Kevin Sandlin, Serial Entrepreneur

[00:00:00] Sanjay Parekh: Welcome to the Side Hustle to Small Business podcast powered by Hiscox. I'm your host, Sanjay Parekh. Throughout my career, I've had side hustles, some of which have turned into real businesses. But first and foremost, I'm a serial technology entrepreneur. In the creator space, we hear plenty of advice on how to hustle harder and why you can sleep when you're dead.

[00:00:21] On this show, we ask new questions in hopes of getting new answers. Questions like, how can small businesses work smarter? How do you achieve balance between work and family? How can we redefine success in our businesses so that we don't burn out after year three? Every week, I sit down with business founders at various stages of their side hustle to small business journey.

[00:00:42] These entrepreneurs are pushing the envelope while keeping their values. Keep listening for conversation, context, and camaraderie.

[00:00:55] Today, we're focusing on small business mistakes and failures. I know that almost all of the small business owners listening today have made mistakes and experienced failure in one way or another. It's all about being an entrepreneur. We're joined by Kevin Sandlin, the Chief Operating Officer of Transcend LV, the low voltage wiring and cabling partner for Atlanta's commercial contractors, project managers, and brokers.

[00:01:20] Kevin, welcome to the show.

[00:01:22] Kevin Sandlin: Thank you very much. Good to be here.

[00:01:24] Sanjay Parekh: So I'm excited to have you on. We've known each other for a long, long time in the Atlanta startup community, which is fantastic. But I'm not going to introduce you then. So I'm going to let you introduce yourself and tell us a little bit about your background, because I'm probably going to talk about things that are maybe not as relevant.

[00:01:41] So tell us a little bit about you, Kevin.

[00:01:43] Kevin Sandlin: Okay, so Kevin Sandlin. I've lived in Georgia since the 70s, which means it's a really long time. Can't count as native, but my wife is, so I joined. And started my first business in 1999 with A bad idea in 250 bucks. And oh, after the a lot of rollercoaster rides on that specific business we ended up selling it to private equity in 2012.

[00:02:12] And after that, I started a few more, fell flat on my face a couple times, and and then have just recently exited. a business that I purchased and and now I'm in another entrepreneurial venture with a couple of guys that were invested in that previous business. So I've all in all, I've started 11 companies and sold three of them and so I have, you can do that math pretty quick and see that I have a lot of failure and a lot of mistakes.

[00:02:39] It's all been fun, obviously stressful at times, but fun. And now I wouldn't have it any other way.

[00:02:46] Sanjay Parekh: Yeah. So do you feel like that failure was necessary for you for the success that you found later?

[00:02:53] Kevin Sandlin: Yes, a hundred percent. If I hadn't failed in the way that we had failed early on with the first company that I started, we, we didn't, you know, we kind of failed in the middle and recovered from that.

[00:03:03] You know, it really, it probably should have gone under but we, we scrapped and, and saved it and, and came back from that. And the knowledge that I got from that. Help me in different ways to understand what was going on and with other companies that I started and were able to, to be successful with, of course, you still continue to learn lessons as you try to push barriers and boundaries, and that leads to other failure.

[00:03:26] And obviously, you know, as I say, wisdom comes from experience experience comes from making bad decisions.

[00:03:33] Sanjay Parekh: So looking back at these. Eight companies that, that didn't quite make it. The failures that happened, how would you classify them? Were they like all in the same genre? Were they different things?

[00:03:46] Were they people, money? Like what were the classifications of the failures?

[00:03:50] Kevin Sandlin: I think almost all of them come down to, you know, when, when, when you talk about forming a starting a business, especially in the tech sector the biggest thing that you can do is focus. You focus on solving that one problem and really focus on bringing joy to your customers and customer delight.

[00:04:09] So that to the point where if you tell your customers, Hey, you know, you're not going to have this product tomorrow. They get, they get really upset. And that's what you want to see. Never want to go to that route, obviously you don't want to tell them that. But that's the feeling that they should have.

[00:04:22] And almost every time we failed it was because we took our eye off that ball, and we found some bright shiny object out there in the stratosphere and said, we should go for that. And every single time it just it ruined everything and when we were able to save the businesses because it blew up, you know, we went in this case, we went from 14 people to 4 literally overnight, but then you don't have a choice.

