Kim Perell, CEO, Amobee
The Factors of Success
How Kim Perell used the five traits of her Execution Factor to become a multimillionaire in the digital advertising space before she was 30.
Kim Perell was at rock bottom.
It was 2002, and the startup she worked for had failed. She had just fired all of her friends, and she had no idea what she was going to do next.
“In an instant, someone had pushed delete on my life, my future, my identity,” she says.
All Perell had left was a bruised ego, an empty bank account and the glowing ember of a new idea. With no way to fund her next venture and no friends to lean on, she called her grandma. With a small chunk of cash from her beloved relative, Perell got back to work in the online space, knowing in her heart that digital advertising was about to explode.
After years of hard work, Perell and her ad business Frontline Direct rose to prominence, and through a series of acquisitions, she’s now the CEO of multi-channel ad platform Amobee. She is also an angel investor, speaker, and bestselling author of the book The Execution Factor.
In her book, Perell looks back on what she’s learned over her years in business, documenting the five key traits she’s come to believe make the difference between failure and success. And, ever-grateful for that loan from grandma, she’s using proceeds from the book to create a new fund that will support up-and-coming entrepreneurs.
“I was going to be a dot-com millionaire!” Perell says with a laugh. “Isn’t that what everyone does?”
It was 1998, and the internet was on the rise. Yahoo had just gone public, and it was clear to Perell that the world was hurtling into the digital age.
So she decided to join the movement. Perell was the seventh person to join the team behind the Los Angeles-based, online storage startup XDrive. They had already raised $1 million in funding and would go on to raise over $120 million. Perell’s future looked bright.
“It was honestly incredible,” she says. “It was like being on a rocketship.”
She thrived in her position as director of marketing and sales, and for three years, the company flourished around her, expanding to a 300-person team that included most of Perell’s friends from college.
“We had so much fun, and it was just an incredible opportunity to be taking part…in the infancy of the internet,” she says.
But, as with a lot of those early internet startups, the world wasn’t ready for XDrive.
“Unfortunately, the company I worked for was a precursor to Dropbox, but there was no or cloud computing, and infrastructure to support that was limited and very expensive, which caused a very high burn rate for the company,” she says.
XDrive paid the price so many companies do for being ahead of their time—it went bankrupt.
“My dot-com dream and the dot-com bubble burst,” she says. “The company unfortunately went bankrupt, and I was a casualty.”
With the flip of a switch, 23-year-old Perell’s dream crashed down around her. The company she believed in was no more, she lost all of her money and, perhaps worst of all, she had to lay off every single one of the friends she had hired to the company.
“People believed in me and they bet on me, and I had to lay them off,” she says. “And then I eventually had to lay off myself, turn off the lights and shut the doors, and put the locks on. It was devastating. It became the worst thing that ever happened to me.”
She didn’t know what to do. So she called her parents, who told her that the internet was a passing fad and that she needed to get a “real job.” She was heartbroken and discouraged, but even still, Perell believed in digital marketing.
“I had seen the inside,” she says. “I saw the opportunity from digital advertising. I saw that advertising…would be reinvented. I believed I could create a company that could offer that opportunity to advertisers.”
She had a vision. All she needed was someone to believe in her.
Enter Perell’s 80-year-old grandmother.
Hustling in Paradise
“I’ve got this amazing idea for a company, and it’s on the internet!” Perell told her Nanny over the phone.
Her Nanny had no idea what the Internet was.
But even without understanding exactly what it was her granddaughter wanted to build, after listening to Perell share her hopes and plans, her grandma gave her a massive vote of confidence in the form of a $10,000 startup loan.
“She believed in me, and she believed in what I believed in,” Perell says, and fueled by that belief, she was ready to take action.
Loan in hand, Perell was bought a computer, a website, and a plane ticket to Hawaii, where she could live rent free with her boyfriend. She soon found out that her new living situation also included her boyfriend’s sister and friend. In this bustling Hawaii home, soundtracked by MTV and filled with clouds of her roommates’ weed smoke, Perell sat down at the kitchen table and set to work building a company from scratch.
“I wasn’t learning the hula or learning to surf, but I was definitely drinking some pina coladas,” she says.
In 2003, just months after XDrive was shuttered, Perell founded Frontline Direct, a digital marketing company that catered to brands looking to make the shift to online advertising.
Scarred from the recent bankruptcy, and especially the loss of many dear friendships, she decided to play it safe by focusing on profitability and shying away from anything that could overextend her or her business. She didn’t raise any capital and hesitated to build a team before she was sure she was ready. She wanted to establish a company that was self-sustaining.
For nearly three years, the kitchen table in a noisy, crowded, rent-free house was her office. Perell says that she believes many others would have called it quits after three months, but her passion kept her going.
