn’t have any adversity, we were just we were doing great, but we were doing great. And you know, in pretty in hindsight, what were pretty easy circumstances. And so I am I’m just eternally grateful that we had a great team that stuck with us that went through those times that rolled up their sleeves and and ultimately proved to be successful, despite some some really challenging macroeconomic situation
Alexander Ferguson 21:54
for you, as a leader going into that, that q2, what were you feeling? And how did you keep going? Yeah.
James Armijo 22:06
So I’d say I was feeling similar between it was it was a, it was kind of an interesting dichotomy. On one hand, the utmost fear and uncertainty I’ve ever had, because I couldn’t forecast right. There were no benchmarks at that point that would say this is what’s going to happen to revenue or not happened to revenue, we just didn’t have any drivers, all of our drivers were were all of our instrumentation, if you will, was no longer relevant. And so that uncertainty kind of creates a spiral of of fear really, right. And on the other hand, there was a sense that we would get through it. I just didn’t know how bad it was going to be. And so I think ultimately, the conversation I had with myself was, How bad can this be right? And the worst case scenario is, we have to substantially downsize the business or take, you know, huge pay cuts. And just grid it out. And I think once I kind of wrap my head around that, and made my peace with it, then that was really what I was able to say, Okay, now let’s find the opportunity. Because, you know, the truth is, is as bad as it was, no, thankfully, what while COVID, I think does present a life and threat challenge for many, many people. Thankfully, we were in a really fortunate position, right, we were able to put everybody into a work from home scenario, keep people safe, keep people isolated. So as a company, we didn’t have to risk life and limb. And beyond that it was really now a question of how do we preserve the team and the culture of the organization as much as our budget would allow? And how do we find a way to prosper going forward?
Alexander Ferguson 23:47
I, I love also the visual that you shared, previously of all right, you just came back down to the five of us in a room just like brainstorm How can we retool, how can we make virtual room in this
James Armijo 23:57
Alexander Ferguson 23:58
yeah, good old zoom or something, and you make it happen? Did you already have just that consistent connection with your customers that you were able to do that? Like, how did you How are you able to find out the right data points, you were building the right tool?
James Armijo 24:14
Yeah. We were lucky that in from the earliest days, we’ve built workflows in place to try to get a capture that feedback. So we benefited particularly in COVID, from the fact that all of our sales were not all but the vast majority of our sales were already being done remote, as well as support. So we there wasn’t really a change in workflow and how we were engaging with our customers. And then Moreover, we had built all these touch points where we could get feedback. So for example, every time we lost a sale, our sales reps had to say why they lost a sale and we had a standardized report to capture that information. Every time we lose a customer. The customer support person has to say why we lose a customer. We had a tool built into the application where we could do screen pops to ask surveys so if we wanted to survey all of our customers We get a 30% response rate on email, which is pretty good. But you get a 90% response rate if you pop something up in the application, so we could do that as well. And we knew we could execute on that we could get a survey out in 20 minutes, right? So I think, I think having gone through a lot of those drills and just having a good cadence, it allowed us to not have to focus on how you build the infrastructure to get feedback, but rather just retool what we were doing with the feedback.
Alexander Ferguson 25:28
So coming out of the dark time, and leading up to a whole remaking reforging of the organization, leading to the end of last year of 2020. Then comes an acquisition. So how did was that already on the horizon? Did you see that coming? Were you already having conversation? Yeah,
James Armijo 25:47
I mean, I think from a strategic standpoint, we we it was clear to us that we were going to have to make a decision about the trajectory of the business in 2021, we were going to raise more capital where we were going to exit the business. And, you know, I think to a large degree, it became a question of relative valuations
James Armijo 26:08
for us, and I think this is true about the market in general. But certainly in our case, the valuation that strategic acquirers placed on the business was probably hot, not probably it was higher than the pre money valuations, we were likely to raise more capital at. And so you know, on a dollars and cents basis, that that benefited our existing investors tremendously. And I think it was the, you know, the right decision to make as a as a good fiduciary steward of invested capital,
Alexander Ferguson 26:37
leading it through a transition, you’re, you’re in the midst of this, there’s only so much you can speak to that. But if you had to share just so far lessons learned to other founders who they are either looking at or or planning towards something similar, what would you share?
