Purdue Entrepreneurship Class Q&A with Richard Stroupe

ACEO E20 Purdue Student Interview

[00:00:01] Welcome to the Amplified CEO with VC and serial entrepreneur, Richard Stroupe.

[00:00:10] Today's special audio only episode where for Purdue University entrepreneurship students turn the tables and ask Richard what it really takes to build scale and invest in companies. 

[00:00:23] So good evening, Richard. It's so nice to see you finally. how are you doing? Good, good. How are y'all today? We are all good as well. a quick introduction to Richard. Richard is a seasoned entrepreneur and a technologist whose career is a masterclass in building, leading, and scaling. He has worked for over 30 years in software development and professional services, and he is just done it all from balance sheets to code.

[00:00:52] He has not only bootstrapped and sold one software service company, but two, and currently he is managing ventures from student housing to resorts, to venture capital. He is truly doing it all and he still finds time to host his own podcast, which is honestly, we are all in awe of you. A proud boiler maker as well.

[00:01:14] absolutely. He's, he is absolutely motivated by curiosity and growth of everyone around him and himself as well. Thank you for the introduction. It's nice to meet everybody. It, it's nice seeing you. my name is Keya Jadhav. I'm a sophomore in computer science, and these are my colleagues.

[00:01:33] We are all, from Entrepreneurship 200, which is a class led by Professor Jorge Romero there, and it's a class about introduction to innovation and entrepreneurship. I'm Matthew Mitchell. I'm a sophomore, so in agricultural economics. I'm Amelia Faurote, I'm a junior study in general management. I'm Madison Hammond.

[00:01:53] I'm a sophomore studying management and accounting. All right. Nice. See everybody. Do you have anything, a few words to share with us today? I'm just excited to to, to jump into the interview and to answer any questions you have about my own personal journey or experiences or just, views on today's capital markets or.

[00:02:14] startup landscape. Okay, then let's get right into it. So I have the first question. how do you think and education help shape future entrepreneurs? If you could change how entrepreneurship is taught, what would you do differently based on your own experience? Absolutely. So I feel education accelerates pattern recognition.

[00:02:36] While mentorship prevents expensive mistakes effectively. So most founders waste years learning what structured education and learning from mentors could teach in weeks. for example, when I joined Harvard's OPM program, it's an executive ed program, out of the Harvard Business School where we spent nine weeks spread over three years, learning from other business leaders around the world.

[00:03:01] Deep case studies of other businesses, that completely transformed my own business trajectory. the program actually paid for itself in the first year, with my first, mergers and acquisitions deal that I closed shortly after unit one. so effectively it compressed decades of learning into two, to, to nine weeks, which reinforces my belief that the most expensive education is learning everything yourself.

[00:03:28] smart entrepreneurs, by speed instead of paying with time, learning from other failures accelerate your growth without having to experience the pain firsthand. my teaching philosophy, 'cause I also teach, my own executive ed class, you know, it's a, it's a resort for CEOs, uh, really centers on forcing clarity.

[00:03:48] You can't teach what you truly don't understand. So you have to break it down into the exact systems that work, not just the stories after the fact. So if I help 10 founders, skip $2 million of mistakes that I've made, you know, that creates $20 million of collective value just from one painful lesson.

[00:04:07] So that compounding impact, watching founders unlock what they truly are capable of is what drives everything that I do now.

[00:04:15] Awesome. So the next question we have for you is that in 2012, you did an interview with Bryn Copen and said a top 10 way to become a successful entrepreneur was to quote, make a decent profit decently quote. Can you elaborate on what you meant by that? Yes. making a decent profit decently, really means building sustainable profit with integrity and business ethics rather than unsustainable growth with corners cut.

[00:04:42] it's applying my own blue collar work ethic, to sophisticated business models, you know, to grow on 15, 20% annually with clean operations rather than 200% with hidden dysfunction or corrupt business practices. Um, it starts with unit, uh, economics. ensure every transaction creates value before scaling volume.

