How to Build a $25 Million Fintech Company - Matt Paulson - S1E9

Today on the podcast, you're going to hear from Matt Poulson. Matt is the CEO and co founder of MarketBeat. MarketBeat is an extremely successful business in Sioux Falls. Over $25 million and 13 employees. I think those margins everybody would love. But not only that, he's a husband and father. He's done a bunch of stuff in the entrepreneurial space. An author of six books. He has a couple of different investment vehicles that are kind of interesting. We talk about. He does real estate development, and he's a community leader, all in the span of 30, 37 years old. So I'm super excited to bring you this conversation with Matt Paulson. All right, well, thanks again, Matt, for taking the time. I'm really excited to talk with you. You've got a lot of things that you've been doing in your life, whether it's being husband, father, entrepreneur, author of a bunch of different books, investment, community leader. There's a. I appreciate you taking the time to talk through this.

No, absolutely. Happy to be here. Love to talk about the entrepreneurial story and what's worked for me and what's not, and I think we'll have a good conversation today.

Good. Well, good. Let's start off your kind of maybe definition of entrepreneurship. I think I pulled something offline that you said entrepreneurship is the act of making stuff up and then making it real. And I completely agree. I mean, I think ideas are dime a dozen, but execution is an idea. That's. Execution of an idea is much harder. So maybe elaborate a little bit on, you know, just taking an idea and turning it into something.

Yeah. You know, I think there's this idea of kind of fake it till you make it that's kind of very prevalent on the Internet of people where it's, you know, people kind of present themselves as being more successful than they actually are. And I think sometimes that phrase gets a little bit of a bad rap, because in reality, we're all kind of just trying to make something that doesn't exist exist. And, like, you know, whether you're faking it or not, like, up front, like, you still have to make it real. You have to build something that doesn't exist. And, you know, hopefully the thing that you think of that you're creating works, and if it doesn't, you try again, then you try again, then you try again, and you try again, and hopefully you'll land on something that makes some money for somebody.

Yeah. And I think sometimes we sell the future a little bit in that. Right. I mean, I think that's part of an entrepreneurial role in some of that. But I think it's not only that. You had another quote in here that I thought was interesting. Just talking about how the secrets of success aren't just about working hard. You talk about leverage, you talk about luck. And so I think there's a lot of people that are willing to work, I think, but I think there's some elements that are beyond just working hard. So maybe you could talk a little bit about that, because I think you had a post on this that I thought was kind of interesting.

Yeah. So, like, I think of my father. He was a police officer. He worked for 25 years, retired, and he worked hard, like overnights, patrol shifts, you know, 911 calls. Like, all that stuff that was not easy work, but that, like, hard work alone is, like, not enough to get what you, you know, outsized financial results. Like, you need some other factors, too, like hard work and time is not enough. You need to do something where you were, you know, have some leverage where you're getting more output than you are putting in. Like, I know that, like, you know, if it's just me, I can get to a certain level of success, but if I have a team of 30 people behind me, maybe I'm still only putting 40 hours a week myself, but, you know, there's 30 other people putting in, you know, 40 hours a week, too. So I'm getting 1200 hours a week worth of work instead of just 40. And then, you know, I think luck plays a factor, too. Like, you have to. You have to be at the right place at the right time or in the right industry at the right time. Like, if I was going to start a personal finance blog today, you know, it's probably not going to work, but it worked in 2006 because, you know, blogging was hot back then, and personal finance was a hot topic back then, and in just a way that it isn't now. So it's. You got to kind of hit the industry cycles at the right point. And, you know, some of that's luck, and some of it's just identifying the right opportunity.

So I wonder if you agree with me. Like, you know, I get a lot of people that ask me about, you know, they're starting out, maybe they're an entrepreneur or they're just aggressive about their careers, and they. They're just struggling to figure out how to put the pieces together. And I think I always kind of describe it as, are there two or three things that you do that when you overlap The Venn diagram of those things, you kind of uniquely placed to do that, Right. I'm not the smartest guy in the world. I'm not working the hardest. But maybe I got some domain expertise, maybe decent at communication. Maybe you're good about putting people together and selling a vision. Once you look at like the conflict of all of those things, then it starts to get interesting and something that you could leverage against other people. Does that kind of fit with what you're saying or is that different?

