Mike is a serial entrepreneur. His story is about persistence, patience, and passion. Where many fail, Mike succeeded by never giving up. This is a true mark of an entrepreneur. His persistent optimism is contagious. I hope you learn some great lessons from his story.
Michael Hatch has been in business for about 40 years. He started as a board artist in the design side of the business which eventually led to the exhibition industry. He successfully owned an exhibit design and production company in the D.C. area. He later sold the business and took the profits to invest in A2Z, a technology company, that produced software for exhibition management. He leveraged knowledge of exhibit at A2Z for 10 years before joining Pat, a former IT director at A2Z to start Fantail Technologies. While at A2Z, they both serviced 70 for the top 400 exhibitions in America.
What value did you see in Fantail when you became involved?
Pat (Mike’s business partner at Fantail Technologies) asked me to see what he was doing. He had started to specialize in open source and cloud based software. He specifically looked into Salesforce because that’s what he used at A2Z.
I can see that cloud technology and open source has clear advantage over the solutions we produced at A2Z. We have recently gotten many large clients that see the value in what we provide.
Even though we are servicing events and exhibition industry, they are really offering cloud based and open source stack of products and services that cover a range of needs.
I was in my early 20s and had just gotten out of the Navy was married. When the company I was working for got closed, I was hit with hard times. I started as a board artist, but essentially I did sales because I learned was better at that.
I went into business for myself. The advantage I had working for myself was that I could do things as slow as I needed to. I just hustled during the day to get business and did the production work at night.
I had to become an entrepreneur out of necessity. I read and learned what I needed to. Eventually a client asked me to come work for them, a very large advertising and marketing agency, and they were doing a lot of exhibit work which interested me. I tried it out. If it didn’t work out, I could always go back to working for myself.
I spent 5-7 years there and worked my up to a Vice Presidency and Partnership. I left them and went to Holiday Inn to their event corporate marketing program. What interested them in me in Holiday Inn’s program was it was very entrepreneurial. It was a self funded program. When I came back to D.C. I went into business again with 5 other business partners which I owned for 17 years.
In the beginning it wasn’t easy. The first year I worked for myself was very hard. We had a new born. We were essentially on food stamps. My wife had left her job. I happened to come across a classified ad in the post.
“Make your own hours.”
I could work there and then work on my projects afterwards. It was a shop that allowed me to do their work at a cut rate and then spend the rest on my business. It was rent free.
They had a full shop for constructing boards which I was able to utilize in doing the work. At first they gave me 75% of my business and then later as I became more proficient at getting business on my own, they were still providing 35% of the work I was doing.
Do you think that other people do the same thing in hard times? Do you think starting a business in a recession is a good decision?
There are some patterns that I generally see. There is a natural inclination in a recession to do a few things when someone loses their job. Some people can become independents.
Almost every small business runs into a wall after 5-7 years. I have seen so many examples where they have grown so much that they need a lot more resources in capital investment. A lot of small businesses if they have two or three bad months go out of business.
From what you have learned, what would you have done differently?
Mike hesitated to answer this question, but you’ll see later that he learned from mistakes that someone else made and incorporated the lesson into his own business.
What type of sales person would you classify yourself as?
I am a sales engineer. In the exhibit business it was a consultative sale. Technology is not something I understand easily. A lot of things just go over my head. I can identify what the client needs and requirements are and then making sure they get what they need.
I continuously build relationships. Relationships are important, even more so in the consultation side. They have to have a lot of confidence in a relationship to pay $200 per hour.
Did you have a low point in business where you wanted to quit?
In the middle of that 17 year run of my business, I had to bring all my staff together and apologize to them. I told them that I couldn’t pay them because I was out of cash. I let 14 people go. The next Monday I started up again and worked for no pay for 3 months.
Then 6-7 years later I decided that I didn’t want to do it again. I woke up one day and said I’m done. I signed a contract with someone to get the company sold. He couldn’t sell it in 7 months. I took it off the table. I then found an opportunity to sell the company to another company.
I was at the lowest point business when I was firing everyone. I also owed a lot of money. I started all over again because it was better to pay that money back working for myself than working for someone else. The pipeline was there, we just weren’t producing. The problem was bad management. I was the bad manager.
How did your business do the second time around? What changes did you make?
When I restarted the business, I wasn’t going to spend a dime on something that wasn’t absolutely necessary. This time around, we also invested in technology. At that time, the digital ink jet system was the latest technology. That technology worked for us for 3 years.
Technology is a mystery. It’s not something I understand. There is a lot of risk involved. Back then new technology was very expensive so it was a huge investment that eventually paid off.