[00:05:05] focus on gross margin expansion, not just revenue growth. build systems that work long term, not just short term hacks that create technical debt, is what I refer to as something that looks good, but when you try to expand it or maintain it, everything gets much harder or expensive. create value for customers, employees, and investors simultaneously , rather than optimizing for one stakeholder at other's expense, um, you know, steady compounding beats, dramatic spikes followed by crashes.

[00:05:35] how you make money matters just as much as how much you make. You know, reputation capital compounds over decades, so, so it's really about building. Something that your kids and family and your friends and colleagues will respect, not just what impresses investors in the short term. That's great. Thank you.

[00:05:52] Our next question is, you mentioned helping founders or pressure test their business models. Could you walk through a time when you helped a founder realize their model was not scalable, and what strategic pivots made the difference? Um. Yeah, it's interesting because in my class not too long ago, you know, 'cause what what I have them do is, is effectively come in and, and, and pitch their business.

[00:06:21] What do they do? How do they do it? Who do they do it for? And what's their top three five business challenges? During that process, you know, I call a business X-ray. Um, it really throws all your cards on the table. So business owners have to be, vulnerable to a period of time to, to really understand what their business issues are.

[00:06:41] And sometimes it could be their own issues, like they're, they're, they're causing their own problems. In one case, a business owner, you know, after the class came to me and told me that he decided to close his business because in the end, not only am I trying to save their themselves from failure of their own business, but also trying to return time.

[00:07:04] Because really time is the precious commodity that we all have. So if their time is is better spent on another venture, then that's also a win for me as well. So he decided to close his business and operate something completely different. 'cause we all carry some cognitive bias. We all believe that, our solution and our product.

[00:07:23] Is the best one out there. and that's why I have to spend a lot of time talking to your customers and getting feedback and doing incremental development and not just building something that you think the customer wants, but more what they need. Um, so it, it's, it's a hard lesson to have, especially, learning that your business really isn't scalable.

[00:07:44] It's not something that customers really want. another example, I invested in a company really early. And they spent two or three years and probably about, I'd say $10 million in operational costs, working down a path. And they found that it wasn't successful or scalable and they had to do a hard pivot.

[00:08:01] and sometimes it's, it's a hard decision to, to look in the mirror and say, yeah, I have to do a hard pivot. Uh, but they did. After about two or three years of a little bit of, uh, storming and performing, uh, things settled and now they're almost a $2 billion company. So it, it really does pay to make hard decisions early and to figure out where your customers are and what kind of business you want to build, and then, you know, building those systems to, to make it scalable.

[00:08:31] Thank you. my, the fourth question I have for you are, what are common red flags that many investors like yourself walk away from and otherwise promising company red flags. Yeah, that's, that's always a good one, uh, to, to talk about. Um, there's several red flags, because I, I think, 

[00:08:51] Founders, you know, people that are launching their businesses, can establish a really big ego and that can think they're better than other people, that they're smarter and they can do things that the average person can't do. so I look for, the individuals and, and what type of, uh, background they have, what their ego is or personality, do they take things, serious or, or are they complacent?

[00:09:15] Do they have a sense of urgency? Do they have grit? Uh, do they have experience and, and handling pressure? Um, so I look at the, the, the person that's leading the business, and then obviously I look at their team. the team themselves and their background figuring out, you know, is this somebody I wanna invest in?

[00:09:33] having a large ego or not understanding your business model fully is a major red flag. Obviously not understanding your numbers, if you, if a business owner can't tell me about their business or why they started it, or their customer's pain and why their, why, their product is, is gonna solve this pain and, and talk about the financials and the unit, the economics.

[00:09:54] That's also another red flag. and that's typically for early stage, founders, to college, to early twenties. Then if you look at founders like in their late twenties, thirties and forties, obviously we look for experience, domain experience. A lot of time people go into industry and work 5, 10, 15 years before they watch a business.

[00:10:15] so we look at their experience, their background, their pedigree. so we wanna make sure that they understand, what they're talking about and then obviously what team they have. And then, we ask questions about the financials and, and, you know, typically, if they all understand the, the unit economics.

[00:10:33] Especially when it comes to scaling and, and raising capital, because you have to have a use of proceeds for the capital. if they can't clearly articulate what some of those things are, then it, it really does, send some red flags such as where does every dollar go? You know, what's the profitability, are you building capability or just burning cash?