[00:04:51] You can't do all this extraneous stuff that you thought was fun, this bright, shiny object stuff. So you have to focus. And that's what we did. And when we got back focused, everything went really, really well. We had a hole to dig out of, but we dug out of that hole. And that's, you know, it took five years, four years to get out of that hole.

[00:05:07] But we did it. And because we went back to focusing on what was the real thing in the beginning.

[00:05:13] Sanjay Parekh: Yeah. So a failure like that, going from 14 to four people. I mean, that's a lot of people to shed. How did that impact the culture of the organization and, and kind of the mentality and morale of the people that were left at the end of that?

[00:05:29] Kevin Sandlin: That's a great question. So what happened at that, when we started getting up when you've got eight, nine, 10, 11, we'd get up there, the culture. That was prior to me really learning anything about, okay, as the leader, I have to set and maintain and really work to create and maintain that culture. I didn't know any of that.

[00:05:50] I was just going into work every day, busting my hump, getting it done. I would, didn't, culture wasn't in my vocabulary. And so, looking back, I can see that the culture was lost on these. These extraneous bright, shiny objects and some of the people that we had brought in ended up being somewhat toxic to the organization and certainly toxic to the initial mission of the organization.

[00:06:16] They were definitely pulling energy and resources away from that. So on that day, and it really was 1 day where, okay, everybody over there. Sorry, you're gone. Everybody here. You ready? Because it's going to be a ride. And when we, you know, we did that, folks, it obviously wasn't that. We didn't use those words.

[00:06:36] But once we, once everybody landed and said, okay, wait, we have four people now. How are we going to do this? Then it became really easy. I said, you're going to do this. You're going to do that. You're going to do that. And I'm going to do these. Yeah. Oh, well, that's really clear.

[00:06:53] Sanjay Parekh: Yeah.

[00:06:54] Kevin Sandlin: And at that clarity that you get from honing down to instead of all this stuff out here that's just distractions, you refocus it, it actually, I'm not going to say it was easy, but it was so clear what had to be done every day.

[00:07:09] Sanjay Parekh: Right.

[00:07:10] Kevin Sandlin: And at that, when, right when that happened, I put, I took a. piece of copy paper, and I wrote our five focus areas on that piece of copy paper. Here's what we're going to achieve by the end of this year. And we, all this happened in, in August. And by the end of the year, we had achieved every one of those things.

[00:07:32] And that was, I was able to hold this up and say, look, folks, because we're all remote. You know, we had an office and then we didn't. That was before it was cool to be remote. I was able to show they say, look, here's what we set out to do 5. We got them all done because of you, because you focused and you got it done.

[00:07:49] And because you're the right person for the job. And then the culture just became just daily success. And because we were focused on what we knew we were supposed to do, what we were good at doing, and the only thing that, you know, the things that broke then were processed things. Oh, this didn't happen.

[00:08:09] Okay, let's work around that. You know, our, our publishing house didn't fulfill properly or they're the order for these books didn't. It was a week late or whatever. Those are just process things. And we were able to work around those, but the product that we provided and the product that we created on a daily basis was ended up being fantastic at that point.

[00:08:28] Sanjay Parekh: Yeah. Was there anything that you ended up doing then in terms of culture to make sure, like. I mean, you're, you're down to three other people other than yourself, right? Like you can't lose another person probably at this point. Right. So how did you think about that? How did you make sure that you didn't have a disaster, another failure on your hands?

[00:08:47] Because you lost one of these three people that, that might've gotten scared. I mean, it would have been natural for them to get scared. Like they just saw two thirds of the organization disappear overnight.

[00:08:58] Kevin Sandlin: And that was part of me being really, really transparent about the finances. Cause that's obviously what it comes down to is economics.

[00:09:06] You know, we, we were, this part of the business wasn't working. So we had to cut it when we had four people, I said, look, you know, here's our revenue and here's our cost of goods. Here's what's left over. It's really easy to make payroll for four people with this model. So you're, you're good. And then daily check-ins, just daily, well not even check-ins, just daily conversations.

