Katie Patterson Speaks of Failure and Success. Mostly Success.
"I am not an entrepreneur who was born destined to be one. That is definitely not my story," revealed Katie Patterson, CEO and Founder of Happy Medium and Happy Boards, and Square One DSM Executive Director Mike Colwell's interviewee for the July edition of Startup Stories. In fact, when she did begin this now highly successful and rapidly expanding business, she had it in mind to be a one-woman shop. That idea was left in the dust and is quickly disappearing even further over the horizon with her current staff count at 22.
Happy Medium Takes Off
Landing in Greater Des Moines (DSM) in 2005, Patterson worked the advertising game from both the agency and media side before, in 2011, a client asked her to come work for them. Instead, she went independent, envisioning herself a contract media consultant for this sole client. The client list grew however, as did her company and the rave reviews.
A New Idea
In 2015, while moving into a new space, the idea for Happy Boards found its way into her thinking as a solution to her desire to provide a digital welcome to clients. Seeing the ubiquitous flat screen TVs, that now don the walls of businesses everywhere, as an opportunity for something more than a regurgitation of CNN or ESPN, Patterson hit on the idea of module based customizable content that could serve both as a digital welcome and as an internal culture building messaging system.
"We were really solving our own problem," explained Patterson of an approach that birthed Happy Boards, but also largely defines the team's approach to development. When several clients embraced the solution Patterson's team had developed, Happy Medium had its first subsidiary and was expanding into the product world, replete with software and hardware components. "I guess I'm not real good at implementing business plans," she confessed with a smile. In five years, her one-woman media consultancy is now a 22-person team incorporating the full spectrum of advertising services along with software development and now partnering internationally to provide the necessary hardware for the Happy Boards software-as-a-service.
Asked if she could share any failure stories, Patterson shot back, "You mean today's failures?" If you're not failing, you are not trying she argued, echoing a mantra all true entrepreneurs know well.
"It's still shooting an arrow into the wind," she said of an aspect of business that often trips up entrepreneurs, particularly those who never intend to have employees. However, the process is much improved at Happy Medium from its earliest days. "I was terrible at it the first two years," she admits, but explains that a process involving a series of interviews along with a skills challenge has helped immensely. "There really is no right or wrong response to the challenges. It is more about how you execute," she explained adding that cultural fit and skill set now weigh almost equally in the hiring decision.
A concept clearly meaningful to this young CEO. The entrepreneurial character of all the team members along with the creative focus regardless of position was a subject mentioned more than once as a part of the businesses success model. Utilizing Trello for account management and Slack as a means of virtual conversations, the team has recently implemented a policy of unlimited PTO and abolished office hours. An experiment that to date has proved successful.
"Some of the best advice I got was hire what you're not great at and do what you love," she said by way of mentioning 'Accounting Kevin', her long term accountant with whom she works very closely. But not being a numbers person by nature is no excuse for not understanding your financials she warns those who might want to do so. "I look at our financials every week," she explains, "and while it is not my strong suit, I can tell you down to the penny where we stand."
Bootstrapping and Borrowing
As might be expected a business that started as a contract consultant required no funding rounds and Patterson managed to bootstrap her way through the extensive growth curve by not paying herself the first few years. Now flush, but moving into the product world with a need for inventory, as well as courting some very large clients that will typically involve a 120 day or more turnaround from purchase to sales revenue, she is confronted with having to consider a line of credit and her first debt load. "Accounting Kevin tells me it is normal, but I'm still thinking about it," she admits.
Sales, Both Kinds
Asked about a sales force for Happy Boards, Patterson sees a different approach. "Although you can buy our product directly, where we are much more going to market is through third party sales," she said. With AV companies coming to Happy Boards asking to be resellers, and they being a natural ally as they install and maintain the flat screens in corporate offices, it seems a natural win-win. Other ad agencies also seem likely to serve as a reseller.
And then there is the question of an exit. While she declined an earlier unsolicited offer to sell Happy Mediums, and Happy Boards seems destined to stay within the fold, Patterson sees her creative team solving more problems through product development, and those could be sold at some point.
Sound insights from this reluctant entrepreneur and CEO of Inc. Magazines choice for 2105's fastest growing company in Iowa.