First of all, how are you and your Family doing in these COVID-19 Times?
Daryl Hatton : We are very fortunate to live and work in British Columbia, Canada. The province has a very strong Provincial Health Officer who has the unwavering support of our Premier and his Cabinet. This has allowed for a coordinated and consistent response to the pandemic. The result is that, despite having some of the first reported cases in Canada, we have one of the lowest rates of infection in North America (based on population) and life is closer to “normal” than in other areas. Compared with some places like the US states of Georgia, Texas and Florida, we have less than 1/300 of the cases they have. I believe the risk to my family is very manageable. It feels like our lives are only modestly impacted.
Tell us about you, your Career, how you Founded or Joined ConnectionPoint
Daryl Hatton : Like many CEOs, I’m unsurprisingly a college dropout. University wasn’t a good environment for me, so I got started in industry very early with a great job as National Customer Support Manager for what became the third largest computer hardware/software distributor in Canada. I also self-taught myself how to program computers along the way which gave me a valuable skill to leverage while becoming an entrepreneur. A major car accident in 1987 inspired me to leave the distribution company and start my own software consulting firm.
It was an incredibly rocky and hard road at first. But, I acquired a great business partner, we invented an innovative document processing technology, sold our company INTO an American company in 1993 and took the combined entity public on NASDAQ in December 1999. I was CTO and SVP Development.
Fast forward to 2008. We took the company off the public markets and sold it to our largest competitor. I worked six months and a day and then started ConnectionPoint with the goal of creating social commerce applications. FundRazr was our first product. Sponsifi and CoCoPay followed a few years later.
How does ConnectionPoint Innovate?
Daryl Hatton : We are still small enough that about half the team is involved in product development and innovation. Over the last few years, we have worked very hard on developing a vision of what the next generation of social fundraising would look like. We refine this vision daily via conversations with our customers, market research and, frankly, some free-form innovation discussions with our team members. We implement small pieces of the vision every four weeks or so (a so-called product development “sprint’) and relentlessly enhance our product. You can say that innovation is baked into our corporate DNA.
How the Coronavirus Pandemic affects your Business and how are you Coping?
Daryl Hatton : At the onset of the pandemic, it was very unclear how our customers and their contributors would respond. In the first month, things went very quiet and we started planning for how we’d adapt to a drastic cutback in business activity. Fortunately, some of our customers, who are also innovators, rose to the challenges they faced and asked us for help in moving forward. We had some of our best monthly revenues ever in the last quarter. While it is unclear how the rest of the year will settle out with all the political and economic uncertainties in the US (our biggest market), we are cautiously optimistic that we can not only have a good year but can help our customers deal with one of the biggest challenges to their existence they have ever faced.
On a day-to-day level, our team has adapted very well to the pandemic. We are a tech company with a strong corporate culture where we trust our team members to “work wherever they are most productive” and are very adept/practiced at working from home. In the first weeks of the pandemic, we simply shut our offices and stayed working from home. We made sure to have regular all-hands video meetings to stay connected but otherwise carried on with minimal disruption. However, people work for three reasons: they love the work, they love the pay and they love the people. In the pandemic, the third reason was under pressure. We’ve elected to reopen our offices for two days a week and have implemented the changes necessary to keep everyone healthy such as maintaining 2m physical distancing, disinfection of common surfaces and increased ventilation. Our team is welcome to come into the office, but it is not a requirement. So far, about half the team has decided to come in and “rub shoulders”. There is NO pressure on the others – it is really for their benefit so they can come back in when they feel comfortable.
Did you have to make Difficult Choices and what are the Lessons Learned?