James Armijo 28:27
I’m a big fan of executive selling in general, whether they’re in a sales organization or with some other title, the CTO is like the best salesperson at the company, for most tech companies, in my opinion, at least at a strategic level. But you are selling the company, you’re a salesperson, you’re on the car lot, and you’ve got a car, and it’s time to move that inventory, and you better sell it hard. And so I think if you can embrace that role and find satisfaction in following through, that the process itself will actually be much more beneficial for you, and frankly, a little bit more enjoyable as well. I’d also say, to communicate with your stakeholders, and consider all of them. So for me, my stakeholders, the way I think about it is there’s employees, there’s customers, and there’s investors, and that’s in every decision exit or not. But what’s interesting is that you as the sort of executive and it might broaden out beyond just the founder to you know, the senior executive team is a little bit of a distinct stakeholder group and an exit because oftentimes, their experience is going to be different than the rest of the employees. They may, you know, they’re they’re also shareholders, and so they kind of act like investors. And so you really have to, I think, consider all four of those groups and try to balance out the needs. I think, if you do a deal that’s lopsided, one way or the other, that, that that will be extra, that’ll be problematic. And so trying to balance those needs, I think, is really beneficial. And then, you know, I’d say last but not least, is communication. I spent more time saying the same thing over and over again through our process and after our process. than I had ever done in my life. And that was incredibly frustrating. But I think it was incredibly valuable for everybody as well. So, you know, those were like my takeaways. The last thing I would say is that, and this is, and I’m, I think this is the one that I’m still learning as we go through it. But it’s actually to realize that the hardest part of the sale is not the sale. That’s actually the funnest part. You’re the you’re the salesperson of your company, you’ve built a great business, you’ve thought through an exit, you’re communicating the heck out of that you’re balancing the needs of all your stake stakeholders. It The hardest part is the letdown that comes after that, because after that, you just you just played in the Super Bowl. And now you’re, you know, you’re in the locker room. And it’s spring and kind of nothing, you know, it’s there’s no fans cheering, there’s no fireworks, there’s nothing anymore. And I don’t think I really thought through that. And so I’m kind of I’m like navigating some of that myself as I go through. So if I take one, or give one bit of advice to the future me it’s think through that as well think through the six or 12 months after the deal in a lot more detail than then maybe I had done otherwise.
Alexander Ferguson 31:12
You have to keep that that excitement going. You mentioned earlier, you’re having to repeat your message over and over and over again. Yeah, what what is the core message that is an integral that is important that you need to communicate to every stakeholder throughout?
James Armijo 31:25
Well, it’s the value that that stakeholder is receiving from the deal. So if I go back to the, you know, my four stakeholder groups, and I certainly would welcome feedback from others about how you might want to think about your stakeholders. But if you if you take my four as definition, each one of them should be getting something substantial from the deal. And they’re also not getting something they probably want. And the reason they’re not getting something is probably because somebody else needs to get it. So as an example, investors might say, hey, let’s take Doa, because that’s the highest price. But DLA is gonna let lay off all the employees, you I think my my thought was, I’ve got to balance those needs. So we can’t go with DLA. Because I can’t lead our employees into a situation where they’re not going to have a job, especially in the middle of a pandemic. So we’re gonna go do p, which is a little bit less, but everybody gets to keep their job. And I’m thinking I’m kind of making this up, hypothetically. But if that’s the case, I’ve got to go back to investors and communicate why we’re taking a lower bid. And part of that is actually preserving value for them in the future. Those employees, they’re gonna go work for other tech companies, and many of those other tech companies might raise capital from the same investors. So you’ve got to think about what your reputation is, as you think about the rest of your portfolio and future portfolio deals. And for employees who might be worried about job security, post acquisition, you need to communicate, hey, part of the reason we did By the way, we gave up some money to do this deal, because we wanted to make sure that you were going to be well employed going forward. And and oftentimes saying the same thing three times over again, but communicating it, you know, to everybody so that they can all come to the table,
Alexander Ferguson 33:06
they understand it, wow, this, this has been quite a journey. And I imagine all the years and past four or five months, whatever that it’s that it’s been for, for you. If you had to kind of think of a word of advice to other founders, again, of getting on this direction of where you’re headed, what anything that comes to your mind that you would want to share.