Yeah, you know, I think we all kind of have, have some superpowers or just things that we're better at than, than other people and we really need to start businesses that kind of are in alignment with what our superpowers are. Like I would not be a good person that has to go to door to like, like person to person sales every day. Like I would not be successful in that role. So I didn't start that business. But you know, maybe you are that person where you are gifted and just talking to everybody about every anything. Like maybe you should go start a business where there is a lot of person to person sales.

Yeah. And so what would you say? Just to put you on the spot, like what are your superpowers? What would you say like you do better than 99% of the population?

You know, a few different things. One, I'm really good at identifying kind of what the next opportunity is to grow something so I can take a look at a business and say, you know, I think you should go do this, this and this. And I've had a pretty good track record of identifying what the next steps are, both in my own business, but in other people's as well. Two, I'm really good at using software to automate things. Like one of the my claims to fame is I was the first person to create automated financial content using structured Data in like 2010. And then the AP started using that tech in 2013 and now it's still kind of around but you know, not to the prevalence that it was because Google does not like that kind of content anymore.

Yeah. Okay, well good. I appreciate that.

Yeah.

Anything else you add or. No.

You know, very much a data guy looking at numbers every day, looking at trends and then just kind of using the trends to identify action items as well.

So analytical.

So I'm willing to outwork. Yeah. Yeah. And then I'm willing to, I think I'm willing to outwork everybody and do it for a very long period of time as well. Like you know, I've been doing this for 17 years, haven't ever quit, given up, you know, anything like that.

That's good. Longevity. That is good. So maybe this leads us into kind of your entrepreneurial journey. I know that, you know, MarketBeat wasn't the first thing you ended up doing and just listening to some of the stuff that you've done. You had a bunch of side hustles and a full time job and so maybe talk about kind of your journey. I think, you know, you've definitely had an entrepreneurial bent even from a very early age that you've basically curated and probably gotten better over time.

Yeah, so we were a family, didn't you know, we had some money, but not, you know, enough for anything extra growing up. So like, if I wanted something, I'd figure out how to get money to pay for it. And you know, I was in elementary school. That meant collecting aluminum cans from kind of the local park and recycling them or selling candy to your friend. My friends. And then in kind of middle school, high school, I kind of figured out some tech stuff where, you know, I was making websites about video games specifically like SimCity 2000. And then I put ads for free web hosting accounts in my sites and I had a bunch of saved games and cheat codes and all that kind of stuff that people could play with. And I was probably making 50, 100 bucks a month doing that. There was one short period where Amazon had a referral program that back in the day you could get paid to do for people to search for through Amazon from your site. And that made me like a thousand bucks, like over a couple months. And so that was enough for me to buy a computer. So that was really cool. You know, got busy with high school, went to college and kind of picked up a new idea when I was in college also, like in a place of like, yeah, I need some money. Job opportunities in Madison, South Dakota are pretty limited. Need some, you know, way to generate some cash. So I was doing some freelance writing online and that led to me creating a personal finance site because I was writing personal finance content and it was just getting posted to personal finance blogs. So I figured these people are making money off me somehow I should be able to do that too. So made a site and it kind of figured out the marketing for it back then, which was kind of all the social book marketing sites, kind of before social media was a thing like dig.com and stumbleupon and Reddit, a few others. Was able to get traffic to the site, was able to get some search rankings, able to get Some like traffic from Google News and some places where maybe not everybody's looking. So that worked out pretty well. And so I had the one personal finance site and then thought, oh, I have one of these. What if I just had four more and paid other people to write on them? Then I had five of those sites and then I thought, this is fun, but maybe I have some other topics too. So like I had a website where it was an audiobook directory and then you click through and if you go to audible.com and you bought a book or signed up for the trial, I'd get 25 bucks. Did okay with that for a while. Had a press release distribution service. So I like found like a wholesale way to buy press releases and then I would sell them for retail, like double the price. And then my whole strategy was just to cold email people that had submitted press releases to other places and said, hey, next time you want to buy a press release or post a press release, you should use our service. And that worked really well too. But you know, that only got to a certain size. So in 20, this had been like 2013. I had just kind of quit my day job. I had a lot of different stuff going on. I was doing like web design for people. I had the audiobook site, the press release site, and then a little site called MarketBeat. But back then it had a different name. And what happened was MarketBeat really grew to be much larger than everything else combined. So I thought, well, this thing is really working. I should probably, you know, focus on the main thing, which is, you know, MarketBeat. At the time I sold a lot of my other websites or just shut them down. I started doing web design for people and focused all in on MarketBeat. And then the business doubled, I think two or three years in a row. So that's kind of what got me to that seven figure mark. And then since then, the model that was probably 2014 was our first seven figure year. And the model really hasn't changed that much since then. We're still a media company, still selling subscriptions and generating advertising revenue. Just doing it at a much larger scale than we used to back then. This year we'll probably hit about 30 million in revenue, hopefully more next year. So it's scaled really big. We have 14, 15 employees now, probably another 15 people that are freelance writers. And it's just grown into be a great business.

