Finding Opportunity in the Unknown | Kurt Heikkinen

NEWaukee: Hello everyone. My name is Angela Damiani and I am the CEO of New Walkie and this is another episode of Making New Possible. On today's program, we welcome Kurt Haikinen, the CEO of Forge. And Kurt is pretty awesome. He is a many-time ⁓ SAS founder. He's been through a couple of different exits, mergers, acquisitions. He's raised over $150 million in venture capital and PE investment. He has a really incredible proven track record of not only creating brand new product categories, but also disrupting existing markets. We are about to talk about all things entrepreneurship and his philosophy for taking on risk. So I could not be more excited to jump right in. Thank you, Kurt, for being here today. Yeah, you're welcome. I'm excited to be here. Well, this program ⁓ explores creative disruption and we come at that from a bunch of different angles, but I'm not gonna lie to you. I think the founder stories are maybe some of my favorite. ⁓ and I can't think of a founder, at least in the like local region I admire more than you. So I appreciate you coming to talk to me a little bit about your experience. Thank you. I'm excited to be here and and be a part of it. Okay, so Many people know you've led multiple SaaS companies through exits, mergers, acquisitions. I'm curious what keeps you coming back to building these new ventures? And can you sort of describe what your experience with being a serial entrepreneur has been like? Yeah, would a glutton for punishment be too extreme? That's fine. You could be honest. Yeah. No, it is. It is part of it. It is about the journey, and the journey is about uncertainty. And that is Part of the satisfaction, joy, and reward that comes with it. Building something new. If everyone was certain that what they were going to create was going to turn out great, then everybody would do it. And so there's a fair amount of risk involved. There's a lot of uncertainty involved. There's a lot of failure involved. And so that's what keeps me coming back, is that entire journey of seeing the possibility, but also knowing that there's uncertainty and than unrelenting belief in yourself and others to do something that others haven't done before. And so it's it's a some call it a sickness, ⁓ but I've seen it as especially the last 15 years of my career, a real blessing. There's been times I've had the opportunity to choose the safer path or the more sure path. And I've always come back to this starting something, creating something new and all of the joys ⁓ and learnings that come with it. That's really beautiful. As you were saying that I was thinking it's like a delicate balance between being like highly competitive and also having that sort of like self confidence. I don't know I don't know that I thought of myself as a competitive person because I have never been into sports. I I did run track, but I was mostly like running against my own record. Like I just I wasn't that good at it. You know what I mean? I d I feel like all the other sport like activities have been things like yoga, you know. It's not really it's not really a sport. Yeah, like I see competitiveness in you. It's not always related to sports, right? You put out great events and if one time you feel like it wasn't great, you're probably really self actualized and beating yourself and wondering what can I do better next time. Well, I think that's the point is I think I sort of came into that identity of being competitive through entrepreneurship and really I think there's a big part of that. Like there has something there's some sort of internal fire or drive that makes you at least that's how I've known that I'm what I'm gonna put out is the like ideal product. It's gonna be the thing that wins. You know what I mean? That's how that confidence comes from is that sort of like competitive itch. Yeah. And there's a level of accountability. And yeah, self, you know, j it comes down to you. If you're the creator, if you're the one that is the founder, there's less safety than if you join a bigger organization that's already proven and there's people to your left and your right and you're in it together. Not that when you're creating something you're not doing it together, but at the end of the day, if you're the founder, the CEO, you've asked an investor for money, they've put their money behind your name. At the end of the day, it comes down to how you perform and how you lead. And there's a level of risk that comes with it, ⁓ a level of exhilaration, but it's far from a sense of feeling safe. Yeah. Yeah. So I mean, maybe speak a little bit about that. you know, having to balance even all the things you just listed out, like your staff, your clients, your investors, that's a lot of constituencies that you have to navigate as a founder. How do you balance that sort of short term execution that's needed with a long term vision? When when growing something that you want to be high growth, right? Like I don't I don't know that you've been a part of any lifestyle enterprises, right? Everything you've done has been high growth. Yeah. That's right. Yeah. It is a challenge. And especially when you're starting new, the vision isn't always going to be fully articulated in its full form. And so you have to be agile, you have to adjust, but there are certain tenets, certain components of that vision that you have to establish early and you have to remain committed to because you will be tested throughout. And so some of those components are the market you're going to serve and the problems you will and will not solve. ⁓ the will not if underlining, yes. Yeah. The will not is so important because you identify a market, you identify your ideal client profile, and you start to engage with those types of buyers. But if you don't have a clear understanding of the problem set you solve uniquely in the market, and you start to become an order taker to the problems that that client wants to tell you about, and then innovate towards those, you're you're