He Helped Build A Company To $2+ Billion Valuation And Is Now Building The World’s First Virtual Studio Network

In the world of startups, where every decision can lead to success or failure, the stories of resilience, innovation, and purpose often stand out the most. Mark Swanson, an entrepreneur with a journey spanning several decades, exemplifies these qualities.

From his early days growing up in a family of educators to leading startups through the dot-com bubble and beyond, Mark’s story is a testament to the power of finding purpose and navigating the challenges of building and scaling companies.

In this exclusive interview, Mark talks about his experiences building and scaling companies and fundraising for growth.

Listen to the full podcast episode and review the transcript here.

The Foundations of Purpose: A Childhood of Learning and Leadership

Born in New York and raised in Tampa Bay, Florida, Mark grew up in a family where education was highly valued. With both parents being teachers, learning was ingrained in him from a young age. This foundation would later prove invaluable as he ventured into entrepreneurship.

Mark’s parents’ emphasis on education and his early experiences in church, sports, and student government shaped his approach to leadership, which would become a cornerstone of his entrepreneurial career.

The Military: A Crucible for Leadership and Innovation

Mark’s path to entrepreneurship began in an unexpected place: the military. Encouraged by his parents to apply to college, Mark found a solution to the financial barriers by applying to the U.S. Military Academy at West Point, where he received a scholarship and pursued a degree in engineering.

Mark honed his leadership skills in the military. During a ten-year career, he commanded two units as an aviation officer and was later a test pilot. One of those command experiences was unique; rather than joining a unit, he formed the first activating troop of Apache helicopters from scratch.

Mark was assigned pilots and soldiers from around the world and was charged with creating a cohesive organization.

Here, he first tasted the thrill of building something new, shaping a culture, and leading a team from the ground up without inheriting something—skills that would translate seamlessly into his entrepreneurial efforts.

In Mark’s opinion, the whole experience felt more like a startup in the military. They invented manuals, doctrines, and tactics and tried to figure out what worked regarding gunnery and formation flight. They were the first to start that unit, a formative experience in his life.

Mark recalls what his commander said when he was leaving command. The commander not only commended Mark’s work, but he also planted the seed of entrepreneurship by telling him that “you will never have this unique experience again.”

After a short stint as a test pilot, Mark decided to get out of the military and pursue an entrepreneurial career.

The Entrepreneurial Leap: From Military to Startups

Leaving military service in 1992, Mark’s entrepreneurial ambitions took center stage. He polished his business and computer skills at Georgia Tec, learned about Business Plans, 3D Graphics, and the Internet, and soon founded Swan Interactive Media.

The early days of the internet in the ’90s were a wild west of opportunities, and Mark was at the forefront. He had some experience with multimedia projects in school and had done some freelance programming work.

Leveraging these skills, he recruited a few people for the new company. By 1994, Mark had incorporated and was facing several challenges. He had to bootstrap the company with little to invest in equipment, office space, and team building since he did not have the money to pay their salaries.

Things got so tight that when Mark hired the first business development guy, he offered accommodation in his basement, an all-expenses-paid deal, and a stipend of two grand a month.

Raising Funding for Swan Interactive Media

One of the standout moments in Mark’s early entrepreneurial journey was the fundraising rollercoaster he experienced. In a tale that underscores the unpredictability of startups, Mark found himself pitching to Dr. Robert Krieble, the inventor of super glue, on his yacht in DC.

After months of negotiations, they were able to close his first investment deal. However, two days after signing, Dr. Krieblel tragically passed away, and the funds were never wired.

With payroll looming and funds suddenly in limbo, Mark had to pivot quickly. He connected with a local businessman who recently sold his business and wanted to get into the Internet. This businessman had recently purchased a video production and graphic design company that needed engineers.

Mark approached him seeking an investment or partnership and eventually merged his company as the founding CTO. He, thus, navigated the company through a crisis in the early internet boom.

Riding the Dot-Com Wave: Success and Setbacks

The late ’90s were a heady time for internet startups, and Mark’s new company, IXL, was no exception. IXL grew rapidly, riding the wave of the dot-com boom. It grew from $17M in the first year to $150M within the next four years, and Mark helped take the company to IPO in the spring of 1999.

At its peak, the company reached a valuation of over $2B+, an example of the explosive growth of the internet during that period. Mark left at the end of ‘99 to found his next company in Silicon Valley.

Mark’s next venture, AppGenesys, was an Application Service Provider, one of the early names of what is now known as the Cloud.

However, as with many startups of the era, the dot-com bubble eventually burst. Despite raising $70M and competing in the rapidly evolving Infrastructure-as-a-Service space (IaaS), the market’s collapse led to significant challenges as customers went out of business and revenues plummeted.

Mark remembers the company competing with Marc Andreessen and Ben Horowitz’s company LoudCloud before the downtrend. The biggest problem they reflected at the board level was that revenues were dropping despite a successful business model, which appealed to startups.

The issue was not that customers were leaving but that they were going out of business. Around 60% to 70% of their customers closed shop within six months and left behind a long trail of unpaid bills and non-responsive voicemails. The failure left a big dent both in his pocketbook as well as his ego.

Finding Resilience and a New Direction–Founding Telovations

After the dot-com bust, Mark took a step back from the frenetic pace of startup life. He moved to Florida to care for his mother and spent three years there. During this period, he helped others with their businesses, applying the skills and lessons he had learned.

One such project was helping his brother-in-law build the world’s largest recumbent bike manufacturer from a garage operation. Another was investing in and assisting a neighbor in pivoting his struggling business, leading to a successful sale.