Yeah, so there's so many things in that that I'm kind of interested in. Let's start with the focus part of it. So I think, I don't think you're unusual in that you had a bunch of things that you were trying to figure out. Do you think that you, in hindsight, would you have doubled, like done the exact same where you had to try a bunch of things to see which one of them actually worked and then double down and create focus on that, or would you recommend, you know, just having amazing focus right out of the bat because you think this is the best opportunity?

You know, what worked for me was trying a lot of different things. I think you need a certain personality type to do that. I think other people have kind of picked the one thing and been very successful at that too. You know, for me, like, I knew I had the skills, I just didn't really know how to apply them. So I wanted to try a lot of different markets to see where the opportunity was. Like, I wasn't like married to investing or finance or like audiobooks or press releases or personal finance or SimCity 2000. Like, I just wanted to find the market that had the biggest upside. And ultimately I was investing because there are 60 or 70 million people that own stock in the United States. We consider our universe to be like 10 to 15 million people. We have about 3.8 million of them on our list right now. So we're pretty sizable market share of the universe we think exists. And it's a pretty big market. So the opportunity is there to get to at least 50 million in revenue, maybe more. And from there we can expand into other categories or do some vertical integration certainly as well.

So that was maybe the second piece to it is it seems like technology has really helped you scale. I mean, when you look at you're a pretty capital efficient business. When you think about just the revenue versus the number of employees, the margin is very good in it. How do you think that continues? Do you feel like just looking at it, you can't be static. You have to be continuously reinventing and looking at what new technologies will help you scale. And so does advancements in AI, other kind of API infrastructure pieces. There's a lot of different pieces here, and the industry is changing dramatically. Maybe the service that you provide to the external individual gets better over time, but really to stay relevant, you got to continue to invest in scale. And so maybe talk to me a little bit about how you think that's changing even in the last 612 months going forward.

Yeah, I think when I started there were a lot fewer kind of tools, websites out there. And you know, MarketBeat was really setting out to be A tool and information website. And you know, over time, like, you know, there's a lot of people that know how to write code and there are all these APIs online from like Nasdaq, Data Link and Intrinio and a bunch of other companies that just sell financial data. So now there's a bunch of websites like MarketBeat, but most of them don't have the reach we do. So we've kind of learned that our moat is our distribution and our reach and our audience. It's not tools that we make. So we are shifting more in a direction of becoming a media company because the value, like anybody can make the tools, the data is publicly accessible. Like there's no magic to that. You know, our value is having, you know, 3.8 million people and growing on our email list, you know, having great deliverability, you know, having multiple different, you know, media brands that we own and operate and just being able to distribute, you know, financial content and at scale and generate attention at scale. Like, you know, we, we have some boutique financial newsletter publishers where we're sending them 2,000 new customers every single month. And like that's a pretty rare thing. So, you know, it's, we've definitely moved away from like the tech and tools and towards like the median distribution because we think that's where the mode is. And like, yeah, AI is going to change some stuff and we're, we've got a guy full time playing with AI tools to see what he can make for us and maybe that'll be a competitive advantage. And like, we're not sleeping on it. But also like, I don't think it's going to change the world in the time period a lot of people think it is. I think the world five years from now looks a lot like it does today.

