Neil Patel

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Tony Atti’s startup has raised a substantial amount of capital to bring big change to the working of many things you touch on a daily basis. His venture, Phononic has raised $230 Million in funding from top-tier investors like Goldman Sachs Asset Management, GGV Capital, Wellcome Trust, and Eastward Capital Partners.

In this episode, you will learn:

  • The truth about trying to disrupt an industry
  • Finding product-market fit
  • Choosing the best place to base your company
  • How to fundraise if you aren’t in Silicon Valley
  • Must-read books for entrepreneurs

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    About Tony Atti:

    Anthony Atti is an experienced clean energy investor and entrepreneur who has demonstrated expertise and leadership in venture financing, business development, start-up growth and operations, and negotiating joint venture relationships.

    As a former Director at MHI Energy Partners, a seed and early-stage energy private equity fund, Dr. Attimanaged deal flow networks, conducted due diligence, structured venture financing transactions, and provided direct portfolio company leadership as an Entrepreneur-in-Residence.

    Dr. Atti earned his Ph.D. in Organic Chemistry from the Loker Hydrocarbon Research Institute at the University of Southern California under the direction of Dr. G.K. Surya Prakash and Dr. George A. Olah; the former a world-renowned fluorine chemist and the latter a winner of the 1994 Nobel Prize in Chemistry.

    Dr. Atti also holds an MBA from New York University and a Bachelor of Arts in Biochemistry from Ithaca College.

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    Connect with Tony Atti:

    Read the Full Transcription of the Interview:

    Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Obviously, I’m super excited with the guest that we have today, and then just before we get started, just a little plug here because the book that I’m launching is literally coming out. It’s going to be out by the time that you’re listening to this. It’s called Selling Your Startup. It’s been four years in the making. It is a guide and a roadmap to help you understand how you’re packaging and positioning your business in order to be acquired. There was none of this out there on the market, and I thought that it was about time to put an end to the madness, so that’s why the book came out. There are great founders, about 20 of them that have sold their companies for over $5 million each, and even over a billion that are getting behind it, so it’s been a privilege to have them, an honor to have them, and obviously, an even bigger honor to be able to put this in front of you all. So I’m excited to see what all of you think. Again, it’s available on Amazon, Barnes & Noble, whatever you think, and it’s coming out now on July 27th. Without further ado, here, what I’d like to do is, I’d like to dive into our episode today. We have an amazing guest. I think that we’re going to be learning a lot about scaling, about product/market fit, about issues with building and ramping things up, and about raising a lot of money, and also not being in one of those hotspots where you typically have access to all of that capital and talent, so I think it’s going to be very interesting to hear how he and his team did it. So without further ado, let’s welcome our guest today. Tony Atti, welcome to the show.

    Tony Atti: Alejandro, delighted to be here. Thank you for having me.

    Alejandro: Originally born and raised in Buffalo, New York, from a family of immigrants from Italy, the ancestors. Tell us about growing up there.

    Tony Atti: Looking back, Rust Belt City, but blue-collar work ethic, wonderful people, very ethnic. We had the honor of being one of the only Italian families, ironically enough, in an Irish neighborhood. My first entrepreneurial start was that of a paperboy, which I had in middle school, and I saw that work ethic from my parents and my grandparents. Although it’s not a classical entrepreneurial city in terms of startup companies and venture capital, that work ethic is engrained in you from a young age, and it never leaves you. It’s a wonderful place to be from.

    Alejandro: That’s amazing. From such a young age, as you were saying, a paperboy. What were some of the lessons that you learned? I think you were very fortunate because there are so many people that are coming out of university, not really understanding the labor market or making money or having that type of ambition. What did you get out of that experience?