closer to a consulting company. Than to an an actual product company. So one of the core components of the of the vision is really the market you'll serve and the problems that you will solve uniquely. And you have a unique understanding of those problems and you have a unique viewpoint of those problems on how they can best be solved. So that's an element of the vision that shouldn't change. The ICP tends to evolve over time. You have an idea of who your ideal client profile is, generally speaking. But over time, in my experience, you become ⁓ more clear year over year in who that is. And the more you can define the characteristics of it, it's not just an organization in this industry of this size. It's more about their operational behaviors and characteristics, other elements of their tech ecosystem, how they buy, the culture of the organization. Those are critical elements of the vision that should be uncompromising along that journey. And so those are really critical elements that are part of that. And then a self-assessment of where you fit within that ecosystem. Okay. And so I've lived in the world of technology, so I think of technology ecosystems and being really clear around where your product will and will will it will it will start and where it will stop. And that is directly related to problems. But sometimes shiny objects can distract you. And you start to innovate in areas where all of a sudden you find it's it's really And far more competitive, far more costly to deliver than you ever imagined. And then one functional aspect to your question of how do you maintain pursuit of a vision but execution to the here and now? Because you're challenged every day. Should I do this or that? Should I prioritize this or that? In a tech company, in a product company, the role of product management, having a product leader that is Always thinking about the future but holding you accountable to what matters most. Because there are trade-offs. There are always hundreds of things you can do and a few that you can prioritize. Those are really key elements that I've always used to find balance. I really love that. Honestly, that's like a master class in product development. Thank you for that. I I don't know that there are many, you know, I'm I'm very involved in the Midwest founder community. ⁓ and one of our core pillars is is capital. And I've actually had you come speak to some of the the earlier stage founders. in the past about that. I don't I don't know many people who've successfully raised money in this market. I'm curious for those that are interested in doing that or think that that's the path they'll go down, what lesson or advice do you give, you know what I mean, for pitching invite in investors from a founder perspective? What what is something that founders overlook in that that part of the high growth journey? Yeah. Well I think the first question is Do you want capital why and for what purpose? Mm-hmm. And so everybody gets excited and perhaps the allure of raising capital. And then that that wears off pretty quickly when the reality sets in that you've allocated and given away a percentage of your company to someone else who now has certain expectations. And so sometimes it like, you know, if they get a board seat something, they have a say. Yeah. Yeah. And they have a say in how well aligned are you in terms of that. approach. And so are you really ready? So let's assume in this for your convers for your question that they have made that decision. Right? I think one of the things that think of a few things. One, they're evaluating you as much you personally as a professional and your ability to lead and execute as much as they are the idea. Sure, of course. We know that the general idea does have the opportunity to evolve and take shape. Mm-hmm. But they're evaluating you first and foremost and never forget that aspect of it. The other aspect of it really relates to the fact that you will be tested. And what I mean by tested is be prepared for those questions that are posed in the form of an intriguing idea that the investor poses. What about? Have you thought about this other industry? Have you thought about taking the product in this direction? And sometimes those are really great ideas that cause you to think differently because they have a different frame of reference. Oftentimes it's a test. Oftentimes they are challenging your conviction to your idea. Yeah, your fortitude, yeah. And how focused you will remain and non-distracted the business will become. They want to know that the person and the idea that they're investing in is well thought out. And there's conviction around pursuing it. So oftentimes, especially early on, the first investor conversations, I was like, Okay, sounds like a trick question. Like it sounds like a great idea, but so as a as an investor ⁓ sorry, as a CEO or founder, the strength of your conviction to actually say no. Like that I've thought through that idea and it's not a a great idea for us in these reasons. So having that strength of competence and sometimes that's hard because you feel like you you really want to earn that check, especially if it's desperate. So Not raising capital out of desperation helps to avoid those things. And then I'd say for those who are later on, and I'd learned this when we went through the process of the sale of Montage. So we were well established. We hired an investment banker. We were gonna sell the company and we established a a ⁓ process that we were gonna execute. The banker we hired was fantastic. And so we were going to ⁓ r we had identified 25 potential strategic buyers. A combination of other tech companies and private equity firms. And so we went through a really diligent process of tiering those. And when you're at that stage, when you're selling a company for a hundred million or more or whatever the number is, you really have to be on the mark in terms of your positioning and the potential opportunity for growth that that acquiring entity can take it from the current