Before long, she began to see growth.
“As digital continued to grow again, and the market bounced back, the business continued to grow with it, which was really an exciting time to see that dream start to become a reality,” she says.
In a pre-social media world, the wilderness of digital advertising was an intimidating one, and expert guides like Perell were an increasingly valued source of wisdom.
“When you look back at statistics on how the digital ad spend grew, we probably mirrored that just in terms of the amount of dollars marketers moved to the internet,” she says. “Timing’s everything, and I think we were in the right place at the right time in order to be able to capitalize on that.”
Climbing the Ladder
In 2006, family needs inspired a move back to San Diego, and Perell, still wary of overextending herself, moved Frontline Direct into the storage room of a friend’s office building, which she paid about $1,000 a month for.
“It was there that we really started to build a team,” she says.
Perell laughs remembering how they would interview potential hires in the fancy conference room of the office building, and then escort them into the windowless storage room Frontline Direct called home.
As she made new hires, she knew she needed to focus on gathering a cohesive team that could work together flawlessly.
“It’s not about having a team of champions; it’s about having a champion team,” she says.
Thanks to Perell and her champion team, Frontline Direct grew at an astonishing rate.
Six months after moving into a storage room, Frontline had its first, dedicated office space, and in less time than she spent working at her kitchen table, Perell’s company was acquired by the European marketing company Adconion Media Group for more than $30 million. Two years later, Perell was Adconion’s CEO.
Then, in 2014, Adconion was acquired by Amobee, a subsidiary of a Singaporean telecommunications company. In December 2016, she was named Amobee’s CEO, the position she holds today.
Although she is light years away from the devastated, broke dreamer working at a kitchen table, she still holds a special place in her heart for scrappy founders.
Perell says that each time she orchestrates the acquisition of a company, she does her best to keep the founders of those companies involved. She explains that it can be difficult to do, but that she sees a benefit to keeping them involved while creating something scalable and building a legacy.
“If we can continue to keep that entrepreneurial DNA in companies, even after acquired, I think the companies continue to be incredibly successful,” she says.
And she especially feels a tug at her heartstrings to build relationships with the founders who are only just beginning their journeys. After her first sale in 2008, she began investing in other entrepreneurs. She knew how challenging and lonely that time at the start of a new company could be, and she wanted to help them along their way. Today, she has invested in over 70 startups.
But she also wanted to share the knowledge she’d gathered across two decades in the space, both from her own business and from watching the companies she invested in.
The Execution Factor
In September 2018, Perell released her book, The Execution Factor: The One Skill That Drives Success to address this very problem.
In it, she shares her insights into the world of entrepreneurship, asserting that great ideas, high IQs, and advanced degrees aren’t necessarily the keys to success. She shares her journey and how her ability to execute was what transformed her from a broke 23-year-old into a successful multi-millionaire before the age of 30.
In the book, she explains how five factors—vision, passion, action, resilience and relationships—make up the “execution factor” and pave the road to success.
But she isn’t stopping there.
“My grandma made a bet on me, and I was going to pay that back,” she says.
Perell has established The Execution Factor Fund to make a bet on the next person working at their kitchen table to turn a dream into a reality. She put the first $1 million into the fund and is directing all proceeds from her book into it as well. The fund will provide early financing to founders, just like Perell’s grandmother did for her, and interested candidates can submit applications at www.kimperell.com/fund/ followed by a two-minute YouTube video sharing who they are and what they hope to achieve.
Perell’s life was changed by one person’s belief in her, and she is dedicated to paying that forward.
Oh, and don’t worry. Perell paid back her Nanny for the loan.
The 5 Keys Traits in the Execution Factor, According to Kim Perell
In The Execution Factor, Kim Perell shares with hopeful entrepreneurs what she’s found to be the keys to success. She says that many mistakenly believe that a great idea or intelligence make entrepreneurs successful, but throughout her two decades of experience, she has seen many great ideas and smart people fail.
Instead, she shares the five traits that make up what she calls “the execution factor,” and says that these five qualities are what turn dreamers into doers.
Perell says that a focused vision is essential for a successful entrepreneur. Without clarity of purpose, it can be easy to become distracted or to lose sight of the goal when the going gets tough.
“What are you willing to suffer for?” Perell asks. She says that passion is the fuel that makes you keep going when you are forced to spend three years working at a kitchen table to achieve your dreams, forgoing free weekends and short-term rewards. She says that those who have passion know they will suffer for their goals, but do it anyway.
More specifically, action with purpose. “It’s about taking that very first step,” Perell says. She explains that she’s spoken to countless people who have great ideas, but when she asks them what actions they’ve taken to bring those ideas to life, they have nothing to show. She says that taking a single, deliberate step each day toward a goal is vital in achieving success.