[00:10:52] and then the risk, assessment, is can you handle the processing to scale five 10 x? Um, what's your path to an a? I usually invest in companies that are seed or pre-seed. they're way before the A round. because I feel like that's where I can, can, you know, be more beneficial to the founders.

[00:11:10] So if there's not a clear path to the a. That's also another red flag. But again, a lot of this comes with just general knowledge about the business, about the industry, about economics, about the macro trends that are forcing, like for example, ai. Um, if they can't tell me how they're integrating AI into their business or how AI is impacting their business, that's also another red flag.

[00:11:32] it tells me that they have a lot of bias toward their own personal, problem or solution, and that they're not really being objective when, when it comes to, to, to a full competitive scan of, uh, both the risk and opportunity and the competitive landscape.

[00:11:48] Thank you. So how do Cape your ventures evaluate early stage startups in terms of market opportunity, competitive advantage, and scalability? And what frameworks or metrics do you prioritize when assessing potential return on investment? Yeah. So how so first off, Cape Your Ventures is justing right now.

[00:12:07] At some point we may raise money in the future, but right now. I've taken some capital from other successful ventures and cashflow from real estate that I've created, and to, to really fund, this portfolio management of, of venture, uh, investments. So really, I look at the, the tees, which I call them, the team, uh, the founder, the management team, and the people that are running the business that have the vision, the fortitude and, and the passion.

[00:12:34] And I'll look at, like I said, their grit, their determination, their resilience, their experience, and, and their, level of fortitude of how they handle problems. I look at the technology I look at to find out exactly how, how does this problem or how does this, this solution work? Does it have ip, did you follow a patent?

[00:12:53] Um, is it patentable? We, what are the competitors? And I'll look at traction. You know, obviously you look at customers. who are they're talking to, their pipeline, what kind of churn they have. churn is when customer turnover happens. So you may have a customer and they leave, I wanna know why, what happened?

[00:13:12] And then you look at the towable addressable market, the tam. At a higher level. So, so typically when I get a pitch or a deck from, uh, a founder, I can size it up in about 10 or 15 minutes. Like I'll, I'll just kind of focus in that area after, spending five, 10 minutes talking about their background and what they're trying to solve.

[00:13:30] I'll get right into, tell about the team, give me the technology dump, like what's behind it, how do you build it, what code did you lever, where's it hosted? What's the stack look like? 'cause again, being a a, a coder, myself and a, and a technical operator, I can ask really detailed questions that normal VCs can't ask.

[00:13:51] and then we talk about traction and customer development and pipeline. and then we talk about the market that they're operating in. And, and then you can kind of get a, a really good vision within 30 minutes on, you know, is this something that I really wanna spend more time on to do due diligence and figure out?

[00:14:08] If this is something to make an investment in or not. so that's kinda our model. You know, I don't, I don't do a spray and pray. There's a lot of funds out there that'll put like five, 10, $15,000 in a hundred different companies, and hope one will will make a, a dent. Um, I'm very methodical. You know, I, I pick only a few funds to work with and when I do, I go deep with them.

[00:14:31] So I want to really know the founder. I want to know their technology, their background, their families. I wanna go out for a beer dinner cookout. I wanna spend time, I wanna meet their spouse. 'cause I know it's, it's a, it's a big commitment for the family as well. So, before I really spend a lot of money, I really wanna make sure that the individual's committed and they are who they say they are, as well as the technology and, and how the business can scale.

[00:14:59] Thank you. Our next question is, as someone who has moved from building startups to now investing in them, how has your perspective on entrepreneurship changed? What would you look for in founders and startups today that you might have brushed over when you were first starting your company? You know, having, having experience on both sides of the table, being an operator and now an investor, has provided some really valuable insight in helping and it, to me, crafting my solutions of, of how to help the next generation of founders.

[00:15:33] my own personal investment philosophy has evolved dramatically. I moved from growth at all costs to sustainable value creation. from visionary ideas to proven business models, from market size to market penetration strategy and from, founder passion to more, founder competence.