    Tony Atti: I give this lesson to my kids. They’ll roll their eyes when they hear it, but on the wall of my office is the side of a Buffalo News Paper wagon that I carried my papers around in. If you know Buffalo, New York, in the wintertime, that’s an occupational hazard. But you’d be amazed when you take jobs like that, whether it’s as a paperboy or mowing lawns or shoveling driveways, you learn customer service. You learn how to deal with management. If your deliveries aren’t on time, the call didn’t go to me back in those days. It went to my parents on a Saturday morning at 6:30 am. That was not a board of directors meeting you wanted to see at breakfast if you came home late. You learn financial accounting, how to keep your books straight, how to manage your finances, and you also learn labor relations that when you can’t make a particular delivery, you have to pay up if you want your younger sister to do it for you. I say it all tongue-in-cheek, but they were incredible lessons engrained, very young, in me, and we were all expected to pitch in and work and contribute in different ways. I was never always the smartest student, whether it was high school, college, or post-graduate degrees, but you can never outwork me. That was a trait that I took all the way through my entrepreneurial journey, even today.

    Alejandro: That’s amazing. I’m sure that for you, you were there in Buffalo, New York, but eventually, you decided that it was time to pack the bags and go to California. So what triggered that?

    Tony Atti: It was unexpected. I had finished my undergraduate degree at Ithaca College. I was expected to pursue a medical degree like many in my family, and I threw everyone a curveball and had an opportunity to interview and ultimately go to the University of Southern California for graduate school. Arguably, Alejandro, that’s had one of the most dramatic impacts on my career. I had never been west of the Mississippi. I was exposed to a completely different culture in a way of thinking that you saw on the West Coast. This was the late ‘90s. Startup companies were all the rage, venture capital from the Valley, all the way down to Los Angeles was very common, and I had the good fortune to work on a program at the university that was very applied, which had collaborations with Cal Tech and NASA’s Jet Propulsion Laboratory. Whether I realized it or not, the program that I was working on was very applied in nature, and it exposed me to everything from Asian interest in technology, innovation, America to venture capital. It put me on a completely different and unexpected career trajectory in and around sustainability and environmental technologies.

    Alejandro: Talking about a different trajectory, it was a Ph.D. in Organic Chemistry what you ended up doing.

    Tony Atti: My professor put a hard sell on me. He said, “A medical degree would be very focused.” I decided I didn’t want to pursue medicine. But he looked at a Ph.D. in Organic Chemistry as sort of a platform approach where it touches so many different parts of the hard sciences that if you had a fundamental understanding and application there, you can excel in many fields. I had the benefit, ironically, between cleantech and sustainability of looking at those applications in the conventional oil and gas field. When you look at a legacy industry, looking through a void being disrupted, you see their behavior, and they’re very proficient in adoption of new technology. It was a great experience for me to see that from the inside out.

    Alejandro: For you, you ended up landing at NASA out of all places. How was that for you?

    Tony Atti: It was an incredible opportunity. Southern Cal and NASA Jet Propulsion Laboratory had a joint collaborative research initiative in the area of energy conversion technologies in fuel cells. I was incredibly lucky that my advisors entrusted me the ability to represent USC, first as a research scientist, and then as a post-doc at the Jet Propulsion Lab where you can see real-world application of your R&D. I joke that many of my colleagues at USD would show up in their own hours. I was expected to be there first thing in the morning and, as the young one, the last one to shut off the lights in the evening. To see the work ethic and the dedication, particularly at the time that Mars Rover Program was just kicking off. It was an incredible impact on my career in terms of working with those professionals.

    Alejandro: Then why the shift to private equity because that’s quite a big change there?

    Tony Atti: I broke my advisor’s heart, and I had come to the realization that I was a good but not a great scientist. I enjoyed research and development, but I loved its application in real-world settings. Given the technologies that we were working on, batteries and fuel cells had so many real-world sustainability applications in the late ‘90s that as the venture capital and technology community came calling, it was hard to ignore it. With a number of partners, we were able to set up a boutique energy technology investment fund in New York City, where, instead of just going to work in one particular discipline, now I was like a scientist in a candy store, where everyday entrepreneurs and technologists would bring world-changing innovation that I got to shift through and ultimately advise on investment decisions. It was just a wonderful experience.