“There are going to be times when you just want to throw in the towel,” she says, “but you keep going.” These are the founders with resilience, the ones who keep pushing ahead through rejection, frustration and even failure. Without resilience, Perell knows she may never have had the confidence to found a company after her bankruptcy, but she did it anyway.
Without her grandmother, where would Perell be today? Without others, success is far more difficult to achieve and far less sweet if you do. Perell emphasizes the important of surrounding yourself with a supportive clan of mentors, partners and friends who can support you when you’re down and inspire you to keep pushing forward.
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Erica Comitalo
- The rock bottom moment when the internet startup she worked for went bankrupt in the dot-com bubble burst
- What she did with a $10,000 loan from her grandmother
- Founding Frontline Direct, a digital marketing company, while living rent-free in Hawaii
- Frontline Direct’s multimillion-dollar acquisition
- Her new book, The Execution Factor
- Why vision, though important, is not enough
- The five traits you need to master execution
- How to attract and retain great talent
- What she looks for when investing in businesses
- Thoughts on branding versus direct response
- On if she felt a loss of identity after selling her business
Full Transcript of Podcast with Kim Perell
Nathan: The first question I ask everyone that comes on is, how did you get your job?
Kim: My current job?
Kim: Gosh! Well my current job I was acquired by a Singapore Telecom, a division, the digital advertising division. And so I went, it was through an acquisition in 2014. Then I had a couple years that I learned the business and then I took over as CEO two years later.
Nathan: Gotcha. So how did you find yourself doing the work that you’re doing today? Where did it all start?
Kim: Oh my gosh! It started in 1998. I think digital advertising was a billion dollar industry. I think this year, worldwide, its 220 billion. So, thinking back two decades, I started when was probably the one place where everyone was buying digital advertising. I went to work for a really hot internet startup in Los Angeles, California. And it was-
Kim: …it was amazing, it was right after Yahoo had gone public. And I was going to be a dot com millionaire so, that’s what I went, isn’t that what everyone does? I went and took a job at an internet startup that had raised a million dollars in funding. And they went on to raise 120 million. I was the seventh person there. And we eventually grew to over 300 people. And it was honestly incredible. It was like being on a rocket ship. And it was really, if you think about the dot com, you would think in your mind exactly how it was at that time. We had so much fun and it was just an incredible opportunity to just be, be taking part of such an incredible time. And such an incredible, at the infancy of the internet I would say.
Nathan: Yeah wow, and so what happened next?
Kim: It didn’t end up, you know … it wasn’t all parties and glamour so unfortunately the company I had worked for, we were a precursor to Drop Box, but there was no AWS or cloud computing. And infrastructure to support that was limited, and very expensive. So I guess that was, which caused a lot of, a very high burn rate for the company. So unfortunately my dot com dream, and the dot com bubble burst. And the company unfortunately went bankrupt. And I was a casualty, so I told all my friends to come work for me. I hired pretty much everyone I knew from college. It was really-
Nathan: Oh wow!
Kim: Yeah it was so much fun. And then it became, you know the best part then became the worst part. I had to, you know people believed in me, and they bet on me and I had to lay them off. And then I had to eventually lay off myself. Close off, you know, turn off the lights and shut the doors, and put the locks on, and it was devastating. So really it became the worst thing, unfortunately that ever happened to me. Like in an instance someone pushed “delete” on my life, and my future, my identity, my multi million dollar stock went up in flames and was worth nothing. I think it was just one of those times when you’re like, “what am I gonna do?”. I definitely hit rock bottom.
Nathan: Yeah. So what happened next?
Kim: Well I did what everyone would actually do, was I called my parents. And you know they said, “Kim, we told you so. You know this is not, the internet is a fad, it’s a fad. We told you to get a real job. This is bad, go get a real job”. And I thought to myself, you know I had seen the inside though, I saw the opportunity from digital advertising. I saw that this was an opportunity that was going to, advertising would be reinvented. And I thought I was gonna make, I believed I could create a company that could offer that opportunity to advertisers.
The only problem was I didn’t have any money because I was bankrupt. I was embarrassed, and obviously I didn’t have any friends because they didn’t want to talk to me. So I called the one person who I thought might give me a loan to, you know, to start. Not thinking about my history obviously, but the bankruptcy was not helping me.
So my 90 year old grandma, I called her up, I said, “Nanny, I’ve got this amazing idea for a company. It’s on the internet.” And she said, “I don’t know what the internet is!” And I said “It’s incredible, it’s an incredible opportunity.” And she says, she asked me, and she really you know, she asked me, “Well what makes you think this is going to be successful?” And I’m like, “Well I just worked for this incredible company and I could see the opportunity.” And she asked, “Well what happened to that company?” And I said, “Well it went bankrupt, but I’m gonna be different, I’m gonna be different!”
