When entering the world of entrepreneurship, it can come with a long list of challenges. Rewarding challenges, but many unpleasant challenges nonetheless. The biggest battle for most would-be entrepreneurs is taking the first step. It may be quitting a job, putting up a website, entering a startup accelerator program, approaching somebody with your first elevator pitch, or simply announcing your new venture to the world and family and committing the dollars and credit you have.
That’s why on today’s episode of the Powderkeg Podcast we bring in experienced entrepreneur and venture investor, Eric Tobias. Eric has started several companies with successful exits to public companies, including Batteries.com and iGODigital.
Most recently, Eric Tobias was VP of Product of Salesforce and Exact Target before being acquired. Today he is a Partner at High Alpha, a venture studio in Indianapolis that conceives, launches, and scales high-growth B2B software companies. They invest in software companies across North America, and Eric serves as a board member with many of these companies.
Along with sharing his entrepreneurial journey, Eric dives in the key factors of what it takes to lead and take the first entrepreneurial steps. Sharing the many challenges that can be tossed along the journey and mean the difference between either startup growth or startup death. Tune for more!
In this episode with Eric Tobias, you’ll learn:
- The massive growth happening in the Martech industry
- Why it’s critical to share your entrepreneurial idea before your ready
- The importance of staying up to date on the latest tools in Martech
- More about Eric’s background and journey through the world of entrepreneurship and tech
Figuring out your next career move doesn’t have to be so stressful. So why not try Powderkeg Matches?
By joining Matches, you’re joining a community of thousands of top professionals in the Powderkeg community to get connected with outstanding people at the hottest tech companies between the coasts. Get matched with great employers, land your next major opportunity, and get started today!
Please enjoy this conversation with Eric Tobias!
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Links and resources mentioned in this episode:
Venture capital firms:
- Eric Tobias (@erictobiasIN)
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Related article: High Alpha’s Big Reach
Eric Tobias 00:00
Don’t get too high and don’t get too low. I think one of the challenges that all entrepreneurs go through is is you know, one day you think you’re going to the moon, the next day you’re going out of business and the truth is always in the middle. And then not worrying so much about competitors, put your head down, go build a great business, and everything else will take care of itself and.
Matt Hunckler 00:31
Podcast, the show that plugs you into the massive opportunities in startups in tech hubs, beyond Silicon Valley that are exploding with potential. I’m your host, Matt Hunckler. And today’s guest is Eric Tobias, an experienced entrepreneur, venture investor and partner at high alpha. We’re going to get into all of that and more on today’s show. But first, what do you like to discover even more interesting companies, stories and strategies to help you reach your full potential, then you can get the full inside scoop with Patrick Higgs hand curated newsletter, The spark delivered to your inbox each week with the tech news and opportunities outside of Silicon Valley that you really should know, there’s tons of opportunity there. And I really want to help you tap into a lot of that. So just go on over to powder keg.com Sign up right on the homepage, and each Thursday, you’ll get an email directly from me with the most important stories, trends, and companies in tech. It’s curated by some of the most connected people in tech hubs between the coasts with insights that you’re not going to find anywhere else. So again, that’s powder keg.com, P O W, D, E, R, k, e, g powderkeg. All one word.com. Okay, today’s guest on the show is Eric Tobias. And Eric is an experienced entrepreneur and venture investor. In fact, he was one of the earliest entrepreneurs that we had on the powderkeg stage going back probably a decade ago, and this fledgling community between the coasts was taking off. He started several companies with successful exits to public companies, including batteries.com, and Ico digital. Most recently, he was the VP of product at Salesforce and ExactTarget, before being acquired. And today, Eric is a partner at high alpha, a venture Studio in Indianapolis, that conceives launches and scales, high growth b2b software companies, they invest in software companies across North America. And Eric serves as a board member with many of these companies. And you may recognize high alpha from many of our other guests on this podcast. Eric is has tons of accolades from being in CIOs 30, under 30, IBJ is 40, under 40, Inc, magazine 500, fastest growing companies many times over. And he’s just a great guy. We recorded this conversation in February of 2020, which was just before the global pandemic, and before we went fully virtual. So it was our last physical event we hosted at powderkeg. And we hosted it at the Vogue, which is actually owned by Eric, and is a historic Theatre in Indianapolis, Indiana. We get into that as well as so much more from software to entrepreneurship, to just growing in your career. And I’m really grateful for this conversation. So without further ado, here’s Eric Tobias. I’m really excited to talk to you, man, because you’ve got an amazing past, I could probably talk to you for this entire time, only about your past and the early days. But can you take me back to your earliest memory of just when you knew you had that entrepreneurial bug.
