His Last Company Is Valued At $1 Billion And Now Raised $50 Million To Design The Future Of Work

Howard Lerman has been building and selling companies since he was in college. After taking his last venture through an IPO, he has launched a new startup helping to solve the future of work dilemma that many are debating right now. 

On the Dealmakers Show Lerman talked about being on the leading edge of new technological revolutions, hitting market ceiling, selling your company, and the good and bad, and ugly of an IPO. Plus, the future of work, why not to self fund your own company, and the most important metric for your business.

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

Starting & Selling Your First Company In College

Howard Lerman grew up in a suburb in Virginia. The same neighborhood as Sean Parker came from. 

It was the 80s. Which meant a lot of riding your bike around, and no internet yet. He also sang opera, which didn’t always go down well when he was playing baseball. 

Yet, even at 13 years old he began figuring out how to use computers to connect people. Starting out with using the phone to engage with bulletin boards, and to run computer games before the internet became a thing. 

Getting into a great STEM school only fueled his passion for math, science, and technology. 

It was a unique moment, on the verge of a new technological revolution. Where he has this technical skill that even his parents didn’t understand. Computing was on the front of major magazines, but most people didn’t know what to do with it yet. He says that it just became a part of his DNA.

While at Duke University studying history, Lerman started his first company. It was a fun website that let you send tips to people anonymously. It went viral. Millions of people ended up using it. Then after it appeared on an episode of the Daily Show, it really exploded in popularity. 

In just one year he ended up selling that business, taking his first company through the whole cycle. 

When You Find Your Business Doesn’t Scale

Howard Lerman’s next business provided consulting services to government agencies and contractors. 

It was just post 9/11, and felt like the patriotic thing to do at the time. Of course, consulting hasn’t really proven to scale as a business yet. So, they did end up having a good outcome, but it was time to move onto something else. 

Next was the first iteration of the company he would end up taking public. It began as gymticket.com. An idea that you could do for health clubs what was being done for hotels online. 

They were essentially driving leads in for gyms. After hitting around 2,000 gyms, and a few million in revenue, they realized there wasn’t much scale in it. 

Howard says they face the choice between digging in and focusing on the vertical, or branching out horizontally into new verticals. 

They chose the latter. They took it to vets, chiropractors, and in total around 20 different verticals. Along with building up $20M in revenues. 

Then hitting a new ceiling, they started a new company, with the same cap table, and then spun out this company to fund their new one. 

The Good, Bad, And The Ugly Of Taking Your Company Public

The new venture became Yext. A powerful listing service that enables businesses to be found across the internet. 

It was a huge hit with big Fortune 50 companies, and for all of their locations. 

This has enabled them to go from raising a seed round, all the way through an IPO, and beyond. In total, raising around $250M. 

No small feat, given much of this was done when there were far fewer VC firms in existence, and their business models were much more traditional than they are today. 

Lerman recounts when there were only around 20 VCs, all huddled around Sand Hill Road. Individual angel investors at the time certainly weren’t throwing around million dollar checks like they can today. 

It also meant being more disciplined in building a real business. Howard says he always liked to put up the results, and have the money seek them out, rather than vice versa. 

Still, after taking his company public, he found several ways things changed. Including the investors you are talking to. Rather than when you are private, and your investors all want you to succeed, and your interests are generally aligned, when you are public, you will have those who want to short your stock, and bet against you too. You just never know what their intentions are. 

Storytelling is everything which is something that Howard Lerman 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.

Accountability–The Secret to Successful Businesses

On the positive side, he says the accountability you are forced to have as a public company helps build better businesses. Everything is out in the open. 

However, this can also lead many to focus on pushing metrics for the next quarter, rather than making the best decisions for the long term. 

When it comes to the single most important metric for all businesses and founders to focus on, Howard says that is your net customer retention.

Entering Roam

After leaving Yext, he immediately started Roam. The company provides an all in one cloud HQ that cysts meeting times in half, boosts productivity, and builds community and culture in the new world of work.

Howard and his team believe that when the whole company is in one HQ people feel more connected to the company. Calendars are emptied. Culture comes back. 

So far they have raised over $50 million from investors with Howard putting in $12 million of his own.

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

• How the fundraising ecosystem has changed
• When to bring in an outside CEO
• The process of going public
• Why not to self-fund your company alone

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