And looking back, you know, she believed in me. And she didn’t know what the internet was. My track record really didn’t matter to her. She believed that, she believed in me and she believed in what I believed in. So she gave me a $10,000.00 loan. You know, looking back I bought a computer, I bought a GoDaddy account, I made a website, and I bought a one way ticket to Hawaii.
And you know, looking back, why Hawaii, is because I could live rent-free with my boyfriend at the time. And I was trying to find, I needed somewhere to stay. I didn’t have and money, and so I took a bet and I went and stayed, and lived with him. Little did I know his sister and her friend were living with us too, so we were all living rent-free on him. And you know, I started from my kitchen table, or his kitchen table, which they, you know, which we all, we were all at. And I think what’s interesting is, you know what I didn’t mention is really his sister and her friend were sitting next to us watching MTV all day, smoking weed. So my office was full of smoke, and it was hard to concentrate.
And, it was great to ideate, so it definitely helped in the ideation phase. But the concentration was kind of concerning. So I sat there for honestly, nearly three years. But I believed and I was committed, and you know, I wasn’t learning the Hula or learning to surf, I definitely was drinking some Pina Coladas.
So you know, I just, I believed in the opportunity. And as digital continued to grow again and the market bounced back, you know, the business continued to grow with it. Which was really, you know, an exciting time to see that dream start to become a reality.
Nathan: I see, so this is Frontline Direct. Can you tell us more about, just for our audience what you guys did? Because I know you’re acquired. And we can, we can talk about all that, and more. But yeah, just for context.
Kim: So yeah. So Frontline Direct was a digital marketing company pairing brands, with online advertising. So, we’d go search for brands that wanted to move their money from traditional means of advertising onto the internet. And at that point it was early so its was, you know, limited to the types of digital advertising they could do. But it included, you know, mostly pay for performance advertising. So really about generating, sort of similar to search, where you could, you know, pay based on the actions the advertiser received. Because at that point, advertisers didn’t want to spend brand dollars. They were willing to risk, you know they just weren’t willing to risk a lot of money on the branding. Which, I think is such a huge part of the digital advertising opportunity today.
There wasn’t any, you know that was way before Facebook or Twitter or Instagram, and any social media or video. So truly at the infancy of the internet. And just really, you know, the companies involved from where we were today, you know and we eventually got acquired by a European marketing company. To really increase their footprint across, across all of the U.S.
So it was truly a strategic land grab. And we happened to be in a great opportunity to be able to, to be able to partner.
Nathan: I see, and Frontline Directs, from my research, it grew pretty fast. You know, in the first two years it hit $3.5 million top line revenue. And within seven or eight years you were turning over $100 million.
Kim: We did! Internet advertising grew just as fast! So when you look back a the statistics on how the digital ad spend grew, we probably mirrored that. Just in terms of the amount of dollars that marketers moved to the internet. You know, we happened to be in a right, right I mean really, timing is everything. And I think we were in at the right place at the right time, in order to be able to capitalise on that.
Nathan: Yeah that’s incredible growth. Besides, I guess, the vehicle and the opportunity … Because you said you were, you were staying rent-free at your boyfriends place for four years-
Kim: Yes! Yes!
Nathan: …so that means, you know, the company would have been turning over multiples of millions of dollars. How come you still stayed there, at that time? You could have afforded to move out right?
Kim: We were profitable. So a really key thing about when I, you know when I started my own company was getting back to basics. The basics of business, which is not the dot com millionaire trying to raise as much money as I possibly could. But back to, how do I run a profitable company? A company that actually self sustaining. Right? And that was the focus. I didn’t take any funding, I didn’t want to answer to anyone, I just wanted to have, honestly a great life. And the freedom to create that.
And so, I fundamen- and honestly I’d been very scarred from the, from the bankruptcy, right? And having people, you know, letting all my friends go, and just being in that situation was, you know, it takes a toll on you. And I just never wanted to be in that position again. And so it really was about playing it safe, focus on profitability as well as growth. And not putting myself in a position where I was overextended.
That’s why now when I see everyone put, you know you always get concerned when you move to the fancy office building. It’s right? And I get concerned.
Nathan: Yeah, see so, did you raise any capital for Frontline?
Kim: No, didn’t raise, no, I didn’t. I mean I got the loan from my nanny, which I paid her back but, I did not raise any capital, no. I really, I self-funded, and I really wanted to just make a bet on myself. It’s like I just believed in the opportunity. And in that way, you know, honestly if it did fail, it’d be my own failure.
Nathan: Yeah that makes sense. And did you move, like these, so you built a team and office in Hawaii?
