Jack Newton is a wealth of knowledge for other entrepreneurs trying to navigate the current market to startup, fund, and scale new companies.
Newton hasn’t just built an incredible startup that employs 500 people. Or has simply raised hundreds of millions of dollars. He did this through some of the most trying economic moments in recent history.
During our interview on the DealMakers podcast, Jack shared incredibly valuable insights on when to make the leap, a million-dollar blog post, why you should check your email spam folder, tips for successfully scaling your team, and managing a remote workforce. Plus, your most important job as a founder and fundraising in a downturn.
He’s been into machine learning since before it was cool and has been in startups across multiple industries.
Jack Newton was born in Toronto, Canada. Since then he spent time growing up in Edmonton and eventually made his way to the other coast and Vancouver.
Each of these destinations is pretty entrepreneurial and have their own challenges. It’s likely these factors were influential in instilling him with an entrepreneurial spirit from a young age.
He and his cofounder Ryan have known each other since they were just eight years old. They’ve tried many ventures together since then. When it was snowing and hitting -40 degrees Jack started a snow shoveling service and hired others to help out. They even started a food delivery service, long before Amazon was as popular as it is today.
Learning How To Solve Problems
Being an entrepreneur is really all about being a problem solver.
At university, Newton took to machine learning, long before it was cool. There he had the privilege to learn from some of the best minds in this space. That includes well-known AI expert Jonathan Schaeffer.
After his Bachelor’s degree, he was recruited and became the first software developer at healthcare startup Chenomx.
He quickly found the problem bigger than he was ready for. So, he went to get his Master’s Degree in machine learning before heading back to Chenomx ready to take it on.
They brought him back in as Director of Product Development. He got to touch technical development, go to market strategy, and learn about fundraising. He caught the startup bug. It gave him the itch to get out there and create something of his own from scratch.
He and Ryan shared this yearning and became two hammers looking for a nail.
When To Go All In
Ryan had been working at one of the largest legal firms in Canada. In 2007, they saw the cloud coming, and how it could be a once in a lifetime transformation that could fundamentally transform industries.
They were surprised to find that there was no competition in the legal tech space, for creating a cloud-based practice management system. They started bootstrapping. They worked on it part-time in the evenings and on weekends around their full-time jobs for six months.
This gave them time to build a prototype, test, raise $100k from friends and family, collect data, and find product-market fit. All before quitting their jobs and going all-in on their startup Clio.
This helped them de-risk the venture as much as possible, though every startup has its odds of failure. It’s a careful balance of taking calculated risks and not letting it become stuck as a side hustle that doesn’t hit its potential.
Now with years of hindsight, Jack Newton says he probably would have gone all in a little early. Even better if it was from day one. Even though he had a mortgage, he had just gotten married and had a kid on the way.
Startup Fundraising During A Downturn
Much like the phase we are in right now, Clio was really getting started in the turmoil of 2008. They set out to raise a $1M Series A round going into 2009.
Most investors had just tucked their checkbooks away, waiting to see how things played out during the crisis.
They hit up every angel forum, and VC they could in Canada and Silicon Valley. Investors loved the concept, believed they could make it work, and even though the pitch was great. They just weren’t finding anyone at all. It was frustrating and demoralizing.
Then one day, simply by chance, and perhaps for the first and last time, Ryan checked his email spam folder. There was a really sketchy looking email from Christoph Janz in Germany. In fact, there were two. The first expressing interest in their company after reading a blog post about them. The second following up about how serious he was about investing in them.
They answered. He ended up leading their next million dollar round. Janz also happened to be the first angel investor in Zendesk.
They’ve since gone on to raise around $300 million. Including a Series C led by Bessemer Venture Partners.
Storytelling is everything which is something that Jack was able to master. 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.
What should be of special note in the wake of COVID-19 is that they launched this startup with a distributed workforce from the beginning. Even the two co-founders lived in different cities and collaborated online.
Recently they’ve been running a team of 500 employees, who are all working remotely. It’s just been their DNA.
Listen in to the full podcast episode to find out more, including:
- The two big leaps in scaling your workforce that will challenge you
- How to create useful company values that help your team
- Why your real job as a founder is to hire such great people that you can be irrelevant to the organization
- Embracing the remote workforce