Murray Hidary has been involved with orchestrating an array of different startups. Conducting their construction, funding, scale, and exit, at an incredible tempo. This includes over two dozen acquisitions, raising tens of millions of dollars in financing, and nine-figure exits. Some great examples include eBillity, EarthWeb, Vista, Dice.com, and Primary Insights, to name a few.
In this episode you will learn:
- How to get a free company that is generating millions in revenues
- Murray Hidary’s top advice before starting a business
- The over-valuation and correction that comes with new technologies
For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
The Ultimate Guide To Pitch Decks
Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).
Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
About Murray Hidary:
Murray Hidary was the co-founder of one of the very first internet-based companies, Dice, which went public and was sold for $200M. Later he started several other companies, including eBillity and Primary Insight, and took both of them public as well.
Then he decided to pivot his career from business to music and created MindTravel, which is an immersive musical experience with silent headphones that takes place in unique beautiful settings. Hidary says his mission is to move people to purpose and help them on a journey of self-discovery and mindfulness.
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Read the Full Transcription of the Interview:
Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we have a great, great guest, someone that definitely brings that creativeness because of what he has done with music. We’re going to be talking about building and scaling. He’s done it multiple times, multiple exits, so I think that we’re going to be learning quite a bit when it comes to the full lifecycle of building, scaling, financing, as well as exiting any hyper-growth company. So without further ado, let’s welcome our guest today. Murray Hidary, welcome to the show.
Murray Hidary: Hi Alejandro. It’s great to be here. Thanks for having me.
Alejandro: Originally born and raised in Brooklyn, New York. Tell us about life growing up.
Murray Hidary: Growing up in Brooklyn is something that I think everyone who grows up in Brooklyn is proud to be from there. But most of us, when we were growing up, wanted to get out. I was definitely one of those. I wanted to see the world. I wanted to experience the world. I grew up in a closed community, very religious, and very separated from everything, so I always had a yearning to break out and see the world, experience the world. At the same time, although my family was very entrepreneurial, my father, along with his brothers and my grandfather, started a company, so I got to see what being an entrepreneur really looked like firsthand. Even today, my mother is an entrepreneur, as well, and has her own company. Probably when I was about 15, I started making my own money by going to the flea markets and selling clothing and other things in the flea markets of Brooklyn, the Bronx, Queens, and the boroughs of New York. Those were some of my first lessons in learning how to negotiate and how to do business hand-to-hand, combat, if you will, on the frontlines, and the trenches of doing business, and learning about customers.
Alejandro: Very cool. How did you develop the love for music?
Murray Hidary: I started playing music when I was about five years old. My mom was intent on all of her children, all five of us, having music in our lives as a way to expand and broaden our life experiences. I started playing at a young age, but from very young, I really took to it because it was a language that was very natural for me. It was a language that I was very comfortable with because, frankly, I was a shy kid, and it was a more natural mode of expression for me than even words were. So, expressing myself emotionally, I found that sitting at the piano was a very natural way for me to emote and express my feelings writing songs and playing much more naturally than expressing them with spoken language.
Alejandro: You did study to become a classical composer, but eventually, the direction that you took was to start a company really early at 22, so tell us about that process.
Murray Hidary: I traveled the world when I was 18. I took a year off. I got to see the world, and then I came back and said, “Music is the direction I want to go.” I studied to be a classical composer. I got the skills to do that, but then when I graduated, I was like, “How am I going to make any money with classical composing without going into writing commercials for TV.” That just wasn’t a direction I wanted to go in. I spoke to other composers, and they all agreed and said, “You can never spend time writing your own music. It’s always on deadlines writing for others.” So I felt like I needed to find another way to earn a living to support the artwork I wanted to do with music. I remember having a conversation with my older brother, who was into computers. When I was going to music camp as a teenager and as a kid, he was going to computer camp. So we were very different, but we are very similar in many ways and very entrepreneurial in many ways. We started talking, and back in 1994, he said to me, “Have you heard of this thing called the internet?” He was working, at the time, for the National Institutes of Health of the government research. He was one of the first to see the internet when it was at the government. He and I got together. We thought it was something so exciting. You can imagine a time when most of the world was not familiar with what the internet was if you can imagine that day actually existed. But it was true, and we thought it was so exciting. We didn’t know if we could make money with it, but we were enamored by the possibility. So we started our own company, and we figured it out as we went along. I was 22 at the time; he was 25, and we started the company called EarthWeb.
Alejandro: What were you guys doing at EarthWeb? What was the business model?