stage to future stage. Right, because they're not just buying your current revenue. Ideally they're looking Help that accelerate whatever their growth structure trajectory is. That's right. That's right. They're not going to write a check for that scale without their own thesis behind it. So it's not only about positioning, but one of the things I learned through that process, and it's very straightforward, is take those tier three investors, those who you really don't think are a great fit, and they're your trial balloon. That's who you practice your messaging on. So whether you're at that stage of exit or at first, just find those genuine investors. Those are the individuals you practice your message. Those are the individuals you hear all of the objections and you refine your messaging so when you're really ready to pitch to somebody you're interested in and excited about, you're on target. Well you have all the kinks worked out. That's interesting. I really like that as advice actually. Yeah, to sort of like tear out who who would you think is the least viable and and have your practice runs with them. Tell me what else sort of weighs on you heavily as you go through a a merger acquisition. Like that's a big you know what I mean, it's a big deal to pick someone you think is going to be able to, you know, ten X or a hundred X, you know, the thing that you've built. What were other factors that you were really considering throughout the experience? So I've been fortunate enough there's been six ⁓ A transactions that I've been a part of and five of the six were us acquiring another entity. And so we've done five and which means we've evaluated dozens to some degree to some degree. And the first thing, it's really simple. Don't fall in love. Do not fall in love. And it's so hard, Kurt. It's so hard. You have the idea, you see the potential. ⁓ so maintaining objectivity is so so critical. And there are some great companies out there where I love the tech or love the people. At the end of the day, it's like this isn't gonna work. And sometimes in one instance, one instance, there was a company we acquired back in twenty seventeen where the first conversation started in twenty thirteen. Whoa, that's a long play. Yeah, it's a long play. But at that time expectations weren't aligned. That entity had a vastly different perspective on their relative valuation than we did. Still loved the idea. It took four years for us to get to the point where they understood what their value was or what we were willing to pay. Sure, sure, sure. Yeah. Not falling in love, maintaining objectivity. And then think of it through the lens of various work streams. So finance diligence is a work stream. legal diligence is a work stream, ⁓ technology diligence, client references as a work stream. Make sure people in culture is a work stream. Make sure people objectively is a work stream, not the fact that you like the people that you're interacting with, because you're going to meet a subset of the total organization if you're finding someone. So make sure that people and culture is a dedicated work stream. And if the culture doesn't work, don't do the deal. Yeah, I I think that's a big that's a because obviously you cannot you the finances can work and you can work out whatever the legal agreement is, but if you can't get the teams to work together, i i it's sort of like a false start, right? There's unless it's a super small organization where you're acquiring the technology and it's a few people and you know you can swap out the individuals if if they're told you. If need be, yeah. That's right. Yeah. So you've been a part of creating new product categories and disrupting like existing markets. know what I mean, like I said, you're kind of a big deal. I'm curious if you have any, I don't know, secret sauce for how you identify those opportunities that others might miss, or you know, is it just sort of like a tingling behind your ears when you come across it? Do you have a practice for this? Like is it something you've cultivated over time? Yeah, I it's an interesting question 'cause I don't see myself as someone who is identifying the new thing. And so I I do see myself as somebody who identifies a way to do an existing thing better. And so the montage story is an example of that. Myself and co-founders, Mike Bonk, Patrick Foy, Andy Bonk, that idea came out of a shared of ex shared experience of pain. And that's a story for many founders. They lived the pain experientially and they they saw it to be so acute, so they decided to do something about it. And that was the story of montage. of recruiters or hiring managers that saw that the process of hiring was just too timely, too costly, and it was a pain in the butt for candidates. So we set out to really transform the hiring experience. That was part of our mission. And that was the advent in 2010 of the of video interviewing and recruiting automation. And if you might recall, as this may predate many folks, back in 2010, 2012, we were shipping webcams to candidates. For job interviews. It's inconceivable. Can you can you think of it now? Yeah, literally like if you want to do this, I have to send you the camera to be able to do it. Yeah. Yeah. We used to get so excited because you know, on a given day there might be a dozen webcams going out the door and the FedEx driver would try stop by and pick up the box. It's like, ⁓ the business is growing. Yeah. But when we look back, we didn't know it at that time, but from two thousand and eight, the company was founded in two thousand and ten. An idea and a prototype two thousand eight, incorporated two thousand and ten with funding. And what we didn't know at the time is during that same window of time, there were 60 other companies across the globe with the same idea. So it wasn't like the montage story was a story of the only one with the idea. It became a story of better to execute in terms of strategy and execution. So I sit on the board of a company called Urban Bound. I was on the board of a company