Richard Sheridan and his co-founder, James Goebel, started Menlo Innovations in 2001 to "end human suffering in the world as it relates to technology" by returning joy to one of the most unique endeavors mankind has ever undertaken: the invention of software.
Through a unique approach to custom software design they named High-tech Anthropology®, Menlo produces custom software that delights users rather than frustrating them. The programming team creates the software that works every day without the emergencies that are all too common in the tech industry. The process itself is so interesting that almost 4,000 people a year travel from around the world just to see how they do it. Many spend a week or more studying "The Menlo Way" being taught by the Menlonians who love to share their experience and knowledge.
In 2013, Richard and his publisher Penguin Random House took a chance that a business book with the words joy and love on the cover might have impact. They had no idea how the world yearned for such a message. His best selling book, Joy, Inc. - How We Built a Workplace People Love now has Rich traveling the world speaking about joy, creativity, and human energy in the workplace.
In this interview, Richard shares a little bit about his work background and what pushed him to pursue entrepreneurship. He also talks a bit about the roadblocks he overcame together with his partners, as well as the most epic and inspiring moments in his entrepreneurial life (thus far).
So, Richard what’s your favorite part of being an entrepreneur and why?
I have to say, I LOVE the variety in the work of being an entrepreneur. I love the switch from focusing on minute details in the moment, to asking the big questions like, “Where will we be in ten years?”
I have been very blessed in my entrepreneurial life to be able to lead the team, write books, travel the world over speaking of joy, inspiring others, opening up serious and important sales conversations, watching over cash flow, taxes, contracts, employment structures, leases, and even emptying the dishwasher every morning.
The best part I love is the RESPONSIBILITY of entrepreneurship. My days are long and I am tired at the end of day (and I sleep well!). The work is hard. It is honest work - important and meaningful. I’m not sure any of us can ask any more of our work life.
How did you get started? Was there an ‘aha moment’?
In my previous life as an employee, I'd been living a tortuous, disengaged work life. Work was filled with emergencies and I stressed about many things that were out of my control due to hierarchical bureaucracy and awful politics. Everyone was watching out for their own self-interest, and very little teamwork.
I decided I couldn’t do it anymore and in that moment I made serious change. I realized the risk of staying the same was far greater than the risk of change. What was at risk was me. It took a couple more years for me as VP or R&D at my old company to know WHAT I was going to do differently, but my inner risk taker was engaged and I was running towards change.
In 1999, everything changed quickly and dramatically as I made major changes to the team I was leading. The experience was exhilarating. I was being an entrepreneur inside this tired old public company, and it worked. The company stock soared, the company was purchased, largely based on the changes I led, and then in 2001, when the internet bubble burst, it was all taken away. I didn’t miss a beat. I told my wife I’d lost my job on April 11th, 2001. She said “you’re unemployed?” (with tears in her eyes). I said “No honey, I’m an entrepreneur now!”
They could take everything away from me … “job, title, pay, office, stock options, team, building …” but they couldn’t take away what I had learned and they couldn’t take away the passion for my new found direction. By June 12, 2001, Menlo Innovations was founded.
How did Menlo Innovations get off the ground? Did you bootstrap it?
Four of us founded the company. We wrote in checks for $15,000 each and we were off and running. Within six months we were profitable, and we’ve been self-sustaining ever since.
What roadblocks did Menlo Innovations face initially and how did you overcome them?
Obstacles turned out to be linked to opportunities. We started the company in one of the worst downturns in the tech industry. That obstacle meant everything was on sale! People, equipment, office furniture, office space...some things we got for 5 cents on the dollar. We still had to find business, but even here obstacles were opportunities.
All the people I worked with at my old company were landing new jobs around town, and our startup story caught their attention and they started hiring our company to help them. Early sales were unnaturally easy to land because we built a good reputation based on our previous work.
Cash was still tight, so we had to be creative. We ended up creating a leveraged play model where we traded significant amounts of cash revenue for equity and royalty in the products we were helping other companies build. This kept us busy and there was enough cash in every deal where we didn’t have to starve, and we were planting great seeds for future success.
What’s been your most epic moment so far as an entrepreneur?
There was a moment in our early years where everything was going great. We had amazingly profitable deals, one in particular, we had a new $3M deal just about to close, we were expanding into a new location, three times the size of our current space, and we just acquired a company with a lot of promise and all the profits would allow us to invest in helping them succeed wildly. Life was good and the future was bright … and then it all fell apart within days.
That most profitable customer fired us and left us for over $100K in unpaid invoices. That hurt, but we’d be OK with the new deal just about to be signed, but then our main sponsor there was fired and we never heard from them again.
I recall sitting outside the new building and the partners asked each other “are we all still in?” It would have been the easiest moment to just throw in the towel, cut our losses and go try the next thing. It took us about 3 seconds to decide...we were all still in.
What makes Menlo Innovations unique and how did you find your niche?
We chose a big mission and chose to intentionally design a great culture to fulfill that mission. Our mission is “to end human suffering as it relates to technology.” We specify in our mission very specifically the kinds of suffering we want to end.
Our culture is focused on returning joy to an industry that we believe has lost its way. Too often the software industry misses the mark and delivers very poor results to the world (think about the original release of Healthcare.gov or Windows Vista) and many time fails to deliver any results at all.
Our industry has learned to call the people we serve “stupid users” and then we write Dummies books for those poor people. We fundamentally believe just the opposite and designed a culture to consistently and systematically deliver joyful results to the world, while not killing the people who do the work with overtime and poor working conditions. In order to do this, we had to change EVERYTHING about the way software is designed and developed.
This is a big one, how do you balance your personal/professional time?
I get up early. I try to work out two to three times a week, including one very intensive session a week with an awesome personal trainer. This gives me great energy and fuels my optimism about life. My days are typically long, yet I don’t work weekends … that time is reserved for family and projects at home.
What’s your greatest fear as a brand owner?
Can we keep doing what we say we can do? Will we keep our edge, keep growing, keep experimenting and pushing ourselves to be the best version of what we can be?
Can you explain how your personal mindset influences your life and business?
The team knows my optimism and my work ethic. They know my heart for people and relationships. I can bring my true self to work and that same person to my family. This allows me to sleep really well at night and have faith in the future.
What are your top 3 bits of advice for starting a business in Michigan?
The Midwest region is very relational. Get to know people and they'll help you. The team you build will be loyal and will work hard. Treat them well. Our region is working hard to make it easier to start a business, get to know all the resources that are available.