[00:15:53] so again, as technology evolves and as, and the business model becomes more innovative, you really have to focus, uh, to do a little more, risk avoidance when it comes to deploying capital. then just taking your own money and bootstrapping it yourself. You could be a little more crazy and, and, and risky with your own capital, which I bootstrapped both of my first startups.

[00:16:16] So I didn't have any investors. So I, I just went really crazy and wild and, and kind of just did moonshots all over the place. but, but now, I really focus on evolutionary improvements, and reliability, security, and trust. I want proven operators with, track records, rather than high growth potential and disruptive tech.

[00:16:37] So, so I really prioritize union economics, retention and, and building competitive moats for the future because, again, I wanna protect my capital, but again, I wanna grow it as well, and I have to balance risk with reward. Uh, so that's been, one major, change in how I, I, from an operator to an investor.

[00:16:57] Thank you. Many early stage founders struggled to balance product development with customer acquisition. From your perspective, what is the best way for a startup team to validate its product market fit without overextending resources Too early?

[00:17:12] Yeah. This has been a classic problem with a lot of startups where again, they create an idea and they talk to their friends. They all believe like it's the best next thing. but they need customer validation. So you don't want to go and build the product you think the customer wants. You want to take a, a, a, an idea or a solution to a customer and form factor it to their expectations and say, Hey, we've identified a problem.

[00:17:41] Do you think that's a, a, a trackable problem? Is that something that we should put a put, you know, some, some traction to or not? Again, kids get excited, people get excited, and they start building this thing and they spent capital time, energy, and effort, and they build something that nobody wants, and then they go out and try to raise money.

[00:17:58] And again, the pro, the, the, the customer base hasn't validated that there's a need. So that's one of the things that we look for. Early on is like, has your product or solution been validated? Who validated it? How do they validate it? what does that MVP look like? What kind of customer traction do you have?

[00:18:17] how many customers have, have, been validated? Do you have betas? so, one of my first investments I got into, recently under Kate Fear, they had 13 customers. So at that point, I knew that they had an MVP that was well validated. They were making about 300 K in revenue. and the, the technology was, was really, really good.

[00:18:37] And I knew it could scale. now they have over 200 customers so that there's an example. another story I did on a podcast recently, Daniel Summers, he created a company called Lab Logs, which effectively, when you go into a medical facility and you give blood. they have to run the blood samples or other samples, bodily samples against this machine to come out and spit out your results.

[00:19:01] Well, those machines not only have to be cleaned, but have to be validated, tested, every single day and certified, and for whatever reason in the industry they're working on the, the validation and the data was being collected on, on manual, notebooks. So he, Came up with an idea of creating like an electronic version of what they were tracking.

[00:19:24] And one customer turned to four, four turned to 10. So it is a good example of like really focusing on a problem that somebody has and knowing that in the industry, they all do the same thing because again, it's equipment, it's standardized. a lot of the equipment makers. Force the lab technician operators to do the same, policies and procedures to record this data.

[00:19:47] Um, he just figured out a niche, by just looking at a problem to make more efficient data collection. So, that's a great example of what to do and how to validate your product. so hopefully that, that answers your question on, on how, founders can, can really transition from a sales mode but not go too crazy until they get a product validated.

[00:20:09] Thank you. So our next question is, as a managing partner at Cape Fear Ventures, you focus on business to business software as a service and champion, The concept of founder led sales for the many tech. Technical founders who are experts at building a product but intimidated by selling it. What is the single most important mindset shift they must make to effectively lead sales in the early stages and build that 10 million blueprint you talk about?

[00:20:35] Yes, that's one of the things we actually cover in my, elevate CEO class. getting somebody who's validated a product, from like 50 K to like two. Hundred K to like 2 million, whatever. the psychology of marketing and scaling that product is, is very, very hard. And, and one of the things I've learned in my experience is that customers, well, just like in relationships as well, there's a cost to change and then there's a cost of staying the same.