[00:09:27] You know, what are you struggling with today? Because one of our guys was you know, up in the, the, the Midwest working in his basement by himself. And he's kind of lonely. And so, yeah, daily stuff. Just daily, whether it's a conversation about, okay, let's bear down and get this. Or there's just a conversation about, hey, what, what are you guys doing for Christmas?

[00:09:46] Yeah. You know, just talking and that, that interaction you know, proves to be a motivator when you, when you can then, okay, I know that I can call Kevin anytime I want night or day. And so that focus of each individual and just having those daily conversations and helping people do their, their daily stuff and just becoming really becoming friends and better friends in some cases was what changed.

[00:10:12] What made our daily life easier.

[00:10:14] Sanjay Parekh: Yeah. Cause your view of failure for yourself changed over your career. Like, you know, like the first failure to the last, like, how, how have you viewed that differently?

[00:10:26] Kevin Sandlin: So I can remember that, that first failure when everything fell through. And this was, this was in 2008 going to 2009, which if you remember was a financial disaster and we had tough times. It was, we had one huge customer that was probably about 40 percent of our entire revenue. And the first business day of 2009 is when it all started. They called and said, we're canceling this contract, 40 percent of our business gone in the stroke of a pen. And they pretended for a while, like maybe it'll come back. So I remember that and I remember, and I can remember my, the lady who worked for me, sat there, she stood in the window of the, or the door of my office and I sat there on the side of my desk just kind of going, you know, I was frozen.

[00:11:20] Sanjay Parekh: Yeah.

[00:11:20] Kevin Sandlin: And when I, when I came out of that what I thought was happening was that life was going to end. Everything I've had is gone. Everything I've built is gone. And when you realize that, and this is how it would help me through the past couple of things. is you take stock. What's the absolute worst case? And this is something I got from, do you know Benj Miller?

[00:11:43] Sanjay Parekh: Yeah. Yeah. Yeah. Benj Miller. Yeah.

[00:11:44] Kevin Sandlin: This is one thing I got from him. He said, what's the worst case scenario. Play it out, play the movie forward, you know, pit pause. What's the absolute worst thing that could happen.

[00:11:53] Sanjay Parekh: Right.

[00:11:54] Kevin Sandlin: And are you okay with it? Can you live with that? And in most cases, it's not horrible. It's not death. It's not, you know, you're, you're not going to be shunned to the street to be begging with a little, a little cup. That's not going to happen. And, and then my wife was, was instrumental in this. Cause I had to go to her several times and say, here's where we are.

[00:12:15] And she was like, oh my gosh. And then she would do that without even, she doesn't, she knows binge, but she doesn't know anything about that. And she said, what's, what's the worst scenario?

[00:12:24] Sanjay Parekh: Right.

[00:12:25] Kevin Sandlin: And, and I would explain it to her and she said we can live with that. It's fine.

[00:12:28] Sanjay Parekh: Yeah. I mean, for most of us that are entrepreneurs, like the worst case scenario is you have to go get a job, right?

[00:12:36] Like that's generally

[00:12:38] Kevin Sandlin: Don't want to do that. Well, that's true.

[00:12:41] Sanjay Parekh: But like you said, you're, it's unlike, like you have a set of skills. You have a set of experiences that are valuable to somebody out there. You're not going to be destitute. You're going to be able to, somebody is willing to hire. Of course, it's not going to be the job you want.

[00:12:55] It's not going to be the thing you want to do, but you'll be able to make ends meet while you lick your wounds and figure out what to do next and what it is that you learned from that failure. So I, and I think a lot of us have this. Experience, especially the first time you experienced failure as a founder.

[00:13:14] It seems world ending. Everything is collapsing around you at that point. So fast forward to the most recent failure, the last failure that you had, how did you deal with that differently then?

[00:13:30] Kevin Sandlin: That was different because I had, that was the first time I had investors.

[00:13:34] Sanjay Parekh: Ah.

[00:13:35] Kevin Sandlin: And so that's a whole different communication ball game.

[00:13:37] When the first time was everything was on me. You know, I had put in 250 bucks and years before that, you know, it didn't mean anything this time we had, we had raised a decent amount of money through investors and going back and forth with the investors. You know, tracking because I, I got in the habit and this was a lesson I learned from the David Cummings world every Sunday, send out the letter to the, to the investors and it was always real, whether it was really good because we had some really good times or it was really bad and that's, you know, where, where it ended up in it, it was really bad and then we sold it and it was fine, but that weekly pulse, I could always call any investor and they would know exactly where we were.