called MentorClick before. Their founder stories are very similar, shared experience where they lived the pain, saw the need. And decided to do something about it. And that's a very common founder story. In the instance of Forge, which is the company I'm building right now, that was more through market research. That was more through the realization that the company originally ⁓ was founded around virtual events in the height of the pandemic. And I I remember that. I had been invited to a number of things. I feel like you hand you hosted like the Milwaukee Tech Club annual meeting or something like that. It was the first time I'd ever been on the platform. It was like, wow, this is really cool. Yeah. And everybody was talking about it as the new normal. If you go back to that stage, and and the most dramatic dramatic example was a company called Hoppen at the time. They raised a billion dollars of funding. We're val ⁓ their valuation was about six or seven billion at its peak. They sold a few years later for fifteen million cents on cents on the dollar. So we had to pivot. We had to pivot. This wasn't a an instance of a new idea that nobody had ever done before, and we launched it and became a great success. So The story of Forge has been a few pivots through market research around really the member the experiential challenges of members for professional associations. And so we have created a new category through seeing the pain that users experience that buyers have. And that's what's made Forge exciting. But it's not as if You know, we started from the beginning and we have this great idea and we have this unique formula of identifying the new thing. Oftentimes it is about uncovering pain and identifying a new approach in my world technology of way a way of showing a client and a user a better experience. Well, you're not giving yourself enough credit and I'm not gonna let you get away with that because I think the fact that you went after both of these, even if you did have competitors in the market and you, you know, have been able to sustain and grow and obviously exit from montage is amazing. I I wanna circle back actually to your comment you made earlier around risk. I'm curious if you had a really strong risk tolerance like your whole life, or is that something you've grown into through these the number of stories you've been a part of? Yeah, it's something I really grew into. If I give you exposure to some of my early professional goals that were pretty simple. I I grew up in, you know, Wawatosa here in Wisconsin in a lower middle a income home and and you know, started working at the age of twelve, paid my way through college. And so it was like the aspirations were far more simple. I don't know exactly what they were, but if I could become a director in IT and and receive a pension someday, that was probably equivalent of what my aspirations at that time. And so I I would say that risk tolerance for me ⁓ was gained through really formative years in the nineties, in my twenties. I grew up inside of a company called PeopleSoft. And PeopleSoft was a darling, a leader in human capital management software. Now I joined when it was just less than fifty million in revenue. So it was all already established. And every year we grew a hundred percent year over year. And within six years it was a billion dollar ⁓ software company and we went from four hundred and fifty employees to seven thousand. And I had the unique experience of really growing. Every year was like a dog year for me, positively. Yeah, at that scale. I mean that so rapidly. Yeah. So I so some of the unique experiences for me, I I took an expat assignment overseas, lived in Sydney, Australia. My wife and I ⁓ ran product for Asia Pack, went out to corporate, ran global support at twenty-nine years old, and I'm running global support for sixteen different countries ⁓ around the world. And so it you know, that that gave me great experience, also built my confidence significantly. And so at that point in time I started to really learn that as opposed to my father who have great respect for, who's a civil engineer, and he just was very loyal to his career and his job and his employer. And I saw there were times where he went there were recessions and he got laid off. I started to make like, I'm gonna take control of my own professional journey. My greatest asset is me as an individual, my professional skills, my network. And it doesn't mean every professional move I made from that point was great. There were times where it wasn't But when you reach that point, which I did, I was fortunate enough to to gain confidence in yourself and belief that you are your greatest asset and you you are going to be successful independent of the trials and tribulations. And you gre grow a greater propensity for risk taking. And that's what happened in my world. I love that. I really love that. Well, I don't know. Maybe you've already answered this. I wonder if you have any th other wisdom to offer to us. I'm curious, looking back at your career, maybe what's the hardest lesson you've learned? It could be about business in general or maybe about leadership. I mean, you've led many different teams too. Yeah. ⁓ so many. I I would say we talked earlier about competitiveness. And those who know me know I'm competitive. I am. I do enjoy sports. I grow up playing hockey. I still play today. I play in a men's Beer League are saying is our beer drinking team has a hockey problem. That shows you where it's perfect. But I'm I'm still competitive. To this day, if we lose and and I didn't play the way I thought I should have, I still reflect on that. And so that's when I look at the hardest lesson, especially when you are the founder, you are the creator, you really have no other excuses. Like if you're hiding inside of a company, all all due respect, that's just how I feel I'm not casting judgment on anyone else. But if you're part of a big company and there's thousands in your one and the company's not doing well, well, guess