That's interesting. I guess I have maybe a slightly different view on it. I think that some of the productivity gains, at least in the short term as they embed a lot of these things. I do think that if people, especially young people, aren't using some of these tools, I think the expectations from a productivity standpoint are going to continue to go up. If you look at young people getting into the industry, if they're not leveraging these as part of their workflow and almost all of their different types of roles, from finance to marketing to writing, copyediting, I mean some industries may be more impacted than others. But it'll be interesting to see how, how an impact and if over a long term period of time it does have some GDP impact, On productivity. We'll see.

Mm, yeah, sure.

I guess one of the things that you don't really. That you. I think you're underselling a little bit was in college you leveraged a ton of investment in just technical skills. So not only did you get a computer science degree, but you've really focused on email marketing and learning something about that in a pretty early stage of development that was in SEO SEM, like the precursor to the success and the tinkering and the experimentation that you had started there. Like, would you agree with that?

Yeah. I mean, to make it work, you had to learn a lot of different skills. And, you know, there weren't, you know, many people. Like, there was. There wasn't anybody that I could, you know, lean on as a mentor. So most of the mentorship that I got was from listening to podcasts and, you know, reading stuff online and, you know, like, there's a site called Pro Blogger. I learned a lot from there. There is a podcast back in the day called Internet Business Mastery. And like, that's where I really started to understand, like, how subscription and information and advertising businesses work and audience based businesses work. That is really kind of one of the things that pushed me to really understand the business I was trying to build, to have a model in different categories that I could base it off of.

So how do you think that this worked? I mean, you said you didn't have a lot of mentors in your life that were entrepreneurs that you could kind of look up to, other than maybe personal figures, you know, professional figures. What got you to kind of say, hey, look, why I want to be an entrepreneur? Did you have a disdain for authority? Did you always want to do your own thing? Like, I mean, I think entrepreneurs all come with kind of a set of thing, you know, directional aspirations. But I'm curious about how you got into it.

Yeah, I mean, for me, I think, you know, a lot of it was just pursuing where I thought the best opportunity was. You know, it's. It's not that I. I hate authority or, you know, don't want a full time job because I work a full time job now. It's. It's really more like, you know, I'm very much an opportunist and like, I saw the opportunity. Like, I could go make 15 an hour doing this or I could go work on my thing that's already making me four or five grand a month. It's like, well, obviously I'm gonna go do that.

Yeah, okay, well, that's good. I mean, I Just think for some people it's a switch. Right. Because some one day you weren't making four or five thousand dollars a month. Right. So one day you're making zero and the $15 an hour is something and you have to make that jump. And I think sometimes for entrepreneurs that's super hard to go. I don't love my job, but it's stable, there's benefits versus I'm going to go try something and jump and do something else that has lower safety net other than you can always come back and get that job probably or something similar.

Yeah, well, I mean it helped that I started at a time when I, you know, wasn't married, had no kids.

Yep.

You know, had had to pay tuition, which, you know, I work, work to pay for. But beyond that, like my expenses were so minimal and like the risk was so minimal. It was like so much easier to start at them than it would be today now that I'm, you know, married and have two kids and you know, house mortgages.

Yeah, yeah, exactly. The last one I had in this section was just talking about the difference between B2B versus B2C. You've definitely stated before you have a preference for kind of the B2B or the B2C model. So maybe just talk a little bit about that. I mean, you feel like you've got a formula that you know how it works and it regardless of kind of product or offering, you feel like the tools that you have and the comfort level you have with the tools allow you to just scale that really quickly and obviously capitally efficient.