[00:21:05] And, and just because somebody is, is not in a perfect situation. Whether it be a, a, a relationship or a product or, or an environment, there's a level of discomfort and pain that we're all willing to tolerate because we're emotional people. And there's gonna be a certain point where that pain escalates to a point where, you know what, I may not, I may have to have a change, and, and changing anything, whether it's changing a product, changing software, it's a, it is an emotional decision.

[00:21:40] There's fear and, and human beings, focus more on fear than achievement for some odd reason. So they, they fear of, of making somebody upset or they fear of the, the cost of change. They fear people won't take it. They fear a loss of sales. They fear, uh, loss of customers. I mean, there's all kinds of fear.

[00:22:03] but there's this level of achievements like, Hey, we have so much better. Solution for you. why don't you give it a shot? So I think it's really, from a psychology point of view, understanding your customer's fear and painting a picture of, Hey, if you don't, if you don't mitigate this fear and this pain that you're having now, it's gonna be much worse than the future.

[00:22:25] and that really starts the conversation of how you transition from one product. to your product and, and what that path looks like. And one of my in, companies I invested in we're, we're dealing with that situation now where it's an industry, that has, hundreds of years. Beverage industry and they're using archaic technology.

[00:22:47] And we're talking about an ERP system that can manage 20, 30, 40,000 people and hundreds of thousands of SKUs in the backend. It's very expensive to change something like that. There's a cost to change, but obviously if there's solutions not giving them the insight and especially around AI and the predictability.

[00:23:07] future and to manage inventory, to cut costs, to be more efficient, then they're, they're giving up future profits, where they can make an investment today for the change. So, you really have to understand your, your, your product market fit. You understand your customer needs the pain, and what that change, that cost of change is for every customer so that you can help alleviate some of that fear.

[00:23:32] And, and start, start turning, these nos into yeses when it comes to converting, your customer base and your traction.

[00:23:40] Thank you. Our next question is based on your experience mentoring or observing other founders. What are some of the most common mistakes entrepreneurs make during the early stages of building their business? More importantly, what strategies or mindsets can students like us adopt to avoid repeating those same errors?

[00:24:01] specific early stage traps. I would say, building an isolation, meaning that you're not talking to customers until your product is ready. obviously you want to get the customer's ear early and often and have the loop back, oh, sorry. A feedback loop at all times to help your customer development strategy.

[00:24:19] feature obsession, adding complexity. Instead of solving core problems, again, that comes into bias. Your cognitive bias where you think this product is better. Like, oh my God, if I was using this product, I would want to do this. Well, you need to talk to your customer, because they're the ones that's actually paying for it.

[00:24:39] hiring and spending before product market fit, people love the concept of, I'm gonna hire people and build this enterprise and go get an office and, get all the tchotchkes and the. The hoodies, with your logo on it and your, your, your burning capital, really to, to no end.

[00:24:55] So you really have to be smart about that. tracking usage instead of revenue and retention, I think that's, that's also a big one. and, and, founder dependency, uh, making yourself essential to every decision or process. That's another focus we do, at my conference is, we focus on founder bottlenecks.

[00:25:14] why does every founder have to be everything to everybody? That's a, that's a fallacy. You can't, you have to build a team and delegate and work through structure and process so that you can scale. if you're working in your business and not on your business, then you're not scaling and growing.

[00:25:31] So you have to focus expansion on the business, how to make the business better instead of being a cog in the will of your own business. so I think, obviously advantages for students, and early founders, talk to 50 potential customers before writing the first code. I know that could be difficult.

[00:25:49] but to talk to as many customers as possible to kind of get the feedback of the problem before you start really, doing code or, or using AI to vibe, code, validate the pain points, make sure it exists and it's not just some fallacy and understand, how people are gonna pay for it.

[00:26:07] what is that price point that people are willing to pay for that solution. build MVPs your minimum viable products. And test quickly and often. don't, don't spend a lot of time building, build something and get it in the hands of the customer and let them validate, let 'em, let 'em tinker on it a little bit and figure out if this works or doesn't work.

[00:26:27] track unit economics every day. Not just growth, but how you're managing your burn, and document your processes and decisions. that's, that's one. Operational, understand where money comes from. The cost of capital is real, interest rates are up. and, and it costs money to, to use money, whether you're being diluted or you're using debt or you're bootstrapping, it doesn't really matter.