Kim: No. So that, after three years we actually, just due to family circumstances, moved to San Diego to be closer to family. And I took, actually in the first office, I went, I mean I totally upgraded from my kitchen. So I moved out of my kitchen, and I moved into the storage room of a friend that had an office in San Diego, and there was no windows, literally.
Kim: And so, but I you know, I think he charged me a thousand bucks a month or something, you know, nominal. Which was again, you know, it was an upgrade from where I was. So I was really excited. But it was there that, you know we really started to build a team. And that’s, you know, that was really core to, you know, the start. I think, you know, we didn’t last there that long, I don’t, you know maybe six months, until we got our own office space. But just moving from, you know, Hawaii to San Diego was, I can remember interviewing people, you know, in one of their nice conference rooms, and then we would go into the, the actually where we were working and I think they were a little concerned. But, it turned out well in the end.
Nathan: Yeah, wow. And when you were acquired by the European company, are you able to share those numbers public, how much it was acquired for?
Kim: Yeah, we acquired about over $30 million including the earn out, so yeah it was a great exit.
Nathan: Yeah wow, and then you said that company was acquired, you said, offline, that company that acquired you guys was acquired by Singaporean company. I know you guys, and you are the CEO is that correct?
Kim: Yeah so in 2008 we sold, and I had a couple year earn out which we, you know, we went through. And then I actually ended up taking over as CEO of that company as well.
Nathan: Oh wow.
Kim: And just, having the same experience and then, you know, in 2014, we split off the assets. That one had also raised, you know, the company who acquired us had raised another $120 million in D.C. funding. And the market was, was tough.
And I think some of the ideas, you know, they had intentions of, you know, doing an IPO, but again, timing is everything and the market was not in our favour. And we had to continue to raise cash, and the VCs were going to, you know, they were at their seven years and they were coming up. And we had to, if we wanted to continue that journey we had to find a strategic.
And that’s when, you know, the time when, you know, sold to, we sold the assets. And we had European presence, we had America and Australia. And we sold the U.S. and Australian business to Singapore Telecom.
Nathan: Got you. And now, you’re still internally working at this company right? Yes?
Kim: I am. I’m the CEO of Amobee. And Amobee’s got about 1,000 people globally. And about 25 offices all around the globe. And two in Australia, we have nearly 100 people there. And, you know, we’re really just focused on continuing that vision, and continuing to, you know, transform digital advertising.
Nathan: Yeah, wow. So I want to talk to you around that because I’ve got a few questions around more, maybe more the technical side. But, you wrote a book also called “The Execution Factor, The One Skill That Drives Success”. I’d like to talk about that book and the premise, because I’m very big on execution too.
At Foundr we, we put out a lot of stuff, and some of it I think is purely just from shipping. Like we call it, it’s a process we call “shipping”, similar kind of meaning, you know. Shipping, execution, just getting things out there, getting it done. Well, it is a little different but, we’re very big on execution. And I think, it is really, really important. But what compelled you to write this book?
Kim: Yeah, you know its exciting. I think, after I sold the first time in 2008, I started investing in other entrepreneurs because I knew, and I had first hand experience. Number one, just how hard it is to be an entrepreneur, and how lonely it is to be an entrepreneur. And just wanting to, you know, mentor and advise just based out of my own experiences. And so I started investing in, you know, different startups that I thought was interesting, and then eventually, you know, I’ve invested over 70 startups.
And then I started to, you know, a lot of them started to sell. To Apple, and Intuit, and obviously I’d sold to Singtel. So looking back, I wanted to understand, was there, you know, was it timing, was I lucky? I don’t know. Or is there something else, right? And when I looked back, there’s a red thread of all the successful companies I’ve invested in. And that was not that they had a great idea. Sure, great ideas are table stakes and there’s a lot of them. It was that the companies out executed. Like they just out executed. And when I, you know, just given my time thinking about well how do I share these learnings and these formula of execution with other individuals who, were probably me sitting at my table, right?
There’s, You know, everyone has a kitchen table, or they started in a garage, or they started, you know, started somewhere. And if I could shortcut the system, and let, you know, share based on my own experiences, what is important for us at Entrepreneur. You know, that was really meaningful to me. And I just felt like, my grandma made a bet on me and I was gonna pay that back.
Nathan: Yeah, that’s really cool. So tell me around this formula, or I guess process around the execution factor. Like you said that the, they just like, these companies out executed their competitors. What are some unique thing there? Because it’s one thing to just put things out there, it’s one thing to get a lot of things done. Was it the culture? Was it the leaders? Was is the market? Yeah, talk to me around that.
Kim: Yeah, when I looked at it, and just looked again at. You know, really taking it from a people perspective, an entrepreneur’s perspective. It’s like, if I was to teach myself what I’ve learned over two decades of experience. I would, it’s the skills, and the traits that are, that have to be mastered. And one of those is vision. So as a great entrepreneur you have to have that crystal clear vision of what you want to achieve. Right? It is table stakes. But that’s not enough.