Yeah. So I am on the board of two B2B SaaS companies. One is called Prismatic that Microsercha leads and then another one called PI Des Moines that Ryan Gearhart gearhardi runs. And you know, I see just the amount of work they have to do for sales in terms of like, you know, you have to have a fully built up product before you can even sell it. And then you have to go pound to pavement of like going to conferences and meeting with people or doing cold outreach on LinkedIn and just working really, really hard to like to get a customer. And granted those customers are very sticky like once they show up. But like, you know, I don't need a team of salespeople to generate revenue. You know, I need an ad campaign that works or organic traffic and then a way to monetize them. Whether it's, you know, ads around my website or, you know, something I sell with the landing page and the checkout page, I just Feel like the kind of the conversion cycle of like, getting somebody in your universe to them generating money just so much quicker. And like, yeah, I might be getting a $2 ad click, but, like, you know, if I set up a, like an ad campaign and get traffic that day, I know if I'm making money that day versus, like, you know, a SaaS product, you might spend six to 12 months building it, and then you might go try to sell it, only to find out that you've built maybe not the quite right solution. So it's a very different game. I like game and playing.

Yeah, that's good. How do you think about Churn, though? You know, and Churn in those two models is very, very different. And so, you know, I mean, that's kind of a key piece to it Enterprise. You hope that if you have the right solution, the right price point, then it's way stickier. Whereas in some of the B2C models, you can definitely have a fair. More. More Churn if it's not a sticky offering.

Yeah, I mean, I think, like, We've been paying SendGrid for 10 years plus, and we're happy to pay them every month. And it's enterprise kind of software. We're playing like, you know, the SaaS churn rate just very, very minimal compared to, like, what I deal with, where, you know, if you have an email list and you send out an email every day, like, 5% of the people are going to unsubscribe every month no matter what you send. And, like, that's fine. But that also means If I have 4 million people on my list, 200,000 of them are going to unsubscribe every month just by sending email. So that means I have to get 200,000 new email signups every month to break even. And, like, I know how to play that game, but it's a very different thing.

It is. It is. Okay, let's pivot to, like, the next section I had, which is really talking about your kind of investment strategy and stuff. You have kind of two areas that I think you spend a fair amount of time with, both the Falls Angel Investment Group, which Black Hills is kind of part of this whole affiliate as well. And then, you know, recently you've launched Homegrown, which is kind of targeted, and you can correct me, I'm wrong kind of Series A. You've raised about 17 million bucks to look at deals in that. And so, you know, I think this idea of saying, I've made some money, I have some ideas of what makes a good entrepreneur and what makes a good opportunity. Now you're kind of putting it in kind of precede opportunities as well as, you know, post revenue opportunities. So maybe just talk about some of your thought process and strategy about, you know, putting your money back into the, you know, to the ecosystem for entrepreneurs.

Yeah, you know, I do it primarily because I enjoy it. You know, I think with homegrown we have a good opportunity to do something that isn't really be done being done well in the state or in the region. You know, I got kind of connected with Falls Angel Fund. You know, they, Tim and Tom tried to launch it in 2015. Kind of a false start. Didn't really go anywhere. 2016, we were able to get enough momentum to get it off the ground. And they asked me if I wanted to be the chair of the fund and I was too dumb to say no. So I got to learn, you know, a lot in a short period of time about like, what makes for a good deal and you know, really how high that bar is for a company to be investable. And you know, I thought it was, you know, maybe, you know, at one level, but it turned out to be at two or three times that level. And that means, you know, you probably have to say no to the vast majority of the dealers that you see and just do a ton of diligence and like, you know, recognize, you know, really recognize success when you see it. And really you are looking for somebody you kind of, you know, I don't say somebody like myself, but somebody who is like, has some traction. Like they've got some customers already, they take advice, they're really ambitious and like, you know, they're going to be successful whether they take your money or not. And like that's really the standard I think. I think you got to look for, you know, there have. We see just a lot of marginal deals at the angel fund level. And you know, it's tempting to write somebody a check because they're local or because you know them or because you just want to help somebody out. But you know, typically when you invest for those reasons, you end up losing all your money and then the business doesn't work anyway, so you didn't really help them out at all. So you kind of have to develop a thick skin when you're, you're playing this game. But you know, ultimately you do find the micro circuits of the world or the Eric McDonald's or you know, people that are really going to do well. And then you can feel really good that you Helped somebody be really successful, even though there was a lot of. A lot of mud to wade through to get there.

