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Scaling with Angel Money Only in Canada: Joel Lessem, CEO of Firmex (Part 4)

Joel Lessem: I didn’t like the venture capital model. I sold my house to take this job. I have a wife and a child. I put too much into this to play venture casino. I’m here to make money. I don’t care how big the company is. I just want to make money and build a business. I don’t mind if it’s not a thousand-employee business. It can be a 50 to 100- employee business. The more I talked to ventures and understood their business model, the more I realized that this is a very high-risk business because they have a very limited timeline. Most businesses take many years, if not decades, to build a solid company. If you go slowly, you can make wise operating choices versus Hail Marys. I said, “No, I’m not going to do that.” We were very good at forecasting. I said, “I’m going to get to cash positive in 18 months and I still have $300,000 left in the bank.” What happened was I got to cash positive in 17 months. Then, I began investing heavily in the product. We were about 25 to 30 people.

Sramana Mitra: What was the revenue level at which you got to cash positive?

Joel Lessem: About $3 million. >>>

Scaling with Angel Money Only in Canada: Joel Lessem, CEO of Firmex (Part 3)

Sramana Mitra: Is this the company that we are talking about right now?

Joel Lessem: Yes, I wrote the business plan 10 years ago. There was no documentation of who owned this IP. Then I had to go to the client and say, “I want to sell this to all your competitors.” I had to structure something with them. I took about a year to actually get the business legal, papared, and moving.

Sramana Mitra: So you bought the IP from these people?

Joel Lessem: That’s not really that important. I structured a deal where we owned it.

Sramana Mitra: However, you started a different company.
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Scaling with Angel Money Only in Canada: Joel Lessem, CEO of Firmex (Part 2)

Sramana Mitra: Very quickly, how long did you work for this entrepreneur?

Joel Lessem: That was a year and a half here and a year for another one. I worked for many of them.

Sramana Mitra: When was the first startup that you did?

Joel Lessem: The first startup I did was in 1999.

Sramana Mitra: What was that?

Joel Lessem: That was in Toronto. It was during the dot-com boom. I had an idea for a piece of software and I partnered with a person who already had a design business. Like a lot of these early companies, you make some revenue off the design business and then you put it into the software. I >>>

Scaling with Angel Money Only in Canada: Joel Lessem, CEO of Firmex (Part 1)

Joel is scaling a profitable company in Toronto called Firmex, and has only spent $4 million in angel money to get to almost $10 million in revenue.

Sramana Mitra: Let’s start with the very beginning of your story. Where are you from? Where were you born, raised, and in what kind of background?

Joel Lessem: I was born in Israel but raised in Toronto from the age of three. I grew up in Toronto.

Sramana Mitra: Where did you do your schooling?

Joel Lessem: I did a pair of history degrees at McGill and a Master’s degree. I was actually in the Ph.D. program for History and Metaphysics.

Sramana Mitra: What did you do after your Ph.D.?
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Blindness and Entrepreneurial Vision

An excerpt from Tough Things First by Guest Author Ray Zinn

Of all bodily senses, eyesight is the most essential. I lost mine shortly before Micrel issued its initial public offering.

I was in London on a leg of our IPO roadshow, where Micrel senior management was engaging investors in the last months before we went public. We were in a restaurant when it started. The menu appeared to have little pieces missing out of it, though everything around it looked right. At first I thought the menu had a printing quality error. I asked the guy seated next to me how his menu looked, and he said it was fine. So I took his menu, and it looked just as poorly printed as mine had. >>>

Bootstrapping Using Services First, Raising Money Later: Rohyt Belani, CEO of PhishMe (Part 7)

Rohyt Belani: Then, we’ll help you analyze this. We’ve built technology to not only  help with the analysis but also leverage existing security investments. If they’re using FireEye, we’re not competing with them. We actually fit along side them. Let’s say the Sandbox from FireEye, or the URL analysis product from WebSense, and take all these factors and say, “What is it that I’m looking at? How bad does it really look?” It’s very difficult to come up with a binary this-is-bad-for-sure or this-is-good-for-sure answer. It’s more of a confidence rating. That’s really what we look to do—operationalize human intelligence.

Sramana Mitra: What’s the competition? What’s the direct competition?

Rohyt Belani: If you look at the product portfolio that I just talked about going from simulation, assisting with reporting, to assisting teams analyze these reports. If you look at it holistically, we don’t have any company that offers this entire gamut of offerings holistically. We have competition on each one of these verticals, I would say. The simulation is the one that we’ve had around the longest. That’s where we have the >>>

Dealing with the Anxiety, Fear, Self-doubt And Frustration of Building a Startup

Startups are extremely difficult, so if you venture into this world, please assume that these challenges will come, no matter what. You will feel anxious, there will be moments of fear, self-doubt, frustration.

I can share a few tools from my own experience both as an entrepreneur, as well as from running the 1M/1M global virtual accelerator where we nurture and mentor numerous entrepreneurs.

First, I suggest you create a set of clear goals that you can follow step by step. This must include small milestones, small action items, and hence, opportunities to win small victories on a daily / weekly basis. This keeps you going, with a positive energy, and a sense that you are making progress.
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Bootstrapping Using Services First, Raising Money Later: Rohyt Belani, CEO of PhishMe (Part 6)

Rohyt Belani: If you want, I can explain with a really good example in a story.

Sramana Mitra: Yes, go for it.

Rohyt Belani: If you think back to 2010, there was a bomb scare at Times Square. There was a Nissan Pathfinder parked right in the middle of Times Square, which is very unusual. If you’ve ever been to Times Square, you see that there are a lot of cops there walking around. None of these systems and technologies caught this anomalous SUV parked right in the middle of Times Square. It was two vendors who stood there everyday selling $2.99 I Love New York T-shirts that said, “This looks whacky.” They went to the cop and said, “We don’t see cars parked here.” The next thing you know they call the bomb squad. It was loaded up with explosives.

While these guys weren’t bomb experts, they were contextually aware. Our whole idea is how do we take that contextual awareness to cyber security. How do you do that? An example is I got hit by a phishing attack myself. We launched our most recent product. I guess the phishers just go after us for bragging rights. >>>