Murray Hidary: In the beginning, the first idea we had was a non-profit one. It was a way to use this new communication technology to help out. At the time, in the summer of ’94, there was a big civil war in the country of Rwanda, and we thought that the internet would be a good way for non-profits helping on the ground to get the word out. So we built a text-based site. That’s all it was at the time. We would upload information from the field that was being faxed to me. I would take these faxes, and we would turn them into basically a site just for text to let people know, and we would point people to give donations to these firms directly just as a matter of helping out. It was written up by News Week, a big magazine, and we saw the commercial opportunity, so we then created EarthWeb to build a presence for some of the biggest brands out there. Then the World Wide Web was created by Tim Berners-Lee in ’95, and now you had images with text. We started building some of the first commercial large-scale websites on the internet. We were rated by Wired Magazine as one of the top agencies in the country. We built websites for the New York Stock Exchange, the Metropolitan Museum of Art, and some epic brands on the internet.
Alejandro: At that time, we were talking about the dot-com bubble and the dot-com bust, and you guys took the company public. What were those times like?
Murray Hidary: Basically, we built the company. It was such a heady time. We raised a lot of money into the company before going public. I think we probably raised well over $100+ million prior to going public. Then when we took it public in ’98, we actually shifted what we did from being a website builder to being a media company. We actually started to build our own properties for techies. So our audience was millions of technology professionals, developers, coders, etc. That’s when we took the company on a promise of building this big platform. On the heels of going public, I did about 24 acquisitions of other websites, and we built a massive platform for the technology companies. But going public was a very hairy situation because we were slated to go public with JP Morgan taking us public with Bear Stearns. Just as we were getting ready to go on the roadshow, the whole market collapsed, and they had to pull our IPO from the schedule. We just had to wait. We didn’t know what was going on. For close to six months, not one company went public. This was in mid-’98. Then we said, “You know what? We’re going to go public anyway. We’re more of a B2B play.” Everything that was going public at that point was more of a consumer play. We decided to go out there, and our IPO actually reopened the market. So it was a big risk, but it’s something that ended up paying off. Our stock price on Nasdaq rose about 300%, one of the largest Nasdaq increases in any single day, and we were able to do it. Literally days after, all these other companies started to go public again, so we reopened the market. Then with that incredible stock, we affected about 24 acquisitions of other websites and other companies, and that helped us build a big platform. What is incredible about early times in any new technology era is that the market can overvalue what we think and overvalue, but it’s really on the promise of what could be built. That certainly is what happened back in ’98. If you look at what’s happening today in the crypto world, for example, it’s a similar thing happening. You have a massive overvaluation or what’s perceived as an overvaluation, but there are going to be a lot of amazing companies and assets that are built. A lot of it will go away, but a lot of it will remain, and that’s always the big question of what stays and what goes? But that’s how it was back then. Out of the hundreds of thousands of different companies, many have vanished, but some still remain. The market is placing these big bets because they know that the potential is so great.
Alejandro: Whatever happened with EarthWeb?
Murray Hidary: When the dot-com crash came, we actually had a situation on our hands where we were growing, but we were losing money like many companies at that stage. So we had to shed the properties that were losing money, which were advertising-based because all advertising disappeared on the internet during that time, advertising revenue. We sold off those companies, and we retained one of the acquisitions, which was Dice.com, as a company that I acquired when it was only about $3 million in revenue. We had grown it in 18 months to about $60 million in revenue through some growth strategies, and it was making very good money. So by selling off the advertising properties, we unleased the profit of Dice.com, which was a classified model. It was a job board, so it’s a different kind of model than just straight-up banner ads. That’s how we got through the dot-com bust. One of the challenges that we still had was the last money we raised was as a convertible note as a public company. So, it was debt. We actually raised debt as a company, about $80 million worth. I think that was, in hindsight, a mistake because it was a bit too risky to take on that much debt. It was very enticing, and our whole board endorsed it, but at the end of the day, when the bust happened, without the ability to pay that all back, we ended up getting squeezed by the debt holders, and we had to convert that into stock at a valuation that was very different than when we raised that money. We ended up having to give a large amount of the company to the debt holders. Then we took the company private in that process. In hindsight, I would not have taken that debt and would have taken it as equity, but it was a big lesson learned at the time because you don’t have to give equity for debt, so it’s very enticing to take the debt. But at the end of the day, if you can’t pay it back in a timely manner, then you end up converting it into equity at a price that you don’t like, and that’s what happened to us. Eventually, we did sell the company for $200 million to private equity firms, but the amount that I personally had was reduced greatly because of the equity that was given to the debt, the paper holders.