Yeah, a couple of things in this one. I mean, I think, you know, I'm involved in the Black Hills Angel Fund, and, you know, I think we've struggled with a couple of different things, and I'm interested if you are, too. I think one of them is, you know, it's a volunteer organization. So the amount of diligence we do maybe varies. And I think we've tried to create more of a consistent process. Sometimes that works, sometimes that doesn't. You have diligence teams that maybe do it in different levels. What next one is valuation. I think we've done some deals and kind of Fund one and Fund two that have worked out okay, but because of the valuation was higher, the multiple and the return back to the fund wasn't as higher. And so I see a tendency now to grind some of the entrepreneurs down as low as they can get them for valuation so that there's some upside in it. And this really leads to, you know, these funds don't continue to go if there's not a fair amount of success in them. And they take a long time.

Right.

Seven to ten years to see, you know, some of this through where. So I'm just curious on the dynamics of that, if those are things and even deal flow that maybe that's the last time I'd say we've seen deal flow. Probably less this fund than we had in kind of Fund one and two in the Black Hills. And so take any of those topics that you think is interesting to talk through.

Yeah, I think a lot of what we learned from Falls Angel Fund is kind of what led to homegrown as a model. Like, we are all volunteers. So let's say I invest $50,000 in Falls Angel Fund, and that's put up between 10 deals. How much due diligence am I really going to do in a $5,000 investment? The answer for me and basically everyone else in the fund is really not that much. So that's kind of led us to maybe sell ourselves short on doing dd, which is kind of, I don't say a flaw in the model, but it's, you're going to struggle to be successful if you're not doing more due diligence than the angel funds are right now. And I, you know, there's pos that we did through Fund one and Fund two and Fund three. Even that I think if I had dug into a little bit more, we had Just spent more time on it. We would have not invested when we did invest and that would have saved us from some losses. So there's that. The other thing like that we do struggle with this deal flow. Like we had to cancel our September meeting because we didn't have any plausible companies to pitch. That's why with Homegrown we're taking a little bit of broader, of a perspective of, you know, some more states and a broader regional focus. Yeah. And we, we've also found that like some people want to write a check to participate in the angel funds, but they don't necessarily like want to show up to the meetings and vote. They just like the idea of investing kind of locally. So you know, that's kind of why Homegrown is kind of a more traditional GPLP model because people do want exposure to this asset class that's kind of hard to get decent exposure to. But they don't necessarily want to show up and vote and spend a bunch of time on it either. So that's kind of led us to the model that we have today with Homegrown.

So maybe talk a little bit more about that. I mean that's like you've said, it's definitely companies that have more traction and you can see it, there's revenue, their customers, they have a go to market strategy. You have a couple of areas of focus that'll let you kind of dive into and then a much more regional kind of interest in not just South Dakota, but you're doing stuff in kind of the regional state.

Yeah. So homegrown we raised $17.2 million for a first fund, lots of individual investors and then we've got some amount of money that I can't disclose from the North Dakota Growth fund to help with fund as well. So you know, we have a kind of an eight state focus of the Dakotas, Nebraska, Iowa, Minnesota, Montana, Wyoming and Colorado. So it's kind of the, you know, we don't really want to look at California companies because I know if they're coming to me, like they've probably been turned down 10 times, you know, locally before they got to me. So it's like that's probably not within our wheelhouse. And then we really wanted to focus in on some different kind of interest areas and like we do have some flexibility to stray from them a little bit. But you know, we're interested in B2B SaaS, we're interested in Ag Tech because there's a lot of around here. And then we're interested in fintech because, you know, Sioux Falls is kind of a fintech hub in a way. So kind of those three categories, we're really looking at the kind of C to series A range, you know, post revenue companies. So our check size is typically half a million dollars on low end to a million and a half dollars in high end. You know, we've got, I think, let's say probably around eight companies in the fund right now. And we've been having a lot of fun doing it and hopefully we've made some good investments as well. Part of that, you know, we get to be on the board of the companies that, you know, we're on, so we get to really follow them closely and keep hear what's going on. And that's been a lot of fun as well.