Eric Tobias 03:37
I was always somebody who had a lot of jobs. Going back to fifth sixth, seventh grade, mowing lawns, cleaning shoes, I mean, I just did all kinds of odd things. The first time I knew that I wanted to be an entrepreneur, was probably in college, when I started doing things around digital work and getting paid for it and realizing that I would do it even if I wasn’t getting paid.
Matt Hunckler 04:06
That if I could figure out how to keep doing that. It’d be pretty cool. And remember your first job, your first digital job.
Eric Tobias 04:12
Yeah, so I went to IU and yeah, go i users, and nice tie into the VOC here. So I got, I got really into listening to live music, and started recording shows bootlegs, they were called back then. And we would trade them on audio cassettes and the way to what is an audio I know sounds like a dinosaur. But the way to facilitate that was through the internet. And so I needed to learn how to code in order to build my website and that you know that that was really how I got into tech and you teach yourself how to code I did Yeah, little notepad and, you know, view source and copy the best and away we go.
Matt Hunckler 04:56
That’s awesome. Well, I know ultimately, you found your way in The marketing technology. Yeah. How did you find your way into that sector, which of course, tonight, we’re going to have almost 400 people here from around the city and around the country to celebrate the awesome marketing tech scene right here in Indianapolis. How did you find your way into that sector? So early on?
Eric Tobias 05:14
Yeah, so right out of school had the privilege of starting a company called batteries.com, which was a ecommerce site that sold specialty batteries, laptops, and camcorders and cell phone batteries. And we started in 1999. And at that point, there was no Google, you know, there were some listings of sites, but but no formal search. And when Google came around, it really opened up everybody’s eyes to the power of being able to attract eyeballs to these digital things. And so in order to build our business, we needed to figure out how to go tell the world that we existed. And we did a lot of early effort to figure out how to run PPC and ad campaigns and all that kind of thing. And in that process, I got really just ingrained in it because it was the intersection of data and creative, and it kind of itch both sides of my brain. And then that led to, you know, a lot of things within batteries.com, around helping guide customers to buy the right product.
Matt Hunckler 06:19
Any any lessons in the intersection between data and creative? I think a lot of people might cringe at that, either on the data side, or on the creative side. Yeah, tell me what that means to you.
Eric Tobias 06:30
Well, I mean, there’s so intertwined, especially today, the you know, everything is optimized. And as we you know, if you look out into the future, you know, algorithms, artificial intelligence, all of that is going to continue to, to make decisions for us or help us make decisions. The piece that I think will always be an important part of the recipe that the computer is going to have a really hard time replicating is that is the creative process. Absolutely. And the creative message, and, you know, visuals and all that goes with it. And it’s been one of the more interesting parts of my career is when you’re internally arguing, well, it should say this, or well, it should do that. And then you actually go and test it and let the data tell you which one’s the winner. You know, inevitably, it’s not the one you thought, right? And so it just kind of reinforces that you got to have both sides working together,
Matt Hunckler 07:28
is there anything that you do, or maybe you did in the past to kind of flex and grow your creative muscle?
Eric Tobias 07:35
Music is is is that piece for me. And then I’m very much a, you know, I have a lot of extroverted qualities, but I’m very much an introvert. And so the piece that helps me be creative, is making sure that I have my life in a balanced state where I have time to rejuvenate and, and spend quiet time and that directly leads me to music, I spend that quiet time, you know, listening and kind of being contemplative.