Alejandro: Of course, but selling a company for $200 million, I’m sure that the next time around, not only do you know the whole lifecycle, but then also I’m sure that people were throwing money at you. In this case, you went at it again, and you started Vista. What were you guys doing at Vista?
Murray Hidary: Vista was on the heels of 9/11. So right after 9/11 happened, as entrepreneurs, as New Yorkers, I think the whole country felt like, “What can we do in response to such a tragedy. As an entrepreneur, I felt that continuing to grow and innovate and make America thrive through innovation was how we could participate at the time. We decided to build the company in downtown New York. We launched it, literally, a block from Ground Zero, and it was a company that was going to use technology to facilitate information for institutional investors, so like an expert network for hedge funds and mutual funds. We built that company, and within just about three years, we sold it to Standard & Poor’s, S&P, for many, many times what we took an investment at. It was over a $30 million cash transaction.
Alejandro: What was your lesson there?
Murray Hidary: There was some speculation that we sold too early. We just got a great deal from them, and it was such a great return that we decided to take it, but if you look at our number one competitor at the time, today, they’re doing hundreds of millions of dollars of revenue, and they’re probably worth several billion. So it’s always a question of how far do you want to take a company? If we had stuck with it, could we have grown it and created more value? I’m sure we could have, but that’s a very personal question about where you are at the time.
Alejandro: Obviously, this was your second acquisition, the second full lifecycle. I’m sure that after the second one, especially, the approach and your mindset toward acquisitions shifted and changed. So how do you view acquisitions now after having gone through two acquisitions on the sale side?
Murray Hidary: I think it’s a great way to exit. I’ve taken companies public, and I’ve sold them. There’s a great efficiency in selling a company like that, especially when you have a cash transaction or you sell to a public company where you have liquidity in the stock. It’s really a very personal question of whether your legacy—that’s what I come down to is, is your life a mission and legacy-bound and tethered to that company? Or are there other things you want to do? Take somebody like Steve Jobs or Mark Zuckerberg and others, where clearly their legacy was intricately tied to their companies. For me, it was super exciting and super fun and a wonderful era, but I knew that I had something else to do in life, which is what I’m doing now, which eventually was to go back to my music. It wasn’t like I envisioned myself running a company for decades and decades like many founders do, which I think is great if it’s right for them. But that’s not what my personal trajectory looked like from my point of view.
Alejandro: And your trajectory and going back to music was triggered by personal tragedy. Would you mind sharing with us what that transition was and how that happened?
Murray Hidary: I think we all go through, just as being human and alive and moving through this planet, we all go through difficult times. It’s just a question of when that’s going to happen, not if it’s going to happen. Certainly, grief is part of that. For me, it happened in 2006 when there was a horrific and tragic accident with my little sister, who was 23. I was traveling with her at the time. She was killed instantly in this accident. I was there with her, and getting through that period was extremely challenging, not having my sister around anymore, who I was very close with, but also just getting through the trauma of what I saw and what I went through it at the time. I turned to music, Alejandro. I turned to music as a way to feel through that pain and to get through that period. Along with family, support, and community, it was incredibly powerful for me. I saw the power of how music could help me and in any kind of grief like that. By the way, there are many forms of grief. That’s a very extreme example I’m giving now, but grief is not just about when someone we love dies, but it could be, for instance, when a company fails. I’ve been through that as well. When the company doesn’t go the way you want, you have to sunset it or sell it or close it. There’s a grief there as well. There’s a mourning for what could have been and for what you thought could have been, and that is no longer. If we don’t grieve through it, meaning to feel the pain, we’re going to carry it with us, and that’s never a healthy thing. There’s also grief with relationships or divorce or ending a relationship. There’s a grieving of where we thought that relationship might go, and so the same is with any of these types or species of grief. In my case, it was a very extreme one, but nonetheless, we have to feel the pain and experience it and get it out of us and not keep it within us. Otherwise, it will haunt us forever and hold us back, and that’s the last thing we want to do as entrepreneurs, certainly, is being held back in any capacity. I realized how powerful that was, and I decided some years later to bring that experience of music specifically for healing and managing stress, and expanding our sense of consciousness and awareness to the world. That’s what I call MindTravel today.
Alejandro: That mindfulness, you also apply it to the way you think about now building companies. In fact, you have two companies that you launched where it was a different approach, which is more now on the strategic-type of side. You would build a team together, you would finance it, and then you would let it go with the team and apply that mindfulness to it. Tell us about this different approach on how you’re involved now with building and scaling.