I’ve seen so many great CEOs that are so lost in their vision, that they actually don’t, don’t understand that the market demand is probably not there yet. Right? Or they don’t have enough capital in order to get to where they want to go. So vision is not enough. And I think it’s important, it’s definitely a clear important trait of execution but its not the only one. I think that’s what the book shares. Yes, you need to have a crystal clear vision, but you also need, you know, four other traits in order to really master execution.
Nathan: And what are those?
Kim: So once you have a clear vision, you need to have passion. And passion is the Latin, root word, for pain or suffering. So, what are you willing to suffer for? And that’s, sitting in your kitchen for three years. I don’t know how many people would have done that, right? Or that is, working out of a, back of a, someone, your friends, you know, company, with no windows. Is that just staying up all night? Is it getting up early? Is it working the weekend? Is it, it’s doing things you just don’t want to do but you’re so passionate about achieving your vision, that you do them anyway. And I think that’s important.
Nathan: What are the other two? What’s the other two?
Kim: So there’s three more. So the third is, once you have your vision, and you’re passionate about it. Well that doesn’t matter, I mean busyness does not equal progress. You have to take action, but like very, action with intention. And so its about taking that very first step.
So I meet people all the time who say, “Kim, I’ve got this amazing idea!” And I’m like, “Great, what have you done to, you know, bring it to life?” And, you know, basically the conversation stops there. Because dreaming is easy, doing is hard. So taking that first step towards your vision, and taking a step every single day, to get you closer.
So whether that is, you want to start a company. Whether that is, you know, getting a business licence, doing the research. Whether that is, honestly, going out and asking for, you know, if you’re gonna raise capital. Like, it hurts. You’ve got to go, I mean that is, that’s hard. So how do you go out every single day, and you’re going to get rejected. And I think that’s number four. The fourth trait is, resilience. You are going to get rejected. I’ve never seen an overnight success. And honestly, it is hard. So let, I think that’s why, you know, resilience is an important trait of any entrepreneur.
There are gonna be times when you want to just throw in the towel, and I have so many of those where, you just think it’s the end. But you keep going. So it’s getting knocked down, and nine times, and getting up ten. Right? And keep going, despite every person telling you, you’re crazy, it’s a fad, it’s not gonna work. I mean, I’ve heard it all.
Nathan: Yeah, I see. And when it comes to, I guess, so these five elements, create-
Nathan: …the Execution Factor.
Kim: They do! The fifth one is the one that brings it all together. Which is, you know somewhere you were saying in culture, it’s the relationships, you know? Success is not easily achieved alone, and it’s surrounding yourself with inspiring and supportive relationships that truly enable you to be successful. And that’s having great mentors, it’s having great partners. You know, I honestly would not be here today without all of the people that helped me along the way. And that’s why, you know, its key to any successful company or entrepreneur. Honestly it’s a principle of life, I would say, as well.
Nathan: Yeah, I agree. Yeah no, I can, each time you talked me through, those key formula ingredients, I was thinking about it. Around, how does that stack up for me? And, you know, one thing, I’m really, really focused around, as we try and grow Foundr’s, is just building an incredible team. And that, that seems to be from what I, from my experience, seems to be one of the strongest traits across all the successful companies, is they have incredible people.
Kim: Mm-hmm (affirmative)- it is, it is! And people that, you know, want to win together, a lot of the people that are with me today, have been with me for a decade, right? We’ve been through two acquisitions. It’s like, they believe, and we’re, we’re in it to win it. We’re here together to do something great. Because success is really best shared with everyone else. Like that, there’s no fun in being successful alone.
Nathan: Yeah, I agree. And it’s fun, yeah it’s fun to win together. One thing I’m quite fascinated about is, everybody talks around, you know, its great to, you’ve got to hire “A” players, building teamwork is where it’s at. And I agree, I am seeing that with our growth, we’ve got an incredible team. But, there actually, it’s actually not something that people often talk about or share from a content perspective. On acquiring “A” grade talents, or hiring “A” grade talent. It’s usually, most of the things you read about or learn about, a lot of it’s around, I guess, starting. That’s where the majority, or growing you know, like tactics, right?
Nathan: You know, this latest tactic. So I’m curious to hear, you know, how have you been able to attract great talent, and also retain great talent?
Kim: Yeah, I’m focused, I am focused on building an “A” bench, right? Like the best of the best. You know, but what I’ve learned over time, is that I, you know, to scale, and I think this is really important, what scale it hits. It’s not about having a team of champions, it’s about having a champion team, and that’s different. That means they have to work together. So, I, you know, as the businesses evolve, you’re not a one man show anymore, it’s just too big.
