43. How Losing $750k Led Justin Hatch to Build a Successful Software Company
Whether it’s starting a business or investing in stocks, our endeavors often come with risks. According to the U.S. Bureau of Labor Statistics (BLS), approximately 20% of new businesses fail during the first two years of being open, 45% fail during the first five years, and 65% during the first 10 years. And as much as 90% of people lose their money in stock markets (Source: Research & Ranking).
These statistics may be discouraging, but risks can yield a big reward too. For example, when Whole Foods Market was created in the 1980s the United States had less than six natural food stores. There wasn’t evidence that there was a large market for natural and organic food. Despite its rocky start, Whole Foods was able to become the industry-leading grocery-store chain for healthy food (Source: Washington State University). Whole Foods Market now operates 472 stores worldwide with a net income of $245 million (Source: Statista).
“The biggest risk is not taking any risk… In a world that is changing really quickly, the only strategy that is guaranteed to fail is not taking risks.”
-Mark Zuckerberg, CEO of Facebook
Justin Hatch has taken some risks in his career. Some of them have panned out while others didn’t. However, in both failure and success, he learned from the chances he took, and he used the lessons he learned to create a successful business that helps others understand their endeavors and calculate their risks.
Justin Hatch was a VP for Profire Energy. and helped take the company from 4 employees to 150. He was the CEO of Strategy SMB, an idea development and business planning software company. Justin is now the CEO of Reach Reporting, a software made to absorb complexity and simplify financial reporting. He believes there are innumerable unsolved problems the world contains, and there are equally as many people that are looking at those problems with questioning eyes. In addition, he believes in finding and pursuing your passion.
The Cost of Not Understanding the Information We Have
Here are two experiences Justin had that led to creating Reach Reporting.
1. Trying to be Everything for Everyone
Growing up, Justin, like many entrepreneurs, was the kind of person that didn’t mesh well with school. He struggled with focus. He struggled with the system, and because of that, he didn’t plan to go to college. So after high school finished, he wasn’t sure what to do. He was given a lot of counsel and advice, but one piece stuck with him; he was told that he should start a business. Justin took the advice to heart.
He knew how to paint, so he started painting apartment buildings. It was grueling work, but it was a lucrative job. He was able to support his young family on the salary it gave him. Over time, people started asking him if he knew how to do other services like repair drywall. Justin usually answered, “No, but I can figure it out.” He bought tools for tasks that weren’t part of his business, and he spent far too much time and money trying to learn how to do these other odd jobs. He could barely make ends meet. It wasn’t a very good business strategy. Because he didn’t have a firm hold on his spending, he was never able to have more than just barely enough.
2. Losing $75k in Stocks Every Day for a Week and a Half
Not long after, Justin was approached by an oil and gas company. He worked as a VP for them for several years and helped them reach the next level in their business. At the end of 2014, he felt like he didn’t fit with this business anymore, so he resigned. He and his wife had some money saved, some stock options, and some equity, so they had enough cash to build a little business.
After about a year, they lost a lot of value in stock after it plummeted. Justin spent many sleepless nights watching the stock drop. He was losing $75k a day for about a week and a half, and he ended up having to pay just under $400k in taxes. He realized that other people are losing money and don’t have a firm grasp on their financials too, and he wanted to help them.
Creating a Business to Prevent Others from Experiencing the Same Loss
After this loss, Justin started thinking about what things would have really helped him as a 22-year-old entrepreneur. He realized that if he could have understood the information he had about his finances, he would have been able to make better financial decisions. He brought in a partner, and they started brainstorming ideas for a business, wondering if there was a market for a business that could help, not only young entrepreneurs like Justin but all kinds of business owners. This brainstorming session would eventually lead to the creation of Reach Reporting.
Reach Reporting became something that solved a problem for people that brought them pain, and it solved it in a way that enabled them to be so much more successful. Their goal became doing anything they could with financial reporting to make their customers more successful and to help them grow their business.
“Ignorance is not a bad thing but it is a thing that we need to recognize. We are so much more powerful if we can understand how ignorant we are of something.”
Reach Reporting is a dashboard and reporting system that gives businesses the ability to see and understand their data in a way that is unique. Reach pulls the data out of the accounting software and applies it to a series of reports and dashboards.
If you’re looking for a deeper understanding of your business, you can use Reach to help you. Maybe you don’t understand the balance sheet as well as you’d like to or you want to have a deeper understanding of it. Reach Reporting’s goal is to absorb complexity so that the customer doesn’t have to. They connect to the accounting software you use, pull the data, aggregate it, and put it into beautiful reports and dashboards. You don’t have to lift a finger unless you want to. Their customers have built incredible reports with this software.
Justin’s Advice on Enduring when Our Endeavors Fail
Justin went through a lot of hard times on the journey to creating Reach Reporting. Most of us have a long road before we reach success, but we can’t give up. Justin believes that there is something in each of us that we can do that nobody else can. The key is to recognize what two or three skill sets we have that can have a dramatic and meaningful effect on an industry, market, or person. It’s going to take grit, a good mindset, humility, and a strong work ethic, but we can make it through hard times and accomplish our goals.
“Everything can be taken from a man but one thing: the last of the human freedoms — to choose one’s attitude in any given set of circumstances, to choose one’s own way.”
-Viktor Frankl, Austrian neurologist, psychiatrist, philosopher, author, and Holocaust survivor
Make the Customer the Hero
According to Deloitte and Touche, customer-centric companies were 60% more profitable compared to companies that were not focused on the customer (Source: Building a Story Brand). People don’t trust what companies say about themselves anymore, but they do trust what customers say. We can seek customer testimonials to not only boost our confidence in our products and services but also to share how customers have used our products and services with potential customers. When we focus on what our customers have done, it makes them the hero of the story and shows potential customers that they can be the hero too.
Thank you Justin for sharing your stories and secrets. Here are some of the key takeaways from today’s episode that stood out to me.
1. We can utilize tools such as Reach Reporting software to understand our business and make informed, data-driven decisions.
2. After we’ve gone through hard times we can use the knowledge we’ve gained to help others in similar situations.
3. Realize and accept that the road to success is going to be a long one.
4. It’s going to take grit, a good mindset, humility, and a strong work ethic to endure hard things.
5. The more knowledge we have the more we will be able to assess the risks before us and make informed decisions. No matter how much we know we can always learn more.
6. Make the customer the hero in your storytelling.
7. Seek testimonials from our customers. Not only do they boost confidence in our products and service, but they are also great for grabbing the attention of potential customers.
Connect With Justin
To learn more about or connect with Justin and his company, please visit: https://www.linkedin.com/in/justinwhatch or
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