He Just Sold His Company For $770 Million: The Entrepreneur Behind The Smart Home Revolution

Stuart Lombard has built and sold several companies, as well as having been a VC on the other side of the table. 

During his appearance on the Dealmakers Podcast Lombard talks about finding opportunity in chaos, IPOs and acquisitions, being rejected by investors 170 times, the best thing that you can do to reduce your environmental impact, and his top tips on branding, culture, and strategy.

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

Serendipity

Stuart Lombard was born in Richmond, VA. His father’s work took them on the road, moving every couple of years, including spending time living in Brazil.

While that constant change isn’t always comfortable as a kid, getting comfortable with being thrown into new cultures and environments, having to integrate yourself, and even learn new languages ends up minting a lot of entrepreneurs. While providing a lot of confidence in being able to accomplish hard things. 

Growing up in a small lumber town in the wake of the Great Depression, his father was very keen on self-reliance and self-sufficiency. They spent a lot of weekends building things together, instead of spending the money on them at Walmart. That embedded an interest in tinkering with things, and the belief you can build things in Stuart, as well as more of an appreciation for the environment. 

Lombard says that he had no plans to become an entrepreneur. He went out to work and got a job at a great company. Though he had a terrible boss that made working there pretty unpleasant. 

Without a plan for what was next he let his boss know what he thought one day, and quit in 1994. On his way out the door one of his colleagues suggested he check out this new internet thing. Back when there were no web browsers and the internet still relied on a dial up connection. 

Looking back, choosing to leave, and that recommendation was really a serendipitous moment that set his life on a whole new trajectory.

IPOs & Acquisitions

Having left his job, and with free time on his hands, Lombard drew up a business plan for an internet service provider company. 

He says that he had saved enough money to go back to school for an MBA. Yet, figured going into business for himself, and betting that money on himself would be just as good of an education. 

That turned into one of the largest ISPs in the country, and then, after merging in two other companies, one of the largest tech IPOs in Canada at the time. 

Stuart largely credits the timing and being able to ride the wave of the internet with their rapid success. Though they also used the strategy of providing better customer service to the next group of adopters to gain market share. Even at a higher price point they were able to win most of the major national accounts in Canada, including big banks. 

Unfortunately, the hands they put their company into just didn’t manage things well. Leaving him to watch in agony as they made a mess of all his previous efforts. 

Not wasting any time, he jumped into a new venture. This time building one of the first VPNs. That business was quickly acquired by a public company. Though, again, he wasn’t sure that it really went into the hands of well aligned partners to continue the business. 

The Other Side Of The Table

Next, Stuart took a role as a partner at a venture capital firm. 

He describes it as a very eye opening experience that really broadened his perspectives. It was the opportunity to see inside hundreds of businesses and the minds of their founders. To see many different approaches to building a business, business models, and getting product market fit. 

It was an eight year ride, of having a beautiful office, an assistant, reserved parking spot, and a pretty cush job. Though eventually he just missed building things, and decided it wasn’t what he wanted to do for the rest of his life. So, he quit. 

What may be surprising is that even having been a VC himself, he went through 170 investor rejections to get his next startup funded. 

ecobee

After leaving his job in the venture capital world, he set about trying to reduce his footprint on the environment.

He splurged $26,000 on solar panels for their home, and was on his way to buy a Prius, when his wife stopped him. She was wondering if all this going green was going to bankrupt them. Especially as he no longer had a job. 

He sat down and began to think about practical solutions for people to reduce their environmental impact, and save energy, and money. It turns out that heating and cooling is 40% to 60% of your energy use. Making better managing your heating and cooling is the best thing that you can do to reduce your environmental impact.

So, they invented a smart thermostat, before Nest. It was a hard sell to investors, but they’ve since scaled ecobee to being acquired for $770M. He has stayed on with their acquirer, Generac, as they continue to grow their impact and push their mission which is to improve everyday life and create a more sustainable world.

Looking back, the curiosity that led Stuart Lombard to dive into new technologies and the determination to keep going in spite of challenges faced along the way were two key ingredients to Stuart’s success. 

Plus, Stuart was able to master the art of storytelling. Being able to capture the essence of what you are doing in 15 to 20 slides is the key. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here), where the most critical slides are highlighted.

Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.

Listen in to the full podcast episode to find out more, including:

• Startup fundraising
• Stuart’s tips on branding, culture, and strategy
• The three core energy trends changing our impact on the environment
• Why he doesn’t like to think about acquisitions as exits or transactions

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