[00:26:50] you really have to, to, get your hands around that and understand it. track your indicators that drive business decisions and hire for the skills you lack, not just the people you like. obviously if family comes in the picture there, I could go all a whole nother session about working with family and the pros and cons, but just be very careful when you, when you're working with family, and strategic planning, do regular reviews and, and do, and make a priority of resources that you have and what you need.

[00:27:20] it really comes down to embracing a mindset, and, and really understand, what are your measures of success. And how are you gonna overcome some of your failures? It's gonna be hard. none of this is easy. if it were easy, everybody would be doing it. It would be successful.

[00:27:35] I believe the failure rate for small business, one to three years is like 90%. so it is, it's, the failure rate is very, very, very high. So you really have to understand what you're doing and be very specific and strategic with how you execute and have the discipline, to do the hard things and make the hard decisions.

[00:27:54] Thank you. Many startups face intense pressure to scale quickly. Sometimes at the cost of culture, quality or ethics, how can emerging entrepreneurs build companies that grow efficiently while still maintaining integrity, sustainability in a positive work environment? Well, it goes back to the question about making a decent profit decency a de a decently.

[00:28:18] it's, it's really easy today to cut corners and, and to cheat. And to try to strong arm people into doing things, misleading your financials, misleading your investors, over promise and under deliver. you, you get called up into the whole passion of fundraising, of building a business and, and the vanity behind.

[00:28:42] You know, I'm a founder, CEO, um. That ego gets to some people and they go kind of crazy. you really, really, really have to, to, to have, discipline, our discipline to, to, to kind of steer right and build a, a decent business and not cut corners and not do things the easy way. and cheat and mislead your investors and mislead your stakeholders, mistreat your employees.

[00:29:10] I've, I've heard several examples of harassment inside of companies. obviously sexual harassment, but, but just harassment in general. Uh, were people throwing things and mistreating people. we have to understand that we're human beings and that we need to be, treat people with respect and de and decency.

[00:29:29] And, and that comes with customers as well. So if you can't treat your own employees well then you can't treat your customers well either because when, when your customers, when your employees love where they work, and they love their management team and their leaders, that shows into the customers. That shows into the how they treat customers.

[00:29:49] company culture is everything. one toxic person can ruin a company culture overnight. So as a leader, not only you have to inspire and really reward people for their effort and success, but but also push the boundaries of growth and challenge people. But you have to be respectful and you have to have boundaries, and enforce boundaries and enforce accountability.

[00:30:15] So if you find out somebody in your sales division, is is bribing people. I've seen that. the need to go, need to be fired. it, it, it's another, anecdote I say is, hire slow but fire fast. So you, you need to have your head on a swivel at all times to make sure that your company culture is intact, that, that you really build something solid that's decent.

[00:30:39] That's, that's, integrity is at the forefront of your business mission. and it shows with customer traction. and the, the turnover that you could have. 'cause obviously people wanna work with good people. So our next question is, when you talk about helping sub $3 million founders build $10 million blueprints, you often em emphasize energy, structure and clarity over hustle.

[00:31:04] At what point in your own journey did you realize that teaching and mentoring founders was more impactful than chasing your next big exit? And how has that changed the way you measure your success today?

[00:31:17] Yeah. 

[00:31:18] it, it's been a journey for me personally. I've had some setbacks and, it hasn't, it hasn't been easy. I, when I was going through my businesses, I had to make some hard decisions. I missed out on a lot of my, early child, activities. Because it had to work, had to travel how to do things.

[00:31:37] And it's a sacrifice that we all have to make. And, and I try to, I try to teach, when I do guest lectures, or activities like this, I always wanna make sure that they understand that there's a cost of everything. if you want an easy life, you know that, that, that has good income, work for a company.

[00:31:54] That has a good culture and, and a good salary, uh, incentive package and, provide some PTO, paid time off to spend time with your family. Because again, we're working to live, not living to work, but you can get called up in it because once, once this entrepreneurship bug gets into you, it becomes a life, building.

