CapLinked is an online platform for the secure sharing of information. “We make it easy for businesses that are looking to transact with other companies to share large amounts of potentially very sensitive and private information,” said CEO and co-founder Eric Jackson. “You can’t send sensitive information for things like mergers or licensing deals via email or Dropbox. CapLinked lets you share it, protect it, and recall it.” He recently spoke with Nav to share his entrepreneurial journey.
Why did you start the business?
I first went into the technology industry in 1999. I was part of the early team at PayPal. When I jumped in, it was a very small startup. It was a very tumultuous time. I actually wrote a book about it, “The PayPal Wars,” because I thought it was such an interesting experience and I thought it could be really instructive for other people. My time at PayPal taught me that I really enjoyed starting businesses and being parts of teams that were building new types of technology. When I started CapLinked a few years ago, it was that desire to build new technology and build things that are useful for people’s lives that drove me. Building a team around that common goal was really appealing to me personally.
How did you finance the business at the start?
We raised capital initially from family and friends. We decided to structure it in the form of an equity investment. As the business began to scale with traction, we had a need to raise additional capital because software has a very high cost to get started, though it can be a very lucrative business once you get the software out there. We then raised some money from institutional investors and venture capitalists, as well.
Managing the Business
How do you manage cash flow in the business?
The key thing we’ve learned is that it’s important to have really good reporting and a good team that has defined roles working on this. Cash flow touches so many parts of the business, there’s no “one size fits all” tool to take care of everything. You really do need to have a close eye on your accounts receivable. Understand the relationship between invoicing and your sales pipeline. Also, have a really strong control over your monthly costs so you can be able to set a budget that’s going to work for your business. There’s a lot of moving parts. Building up good processes around those things is incredibly important.
What’s the most challenging thing about running the business?
I think the most challenging part of any business breaks down into two categories that are intimately related. One would be acquiring new customers. It’s the bedrock of any business to bring your product to market. Equally important is building a great customer experience through a great product or service. You can work very hard to acquire customers, but if you don’t deliver a great experience to them, you’ll lose them and all that effort was for naught.
What’s the most rewarding thing about running the business?
That’s easy. It’s hearing from happy customers that are using our service. There’s nothing as exciting as knowing that our team built something, contacted this customer, told them about it, and convinced them it would be helpful to them. Then, hearing back that all of those efforts are helping someone run a project, there’s nothing as gratifying.
What I’ve Learned
What’s the biggest mistake you made when you were starting out?
We learned early on that it was important to manage customer expectations really well. Especially when you’re young and your product or service is in its early stages, it’s important to be transparent about where you’re at and what your capabilities are. Overpromising with the idea that in the future you can make up or catch up on what your promises are is a risky thing. You can set expectations and tell customers that you don’t have certain capabilities, but you plan to have them in the next six months. When you do that, you need to be sure to deliver on that and remain in constant communication with them.
What’s the smartest thing you did when you were starting out?
I think the smartest thing we learned to do was really listen to our customers. We have customers, for example, with really complex types of projects. In a situation like with M&A activity, there will be thousands of files that need to be shared with an outside party. That requires a lot of work. We recently made a number of enhancements to our search functionality so customers could more easily find specific types of files. We’ve had a constant customer dialogue to make sure that we make what we do better.
What advice would you give to a new entrepreneur?
It’s really fun and it’s really hard. You should really stop and think, “Is this for me?” I remember reading in “The E-Myth” the difference between being a baker and running a bakery. It makes the point that if you start a business, you’re an entrepreneur. If you’re running aspects of the business, you’re a manager. If you’re performing functions of the business, you’re a technician. There are really three different roles. If you really love doing something, being an entrepreneur is a few steps removed from that. It’s an important thing to keep in mind.
What’s next for CapLinked?
We have a lot of new initiatives that we are looking to roll out. We are improving our software in some dramatic ways to make it easier for virtual data rooms and M&A deals. Our partners are doing some international expansion, so we will be expanding to further offices abroad. We’re also building some interesting technology with blockchain.
Image Courtesy of Eric Jackson