Last month, Utah Business hosted a roundtable conversation sponsored by KeyBank and moderated by Steve Arntz, co-founder and CEO of Campfire. The roundtable discussed what it really takes to scale a business in Utah, from turning down outside capital to knowing when growth is helping and when it’s just noise.
How has being based in Utah shaped your competitive positioning? Where has it created limitations?
Erika Mahterian | Co-Founder & Chief Community Officer | Leland
Leland was founded in the Bay Area on Stanford’s campus. … Coming to Utah was a decision around family support and the stability of the state, but also being able to play big in a small pond. People really do have a sense of loyalty here. … When people choose to come work with us, you can feel that they really want to be here. … I don’t think there’s that sharkiness of the Bay Area where people just want to outbid each other. … Talent-wise, it’s been an exceptional choice to be here.
Zachary Dickens | Chief Investment Officer | Extra Space Storage
Having an international airport so proximate to the city is huge for us because our business operations are throughout the United States. The tourism and the skiing attract a very unique worker base. … If your business runs on accountants and programmers, and you leverage those universities, it’s nice to have a university base that’s actually pretty skilled. You get a lot of great people out of the University of Utah and Brigham Young University, and we couldn’t do it without them. I think our biggest challenge is attracting talent that actually recognizes the name Extra Space Storage, because it’s not a household name.
Jeff McClean | Co-Founder & CEO | Solidarity Wealth
Because of that culture of entrepreneurship, people are willing to share their time. That’s very different from what I grew up with back East. People are willing to … [have you take] them to lunch so you can pick their brain. It’s really unlike anywhere else. There’s something about the willingness to lift and help those trying to grow.
How do you maintain the quality of your product or service while growing at a rapid pace?
Lucien Morin | CEO | Savvos Health
I learned a number of years ago that most companies don’t die of starvation — they die of indigestion. You can get caught up in too much, that it’s really hard to move. I look at what we do at Savvos — the integrity of our system, movement of funds — that always has to be right. There are some things you can’t compromise on from a growth standpoint.
Movement and speed to market are a company’s greatest assets. … Our ability to pivot, to fail fast and to bring new innovation to our clients quickly has changed everything about Savvos. Recognize when you’re trying to grow, especially at scale, that you’re going to have to let little fires burn while you’re moving the needle; recognize that there are some areas of your business you can’t compromise on.
Corey Vandenberg | CEO | Clixsy
We have a concept in our company [we call] “gauging risk of ruin.” Two years ago, building new software internally would’ve had a high risk of ruin. [Now, with AI, it doesn’t.] If we get it wrong, we build another one. At any given moment, there are ten thousand things we can do, and my job is to narrow it down to four or five that’ll impact one of the key indicators. [Clients] come to me asking, “What are we doing about AI? Should we be doing this tactic and this tactic?”, and we run these questions through the risk-of-ruin lens.
Erika Mahterian | Co-Founder & Chief Community Officer | Leland
Being a consumer brand, I get worried every day about negative customer experience. … The cost of a negative customer experience feels way worse than ever before because of social media exposure channels. Reddit is our worst enemy. Someone has a negative experience on the Leland platform, they run and they write it out, and when people search us, that’s what comes up.
I think a lot about our AI Builder program, which is our latest product launch. … It was the perfect time for the market … and we wanted to be at the forefront of that. Now that the product is up and we have customers, the best thing we can do is give them an amazing experience, because if they don’t have an incredible experience, this product doesn’t matter at all. … I think a lot about the risk of ruin being even two out of the 10 thinking it’s mediocre, and mediocrity then stunts our growth.
How do you think about funding growth? What has worked for you, and what would you do differently?
Corey Vandenberg | CEO | Clixsy
I’m getting four or five contacts a week [from PE firms] with offers at six, seven, eight multiples. I said no. I’m betting on us and whatever they are seeing down the road. … Four of my biggest competitors were acquired last year and they are hemorrhaging clients. … [Those clients are calling us saying,] “I want to work with the founder. I don’t want to become a number.” … [That’s a big part of] why I haven’t taken the offer — how your market perceives you [matters.]
Jeff McClean | Co-Founder & CEO | Solidarity Wealth
I’ve been approached a ton … and I’m emphatic about saying no to everything right now, even though some of them have been really appealing. … I can probably raise capital in five days for any acquisition between family offices we already have a relationship with or PE firms that have been pounding down our door. … Raising capital and getting capital when I need it, that’s actually the easiest part. The hard part is knowing when to use it. … Multiples are really high. Interest rates are really high. I don’t want to combine those two things at the same time to make acquisitions. That’s how people get in trouble.