[00:32:13] My first company was like a baby. And going through that process, you get very emotional. And even, even when I sold my first business, I was very depressed. the couple weeks after, even though I sold it for $24 million, that that didn't matter. You know what mattered is my people, they're gonna be, they're gonna be mistreated now, now you're just kind of handing it over to somebody else to manage and, it's, it's, it's a hard pill to swallow.

[00:32:39] And I think, Over time, you just try to take some of the, the, the losses that you have, the missed time that you spend with family members. in most cases that's most more important than the success of business and everything has a trade off, and I think every founder needs to have a good, solid.

[00:32:56] Practice of a work-life balance where you spend your time working, you have your career and your goals and your incentives, but you also have to, to factor in life. And if you get married and if you have family, if you have kids and you wanna spend time with your, your family, if you move away from them, you know how often you're gonna see them.

[00:33:14] last couple years I've had family members to pass away and, it left a big dent in my life. Now, now I've reached a point in my life where I actually have time to do things and the people that matter the most to me are no longer here. and I think about that all the time. so really I think you just have to focus on what matters the most to the individual and, and do the best you can about creating a work-life balance, that can, can meet your goals and your objectives, but also doesn't sacrifice your life and the people that matter most.

[00:33:48] What trends or shifts do you see shaping the next generation of entrepreneurs and what skills do you think will matter most for them to succeed? Yes, trends. I believe every founder should always have their head on a swivel looking at macroeconomic trends. If you look to see what's happening with China.

[00:34:12] With foreign policy, with interest rates, with the spending that our, our country is doing, the value of a dollar, asset prices, it all has an impact. Um, and it also drives decisions on what you can and can't do back to the cost of capital. So I think it's, it's very important that you do stay.

[00:34:33] Abreast of what's happening in the world and try to make the best decisions that, that obviously, won't impact your business or your lifestyle because we're seeing decisions being made that are impacting everyone in this country. Whether you're buying a car or buying a house, borrowing money for debt, to start a business, customers.

[00:34:57] That are impacted by their supply chains. the, the government being shut down right now. I mean, you may work in the public sector, not the private sector, uh, but many private sector companies have public sector exposure. So, there's ebbs and flows and you just have to, understand to, to keep account of that.

[00:35:15] technology trends, obviously AI infrastructure, building reliable, secure, trustworthy AI versus flashy demos. really, honing in on the AI technology to help with coding to help reduce your operations. it's been good for some things, but you need to make sure that code is clean and usable and it works.

[00:35:36] not all AI is the same. I mean, it's getting better. but, but you really have to spend more time on that. defense technology. I think right now, we're in a, rebirth phase. We'll, we'll talk about creating new opportunities and secure software, hardware, drones. obviously with, with cyber and ai, hackers are gonna be prevalent.

[00:35:59] Personally, I'm deploying more money into cyber, companies, both on the public side and the private side. I think cyber is gonna be a big, big, big opportunity in the future because AI is like pouring gas on a fire when it comes to cyber. I mean, you learned a couple weeks ago on 60 minutes that China.

[00:36:17] has been hacking into, infrastructure systems like water systems of tiny, small towns like in, in Pennsylvania and probably some in Indiana. they're learning. This is a command and control risk that we have where you don't want a, a country or an adversary to control, sophisticated, systems that we must now do what they say otherwise they'll shut our water off.

[00:36:41] it's, it's something to think about. Um, distributed work, remote companies, sustainability, business models that improve environmental outcomes, da data privacy. we talked about, the cyber risk. Skills for, for you all to think about, operational discipline.

[00:37:00] I think cash flow management, unit economics and systems. invest in an accounting class. or if you don't take accounting in college, you can learn accounting on the fly. There's, there's like Khan Academy and other places, but learn balance sheet, learn, profit loss, what goes into them.

[00:37:19] Do some, finagling and learn, looking at different p and ls and balance sheets of different kinds of companies. And because that, that was a very interesting case study that we did at Harvard where they gave us 10 different p and ls and, and balance sheets, and we had to choose what business sector they were, uh, like defense supermarkets, web or it, it's, it's really interesting that they all kind of have their own same, type of rhythm that they operate in.