James Armijo 33:34
Yeah, you know, I’ve thought a lot about this question. And, and the single best thing I think I could say is Go for it. This is it’s a scary, oftentimes scary, oftentimes rewarding, oftentimes boring, you know, insert emotion here kind of process. The end result of which, though, I think is, is a feeling of great accomplishment. And I think most people who get into trying to start and lead companies like to accomplish things. And I can say, personally, I think this is been one area where I felt more professional accomplishment, then then most anything else I’ve ever done. I’m glad we went through the process. They’re certainly the things I wish we would have done better and you know, all the normal stuff. But I would certainly tell people go for it. Go for it at the right time and under the right circumstances and all those other things, but go for it. Go for it. I
Alexander Ferguson 34:30
like it. I like it. I What are there any books, audio books, podcasts that that you’ve read and would recommend that’s helped you grow as a leader?
James Armijo 34:38
Yeah. So as a leader in general, I think there are many of those I love. I love podcasts that helped to focus on questions of decision making in business and economics. So some of my favorite are actually hidden brain. It’s an NPR podcast. I think it’s great. It talks a lot about how decisions get made, and there’s Almost always parallels in the business world. So I think that those are incredibly impactful. Beyond that, I really enjoy reading some of the shorter pieces, there are a number of partners that venture capital firms that publish pretty short articles. So red point is a great example. But that summer, others do that. I think those kinds of like really digestible pieces of content are really, really helpful. And they’re also kind of a trickle in, you know, you don’t have to dedicate a month to reading a full book, you can kind of take them in Time, My Time, what I think is most important, this is actually what I do. I use, you know, use any note taking app that you want, OneNote, Evernote, whatever, but I’ve got a notebook, a digital notebook, where I try to keep my own sort of list. So I it’s, it think of it almost as kind of like a textbook, right, it’s got a got a table of contents. And I’ve got topics and underneath those topics, I have different articles. And the reason is, and others might be a lot better at this than I am. My memory is, you know, pretty much 15 minutes in the past, and that’s about it. But I can usually remember a topic, if not the specificity of that topic. So for example, I have a section about, you know, personnel management. And I’ve got stuff in there from, you know, as far back as jack Welsh, and he talks about, you know, his 10 traits of leadership to as recently as an article I read out of countries, and everything in between. And so that really helps me when I’m dealing with a specific situation to reflect to maybe go back and find a model that might work for a specific problem. And just always constantly add to that library. And the last thing I’d mentioned, and this is something that we did at smartcare. And I liked it quite a bit, we created our own, we call it smartcare medium channel, but it was a channel in slack where people could share their own articles as well. And I thought that was really impactful because everybody has a unique perspective and, and it was a great way for people to engage in that channel and really share information and I took in information from sources that I didn’t even know existed. And I think those really benefited.
James Armijo 37:01
You just packed a lot of great tips and insight in there. I actually I’m gonna have to create my own Evernote personal book now. Of all the articles and content. That’s a great, great idea. Thank you so much Shane’s for this time for being able to share the journey that you’ve been on. And it’s in some ways, it’s still just beginning of where you guys are headed. But I’m delighted for this time you’re able to spend together Thank you so much. That concludes the audio version of this episode. To see the original and more visit our UpTech Report YouTube channel. If you know a tech company, we should interview you can nominate them at UpTech report.com. Or if you just prefer to listen, make sure you subscribe to this series on Apple podcasts, Spotify or your favorite podcasting app.