[00:14:20] I didn't have to back up and say, well, let me tell you what's happened the past six months. No, they knew what happened up to last week. And so that was the, that was the difference in in a more, the more recent failure is that I had to, I had to report to, if you will, the investors. It was their money, my money too.

[00:14:38] But but I had to report to them and explain to them and, and go, go to them for help. Hey, how do we get out of this? Do you know a way out of this? What, what do we do? And then go to them with the real situation. Here's what's going to happen.

[00:14:51] Sanjay Parekh: Yeah. I see that, you know, as, as somebody who also invests in, in other founders and startups the better ones I see are the ones that keep you up to date.

[00:15:00] It doesn't have to be once a week, but I've got some that regularly send me updates. And so I always know when things are going wrong. And I always tell them like, look, you only need to call me, actually call me when there's something wrong. And just, it's funny, just this last weekend, I actually had a call on a Saturday.

[00:15:17] With a founder. I knew like, okay, something's up. I guessed at what it was. I was 100 percent right at what it was based on what I knew from, from their update. They didn't mention this stuff in their update, but based on what he'd said, I was like, I surmised what the issue was. And it helped us. In that conversation, because, you know, he updated me on some of the other good things that have happened.

[00:15:39] And then we dove right into what the problems were and then started strategizing how to deal with that. And I gave him a bunch of advice in terms of what he should do. And a lot of times, and he's got investors as well. A lot of times, one of the things that entrepreneurs struggle with, I think, is that transparency and, and being honest with investors.

[00:15:58] And so have you, it sounds like you've done that transparency thing yourself. Have you seen other entrepreneurs do it the other way? And kind of what's your opinion on that in terms of their ability to succeed or fail?

[00:16:11] Kevin Sandlin: I think that that communication, the ability to be transparent with your investors.

[00:16:16] Now that I've been through a full cycle is, is paramount because one of the things when I started doing that, you know, three, four or five weeks in, I had a couple of these investors come to me and said, what are you doing? And I said, what do you mean? They said, I get an email from you every week. Yeah, but I don't understand.

[00:16:32] What's the question here? They said, I've never gotten an email once a week from any of the people I've invested in. I said, I, you know, this is, I'm not gonna, I'm not saying, I didn't start anything brand new, it's just how I think it should be. You need to know, it's your money. And so that blew up, some of them were very confused by it.

[00:16:50] And, and you know, a few of them said once a week is too much. So maybe once a month which I was fine with. And, but I think doing it the other way, and I've, I haven't done it, but I've seen other people who just kind of hide. You can't hide. They're gonna find you. They know where you live. And when you try and hide, if you try, if you hide one thing or if you, if you discolor one thing and, and they find out later that it was the other way, then trust is, is broken.

[00:17:20] And it's very, very, very difficult to win that back, even over something little, if it's something huge. Oh, yeah. We know we, we lost a million dollars or whatever. It's, it's really hard to have that because they're going to see the P and L anyway. But when you cover up the little things, then trust is gone from how you're doing with the big things.

[00:17:37] Adam Walker: Support for this podcast comes from Hiscox, committed to helping small businesses protect their dreams since 1901. Quotes and information on customized insurance for specific risks are available at Hiscox. com. Hiscox, business insurance experts.

[00:18:00] Sanjay Parekh: Let's talk about failure and, and support for, for entrepreneurs around failure. Do you think there's a way that society or the business community, startup community could better support entrepreneurs who experienced failure? And if so, like, in what ways?

[00:18:16] Kevin Sandlin: You know, it's, it's interesting the way you phrased that question.

[00:18:19] I appreciate the way you answered that because for the last 15 years, you know, in the Atlanta startup community, especially the tech sector, it's all about celebrate failure, celebrate failure, celebrate failure. But it's hard to do that. It's easy for somebody else to say, Hey, they failed. So they learned a lot.