Matt Hunckler 07:59
While I want to make sure I talk to you more about music and the vote, but I don’t want to miss sort of your big aha, with batteries.com. And how you ended up starting I go digital.
Eric Tobias 08:10
Yeah. So again, very fortunate I was 22, when I started the company and had a lot of people helping me. And over
Matt Hunckler 08:17
was there one person that really kind of helped push you over the edge or gave you that one piece of advice that
Eric Tobias 08:23
probably my father, just encouraging me to go for it. And you know, realizing that that point in my life was a great time to take a risk. So probably he’d be the one but the way that it kind of evolved as we got to working with big retailers, and we had Walmart and Best Buy and those kinds of folks as customers, and I was out to dinner one night with a CMO of Best Buy really great opportunity. And this was in probably 2004. And he said, ironic now 15 years later, he said, Our stores are incredible. We have great salespeople, they’ll help you find exactly what you need. Our online website is like a flea market. It’s just, you know, all these products and nobody can figure it out. Now today, we know that that’s actually been reversed, right? Or certainly on par. Yep. But it was that kind of spark of a comment that led me to think software can solve that the online shopping experience can be better. And that led me to go digital.
Matt Hunckler 09:25
Is there anything you do when you have that spark of an idea to really test it and see like, is this just an anomaly? Or do you just go after it until you hit a wall? Yeah, I
Eric Tobias 09:36
had one last night I couldn’t sleep. And so all day today, I’ve been either writing it down and because if you can’t write it down, you can’t articulate it. And then I just try to tell everybody I can and get feedback and have people say, well, don’t you know so and so’s already doing that or oh my gosh, that’s a dumb idea for XYZ reason but sharing before you’re ready, as Max Yoder says Is, is I think a critical part of the process. And then and then being able to to document it.
Matt Hunckler 10:06
I totally agree. And we’ve had max on the podcast actually twice already. Oh, nice. So he’s been an amazing guest. And I agree on the show before you’re ready peace. Don’t you ever one worry, especially being a venture capitalist, and looking at IP and things like that, if someone’s stealing your idea?
Eric Tobias 10:23
Yeah, I get asked that a lot. Yeah, no, is the short answer. It’s not that ideas don’t matter ideas are really, really important. But the execution is where you know, the money’s made, quote, unquote, you have to be able to understand how to take the idea and get that first customer and then get that second or third and 10th, and hundreds customer. And that’s where the work is done. Also, the, you know, I think there’s so many ideas today that already exists, meaning, the new ideas are sort of derivatives or mashups of existing things where you’re making it better, or you’re using new technology to improve upon the workflow or the system. The idea that we’re just gonna walk down the street and have a original thought that somebody in Seattle or Austin is already working on, I just don’t believe that. And so it’s very much about how do you outwork and out execute?
Matt Hunckler 11:21
Well, and I think a great example of that is just how different the marketing tech space is now than it was back in was it 2011 2012 2012? You got acquired by ExactTarget? Yeah, well, you didn’t get acquired by I go digital got acquired by ExactTarget? What differences have you seen in the landscape? What are some of the biggest differences you’ve seen from 2012? To now in the whole marketing tech space? Cuz I know, You’ve had a lot of portfolio companies in that space.
Eric Tobias 11:46
Yeah, yeah, we do. You know, I think the idea that at that time, social media was still a rising channel, mobile was still thought of as a rising channel. And this idea that consumers don’t think about, that’s the email channel, or that’s the mobile. That’s just how they interact, right. And we live in a world where you’re always on and you’re, you have access through a lot of different places, to brands, that marketing tech has to be able to respond to that, that we need to be able to understand who Matt is, regardless of how you’re coming in, or, or whether you’re a known user, customer, whatever it may be. And, and I think I think that’s a, that was a thought back then I think today, it’s just kind of understood. I think the other big part of it is the level of expectation from the consumer, as it relates to software has gone up dramatically. So when we launched our business at I go digital, we launched it, Black Friday, so the day biggest shopping day of the year, and we were startup and the user experience I’m embarrassed about I mean, it was terrible. No way when that happened today, a, you know, the customers are more educated, the retailer’s, more educated. And we’re all using software so much more, that if an experience doesn’t match our expectation, there’s so many options, we just give up quicker. So the as it relates to early stage companies, your MVP has got to be better. As it relates to ideas, it’s got to be more thought out. And as it relates to funding, you know, it just takes more to build companies these days.