How is working with a business partner who is a co-equal?
Ive been married for 42 years. Working with a partner is like a marriage. We have to make compromises. Sometimes, you don’t like them, or that’s what you feel. Sometimes there are financial problems. It’s very much a give and take situation. There some days where it’s not easy at all.
For 17 years I was the man in charge. When I started working with A2Z, I had to work with different personalities. The person I sold my business was a jerk for a lack of better word. He did crazy things that ended up on the front page of the Washington Post.
In situations where there are crazy personalities, I have been able to step back and watch things as they are.I can’t control how other people act, but I can control how I re-act. That’s a lesson I learned from my wife.
Being a partner is hard because you just can’t just walk out. If you work for someone you can quit. For someone who’s young, or hasn’t been married, its hard to understand how to deal with partner.
Even though partnership is an act of co-creating. There has to be someone that has the final say however. Having been in business for myself I’ve been in control and been in no control. When I worked for A2Z, as 10% owner, I was able to be a good ‘number two.’
Do you have a general direction where you want to take Fantail Technologies?
Yes. It’s evolving. We were looking at what has worked and what hasn’t in the last year. Coming from a particular industry, the events industry, and having solutions like Salesforce and Google has expanded our universe.
There’s a little story that I got from someone about “focus.”
“It’s little bit like the Serengeti. If you are like a lion out there, the place has a lot of food. But you can starve out there. If you can’t find that gazelle, then you can’t get food.”
We have decided not to actively go for business around the United States. We are concentrating our efforts locally because D.C. has enough business here. We’ll take business reactively from other places, but are proactive locally.
If we can convince the people in DC/MD/VA area, that we are the best thing since sliced bread, then it doesn’t matter if we are global or not. We’re going after low hanging fruit. If we do that business. That will lead to the other business.
What has been your most satisfying moment in business?
When I left my position at A2Z last year with a nice capital gain, it felt really good. In the exihbit business, we delivered a 200 foot island exhibit that was a huge deal.
Actually a side story about the exhibit. I had someone working for me who had just gotten out of college. She was designing 10 foot exhibits when I gave her the project. I told her that if she did a great job on the project, I’d give her a bonus. She met the challenge with full force and was able to deliver a masterpiece.
When I told her that everyone loved the exhibit, she asked if she could use her bonus to fly out to the exhibit to see it. That was definitely one of the greatest moments. The satisfaction of seeing it complete and the satisfaction of seeing someone develop professionally and do something great.
Who or what has been your greatest inspiration?
An early partner. John was the early customer which helped me get started. I learned a lot from him. I eventually stopped working with him. He was almost like my dad. From a business stand point I learned a lot of business principles. He was a mentor that I could ask any questions I had.
If you were conducting this interview, what would you have asked?
The one I would ask is what you asked earlier. What’s the biggest mistake you made and what would you have different now?
Remember I told you about how I got started? The company I used to work for was in deep trouble with the IRS. They couldn’t pay the payroll taxes to the government so they lied. It eventually caught up to them.
When I was running my business for the first time, I had to fire everyone because I couldn’t pay the payroll taxes. I told myself that if I could not pay the government their due, that’s when I would shut down. There’s no reason to break the law.
If you were in my situation?
If you can get outside investment, I would suggest that. It’s hard to start with nothing. When I went into business with my 5 business partners, I had access to work, and a line of credit.
I was asked to invest equally into the business to have “skin in the game.” When I had half the money, I was loaned money from one of the partners, and went in. I eventually bought out everyone else. I couldn’t quit my job at that point, so I needed revenue. It’s different when you have a family, a mortgage, and expenses.
I understand that you had to figure out the idea before you could put monetary resources in building the idea. However, for us, we have the skill sets to make it happen and our only capital investment is our time. Do you think I need a business plan?
You need a business plan. Let me ask you a few questions.
Do you need a resume?
Do you need a business card?
Do you need a business plan?
The thing the business plan does is that it forces you to think through the ideas. The business plan will come up again and again. You may have it all in your head, but other people will want to see it.
It’s a big deal to be able to share it with your staff, maybe for a loan to a bank.
Find yourself a mentor. Having one definitely helped me.
I was very grateful to have had the chance to interview Mike if only to have further vindication that entrepreneurial success is possible in very harsh circumstances if one has the drive. Mike and I met through LinkedIN. He was very eager to get on the phone with me and talk about his business. Mike’s company and what Anant Corporation, where I provide professional services have a lot in common. My initial reaction was to see Mike as a competitor, but it turns out that their company does exactly what we want our channel partners to do in the future as we develop products. I will be talking with Mike in the future to publish an article on his industry.