    Alejandro: It sounds like, as well, when you went into this private equity type of role that you started to see how things may look from the other side of the table, not from the operating role. In fact, you ended up doing a transition after having placed a bet into one of those funds of some sort. You became an Entrepreneur in Residence, and that led to you getting on the operating part. Especially for the people that are listening, what is an Entrepreneur in Residence? What is the role?

    Tony Atti: Before that took on my secret weapon as a technologist was, I could go deep into the university and engage with professors and technologists one-on-one. It’s an area that venture capitalists normally avoid because it’s really hard work. You have to evaluate intellectual property as much as you do technology, and it’s often unproven at that stage. But from our funds’ perspective, that’s where the fund was. What I very quickly learned early on is, I could only advise on so many deals per year, and there were only so many resources available to do investments. Once those investments are made, guess what? Your shareholders expect a return. At that point, the Entrepreneur in Residence role, typically used in venture capital funds, most often with early-stage companies, are areas where the investor takes people off of the bench and puts them in operation roles in the company. It’s an opportunity for the company to defer resources and focus on R&D and technical development where the Entrepreneur in Residence can take on multiple functions. Alejandro, depending on the day of the week, I was VP of Biz Dev, strategic partnerships, and HR. And I like to think I provided a critical role to that company’s founder so he could focus on the R&D needed to perfect the technology, and the investors felt comfortable that we had a man on the inside. It was a wonderful experience to take on the other side, the operating role, and see it from the entrepreneur’s perspective. So, coming through at that point in my career, I had the unique experience, the lucky experience of having seen technology and innovation from the eyes of a research and development scientist, from the eyes of an investor, and now from the eyes of an operator. That’s the three critical areas for successful entrepreneurship.

    Alejandro: I think even something that, at least in my opinion, is even bigger is that as part of this opportunity, you were able to see the full cycle of companies. You were actually part of this company that ended up going through an acquisition. When you’re able to see the creation, the fundraising, the scaling, and then the exit, it’s like, now you’ve got the full 360-degree view that not a lot of entrepreneurs, most entrepreneurs don’t have. What kind of visibility would you say that gave you?

    Tony Atti: The one interesting thing is, venture capital, to date, even in the late ‘90s, early 2000s, has become very institutionalized. By that, I mean the funds had become so big, you oftentimes hear investors or entrepreneurs talk about one out of every ten companies succeed. The firm I always had didn’t have that luxury. We were dealing with high-net-worth private investment. We didn’t want to see nine companies fail. So instead of investing in ten and hoping that one survived, we invested in four or five, and then the four or five partners got active with all four or five. So the interesting aspect is we all really pulled for one another; we shared experiences in the various operating roles that we had and had a remarkable success rate where several companies went public, and others were acquired. So it gives you a much greater appreciation for the invested dollar and shareholder value from that perspective as opposed to just trying to find that one in ten, loading up on that one, and then the other nine just fall by the wayside. You get a much better appreciation of the entire investment cycle, from the technology development to the investor’s due diligence to the role that the entrepreneur plays in building his or her own company, and then it puts you in a unique position to add value. Seeing that from the inside out, while not always appreciating it at the time, is certainly what I brought with me in launching now Phononic.

    Alejandro: Talking about Phononic, which is your baby, we’re going to be talking about your baby very soon.

    Tony Atti: It is!

    Alejandro: But, talking about Phononic and the sequence of events that led to Phononic. During this time of this operating role and helping as an Entrepreneur in Residence, you actually were, right after recruited by Tier 1 VCs, basically to help them in doing diligence for one of those opportunities that they were running, which eventually led to the incubation of the idea of Phononic and to the creation of Phononic. So walk us through that sequence of events.