Matt Hunckler 13:26
Yeah. Well, and talk to me a little bit about that, because you’re in a very different phase of your life now than last time you did a fireside chat back in 2011 2012. whenever that was, talked to me about that shift. Are you in a different headspace entirely as a VC than you were in the CEO role?
Eric Tobias 13:46
I definitely don’t like to refer to myself as a VC. Even though that is what I do. But we are still operators, you know, Mike, Scott, Christian, and I and all the team at alpha, we’re building companies day in and day out. That’s what’s unique about our model. We’re both a studio Anna, and a fund. And I continue to have great empathy for entrepreneurs. Because I face a lot of those challenges every day myself, how are we gonna get the next customer? How are we going to build this product? How are we not gonna run out of money? I think the thing that is different is through the Igo digital experience, and then spending time at Salesforce. I have had a peek on what it looks like to achieve scale. And it’s no longer scary. In fact, it I’ve embraced that ambition level of if we can do it one time, we can do it lots of times. And I think entrepreneurs need help. If nothing else, just coaching and talking through that and reinforcing that they’re doing the right things and helping them stay in the lines. And so a big part of what I view my role now as a VC is is not only to apply the experience that I had, but also apply the mentality that that that maybe was missing, or that could have been stronger. When I was an operator myself,
Matt Hunckler 15:05
what’s one of the most frequently given pieces of advice on operator mindset?
Eric Tobias 15:12
Yeah, don’t get too high and don’t get too low. I think one of the challenges that all entrepreneurs go through is, is, you know, one day you think you’re going to the moon, the next day, you’re going out of business, and the truth is always in the middle of it, and then not worrying so much about competitors, put your head down, go build a great business, and everything else will take care of itself. And don’t get hung up in the minutiae of of what others are doing.
Matt Hunckler 15:36
Yeah, that’s, I mean, that’s great advice. What are you most excited about right now that you’re you’re seeing a lot of different companies, a lot of different ideas. What are some of the spaces or sectors that you think are going to be the biggest growth opportunities, whether it’s an investment or starting a company, or existing companies extending their offering? Yeah, into that space.
Eric Tobias 15:56
I mean, gosh, there’s so many, but a couple of things come to mind. We worked on a sprint week last week, which is our process of high alpha for new company creation. And I was reminded that a company like MailChimp, everybody’s heard of MailChimp, worked with MailChimp, MailChimp, is about an $800 million business serving kind of small to medium sized businesses. MailChimp was started in 2001, that’s 19 years ago, and the technology that runs that product and that business. I mean, Mizel been 1801. I mean, if we the world has just changed dramatically. And so why do I bring that up? Well, there’s there’s all kinds of opportunity to disrupt existing categories, existing businesses, with the latest and greatest. So that’s kind of one line of thinking. And then the other is a totally different line of thinking, which is, what are things that we don’t even think about or utilize or imagined today, that we know will take place and AI is such a big part of that. We have an amazing data science team at high alpha working on the next set of innovations on, you know how computers can help us as humans do better in our jobs. It’s not to replace humans, it’s more to help us make decisions faster use data in ways that we weren’t otherwise able to. And that will provide a whole new set of tools for us as knowledge workers, day in and day out.
Matt Hunckler 17:22
I love that you brought up the fact that new technologies like aI just open up entirely new categories. In fact, this week’s podcast was with Mark Klerk. And from who runs your data science don’t. He was phenomenal. He was our last live podcast guest as well. Tell me a little bit about your take on people who work at software companies are who work in tech, how in depth? Do they need to be staying on top of some of these new technologies? You know, even if they’re not a software developer?