[00:37:46] AI fluency, learn how to integrate AI without being disrupted by it. I do think that's a future is that, there's a fear of people being replaced by ai. I think those with AI skills are gonna replace people without AI skills. So I would highly recommend taking some type of AI architecture or course, or getting, really, really deep into AI technology.

[00:38:12] cross domain thinking, applying insights from one industry to another is, is a great perspective. we talked about the global international markets and, obviously, stakeholder management, learning to, to work with boards and investors, learn case studies of other successful ventures, that you've, that you've, that you know of or experience is, is always good.

[00:38:37] Well, thank you so much, Richard. Throughout the course of this interview, we have talked about you as an investor, about you as a founder, you as a family person, and we had like so many professional and personal insights to gain from you. So thank you so much for spending the time with us. Absolutely.

[00:38:52] Thanks again and good luck with your, your class this semester. so I just had like one last question for you. Was there ever a moment in your career, I know you've touched upon this, but did when you realized that success didn't mean what you initially thought it would?

[00:39:11] yeah. There's been a couple, examples. I'll tell you, one personal, I was that guy who was working 80 hours a week. Because I was a perfectionist and I enjoyed it, and I loved it, and I wanted to be in the business at all times. and I was actually having some personal problems as well.

[00:39:31] And now that I've, I've found that I'm an avoidant, I was avoiding my problems by focusing on work because that was an easier outlet to do. it called up with me and I had to go to the doctor and I found out. I had a medical problem and I had to have surgery, and it was nothing, it was, nothing serious.

[00:39:49] But it was, it was, an alarm bell for me that I was like, wow, you're 33 years old. your kids are very young. you're working way too much. You're stressed. your body's telling you, Hey, you need to make some adjustments. and I did then that's about the time I went to Harvard OPM class and then got the bright idea to sell my company, and then I sold it the very next year.

[00:40:14] that's one. But then two, after selling my first company, I got really depressed. I thought, having, $15 million in the bank would be life changing, but really it wasn't. yeah, I could pay off my debt so I could pay my mortgage. I paid off my student loans. I did my 5 29 prepayment plans for my kids.

[00:40:37] but it was like, what's next? Like, what do I do now, you know? And, I eventually left my company. It got really depressed. Um, started my next company, which made me very happy. I built that one. For nine years and I sold 75% of that to private equity. And I was, I left the company in 22 after experiencing some personal problems with my mom and her husband and my dad.

[00:41:08] And, there again, it was another life reminder that even though you had all this success and you had tons of money. What really matters in life is finding purpose. And it's taken me a long time to figure out that if you don't have a purpose in life and you don't have something to make you happy, you can fall into a deep, deep depression no matter how much money you have, which is why, you could do some research and, and finding that like founders who sell their company for millions of dollars.

[00:41:42] They leave the company, for whatever reason, and then they get depressed and being young, you're like, wow, if I was a millionaire I would travel. I'll do this, I would do that. But no, you won't. if you have kids have responsibilities and they have homework and test, and you have to, stay in the grind and day-to-day stuff and, and then you have a, a non-compete that you can't work in the same industry that you're in, what do you do now?

[00:42:06] Which is why I became a venture capitalist, and that's why I had to move outta the software world. and technically I'm still under non-compete, from a private equity buyer that I can't do software, where I live. So, yeah, it, it's, it's interesting, that you have to put things in perspective and, and don't lose your, your true North sar, don't lose yourself and your business and the capture of being success, because really success means, different, has different definitions of different people.

[00:42:33] But as long as you're happy and you're finding peace within yourself, and doesn't matter how much money you have, that, that to me is a true, item of success. So, well, thank you so much for being so vulnerable with us, and I generally hope that you and all your loved ones are in the pink of health now.

[00:42:50] Thank you so much again. Good luck to your semester and bowler up.

[00:42:56] Amplified CEO is produced by Topsail Insider, edited by Jim Mendes-Pouget.

[00:43:02] and sponsored by Cape Fear Ventures. For more information about Amplified CEO, Richard Stroupe or Cape Fear Ventures, please contact Christa at (910) 800-0111 or christa@topsailinsider.com.