    Tony Atti: On one hand, I just got done complaining that venture capital has become so institutionalized in terms of size of the fund, but they’re not all like that. There are still investors out there doing Greenfield or Openspace investment of whatever term is used. After exiting that company from an Entrepreneur in Residence role, you ultimately build a network of investors all around the country. And in reaching out to them, looking for the next investment opportunity, I was quite literally given this pitch, which, Alejandro, has been the first slide in the first discussion of every engagement I’ve ever had on Phononic, that is, Silicon Valley is not randomly named. Silicon is a semiconductor material, which has transformed our way of life: data, communications, solar, more recently, Lidar and LED lighting. Yet, in the world of refrigeration and cooling, 200 years of mechanically-driven compressor, unsustainable, brute force, yet $50 billion a year in annualized market opportunity. Why haven’t semiconductors impacted that space? Tony, we want you to find that out for us. That was quite literally the conversation I had with Matt Trevithick, my co-founder, who at the time was at Venrock. Not knowing where to begin, I leveraged the contacts I had at NASA Jet Propulsion Lab. It turns out, Alejandro, semiconductors had made [15:12] in cooling and refrigeration. There’s an entire class of physics called thermoelectric cooling, the principles of which are almost as old as the compressor. Yet, the commercial efficacy and viability has been dated by efficiency, scale, and cost. That’s going to come up later because that was effectively the business plan for Phononic. I didn’t know it at the time, but I called a whole bunch of people in my network, went on an almost two-month listening tour where I finally looked back and said, I met with every liar and thief in academia at all of the world’s major research universities, understanding everything I could about thermoelectrical cooling and it’s commercial inadequacies and came back to the investor group with a recommendation of a handful of universities that were doing interesting work and a loosely-structured business model. Quite literally, Alejandro, that afternoon in the fall of ’08, I was given a term sheet, and Phononic was born that afternoon. It’s the rawest, most exciting entrepreneurial experience I can think of.

    Alejandro: Wow! Why did you do it out of North Carolina out of all places?

    Tony Atti: That wasn’t supposed to be the home. The Entrepreneur in Residence role I had taken happened to be in North Carolina, and I had prepped my family that the investors asked me to do this diligence or the blue-chip investors in the Valley, Silicon Valley. “Get prepared; we’re going to leave.” For the first 18 months of Phononic’s life, we were in hardcore research and development mode, working with a handful of universities as a virtual company with me on a plane. While that was cost-effective, it certainly wasn’t healthy. So roughly 18 months into the engagement, the board called me out and said, “You can’t live like this. We now have seen promise in the technology. It needs a commercial home.” So I had a completely clean slate. I looked at the Valley. I looked at Arizona. I looked at Austin, Texas. I looked at Boston, conventional areas of semiconductor material science, and low and behold, in my own backyard, particularly on the campus of NC State University, was an entire semiconductor material science infrastructure that we’ve been able to leverage quite successfully. That’s Phononic’s first official home with that decision having been made.

    Alejandro: That’s amazing. For the people that are listening to get it, what ended up being the business model of Phononic?

    Tony Atti: It depends on the day of the week, Alejandro, with respect to the business model. Here’s where the hard work comes in. Semiconductor cooling, thermoelectric cooling was talked about for 25 years; nobody’s been able to crack that just yet. While we were starting to see technical proficiencies that suggested we really had something. The mistake you make with a disruptive technology company, and all the romance that you hear about is you just expect industries to be ready to disrupt themselves. It doesn’t work that way. So the irony in our business model, we’ve finally come back to where we started, which is, we believed in areas of refrigeration and cooling and air conditioning, we would provide the design for our product and then sell the associated semiconductor device that we manufacture right here in Durham. Clean, looked good on paper, capital effective plan with effectively high-gross margin right up until I had to put it into practice. When you’re a disruptive technology company, and you provide to even the most progressive customers your design, they don’t just rush to design you in. We learned in a difficult way early on that if we just dropped a paper design and a thumbnail-size chip on someone’s desk, making the broad declarative statements of what we could do, it would be forever and a day until they moved. So probably the most painful but the most rewarding part of my Phononics career is, we quite literally morphed ourselves into a refrigeration and freezer company. Depending upon the segment, we were selling chips, full refrigerators, and full freezers, demonstrating the efficacy of what our technology can do. It generated an incredible intellectual property portfolio. It required tens of millions of dollars in venture capital as well as a global supply chain. Candidly, it almost broke our back, but then when the technology finally took hold, and you could see that value proposition with some focus, we’ve ultimately gotten back to that more effective business model where we sell devices. In some select cases, we will sell products, and in others, we will license the technology so our brand partners can take that burden on, on their own.