[00:18:39] Well, look at the entrepreneur who failed and ask yourself, how does that person feel? Because what they wanted, they don't want to go walking into some, you know, a TV going, Hey, I failed. Nobody's high fiving them, slapping on their back and, and tell them, congratulations, you fail. It's miserable. It, it does things to your, to your psyche.

[00:19:00] It does things to your, it ruins your confidence, first of all. And so you don't have the confidence to go ask for the, all right, you know, six months later or whenever. when you find some new idea and you want to jump, you're like, should I even ask the same people? So it ruins your confidence and takes away for everything there.

[00:19:18] But and that takes a long time to recover from emotionally. Especially when you especially when you lose other people's money.

[00:19:25] Sanjay Parekh: Yeah, I mean, it, it reinforces that that imposter syndrome that I think everybody has a little bit of, right? So what do you, like, what do you think? Should we do something differently as society in terms of these people to help?

[00:19:42] Because it's, it's, you know, a lot of times these failures happen and I think you would probably agree. And it's really not because of anything you did, right? When that, that customer went away with the 40 percent of your revenue yes, it was a failure on your part for not diversifying your revenue better, but it was also something on their side that caused them to be like, oh my God, we cannot spend the money and we need to be scared of the future.

[00:20:04] Kevin Sandlin: Yeah,

[00:20:05] like the biggest financial crisis

[00:20:06] in the history of the country.

[00:20:07] Sanjay Parekh: Yeah, and I mean, you, you can't control their feelings about that and, and their actions around that. So it wasn't really your failure at the end of the day that happening. The failure happened to you, not because of you. So I mean, what do you think about it?

[00:20:24] Like, what is there that we can do?

[00:20:27] Kevin Sandlin: I think what we should encourage entrepreneurs to do is to develop that circle. Of whether it's investors or advisors or friends or other entrepreneurs who are kind of in the around the same stage so that when you fail, they can learn from it. But they can also be there to say, you know, to talk about what you just said.

[00:20:50] Look, was that really your fault? Did you do something stupid? Did you do something wrong? Maybe you did and you have to own it because that happens. But I think the, the having that circle around you when you're going up that, you know, getting on the roller coaster, because when you fall off that roller coaster, if that, if that group, call them friends, call them colleagues, whatever you want to call them, if that group is there to help pick you back up, then you'll get your recovery will be that much faster.

[00:21:19] And most people don't have the group, as you know, entrepreneurialism. Is a, is a very lonely sport and that's what the, that's what I think the EO organizations of the world should be doing if they aren't and the, the group of advisors that you, that you gather around you when you start a company, that's their real job.

[00:21:41] Is to hold you up personally, because if you're, it's no different than in a, in a sports atmosphere. If you're sucking wind mentally and emotionally, when you get out on the court or the field or whatever, you're not going to perform at your best, even if you're physically way out matching anybody there, you're not going to perform if it's not right up here.

[00:22:01] Yeah, and so keeping it right up here is really what the job of. Of that that core group of people should be but most I'd say probably 80 to 90 percent of entrepreneurs do not have that core group

[00:22:13] Sanjay Parekh: By the way for our listeners if you don't know eo that stands for entrepreneurs organization, which is a worldwide organization That is made up of just entrepreneurs so along those lines how do you feel like entrepreneurs can manage risk then without becoming overly cautious, right like Risk is kind of a part of the game when you're an entrepreneur, right?

[00:22:36] We do things that are more risky and that's a part of the job, but a lot of, and I've seen it, and I'm sure you've seen it too, entrepreneurs that get less And more and more risk averse and less willing to take risks over time. So any thoughts about how an entrepreneur can manage those risks without becoming too, you know, basically being a manager of a big fortune 500 company, right?

[00:23:03] Like those are the two extremes that you've got there.

[00:23:06] Kevin Sandlin: I think the first step in that, yes, the answer to the question, what can they do? Some of the first step is just acknowledging that these risks exist. And at the very basis of anything you're, if you're not doing it on paper, you're doing it mentally.

[00:23:18] Some sort of SWOT analysis. What am I good at? What do I suck at? What out there could knock me down? And what out there is just the greatest opportunity ever. You know, and you can look at the Elon Musk's of the world and, you know, how much risk does he have flying into space once a week? There's a lot of risk there.