Jeremy Barker | CEO | Murphy Door
It’s really impossible [to raise capital] as a manufacturer made in the U.S. We get paid up front so we don’t have accounts receivable. We buy all the equipment. We’ve bootstrapped this whole way. … I get hit by PE and VC all the time and I say “no” because it’s not in my realm of understanding. I spoke at a PE event in Atlanta and told 250 people that the reason business owners hate [them] is because we’re afraid of the sharks entering the room and talking above our heads. … And we can’t go to a bank either, because we don’t have the receivables and we don’t have all the XYZs and it’s high risk.
Fast growth often strains culture. What specific practices have you put in place to protect or evolve your company culture as you’ve scaled?
Matson Tolman | CEO | Evolved Commerce
I had the same crew with me for 10 years and you’re loyal to that crew. And when you go through a growth phase, some of those you’re loyal to don’t necessarily grow with you. That was really hard for me to realize. … As soon as we started figuring that out, there’s still a place for them if they want it, but I needed to hire talented people and hire quickly — it was a key to our growth. It was a hard lesson learned, to be honest.
Zachary Dickens | Chief Investment Officer | Extra Space Storage
We worked [growth] into our core values from day one. … Growth was always at the top and … one of those underlying principles. We talked about it at every company meeting. … The leader sets the table for people to see that this is still a growth company — that they’re part of something that’s growing and engaging. Because in life, if we’re not growing, we’re dying.
How do you distinguish between growth that strengthens your core business and growth that dilutes it?
Lucien Morin | CEO | Savvos Health
Sometimes we’re measuring the wrong things, and that turns into bad growth. Sometimes we confuse activity for growth. We can be really busy tracking how many logos we add and how many customers we add. There was a year at our company where it was just really bad growth. [We needed to] make sure that we’re measuring the right kind of growth. It all ended up being around just the unit economics of, “Are we pushing the right products and the services that are moving the needle from a revenue standpoint?”
Jeremy Barker | CEO | Murphy Door
Over the last year, we had almost a billion views on social media. … We started chasing views, but the conversion rates were dropping. We started focusing a ton more money into the view chase and we started bolstering the production team and the social media team, but it wasn’t translating to conversion. … What hits for a customer doesn’t necessarily transact. Who’s the 12-year-old who wants a Barbie room or a Superman room versus who has a checkbook to buy it? We had to balance that out.
Another example is [my other] brand called Murphy Ladder. It was the fastest product ever launched by Home Depot in history. … I was able to convince Home Depot, which they don’t [typically] do, that I want a $15 million minimum purchase guarantee for 12 months. … This is a $15 million added [to the top-line]. … We signed this agreement in 2019, [our product was released] February 2020 as COVID hit in March. Inside that, we got distracted from our core business, Murphy Door. … We executed flawlessly. However, tariffs came in, COVID hit, and all the stuff went wrong. … I just wonder what I would’ve done if I wouldn’t have been distracted by a ladder. Is top line always the chase?
Matson Tolman | CEO | Evolved Commerce
For us in the e-commerce space, COVID was a cash grab. … We started growing different verticals that started pulling us away from our why. … The reality was we probably could have made good money on those channels, but it started to disrupt us internally from our employee standpoint because we started to drift from why we existed as a company, and it caused a lot of strife and angst that I wasn’t ready for.
If you could give one piece of advice to a Utah founder about to enter a high-growth phase, what would it be?
Lucien Morin | CEO | Savvos Health
Figure out what is actually driving your company and become ruthless about protecting it.
Matt Dent | SVP & Commercial Team Leader | KeyBank
Align with people and partners that you can trust and who have your long-term interest in mind.
Dr. Betty DeLass | Owner & CEO | Reborn Pelvic Health & Wellness
Get ready to look at all your insecurities in the mirror at once. The faster you can do self-work, the more successful you’ll be.
Jeff McClean | Co-Founder & CEO | Solidarity Wealth
You can just build an incredible product or service. You don’t need to wait for funding or staffing. You can just build.
Erika Mahterian | Co-Founder & Chief Community Officer | Leland
Be clear on your vision and revisit it often so you’re always intentional about your direction and investments. Be thoughtful on the right balance between bets and the core business.
Zachary Dickens | Chief Investment Officer | Extra Space Storage
Establish your identity early. Focus on intentional processes, people and values that make you who you are. Now is not the time for an identity crisis.
Matson Tolman | CEO | Evolved Commerce
Your job isn’t to add pressure — it’s to remove the obstacles that you created.
Corey Vandenberg | CEO | Clixsy
Figure out who your ride-or-die people are and invest in them like you would yourself.
Jeremy Barker | CEO | Murphy Door
Buckle up. High growth is the most exciting but also the most dangerous phase in the business. Remember footing and foundation before height. Build accordingly.
