The Founders Who Turned a Dud Into an Enterprise With a Million Paying Customers

The Founders Who Turned a Dud into an Enterprise with a Million Paying Customers

This post, “The Founders Who Turned a Dud Into an Enterprise” appeared first on Inc.

It was the spring of 2009, before we had even met Mike Silagadze. He was sitting in his apartment, waiting for his roommate and business partner, Mohsen Shahini, to show up. He had some devastating news to share about their startup, Top Hat, a teaching platform for schools that worked on mobile devices.

When we spoke to Silagadze recently, he reflected that on that spring day six years ago he was convinced he and Shahini had just spent the last few months proving their business wasn’t viable. It was a painful conclusion to come to after working their tails off and going into personal debt for a venture they had such high hopes for when they first conceived of it earlier that year.

The Moment of … Aha!

Back then, the two recent university grads had been playing around with some software for a mobile app game they were building when they had an aha! moment. The software that was making their mobile games fun and interactive could also be used to vastly improve the classroom experience–for both teachers and students. As former students who had sat through countless droning lectures, they knew there was lots of room for improvement, and harnessing the power of mobile devices seemed like the right way to do it. Most students came to class with smartphones, so why not turn them into educational tools by building a teaching platform that worked through a mobile app?

Silagadze and Shahini imagined professors doing things like sending short quizzes to the students’ devices and getting their answers right away–letting the professors know instantly if the students were grasping the content or not. The professor could then drill down on certain concepts, instead of just talking over the heads of the students. Or a professor could share slides and notes he or she made on the fly, or ask students to test out things they had just learned in interactive games. Imagine a chemistry class where students could play around on their mobile devices with how certain molecules fit together? This kind of teaching platform could transform the classroom from a passive environment to a highly interactive and engaging one–and certainly a more effective one. Plus, maybe it could also prevent students from being distracted by playing around with their phones during class.

A Well-Loved Idea

Silagadze and Shahini envisioned their platform sweeping through the educational system. Pumped about their idea, the two entrepreneurs started building it right away. They also immediately put together a presentation and started booking meetings with the deans of universities and school administrators. Almost everyone they spoke to loved the idea and wanted to get it into their institution.

But Who’s Going to Pay for It?

Because of the overwhelming response, Silagadze and Shahini quit their jobs and their game development projects and everything else they were doing and devoted all their time and energy into getting the interested universities to green-light pilots of their platform. But then nothing happened. After months and months of meetings that all seemed to go well, it turned out that the school officials–despite how supportive they were–simply couldn’t give the go-ahead to a pilot. They had neither the authority nor the budgets to actually say yes. Silagadze and Shahini were eventually able to get a pilot going, but that was only after arranging for a third-party to subsidize the $10,000 project through a grant.

An Unviable Business

It was shortly after the pilot got under way that Silagadze realized their business wasn’t viable. Sure, they had a valuable platform, but that didn’t matter. For the business to be viable, they needed an efficient and profitable way to get their platform into the schools–and there was no way they could build a business when it took half a year to make one small deal. It wasn’t simply a matter of a long sales cycle, which might have been solvable. It was that the schools didn’t have the capacity to adopt new teaching platforms. It was like having the cure for a disease but no way to administer it to the patient.

Bottoms Up

When Shahini showed up at the apartment that day in the spring of 2009, Silagadze shared his thoughts. A black mood descended upon them as they contemplated saying goodbye to their startup dream. It would be a big loss for both of them, and such a shame, too, especially because some of the professors in the pilot were loving the program and seeing a huge improvement in engagement and results from their students.

As Silagadze and Shahini talked further, an idea hit them–what if, instead of trying to make the sale at the enterprise level, they went straight to the professors? Get the professors to adopt the platform, just like they adopt a textbook for their course, and then have the students pay for it, just like they pay for their textbooks. Maybe this was how they could transform the classroom experience–bypass the enterprise altogether and go bottom-up instead of top-down. It’s the business model that works for textbooks, so why not for Top Hat too?

One Million Paying Customers

Silagadze and Shahini tested their new strategy right away and began calling professors all over North America. By the time the next semester rolled around, 15 professors across five universities had adopted their teaching platform and 3,500 students were paying a subscription fee of $20 per semester to use the Top Hat app, which they could use for any course. It was enough to prove the model and to excite venture capitalists to invest. It was also a model that proved easily scalable. By 2011, 22,000 students across 35 universities were using Top Hat. And the growth would explode from there, attracting more than $20 million in venture capital from VCs such as Emergence Capital (investors in, Georgian Partners (investors in Shopify), and iNovia Capital (investors in VarageSale). Today, nearly a million students at hundreds of universities–including Harvard, MIT, and UCLA–use the platform.