And so, it’s making sure that you can work together. And I think that, that has been, from my experience, you know, so important. I think you see it, you know, with the, with the first team, with the Foundr team, you always see it, because you’re, everyone’s doing everything. But as you grow, it’s about, you know, there isn’t just one person that makes an organisation. It’s about having individual experts within the organisation that are best at what they do, and can play as a team. It becomes more and more important, I believe, as the bigger you get.
Nathan: Yeah, and at what point do you … because one thing I find interesting as well is, is yes, people talk about “A” players. But then it comes down to like, what stage, do you go from generalist to specialist? Because at the start you want all these generalists, like you said, everyone’s doing everything. And that’s, that’s kind of normal. But then you work towards transitioning. How did that, how have you seen that happen? Because, one thing I’ve found is, just like how you talk around that, the skill of execution that drives success. You can move faster if you have specialists versus generalists, or everybody doing everything.
Kim: Yes, yes I would agree. I think it depends, based on my experience, on the size of an organisation. And also, the individual people. So I’ve, you know, I’ve come to have a really healthy respect. Since I started in my kitchen, you know, I under … I love the entrepreneurial spirit, right? I love that. I believe that, and I like that, you can get a lot done. But how do you, the same people that, hundred, or even hundred million, right? May not be the same as half a billion, right?
It may be better at the Foundr’s start, right? Founders are founders for a reason. And then, you know, it’s interesting to see, different, you know different people and different types, and sizes of a company. They excel. And I’ve seen it, you know, it’s interesting, it’s just … and then they, they’re probably not happy at some point either, or some make it through a lot, you know, through the scale. But people are, you know, through my own experience, it’s a different type of person, you need a different type … different phases of the organisation. And it’s, I think it’s self reflecting and being like, “Am I still happy with that?”. Does that make sense?
Nathan: Yeah, yeah, no it does. Is it really, really difficult when that time comes though? For-
Kim: Oh it’s so hard, right? It’s so hard because your team, so any change to that team, regardless is, I think, hard on the organisation. But usually it’s in the best interest of our company to be able to scale.
Nathan: Yeah, I see. And, when it comes to execution as well, have you found that these companies, from your experience have a shipping or execution based culture? Certain personality types, or…?
Kim: Personality I don’t think, you know honestly, I think personality would come back to a relationship. Like you have to appreciate and value the strengths of others. So I think that’s important, regardless. But I’m not sure, you know, it’s an interesting, just … if you look at all the companies, what’s most important is that you surround yourself with people that have all of the traits, right? That would be the ideal team. You have a visionary, you have someone that looks at the relationships. You have someone that’s just going and doing, you have someone that’s keeping the passion, and you know, you have someone that’s really looking at how do we continue to move forward despite setbacks and challenges, right? I think that, my opinion, would be the ideal team to have, right?
Nathan: Yeah, I agree. So have you, like with these companies that you’ve invested in, do you look for solo founders, like yourself? Or are you looking for three co-founders, four co-founders, does it matter?
Kim: Yeah I don’t think it matters-
Nathan: What’s the formula?
Kim: I mean, it’s really, you know the formula is to make sure that the founder or the co-founders, I think all of those can work. As long as they respect each other, and can respect the differences. It’s really a respect, and understanding. You know, it goes back to your specialist, it’s understanding who’s in charge of what. Because I think that’s where you find the most conflict, is between, you know, that’s where I’ve seen the most conflict is, there’s not, there’s ambiguity on who’s in charge of what.
Nathan: Yeah, gotcha. Okay, well look, we’re going to switch gears and we have to work towards wrapping up Kim. You talked around, just because you’re, you know obviously a lot about performance marketing, direct response, and advertising, paid advertising online, digital. You know, one question that I think a lot of people think about, or get exposed to is, this whole branding versus direct response stuff. And you said that, you know you think there’s a really strong opportunity to do, basically investing money in digital advertising on just brand, and not direct response. So I spend a dollar, and I can correctly measure that I get three dollars back. What did you mean by that?
Kim: No I think that was, I mean, more direct response and, you know, when I started I think the market shifted. And more “top of the funnel” dollars are coming in. I actually think you need both, right? You need “top of the funnel” branding dollars, as well as “bottom of the funnel”… really ROI, or RO as in terms of ad spend. So I think you need both of them, I think we’ve at, we’re at a historic time in technology and advertising. And there’s been a shift and fragmentation of consumer consumption of media. And that demands that marketers change how they’re interacting with the consumer. And that’s where we believe, you know, we’re perfect in position to compete.