Eric Tobias 17:50
Yeah. Yeah. I think always having a working understanding is really, really critical. And it’s hard because stuff is coming at you all the time. I have trouble keeping up. I’m sure. Everybody,
Matt Hunckler 17:59
what are your go to Resources?
Eric Tobias 18:01
I read a lot of route a lot of blogs, subscribe to a lot of email newsletters, trying to carve out time for learning is really important. Are there
Matt Hunckler 18:10
any ones in particular that you’re like? These are consistently good? Are you kind of like a grazer? And you see something that looks interesting and you go deeper.
Eric Tobias 18:18
I’m a grazer, me too. Yeah. I’m a grazer.
Matt Hunckler 18:20
I’d love to tell you. This is the one Yeah. But I was like to find a new field, the Grayza two, which is why I asked Yeah, if you had any new Yeah,
Eric Tobias 18:27
check. I’ve recently gotten into with voc venture a lot of business music. Oh, interesting writing and that that’s interesting intersection, because there’s a lot of tech disruption going on Absolutely. In that world. So yeah, I’m a grazer.
Matt Hunckler 18:40
Well, so talk to me a little bit about the music business. I obviously, there’s been a thread throughout your life that has been a creative outlet for you. Now, it’s also a business outlet for you as well. How did you come together with some other entrepreneurs to buy the Vogue, which has this awesome history? Yeah. How did you decide to make that plunge?
Eric Tobias 19:01
Thanks for being here. It’s fun to have everybody here at the Vogue. So Scott, Craig and I have known each other a long time went to high school together and spent a year at Xavier together and been just really great friends, co founder of Moby right, co founder, Moby. So as he was building Moby and I was building batteries.com. And then I go digital, and we’re just we’re, we’re kind of business acquaintances and friends. And one night at the Hi Fi, we said, hey, wouldn’t it be amazing if someday we owned, you know, a music venue. And then Scott was working with Andrew Davis and they had been comrades at Moby for, I don’t know, five, six years. And Andrew kind of stumbled upon the fact that the Vogue was looking to make a change. And, and I was fortunate enough to just get the call from Andrew and Scott to say, Hey, do you want to you want to do this and it’s been such a special partnership to work with those guys and then to inherit, what is, you know, frankly, didn’t know what a city treasurer was Yeah.
Matt Hunckler 20:00
Tell me a little bit about it. What’s the story of this place? Knowing that we probably only have about 510 minutes left, but yeah, what are some of the? What’s the arc of the vote? Because I mean, it’s been movie theater, right? At one point it was maybe not, not G rated,
Eric Tobias 20:17
not G rated movie theater, G rated movie theater. Yeah. If These Walls Could Talk,
Matt Hunckler 20:21
but also like Willie Nelson is played here. I remember when Snoop Dogg was coming through here.
Eric Tobias 20:27
Oh, yeah. Yeah, we’ve had some amazing artists on the stage. And hopefully that trend continues. Built in 1938. Wow. One of the first movie theaters I think was the second movie theater in Indianapolis. No kidding. And, and went through a transition. And you kind of fast forward to modern times, it’s been a nightclub. It’s been a concert venue, it’s kind of going back and forth as as music trends have changed. And as broad ripples changed. What I love about it is it serves a lot of different audiences with a lot of different genres and a lot of different types of events. And I think that popery is really interesting. You know, one night, we’ll have a bluegrass band The next night, there’s a rap artist, we had eSports, in here last night, we’ll do movies every Monday, kind of back to the original roots, a lot of private events, or companies are doing, you know, corporate retreats or off sites. We’re just trying to get the community in here. And what one of things we’ve heard in this journey is, is gosh, I haven’t been here since I was, you know, however old. And I think people forget about the VOC. Yeah. And we’re trying to, you know, talk about marketing and marketing tech, we’re trying to use a lot of the tools out there to remind people that we’re here.
Matt Hunckler 21:40
Very cool. Well, and I know, we’ve had this, I think, our third event where we had 300 plus people coming in, thank you for marketing tech. And thank you. I mean, it’s an amazing venue. Your The staff here is amazing. Yeah, they are. And I’m curious, you know, you’re bringing a lot of this marketing technology to the music world, in the venue world. Is there anything that you’re learning in the music, business and venue business that you’re taking over to what you’re doing at the high alpha side?