    Alejandro: Got it. What was that day where you realized that product/market fit was present?

    Tony Atti: I’ll say the date when I remember that it wasn’t present, and that was Halloween of 2019. We had a variety of products all over the market; we had a variety of products in all different segments. We were burning through a tremendous amount of cash, and I don’t mind saying that one of our largest investors took me to the venture capital version of the woodshed and said, “You can’t run like this. This is too exciting of a company. You’re too talented of an entrepreneur, and you’ve built too great of a team. You’ve got to tighten this up.” It was at that meeting where we made the fateful decision to really zero in on a particular segment, one that we call micro-cooling optical component, 5G communications, data transmission in Lidar. Boring by venture capital standards, but tight, sticky business model where our chips provided performance nobody else could get. At the time, it seemed to make sense. Second was a warehouse logistics program for food—very nascent in our development, but one that was now, for the first time, governed by actual market research and not by reaction. Then the third was everything from vaccine storage to ice cream, where we would license the designs to our refrigerators and freezers. That was when I recognized the product/market fit wasn’t there, but those three decisions would get us there. Then, candidly and very humbly, roughly right at the beginning of the pandemic, each one of those segments exposed just how mission-critical our cooling solutions are, and it was roughly July 4th of 2020 when we recognized that hold was there, and we’ve been holding on for dear life ever since scaling and doubling and increasing the size, scope, and capacity of the company. It’s been quite gratifying to have gone through that experience.

    Alejandro: How much capital have you guys raised to date?

    Tony Atti: Including the most recent $50 million financing that we just closed from Goldman Sachs, it puts us at roughly $230 million in capital to date.

    Alejandro: Wow. Tony, that’s a lot of zeros for being in North Carolina.

    Tony Atti: You know, when you can connect—I tell this to entrepreneurs all the time, particularly those who are outside classical areas of the Valley or Boston. Investors ultimately don’t care. If you can connect the dots, particularly in our case, of a disruptive value proposition, one with a dramatic environmental, social, and governance value, with a proven economic value solution, you can bring in dollars all around the world. We’ve always believed that, and we’ve been putting it into practice now, particularly the last 18-24 months.

    Alejandro: You’ve done several rounds here, so part of that journey of raising money because I’m sure that you’ve raised money from investors all over the world. What has been perhaps that hurdle with them when they saw you were not in one of those hot hubs for startups for, let’s say, New York, Silicon Valley, or whatever that is. What have been some of those hurdles because I’m sure that there are going to be a lot of people that are listening and watching, and that they are also outside of one of those hubs, and they’re wondering, “Man, I wonder how Tony did it, and maybe there’s something I could learn from what worked for him”?

    Tony Atti: Let’s be careful of how Tony’s doing it. I guess the answer to your question, Alejandro, is very stage-specific because the scrutiny has gotten a lot tougher over the last two to three years. In the early stages of Phononic’s development, and this is true for any of you entrepreneurs who are listening. When we’re in the hardcore technology development stage, investors tend to be less critical as to where you are, particularly in a remote world like where we are now because the belief is scientists, software, material science, while the Valley certainly has a concentration of that skill set, there are smart people all around the country. So in the early development, the investors were satisfied that I was able to show them that our technical team and our engineering team are best in class. It was hard to argue with that when you looked at the technical capabilities of what we were proving every day of the week. It gets much more discerning as the company matures from just technology development to a product, and then that product goes into the market. Alejandro, we aspire to be a multibillion-dollar company. The size of the market is there. The ESG solutions we provide are obvious. That’s now our mission and mandate. So the decerning criticism that we have to answer, the hurdles, to use your words, is, can we find sales, engineering, and marketing executives who have managed a large PNL before? I have this conversation in North Carolina all the time; it’s my home, this is the ecosystem that we want to build. So you have to be willing to either relocate or coach up and mentor your team such that they can give investors confidence that they’re not just smart technical people, but they can understand, drive, and scale the PNL of a business. And that’s ultimately the question that you have to answer, and we’re answering that every day of the week.