Daryl Hatton : I’ve had to make many difficult decisions in the 10+ years of running an investor-backed startup/scaleup including some potentially dream-destroying “go/no go” decisions. However, one of the biggest lessons I learned was at the public company. Things were not going well post Y2K and the company was bleeding red ink. As one of the youngest executives on the senior team, I was constantly second guessing my opinions and suffered some significant “imposter syndrome”. But one day, I got angry at the ineffectiveness of our team in dealing with the crisis and “surrendered” to the moment i.e. I felt I had nothing left to lose so I firmly put out my opinion about what needed to change. I was shocked when it became the catalyst for a major reorganization of the business. Lesson learned: learn to trust yourself. If you are looking for external validation of your worth, you are making bad decisions.
How do you Deal with Stress and Anxiety, how do you Project yourself and ConnectionPoint in the Future ?
Daryl Hatton : Creating a company out of thin air that addresses a new market is one of the most stressful things you can do in business. I have a number of “core principles” that make it easier. One is to frame EVERYTHING that happens along the way as a chance to learn and improve. When we take the self-recrimination out of the equation, we can be much more responsive to the reality of the situation and tend to make better decisions much faster. Despite moving faster, this REDUCES stress and also paradoxically creates better results.
I’ve chosen to live my life and lead my company from a place of radical transparency. By honestly sharing the reality of the situation with my team every step of the journey, I think I’ve been able to dramatically increase the level of trust that we have for each other. This has translated into much higher productivity and surprisingly REDUCED the amount of time we need to communicate with each other. A side of effect of trusting them with the facts I know is that they trust me with the facts they know and that REDUCES my stress because I’m not worried about things going wrong where I don’t have any visibility. I only have to worry about things “we don’t know we don’t know”. I deal with the stress of THAT by focusing on our ability to respond to the unknown versus all the ways things can potentially go wrong.
Who are your Competitors? And how do you Plan to Stay in the Game?
Daryl Hatton : The nonprofit fundraising market is huge with thousands of competitors ranging from tiny to behemoth. In many crowded markets, highly competitive pricing is normal. In fact, in the nonprofit market, there is what I call a “race to zero” where companies are trying to leapfrog each other with small discounts in an attempt to be lowest cost provider. In my opinion, the only way to win this game is to lead i.e. be the first to hit a zero cost product. Basically, the strategy is to find someone else to pay for the product or service that you deliver to your customer. With FundRazr, we let nonprofit customers use our software platform for free. Completely free. No fees of any sort. We simply ask the donors if they are willing to pay a small amount for us to let the nonprofit use our system for free. Many of them are and we make money on it.
But adopting an aggressive pricing strategy is one of the weakest ways to stay competitive over the long term. To really win, you need to create a significant business value for your customer and then find a way to increase that value over time as more customers start to use your system. This is known as the “network effect”. In our market, we are working to reinvent social fundraising and create ways for our nonprofit customers to create sustainable recurring revenue streams from their community of contributors.
To help make this easier, we are bringing not only nonprofits and their donors into our ecosystem but also corporations who need to demonstrate their commitment to funding social causes in order to attract and retain their consumers. Our fundamental mission is now to help causes, corporations and contributors/consumers fund important projects in their community. The more causes, corporations, and consumers we add to our system, the stronger our network becomes, the more value everyone takes away from it and the less likely they can be stolen away by competitors. This creates substantial sustainable competitive advantages and is well worth pouring all of our efforts into our product innovation so that we can easily attract customers and accelerate the whole process.
Your Final Thoughts
Daryl Hatton : Over the last couple of years, I’ve started to realize that our company is really just a vehicle for our employees to discover who they are and help them build a life they enjoy through their involvement with us. This may sound fanciful and “woke” but I’ve discovered that we are getting much higher productivity, effectiveness and achievement of our corporate goals by expanding our definition of success in this way. I believe we need to reimagine our relationship with work and with the way we organize work i.e. companies, if we are to elevate more of the world’s people above a mundane life. This is not a zero sum game; I believe the more we help others win, the more we win in all areas: health, wealth, happiness.
Corporate website: https://fundrazr.com
Personal website: https://darylhatton.com
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