After helping the company navigate regulatory changes, Mark became the chairman and hired a new CEO. Eventually, Halo bought out the company. These experiences reignited Mark’s passion for entrepreneurship.

Mark had noticed how expensive phone systems were during his time at the bike company. He started getting interested in voice-over IP (VoIP). He spent a year working on soft switches and VoIP, figuring out how to plug them into the nation’s phone network. Then, he met someone from the telecom industry.

That’s how Mark ended up founding Telovations, a voice-over-IP company. Unlike his previous ventures, he approached Telovations with a more measured strategy. He spent a year incubating the idea, ensuring that the timing was right and that the market was ready.

Mark also experimented with different technologies, specifically Asterix. This approach paid off, and Telovations quickly gained traction, eventually leading to its acquisition by Bright House Networks seven years after its founding.

Lessons Learned from Building Telovations

In retrospect, Mark leveraged key lessons he had learned, the most crucial of which were staying ahead of the curve in terms of business opportunities and being patient with market timing. He also learned that entrepreneurs sometimes overestimate market readiness because of their unique perspectives.

However, entrepreneurs often underestimate the size of the impact and opportunity. For instance, Mark had no idea that the Internet and the Cloud would be this big. But he didn’t want to jump the gun and was aware that VoIP was ahead of its time.

Telovations grew to over 100 customers in six months even though they hadn’t built the service yet. They rented the infrastructure and developed their soft switch technology and network. Their second advantage was that they were good at targeting a particular group of customers.

Telovations became the leader in VoIP, connecting multiple offices and healthcare companies, which are very good niches. The business grew by following a more traditional market penetration and niche strategy and then grew from there, getting a beachhead first.

As Mark explains, his nature is to view business as a work of engineering. He looks at machines and thinks about how to design and operate them in the most efficient way possible. The ability to do something abstract with a business and remove it from one’s personality is a powerful skill.

Mark can separate it from his identity since he knows he isn’t the right person for every job in the company. The whole business will likely work better if he can find the right person to operate that machine. He enjoys building companies as an engineer and considers it a rewarding experience.

The Transition to Purpose-Driven Leadership

After the acquisition of Telovations, Mark faced a turning point. Having achieved financial success, he began to reflect on what he truly wanted to do with his life. The answer was clear: he wanted to help others succeed.

This realization led Mark to become a startup coach, where he could leverage his vast experience to guide other entrepreneurs through their journeys. His work in this area culminated in his involvement with Vū Technologies, a Virtual Production tech company born out of the pandemic.

When the world shut down in the spring of 2000, Mark remembers discussing PPP with Tim Moore, then CEO of DIamondview, and suggesting turning the company into an R&D unit.

When Tim discovered virtual production technology, he built a prototype stage and raised low-interest funding from the government. He also had an excellent team.

Being very impressed with the fast execution and potential of this technology, Mark joined Tim to help spin out the company in 2021. Mark led the efforts to help plan and fund the business, raising a $17M seed round to get the company off the ground.

Flash forward to today, and Vū has over $30M of cumulative revenues since its founding. The business was highly capital-intensive, so they had to raise another $3M, bringing the total to $20M.

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Mark also helped the company navigate the challenges of the pandemic and transition into a new growth phase.

Advice for Aspiring Entrepreneurs

Mark advises aspiring entrepreneurs not to rush headlong into a business and to be aware that a business opportunity may look more viable than it is from the outside. They should have a good business plan and do their homework and scenario analysis.

That’s exactly what they did at Vu Technologies. Mark, along with Tim and the other co-founder, Jon Davila, drew a quarterly roadmap for three years.

They spent the initial three months planning the business and laying it out. The business evolved exactly the way they anticipated every quarter, except for the unexpected surge of AI.

Generative AI arrived about 16 months after Vu started, and they knew it would be existential to their business.

As a result of the meticulous planning, Vu Technologies was able to handle a huge pivot–simply because they knew what was coming. Vu has become the first company to develop a video production system and workflow fully enhanced by AI.

One of the most impressive aspects of this pivot was that it only took a little over three months. Initially, they thought it couldn’t be done. But the team is fabulous and was able to respond and make that happen.

Conclusion: The Power of Purpose in Entrepreneurship

Mark Swanson’s story is about resilience, adaptability, and, most importantly, purpose. His journey through the highs and lows of entrepreneurship—from the military to the dot-com boom to finding his purpose in helping others—offers valuable lessons for any entrepreneur.

It underscores the importance of staying true to one’s purpose, even in the face of adversity, and the power of using one’s experiences to impact others positively.

Listen to the full podcast episode to know more, including:

• Entrepreneurship can be born from unexpected experiences, like Mark Swanson’s journey from military leadership to startup culture.
• Being ahead of the curve in technology, as seen with Swanson’s ventures in the early days of the internet and cloud, can be both a blessing and a challenge.
• Resilience and adaptability are crucial in entrepreneurship, especially when facing unexpected setbacks like losing a major investor or surviving the dot-com crash.
• Building a successful startup often requires creativity and resourcefulness, as illustrated by Swanson’s early fundraising and strategic hiring tactics.
• As Swanson did with Telovations in healthcare, targeting a specific niche market can lead to rapid growth and market leadership.
• Transitioning from a technical to a business role can be rewarding, especially when viewing business operations as a form of engineering.
• Helping others succeed can become a fulfilling purpose after years of entrepreneurial success, as Swanson discovered through mentoring and startup coaching.

 

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