With a growth rate of 100 percent year over year for Top Hat, it’s safe to say that Silagadze and Shahini are well on their way to realizing their vision of transforming the classroom experience on the broadest scale.

If You Want to Get Paid … Find Your Buyer!

We found Top Hat’s story particularly fascinating because it made us wonder how many businesses out there have a valuable service but haven’t yet discovered the right buyer. And how many businesses have folded because they didn’t figure it out in time? A few years ago, our own business, ClearFit, almost became one of these casualties. Back then, we had made the assumption that the initial buyers for our predictive job matching solution were HR departments. But the sales cycle was too long for a company that was just starting out, and we were wasting time and resources we couldn’t afford. It almost crushed us. So we rethought our initial target customer and decided to start building ClearFit with business owners and hiring managers in mind, who we felt could make a quicker buying decision because they were the ones who would directly benefit from better hiring. The new direction proved to be the path to rapid growth.

So if you’re struggling to sell your product or service, maybe it’s because you haven’t found your right buyer yet. As the Top Hat story–and our own experience–clearly shows, it’s easy to fall into a mental trap about who you think your customer is or should be. Sometimes the buyer you are targeting can’t make a buying decision quickly enough for the stage your company is in, or maybe the buyer isn’t equipped to make a buying decision at all. Look for someone who can say yes, and who can do so within a timeframe that works best for your business.

Startup Hiring: Who Will Soar? Who Will Crash and Burn?

A data-driven approach to hiring the people most likely to succeed
Startup hiring: It seemed like a stroke of luck when she was referred

It seemed like a stroke of luck when she was referred by one of your VPs who’d worked with her in the past.

She had a rock solid resume showcasing her success at a couple of well-respected companies.

Her LinkedIn profile was top-notch, complete with recommendations from several former managers.

She breezed through the interview process, leaving you and your team with no doubts about her intelligence, enthusiasm, and track record. Besides, she’s exactly the kind of friendly, outgoing person you knew everyone would love.

Six weeks later you’re wondering how it all went so wrong.


Going Downhill Quickly

Going Downhill QuicklyFor the third time in two weeks you’ve been pulled aside by a colleague wanting to express concern about your new hire. She’s alienated one member of the company after another with a strange overbearing approach to some aspects of her role and disregard for other tasks. Attempts to get her back on track have been ignored, and recently there’s been a hint of hostility creeping into her communication with several of her teammates. She missed work again today and you’re not sure what to think.

It’s not that she can’t do the work, it just seems she doesn’t really want to. At times she seems to be doing pretty well, but there just isn’t the sort of consistent engagement you expected when you hired her.

And now you’re worried that she’s pulling down the rest of the team.

She’s not a bad person. She’s not intentionally causing problems. She just doesn’t… fit.


You’re Not Alone

Sadly, this scenario plays out all too often, and it’s not confined to startups. It’s really no surprise given the astonishingly low correlation between what’s on people’s resumes and their likelihood of success in the role.[1]

Bad hires are expensive, especially for startups. It’s not just wasted recruitment and training investments, it’s also hard-to-quantify elements such as impacts on team morale, damage to client relationships, and lost sales.

In a startup — where things happen extremely quickly, problems arise and are solved everyday, and everyone wears multiple hats — fit is absolutely vital.


Injecting Some Science into the Hiring Process

Startup hiring: Injecting some science into the hiring processYour startup is data driven. It’s in your DNA to lead with data. Product people, developers, marketers… everyone comes to the table with data. Why is hiring — the very lifeblood of scaling your organization — so different?

Probably because there hasn’t been a simple, effective way of bringing data into the hiring equation at the right time… until now.



What Defines a Top Performer?

Startup hiring: What Defines a Top Performer?Ask your network what defines the top performers in their organizations and you’ll likely hear about passion, about genuine love for what they do, about a thirst for continuous learning and improvement, and about fearlessly taking ownership even in times of great difficulty.

Seldom will you hear that peak performance is built on particular experience, education, or even specific skills.

It’s not what’s on their resume that makes them great; it’s what’s in their heart.

Why then do we put so much emphasis on resumes in the hiring process?

Sure you dig deep in the interview process, having candidates meet with various stakeholders. Maybe you even have a well-structured set of behavioural interview questions and a consistently applied way to score answers.

You likely pride yourself on your ability to get a good read on a candidate. Nobody lives your company culture as completely as you do, and you know when you see that fire in somebody’s eyes.

Guess what? That’s what pretty much everybody says, yet they still make hiring mistakes. Lots of mistakes.


Who Was Overlooked?

Startup hiring: Who was overlooked?An important question to ask yourself is “what about everyone you didn’t interview?” Maybe you did choose well amongst those you interviewed, but what about that stack of resumes you blasted through, eliminating people from consideration after a cursory glance?