    Alejandro: Got it. Very cool. I love it! Then in terms of people, you were alluding to people. How many people do you guys have now?

    Tony Atti: We’re roughly 250 people, and in the company right now, roughly 100 of them are manufacturing technicians and operators as we manufacture all of our chips here in Asia. We’ve been growing dramatically our sales and marketing team. Like all companies that entered into the pandemic, I made that comment about the woodshed moment in late 2019. We had to lock and load in just engineering and a few couple of type product sales and marketing segment. Now that we’ve seen that traction, we’re making up for lost time on everything from HR to sales to marketing and PR as we now want to tell our story all around the world.

    Alejandro: Obviously, now, you are in this rocket ship. You have enough employees to get people excited, but when you’re in areas outside of those hot hubs where they’re more used to, let’s say, hypergrowth like super-early-stage type of companies, they tend to be a little bit more conservative when it comes to career choices. So how were you able to enroll people into the possibility in the future, and what you guys were able to achieve by bringing them on board in North Carolina there?

    Tony Atti: That’s a great question, and it impacts multiple stages of your career. I’m so glad you asked that because it goes back to that romanticizing entrepreneurship as if the decision to start a company, join a startup company, or take what would be deemed to be professional risk is this cataclysmic decision. I started as a paperboy from Buffalo. You were expected to work at the same company for 50 years. I am not a risk-taker. When I go skiing on vacation, I take the slow Blue Hills while my kids do all the Double Black Diamond. So I try to personalize the experience with people that interview at Phononic, which is there are ways you can mitigate and be risk-risk by being smart, by being disciplined, by leveraging your talent in ways that the organization really needs. This perception that startup companies are this beehive of people going 100 miles per hour—yeah, there are certain elements of truth to that, but if that’s how the company is run on a prolonged basis, it is not going to be in business very long. So the challenge is, early on, you have to mentor and coach those initial employees that this is a very risk/de-risk decision based upon the plan, based upon the objective, based upon the capital that we’ve raised, and based upon the investors at the table. Then, as you mature, the sell becomes a little different where you can say to more mature employees who come from much larger companies, “We’re bringing you in because you’ve got the discipline; you’ve got the [27:55], and you’ve got the moxie that the organization requires.” I very rarely zero in on this esprit de corps or this reckless mindset that you sometimes correlate with venture capital or startup companies. I try and personalize it for myself and personalize it for the person that’s interviewing so they can see, “This should be considered as a career choice just like a Fortune 500 company.”

    Alejandro: That’s amazing. I love that because I find that entrepreneurship, at the end of the day, is just like you were saying, de-risking. But more important than that, simplifying the journey and everything around that journey for everyone else that you want to bring on board, whether it’s employees, customers, or investors because they need to get it. They need to feel that future and possibility. So, in this case, when we’re thinking about what’s possible, imagine, Tony, that you go to sleep tonight, and it’s the biggest snooze of your life. You go to sleep tonight, and you wake up in a world where the vision of Phononic is fully realized. What does that world look like?

    Tony Atti: We want to fundamentally transform the ability to cool. We want you to have modular distributed cooling and refrigeration solutions for every facet of your lifestyle: the way you eat, the way you communicate, the way you drive an autonomous vehicle. Phononic solutions have the promise to play a disruptive role in each one of them and seeing that impact, not just customers. That’s easy, but seeing them impact society, that’s what we’re driving forward; whether it’s my dad who wants a quieter refrigerator or my son who thinks autonomous vehicles are cool, Phononic solutions are going to bring those applications to life. When I wake up, I want to see that in action.