Murray Hidary: I’m involved in a couple of companies now. One is Primary Insight, which is very similar to what Vista Research did and Expert Network for institutional investors. There, I was approached by actually somebody who worked with me at Vista who was doing the same within Bear Stearns. This was back in ’08 when the Great Recession hit. Bear Stearns, of course, was folded into JP Morgan. JP Morgan was organizing the assets of Bear Stearns, and they found this division, and they said, “This doesn’t fit within what we’re doing. We need to sell it off.” My guys called me and said, “Would you be interested in acquiring it out of JP Morgan and spinning it out?” And we did. The conversation that I had—remember that the world was falling apart at this time. This was late ’08 at the height of the Great Recession. The conversation that I had with them was, “Who knows what’s going on in the world. We’ll take it off your hands, but we’re not going to pay for it. We’ll give you a 25% stake in it, but we’re not paying more than $1 for it.” It was doing millions of dollars in revenue. After a bunch of back-and-forth negotiations, they agreed. They kept a 25% stake in it. We spun it out. We ended up growing it, and just a couple of years later, we actually bought back that 25% stake for a very nominal amount because they just wanted to clean everything up and didn’t want it on their balance sheet. We ended up buying it for no dollars, taking advantage of an opportunity when, of course, there’s a great crisis. That’s when there were a lot of opportunities during downturns in economic cycles if you’re willing to take some risks. That’s exactly what we did, and we continue to run it today, and we have a great number of hedge funds and institutions that use us who are customers. eBility was a little different because eBility was a childhood friend who came to me and said, “I have this great idea.” I thought it was fantastic because it was a subscription business, which I love. It was very visible in the revenue. Subscription businesses allow for tremendous visibility. You don’t have to get new customers every month, but you just renew the ones you have and grow from there. It was in the time-tracking space, which I thought was very needed by almost every kind of company. We’ve shifted it from individual software, off-the-shelf software, to a cloud-based model. This is going back about nine years now. Today, it’s a profitable company, and it’s been profitable since we launched it. That was a great story of launching. We built the platform; it took about a year. Then we built the launch plan. We ended up getting a call from Intuit, which owns QuickBooks, and they said, “We have a feature in our Desktop software that tracks time, but it’s not so good. We like yours better.” They did an industry-wide search, and after six months, they landed on our solution. They integrated us in, and overnight, we onboarded thousands of customers, and it was profitable instantly. It was one of the best company launches I’ve ever experienced. So that does happen, although you can’t count on it. If we didn’t reach out and take advantage of that opportunity, which we had to work through the night for several days to prove that we could handle it, then it wouldn’t have happened. Many people would not have made the effort thinking it was a long shot, but we went for it, and we satisfied their needs, and we got the deal.
Alejandro: Why, on those two companies, on Primary Insight as well as on eBility, why haven’t you raised any venture money?
Murray Hidary: Since we were profitable out of the gate, we decided to continue to run on profit. I think because we started those companies, Alejandro, on the heels of the recession, we were in a different mindset. We decided to run them more as lifestyle companies distributing the profits we had to the small number of shareholders, and that’s something that worked for us. We only raised about a million dollars into the company, including my own money. But it’s something that now we’ve seen a tremendous return on by just running it in that fashion. And now we have different opportunities to either take on money and grow it larger or sell it at this rate.
Alejandro: Imagine if I put you into a time machine, and I bring you back in time to that moment where you were thinking about launching your first company, EarthWeb, and you had the opportunity of sitting down with your younger self and sharing with your younger self one piece of business advice before launching a business, what would that be and why, given what you know now?
Murray Hidary: I think if I had to go back, I think that the main thing would be not to take everything so seriously. We tend to take every single situation so seriously. Part of that, also, is there is such an optimism that entrepreneurs have to have by nature. We’re, of course, only starting companies which, most will fail, but we do it against all odds because we have such an optimism. One of the things I would do would be to have a more measured approach in terms of when to sell and when to take some chips off the table so that there would be less risk in the long term.
Alejandro: That’s profound. The next question is, for the people that are listening, that want to get in touch and say hi, what is the best way for them to reach out and say hi?
Murray Hidary: They’re welcome to either DM me on Instagram: @MurrayHidary or drop me an email at [email protected]. I’m always happy to help when I can.
Alejandro: Amazing. Murray, thank you so much for being on the DealMakers show today.
Murray Hidary: Thank you, Alejandro. It’s great talking to you.
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