Were there “diamonds in the rough” that you missed? Perhaps people with unusual education or career paths that didn’t seem to fit the mold but might have become your next superstar hire?


How Do You Judge Based on a Resume?

If job performance is built on a foundation of core personal attributes, how do you find that in a resume?

Certainly you aren’t looking for the words. People who call themselves “passionate lifetime learners and problem solvers” or who say they “fearlessly take ownership in the face of every adversity” are probably mimicking what they read in an interview guide.

Surely you’re sophisticated enough to look for evidence of these traits in their past actions and results. But that’s far easier said than done.


What If You Really Knew?

Startup hiring: What if you could look inside every applicant and see what makes them tick?What if you could look inside every applicant and see what makes them tick?

What if you knew who was “built” for the role?

What if you could get this perspective on every applicant before deciding which ones to interview?

You’d make better decisions about who to interview, and who not to spend time on.

Your interviews would be more effective too. You’d ask better questions, focusing in on how the candidate’s traits, motivations, and work styles align with (and in some cases clash with) benchmarks of top performers.


The Next Logical Step

Measuring candidates against proven success benchmarks for each role is a tremendous leap forward, but it’s possible to go one step further.

Perhaps you have a team of people in similar jobs. It might be sales, customer support, or some other vital function. If your company is like most, their job descriptions may be the same, but their performance certainly isn’t.

They’ve all got the skills, experience, tools, and training to prosper, but some outperform the others week after week, month after month.

Do you find yourself wishing you had more people just like your top performers?

ClearFit Custom Profiles enable you to model a success profile, unique to your company, built upon the attributes that make your top performers the A-Players that they are.

No more guessing. Scale your team with those most likely to succeed in the role and in your specific company.


The Next Time That VP Refers Someone…

Startup hiring: Next time you’ll be ready to bring some objective measures into the equation.Next time you’ll be ready to bring some objective measures into the equation.

Next time you’ll be ready to explain exactly what it takes to thrive in the role, and how this candidate aligns (or doesn’t align) with the proven success profile.

Next time you’ll hire someone who fits.



Learn More about Effective Startup Hiring

To learn more about how ClearFit is transforming startup hiring, check out this 30 minute webinar.

Highlights include:

  • A closer look at how ClearFit measures every candidate’s traits and preferences, matches them against proven success profiles for more than 1000 job roles, and instantly identifies those most likely to succeed.
  • More information on building a Custom Profile specific to your organization, modeled on your top performers, to enable you to immediately identify strong candidates at the time of application.
  • Hear from Chad Horenfeldt, VP Customer Success at Influitive, a fast-growing advocate marketing startup with a passion for exceptional service, on how a ClearFit Custom Profile is fueling their hiring success.

Click here to view the startup hiring webinar or visit for more information on how to transform hiring at your startup.



[1] Tett, Douglas N. Jackson and Michell Rothstein, “Personality Measures as Predictors of Job Performance; A Meta-Analytical Review”, Personal Psychology, Winter 1991, p.703. Also US Department of Labor; Hewitt Associates; Gallup Management Journal; Dr. B Smart, Top Gradin


How Influitive Uses ClearFit to Build Its World-Class Customer Success Team

How Influitive Uses ClearFit to Build Its World-Class Customer Success Team

How Influitive Uses ClearFit to Build Its World-Class Customer Success Team

Behind every customer is a story, a reason that ClearFit has made sense for them. Today we shine the spotlight on Chad Horenfeldt, VP of Customer Success at Influitive.

Hiring for any company is never easy, but for an early stage startup it can be a next-to-impossible task. There is usually no one in HR, budgets are limited, you’re too swamped to take on hiring, and you can’t afford to make a mistake. These are just some of the problems a hiring manager at a startup faces. And solving them, as Chad Horenfeldt, VP of Customer Success at startup Influitive would discover, takes some ingenuity.

8 Typical Startup Hiring Challenges

Although Chad had several years of experience hiring people for a Customer Success team at Eloqua, he would face several unfamiliar hiring challenges when he joined startup Influitive, an advocate marketing software solution, in 2013. The lack of an HR department at the time meant he would have to source and vet applicants himself. His tighter budget would make it hard to attract senior people, and instead of job security, he could offer hope and opportunity.

As well, like a lot of startups, Influitive was working in a new domain, which meant there wouldn’t be a lot of people with experience in advocacy marketing. There also wouldn’t be a lot of people with “customer success” on their resumes, another problem typical of startups that require new types of roles. Without the necessary keyword indicators on an applicant’s resume, it was going to be hard to identify people capable of performing the job at a high level.

On top of all this, Chad faced the pressure every startup does to avoid a hiring mistake, which can seriously derail momentum at a critical stage, and to make sure that every single hire knocks it out of the park and lifts the business up.