[00:23:36] And that, you know, obviously you reduce that down to what am I doing once a week or once a day that that is a risk as long as you acknowledge that it's a risk and don't pretend because. As entrepreneurs, we tend to make the sky and put on those rose colored glasses and say everything's great.

[00:23:54] Everything's not great, and you just need to acknowledge that. And then as we, you know, you say over time, we get less risk averse. Well, we also get older and we have kids. And we have families and we have responsibilities that if, you know, if everything goes away, well, I don't mind living in a dirt shack, but my kids might not like it very much.

[00:24:15] And I don't want to do that to him. So you have to. Yes. I'm more risk averse, but I'm still going to take risks. They're just going to be a little more calculated. I'm going to know they're there and I'm going to have a backup plan. So the 1st step is acknowledging and not playing Pollyanna. Acknowledging the risks that are absolutely there that you have to watch.

[00:24:38] Sanjay Parekh: I also like to position it in the scale of risk, right? I sometimes will do these talks and I'll mention the founders of the United States of America. I view them as entrepreneurs, right? Starting up a country. The downside risk that they had if they failed was they would be caught, tried, and executed for treason against the British crown whereas for most of us, not really an issue.

[00:25:04] We can fail in our startups and our companies. And nobody's going to execute us for treason. So just view it on the, I guess, on the lens of, of, of the, the scale of risk that might be possible there. So

[00:25:18] Kevin Sandlin: worst case scenario.

[00:25:19] Sanjay Parekh: Worst case scenario, go get a job. Right. Okay. Last question for you, Kevin, you've been through a lot.

[00:25:26] You've been through a bunch of failures. How do you maintain kind of optimism and resilience for yourself in the face of all of these setbacks?

[00:25:36] Kevin Sandlin: I've got a set of skills that are valuable to somebody. They might not be as valuable as they were if I owned a, you know, a very successful company, but they're going to pay the bills.

[00:25:46] And if it's, it's sometimes it's not so much confidence as just realizing it's not the end of the world and I can get a job and and, and survive another day. Because the next thing that's going to happen is as an entrepreneur, I'm going to think of something else that I want to do. Hey, let's go solve that problem.

[00:26:05] And my wife will roll her eyes and go, all right, here we go again. And you, you know, wash, rinse, repeat. And and you go from there. Because unless you get back on the horse that threw you off, you're not going to, you're not going to be able to step forward with confidence in anything.

[00:26:19] Sanjay Parekh: Yeah, I will say our spouses, our significant others, our families.

[00:26:24] are probably the bedrock of us as founders and entrepreneurs being able to do the things that we are able to do. So make sure those people are on board with your craziness. That I was very fortunate the first time I did my first startup back in 99. That my wife was on board with me doing this crazy thing.

[00:26:44] My parents still didn't understand it. I don't think they still understand it. But my, my wife was on board.

[00:26:50] Kevin Sandlin: And that's a big deal. You know, when you talk about investors and communicating with investors regularly, well. Guess what? Your spouse is your biggest investor because they're investing here and they're investing in you emotionally.

[00:27:03] So it's really, really, really important to keep them informed of the scale that's moving up and down.

[00:27:10] Sanjay Parekh: Exactly. Kevin this has been fantastic. Where can our listeners find and connect with you online?

[00:27:17] Kevin Sandlin: Easy way is LinkedIn. So I'm very available there. Just Google or LinkedIn, search Kevin Sandlin.

[00:27:23] I'm there. You want to connect? I'll connect with anybody. And and I would enjoy, you know, these kind of conversations with anybody who's thinking about going through it, just went through it on the downside, just went through it on the upside. Whatever you want to talk about, I'm here.

[00:27:36] Sanjay Parekh: Awesome. Thanks so much for coming on today.

[00:27:38] Kevin Sandlin: You're very welcome.

[00:27:42] Sanjay Parekh: Thanks for listening to this week's episode of the Side Hustle to Small Business podcast, powered by Hiscox. To learn more about how Hiscox can help protect your small business through intelligent insurance solutions, visit Hiscox.com. And to hear more Side Hustle to Small Business stories, or share your own story, please visit Hiscox.com/side-hustle-to-small-business. I'm your host, Sanjay Parekh. You can find out more about me at my website, SanjayParekh.com.