what? It was because of this or the the economy or the the executive team didn't. So it was on the outside. The blame is on the outside. Yeah. When it's your company and it's not doing well. And there are many stretches in the time of montage and in the current state of Forge where it's not straight up and to the right. Mm. There are trials and tribulations. There are down periods. There are times where we don't execute according to the way that we want to execute. That can be really challenging. And that's been one of the hardest lessons to learn is the self reflection that comes with it. Because if the company's not doing well, it's a reflection on you as the CEO or the founder from a performance standpoint. And so you have to give yourself some grace and admit that you're not perfect and you're human and treat those experiences in a way that there there's growth. There's growth through failure and then pick yourself off the mat and get back up and say how can we improve and do better the next time. And so that would be one key lesson. And then the other one, for those folks that know me, a few years back I had a my LinkedIn headline said something like glass door review rating of ninety two percent. Okay. And I I you know when you're ⁓ when you're the CEO, you're a target. And so anyone could go out on Glassdoor and rate the CEO. And so one of the things that took me a while to learn as a CEO is I'm not looking to be liked by a hundred percent of the people. My goal is to be respected by a hundred percent of my employees. And I I know I haven't achieved that and I've fallen short. But if ninety-two percent of the individuals who have worked for me or worked with me respect me, then ⁓ then you know that's satisfying. But you have to develop some thick skin because Individuals aren't going to always appreciate your leadership style. Right. They're not the the maybe the outcome for them in their career at that point at your company didn't work out. And so you just have to be able to separate the realities of what it takes to build a business from other realities of how that may impact certain individuals or how they may view you. Culture has always been a priority for me. So I take that personally. One of my greatest joys has been, if we could flip the opposite of hardest lessons we just talked about, one of the greatest is. the outcomes of investing in people. Absolutely. That's the best part. It's the best part. And then seeing them go on and do things beyond and knowing that maybe you had a small little part in in their exactly. Yeah. Yeah, I don't I don't know that I've mastered what you're describing. I think not taking it personally. I think somewhere along the way I learned that there is a point where New Walkie ends and I start. Like that I can I can sense the boundary there. You know what I mean? In a way that I couldn't in earlier iterations. But I still take particularly when it comes to our people, I take all of it very personally. Yeah, and that's interesting. And I don't know, don't know if I don't know if I like am upset about that, to be honest with you. I mean, I am really invested. I feel like they're investing their time and their energy in in what we're trying to build and that benefits me and my family, in addition to obviously the supporting their their livelihoods or whatever. And I just think like People have choices. That's right. But we've ch we've come into this contract and I I realize that it's an exchange, you know what I mean? But it's not transactional for me. It actually means something to me. That's right. That agreement that we have between us and it's really hard for me to not take all of it very personally. That's right. I mean you do you care so much about the individuals who put their trust and confidence in you as a leader. Because everyone who works for you and me has a choice. Mm-hmm. Every day we are seeking to rearn their trust and confidence in that 'cause we don't pay the highest. We don't give the greatest benefits. We don't have the four and one K match that others have. So what can we provide? We can provide a culture and an environment, a sense of purpose and a sense of accomplishment. And we have to re earn that trust and confidence every day through how we lead with authenti authenticity. And so yeah, we have to take it ⁓ serious, but we have to give ourselves some grace if we don't get a hundred percent. All the time. Yeah, I think that's right. Yeah. That's right. And I think, you know, where there are shortcomings, I don't know, I tend to think of myself as an opportunist, you know, so not all of it works out. You're right. You can have the perfectly designed roadmap and then, you know, you have to turn left at an unexpected place. And I just think part of my own risk tolerance development has realized that like I've always figured out a new path. Like I just you know what I mean? I this might not be how I imagined it would go, but I have come to realize that like I'm smart and I'm on a team of people who are also really smart and we will find a way forward. And so knowing that actually I think makes taking the next risk ⁓ seem more palatable or accessible. I think you said that. I think you said that great. That's right. Like you've you you gain confidence in your ability to work through and the resilience that you've created. And so So the fear of what's next is I can do that. Bring it on. Exactly. It's exciting. What is around the corner? Let's find out. Not that we engineer failure, but we're just preparing a case. Okay. Exactly. Well, that's the ideal state. Yeah. Kurt, this was absolutely fabulous. Thank you so much for taking time and for sharing your thoughts on all of this. ⁓ we are a hundred percent on ⁓ rooting for you and hoping that you have tremendous success with Forge and whatever else you get into. ⁓ but I really, really appreciate you spending some time with us. Thank you. I appreciate all you're doing in the community and and the opportunity to share with you and your listeners. So thanks so much.