    Alejandro: That’s amazing. Imagine now, Tony, it’s been 12 years with Phononic, 12 years full of lessons learned, full of ups, full of downs, and everything in-between that is building a scaling a company, but imagine that I put you into a time machine and that I’m able to bring you back in time to that moment where maybe you were looking into this thinking maybe there was something to do, but even before you got the term sheet from those investors that changed everything. Imagine you’re able to have a sit-down with that younger Tony, and you’re able to give that younger Tony one piece, only one piece of advice before launching a business. What would that be and why, given what you know now?

    Tony Atti: That’s a hard question because my nature wants me to say something inspirational to my younger self: persistence, vision, don’t quit because as I look back, that unbridled enthusiasm and that unbridled persistence through all of the torturous things that we’ve experienced is why we’re now here and getting traction and seeing the gratification of all of the hard work that we’ve put in. If I had to give my younger self a tactical bit of advice that’s maybe a bit more boring, it would be discipline. You simply have to be disciplined in how you spend money and how you pick objectives and how you pick customers, and how you pick markets. Then with that discipline, you can let your enthusiasm and persistence loose. Some would argue that the word I’m looking for is focus. They’re probably right, but it’s fun, sometimes, to get a little unfocused. So if I sat down with myself, I’d give that uplifting speech of persistence, don’t quit, don’t give in when others want you to. And if it was tactical, I would say, be disciplined in every aspect of how you execute and operate your business.

    Alejandro: I love that. We were talking before about the risking of the journey. As people say, history repeats, and obviously, I’m sure that you’ve been able to read some stuff that has given you a different perspective or perhaps some guidance as you were doing something for the very first time, which is building Phononic, so in that sense, what would you say has been a book that you wish you would have read sooner?

    Tony Atti: I want to be careful because I can’t wait to read your book. Zero to One had a dramatic influence on me, particularly the one chapter of when you find a product in a particular product segment, ensure that it’s ten times better than the incumbent, and then own that segment. Back to the discipline that they younger Tony Atti and his company could have used, at any one point in time, we might have had a half a dozen products, that 10x improvement over the incumbent, and only got part of the way into taking over that respective market segment. That’s where discipline came back to bite us, where, of the six or seven that you could own, let’s really own three. I wish I would have read that book in ’17 or ’18 when Phononic was really at the advent of its product marketing process. At the time, we had stumbled through a whole lot of hard work. The performance metrics needed to be commercially viable, and we were so excited that we had reached that threshold that we went after everything, often at the same time. In some cases, it was pridefully driven. I’m going to shut up the skeptics who have given me a hard time up until then. In others, it was technologically driven. We could measure just how great we were, and in others, it was product-driven where somebody paid us to do it. That’s a hard way where reading Zero to One, after the fact in that 2019 timeframe, I had to look very dispassionately at the five, six, or seven things that we were doing or could do and say, “You know what? Here’s where there’s a 10x improvement, and here’s one where we can own that market, and let’s go get it. While hindsight is always 2020, if you look at those three segments that have been absolutely electrified over the last 18 months, my goodness, that Zero to One argument is spot-on for each one of them.

    Alejandro: That’s from Peter Thiel, a great book. For the people that are listening, what is the best way for them to reach out and say hi, Tony?

    Tony Atti: Our social handles are all active. At Twitter, I respond to posts, but LinkedIn, I’m open to invitations, and I’m open to requests @anthonyatti, I go by my humble first name on LinkedIn, and I have inquiries that come in all the time. I really don’t filter. I try and respond to each one. So, either my Twitter handle @anthonyatti, or my LinkedIn profile are the two easiest ways to reach out. Be a little patient with me. I’ve got a lot going on, but I always try and help however I can.

    Alejandro: Amazing, Tony. Thank you so much for being on the DealMakers show today.

    Tony Atti: Our pleasure. Thank you, Alejandro.

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