8 Typical Startup Hiring Challenges 

  1. Too Busy For Hiring
  2. No HR Department
  3. Limited Budgets
  4. Offer Hope and Opportunity instead of Job Security
  5. New Domains
  6. New Roles
  7. Can’t Afford to Make a Mistake
  8. Every Hire Has to Lift up the Business

The Beginnings of a Strategy: “Diamonds in the Rough”

Because there wouldn’t be many people with a proven track record, Chad knew he had to find people that “had what it took” vs. “had the right experience.” So Chad decided to target what he calls “the diamonds in the rough—people who are great talents, but haven’t had the opportunity to demonstrate that.” They have the right attitude and personality, but not necessarily the skills and experience, and they’re happy to come in at a junior level and take on the risk of joining a startup for a chance to prove themselves, learn new skills, gain experience, and grow along with the company.

The strategy was sound, but with all the other balls he was juggling, Chad couldn’t afford to spend all his time advertising jobs and wading through resumes, trying to find clues that an applicant has what it takes, despite their lack of skills and experience to prove it, and then conducting interview after interview to find the great, unproven-but-budding talent. And though he felt he had a keen eye for recognizing potential in people, Chad knew he would need something more than his gut to make sure he made the best possible hiring decisions to build his killer team.

The Critical Tool to Execute a Startup Hiring Strategy

The answer to this last set of problems came to Chad when someone at Influitive suggested he use ClearFit to source and vet applicants. ClearFit’s ability to post on multiple job boards with one click would help save time sourcing, but it was ClearFit’s unique12-minute job-fit survey, which Chad saw as the critical piece.

The job-fit survey, which is something all applicants fill out when applying, measures candidates on how well their personality and motivations fit the job. For example, the survey results would tell Chad whether someone had the level of “service orientation” and “consideration for others” required to succeed in Customer Success. This was exactly the kind of data Chad needed… when he needed it, which was as soon as someone applied. This meant he wouldn’t have to wade through resumes and guess. The only people he would call in for an interview would be built to shine in a customer success role.

Why Objectivity Matters in Startup Hiring

The survey results, which are based on millions of data points, are also scientific and objective. While some people are reluctant to accept that a science-based survey could genuinely enhance their own decision-making ability, Chad was open to the idea. But he didn’t want to bet something like his hiring on blind faith, so he began to test its reliability. While searching for his first hire, he found himself in a debate with a colleague about an applicant based on their cover letter. The colleague thought the letter revealed a cockiness that wouldn’t fit at Influitive. Chad thought it showed the kind of “ballsiness” that the startup needed. To bring in a third, objective opinion, Chad checked the applicant’s survey results. They were off the chart—indicating someone who would excel in the role, which confirmed for Chad that he should bring her in for an interview. He eventually hired her and she would become a tremendous asset to the team.

Chad would continue to refer to an applicant’s ClearFit scores, rather than trying to wade through a stack of resumes, as a way to make faster and better decisions on whether or not to interview a candidate. He would also find it helpful to have an objective measure of predictable success when it came to internal referrals. In the startup world, current employees are often the best source of strong candidates, but the practice can cause tension if an employee gets excited about referring a friend and that friend gets rejected. Having an objective survey that indicates the applicant isn’t a fit would help Chad make the case that the decision isn’t based on his personal, subjective opinion.

Finding the Diamonds in the Rough

Using ClearFit, Chad would eventually hire people from a wide variety of backgrounds, including someone who taught English as a Second Language, a recruiter, and a bank teller. Without a tool to reveal who an applicant is beyond their skills and experience listed on their resumes, Chad would never have been able to know they were worth considering as candidates.

The Signs of Success

With one exception, all of the eight people Chad has personally hired are still at Influitive, excelling in their roles, which Chad considers a sign that his hiring strategy is paying off. As for that exception, that person left to follow her boyfriend across the world and work for one of Influitive’s clients, a great compliment in Chad’s eyes. Another sign is the five-star rating on Glassdoor, a site for anonymous employee reviews. And then there’s the fact that Influitive is the top-rated app in its category on the independent app review site, G2 Crowd. And Influitive’s founder and CEO, Mark Organ commented: “We have a reputation for having the best service team out there. In fact, it’s the number one thing our customers advocate for us!”

To sum up the role that ClearFit plays in his hiring strategy, Chad says, “When it comes to identifying which applicants are right for our Customer Success team ClearFit is off the charts great. Influitive has hired over 20 employees now with ClearFit and they’ve all gone on to be fantastic. Growth here never stops, so anything that can help us find great candidates quickly and easily means that we are not only going to meet our goals for growth, but that our customers are going to succeed. I recommend ClearFit to everyone looking to grow and scale their teams quickly and easily with the right people.”

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