Panos Bethanis | Crain's

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Panos Bethanis

Background:  

Boston-based Survey.com recently expanded its retail intelligence firm with a new operations center in downtown Charlotte. The five-year-old company plans to hire 25 full-time employees in business development, human resources, IT, and sales and marketing over the next six months. 

The Mistake:

For all the guys and girls working in our industry of software and disruptive technologies, you get raised and groomed to think that you need to raise money at all times. Very often in my 20s and even in my 30s, I made the mistake of spending all of my time trying to raise money to grow the business, rather than [trying] to build a good business.

To raise money and fund a business from the ground up, investors need to see a couple things: early revenue and renewal of that revenue. To some degree, you’re conditioned to think that all that matters is who buys your product first. The worst thing in my industry is to “run out of cash.”

Once, with a company I founded, I spent all my time and resources – and all of my co-founders’ time and resources – by maximizing early revenue, but not paying attention to the client or the product. I thought the objective of a CEO of a tech company was to raise money. Clearly, I was micromanaging the situation and not building a business and building value.

I was kicked out of a company that I was CEO and founder of. After the first couple years of looking back and blaming everybody else for my misfortune, I took the time to watch how that company was doing, and it wasn’t very well. It became glaringly obvious that whatever I had not built was haunting them. They could not become a good company, because I didn’t set it up properly.

It’s important to build something good before you talk about it.

The Lesson:

At some point, you have to look in the mirror and face your deficiencies. As I got older – and I’m not that much older now, I’m 43 – I started to build businesses where raising money is a natural consequence of having a great product that a lot of people may want to buy or natural consequence of building something more efficiently. Once you start caring about the core value of what you build, it cascades to every other part of the organization.

I find religion in building something that I’m satisfied with first, where it used to be my first instinct to build the bank account. Now, it’s become a discussion with my team – it’s probably the time to raise more money to hire more people. The timing of that equation has flipped on its head the last few years.

Now, I apply the 80 percent rule – do good things 80 percent of the time and spending 20 percent of the time telling people about it. I used to spend 100 percent of my time on the second to raise money.

I slowly reverse-engineered what I was doing and set up those rules for myself. It’s important to build something good before you talk about it. You end up being a much better manager and a much better delegator. The businesses I build right now grow much faster.

Follow Panos on Twitter at: @pbethanissurvey 

Photo courtesy of Survey.com. 

Do you have a good story you’d like to share, or know someone we should feature? Email hgamble@crain.com.

And be sure to sign up for your local newsletter from Crain's.