You also see the convergence of media over time. So, in terms of social and programmatic, and T.V. and digital, right? Digital video. You’re seeing the convergence of all of these coming together and there’s opportunities, really to provide leading advertising solutions for this converging world that we are in today. And it’s exciting to see the evolution, from an advertising perspective, in terms of the opportunity from the marketers and advertisers. You know, really to be able to follow and have an opportunity to reinvent advertising, as a new opportunity for themselves, right?
When you look at just the differences of how the market shifted from traditional T.V. advertising and brand advertising, to OTT and VOD. There’s so many opportunities, and I don’t think it’s one or the other. I think brands are more comfortable today with brand advertising. And there’s an opportunity to really leverage both brand and direct response, for you know, the ideal marketing mix.
Nathan: Yeah I see. Let’s just say you’re a startup and you’re doing, you just say, a few hundred thousand dollars a year in revenue, and you’ve got, let’s just say, a budget of five to ten grand to spend a month. What sort of split would you, like if you were to do percentage wise, you know, direct response versus branding. Just so people- can get a little bit of clarity.
Kim: Oh, I honestly if I do straight direct response, I can do search, I do paids, I would actually try to do as much direct response as possible. You only have so much money, you don’t have time to brand. You’re, you’ve got a run short runway, you’ve got to figure out how to get more leads in the system to capitalise on. That has to be your focus.
Nathan: Yeah, and then once maybe you’re, you know, $10 million plus-
Nathan: Yeah, established.
Kim: Exactly, an established brand, for sure. But for a startup without a doubt, I’d say, focus on lead generation to increase your sales so you can get the scale to be able to become a brand that would do a branding campaign.
Nathan: Yeah, gotcha. And then, when you’re doing perhaps like ten, twenty million dollars you can, you can do ten to twenty percent brand and then 80 percent direct response.
Kim: Yeah I think, you know as a business, you’re job is to make, say, to increase your customer base, right?
Nathan: Yeah. Yeah, okay. That makes sense. I’m curious, just, a couple last questions. One thing that pops up around, is around your success as a founder and your identity attached to that. You mentioned something that I thought was interesting around, you said that, with the startup, the startup that you joined, and you were like an early stage hire there in the founding team and it went bankrupt. You said you lost a big part of your identity.
When you sell your company, and you know, you went to an, and now you’re actually the CEO after two acquisitions. Do you, did you feel a loss of identity? Or?
Kim: You know, I think it’s a journey, right? As a founder, it’s like a baby, you feel it’s your baby, you’re creating it from scratch right? And I think, from my experience, since I’ve had great success in selling companies, I look at it as, maybe like marriage. You’re not, you know, it’s not the end, but the beginning of a new life, or a new opportunity. And so really I think it’s perspective. You know, it’s not just me anymore, sitting at my kitchen table. There’s a thousand people around the world. So, the company is the people in it. And that’s what makes great companies.
And so mine really, you know, my identity, definitely is not, is different than a founder identity and mentality I think, at this point. But we have done, you know, dozens of acquisitions over the last twenty years and as an acquirer I love the founder, so I think that’s just something I respect. You know, I have immense respect for it, because I’ve been there, and I’ve done that, and it’s hard. And if can continue to keep that entrepreneurial DNA in companies, even after acquired. I think the companies continue to be as, you know, incredibly successful. I think that’s hard, to keep founders once they’ve been acquired, engaged.
Nathan: Yeah, that’s interesting. I agree, that’s something a trend that I’ve noticed as well, and it’s, I like companies that are very, very passionate about that. You know, founder-lead.
Kim: Right, yeah! And it’s exciting, and I think you get, there’s a DNA, right? That comes with it, and so how do you continue to keep that founder DNA while creating something scalable and leaving a legacy?
Nathan: Yeah, I agree. Well look, we have to work towards wrapping up, Kim. Last question is, where is the best place people can find out more about yourself and your work?
Kim: Yeah, great! Please! I actually, with the book launch, I launched an “Execution Fund”. And I put the first million dollars in and all royalties of the book actually go into the fund as well. So-
Kim: …my, they, yes that’s at KimPerell.com. I highly encourage any aspiring entrepreneurs to go and submit an application. I’m looking for great entrepreneurs that can execute. And really want to continue to pay it forward, and make a bet on, you know, a bet on the next person sitting at their kitchen table.
Nathan: Amazing. Well look, thank you so much for your time, Kim. I really appreciate it, it was great chatting with you.
Kim: Oh it was great chatting with you too, Nathan! I appreciate it, have a great day!
Nathan: You too, alright, I’ll speak to you soon.
Kim: Take care.
Key Resources From Our Interview With Kim Perell
- To learn more about the five traits that help you master execution, check out Kim Perell’s new book, The Execution Factor: The One Skill That Drives Success. All proceeds from the book go into The Execution Factor Fund.
- Visit KimPerell.com to apply to The Execution Factor Fund.