Eric Tobias 22:07
Yeah, great question. Yes, I think the, the one of the risks we run in all software companies is getting away from the actual customer who’s using the software. And one of the great experiences about this, this journey, for me has been getting back to being a user of software, and seeing the pain points that everyday businesses, especially the size of the Vogue, go through when trying to go through a digital transformation. When we got here, everything was done on paper. And we’ve been going through the process that many, many companies are going through of trying to modernize and use technology to be a differentiator and to be an advantage. Well, that’s not easy. And a lot of software companies today take for granted that their users understand how to make that leap. It’s really informed me of the need to have services accompany the software, especially at the early stage. And also to really focus on that onboarding experience of new customers and new users to hold their hand a little bit through that process.
Matt Hunckler 23:10
As a VC, do you ever cringe when you hear a software company has a services arm? No,
Eric Tobias 23:14
I don’t I don’t know you’re not a VC or not? I don’t I think I think the mistake actually is is shying away from it. Okay. Once you achieve scale, it’s super important to have, you know, the blend of product and services figured out but at the early stage, it’s so messy. You just got to make customers successful. Yeah. And oftentimes, the best way to do that is augmenting the software with people.
Matt Hunckler 23:39
That’s great advice. My last question for you is, what are you most excited about for Indianapolis right now? I mean, you’ve got you grew up here, you started several companies here. You’re still starting companies at high alpha investing in new businesses. What’s your greatest hope for this community that’s here tonight and out there and broader pool?
Eric Tobias 23:59
Yeah. I said this to an entrepreneur earlier today, who was asking for feedback on a on a pitch. We’re so humble, it’s probably our greatest asset. It’s also as most things in life, the things that are so positive, have a dark side. And the dark side for us is that humbleness can limit our ambition. It can limit our ability to think big at times, and to feel like we belong on any stage. My wish for the community is to see themselves, like others, frankly, see us. We have people come in into high alpha every day, from both coasts, and frankly, from all over the world that say the stuff that’s going on in Indianapolis is incredible. The companies being built here, the technology seen the innovation, the quality of living, I mean, there’s so much to like about what’s going on. And I think we have a tendency of being like whoa, shucks, of course, no, this is amazing. Like it’s amazing, plus Ace and have a little bravado about that and to not apologize for that. And then translate that out into the business world of let’s go build some amazing companies. And why shouldn’t it happen right here in Indianapolis?
Matt Hunckler 25:12
I love that. That’s a great question to end on. This is a great night to celebrate and take Eric’s advice and share some of the stories you hear tonight. From Eric from the other entrepreneurs you’re going to see here on stage. It’s going to be a great evening. Thank you all for being here. And thank you, Eric, for sharing your story. Thanks for having me. Absolutely. That’s it for today’s show. Thank you so much for listening. Also, a huge thank you to Eric Tobias of high alpha, make sure you go check him out at high alpha.com. And for links to Eric’s social profiles, and the other people, companies and resources mentioned in this episode, you can head on over to powderkeg.com and check out the show notes there. And if you’re currently in the market for finding a new role powderkeg can connect you with some awesome tech companies between the coasts that are growing like crazy. Right now you can apply for our free matches firstname.lastname@example.org slash jobs. Matches has a specialized focus on tech hubs outside of Silicon Valley so you can easily navigate this opportunity packed landscape for potential. Our job matching platform leverages 1000s of participants, employers and teams within our ecosystem to get you connected directly to decision makers shortcutting, the hiring process, apply today for matches at powderkeg.com/jobs. And to be among the first to hear about the stories and entrepreneurs, investors and other tech leaders outside of Silicon Valley. Subscribe to us on iTunes and powderkeg.com/itunes. I would be forever grateful if you left us a review. And if you have already. Thank you so so much. I’ll look for those reviews and we’ll catch you next time on powderkeg podcast