So any early insights like there's is just like you were talking about the angel network. You know, you get better as you kind of do these. I mean, is there any insights there that you have that you kind of said, hey, from the beginning of homegrown to kind of where we are from maturity standpoint, there's some areas that we've gotten better at. Is it diligence? Is it deal flow? Is it anything, you know, like observation or helping them from an execution standpoint?

Yeah, you know, a few things. Like one of the things that was surprising for us is that a lot of our deal flow comes from other VC funds in the region. So like Great North Labs out of Mankato. There's some groups in Nebraska that are ag tech focused. And like Tim. Tim travels for us. Like, you know, his, his kids are old and you know, mostly out of high school. So like he has the ability to travel in a way that I don't. But, you know, we've had a lot of success by being up in Fargo and in Minneapolis and in Des Moines and in Omaha and just kind of showing up to events in person. We've gotten a lot of deal flow that way, so that's been very helpful for us. We've also kind of realized, like, you know, a tech company is not a tech company. It's not a tech company. Like, the growth and exit path for an egg tech company is very different than, you know, B2B SaaS. Like egg tech companies can get acquired earlier if the technology is right. Where B2B SaaS, companies, like, they probably got to grow to 10 million in revenue before somebody wants to acquire them. So it's just, you know, kind of got to recognize. And then like fintech companies, you just need a boatload of money to get them even started because of their regulatory stuff involved and having to get approved by you know, a banking partner. So just kind of understanding like these kind of different interest areas are all very different and treating them differently, that's been been a valuable kind of learning as well.

How do you think about execution in these investments? I came from kind of an operation background at Concur and the way I had success at Concur was basically just having really well functioning teams. And so when I look at startups that's one of the things that I probably over focus is how well can they execute. Maybe the idea is okay and sometimes they change. If you're a well executing company, even if your direction or your strategy strategy is a little bit off, but you can pivot like I feel like you can recover from a lot of things. I see a lot of companies that have the right idea, well intended people but they just don't execute well. They don't focus on the right things and they don't do them well. And so I'm curious on like how, how is that part of your mentality and thinking about it, how do you look for that in some of your investment opportunities or isn't that important to you?

So with homegrown we look at strictly post revenue companies and that probably, you know, nix is 2/3 of the ideas off the bat. We just kind of use that as a baseline filter of like have these people actually done anything interesting? And then you know we, you know we're kind of looking for probably a quarter million in annual rev recurring revenue as a starting point. Then from there like you know we also like to see kind of the growth path there. You know There are some SaaS companies where it's maybe they're making a million two in revenue but it's you know, the 1520 annual growth and like that growth path is just not going to get you where you want to go. So you really want to see kind of have some revenue but also like the growth that's there. You know, you want to see kind of, you know, you want to make sure that they don't have really high churn rate and just that kind of the fundamentals of the business are sound in terms of like if we pour gasoline on this and you know, ramp up, ramp up the product and wrap up ad spend, like is there an engine that's actually working here or are we just going to cause something to blow up? So you kind of want to look at all the different financial aspects of revenue growth. What is the burn rate, are customers sticking around, all that stuff. And that tells you just a lot about a company before you even know what the product is.

Yep, I think that's good. Okay, well, good. I appreciate that. Maybe the next section I kind of had was just talking about being a community leader. You've been pretty public with a lot of your ideas and just kind of how you want to see see Sioux Falls in general continue to evolve. You've had some kind of pet projects as far as whether it's the ecosystem, whether it's your church, whether it's just other passion projects. But you had this idea of, like, I started off as a nobody, and I wanted to be somebody in my community. And so maybe talk to me about, like, how you think about that. I think there's a lot of people that would love to be in your position, but again, it's the hard work to get there, and I think it's a methodical approach to what does success look like in this, and how do I be a community leader in my Sioux Falls environment?

Yeah. Ten years ago, I went to my first Innovation Expo, and that was really.