10 KEYS TO ENTREPRENEURIAL SUCCESS FROM A TWO-TIME ENTREPRENEUR OF THE YEAR OR HOW I CAPTURED LIGHTNING TWICE AND CREATED HALF A BILLION IN REVENUE:
Ten Keys to Entrepreneurial Success by Pat Sullivan founder of ACT, Saleslogix and now Contatta
I was born a salesman and an entrepreneur. I really believe that’s true. Along the
way, others have helped me become better, but the drive, desire and discipline
to succeed at both have been a part of me for as long as I can remember. I was
fortunate to have parents who made me believe I could achieve anything I set my
mind to. I love entrepreneurs. I love being one, I love meeting other entrepreneurs
and I love everything about entrepreneurship. Having twice been named the
Ernst & Young Entrepreneur of the Year, I get asked a lot about what the magic
bullet or secret sauce is that’s allowed me to catch lightning in a bottle more than
once. The answer should be obvious: There isn’t one. If there were, everyone would
be a successful entrepreneur. What I can share with you are some of the traits,
habits and practices I believe increase your chances of success, and without which
you’re doomed to failure (or at the very least, far less likely to succeed!). I hope the
following brings you the same success and satisfaction it’s brought me.
SUCCESS KEY #1.
THE OMNISCIENT ENTREPRENEUR
The first key to being a successful entrepreneur is to know your stuff. Know your product, know your market,
know your positioning, your competition, your message – everything about what it’s going to take to get where
you want to be. Benjamin Disraeli, who twice served as Prime Minister of England, once said the secret of
success in life is for a person to be ready when their opportunity comes. Being prepared as an entrepreneur
means knowing as much as you can. You need to become an expert in whatever it is you are attempting.
How? Study everything. Learn everything. Be curious. Seek knowledge from wherever you can. Then question
everything you read and hear until you’re confident in your knowledge of what you’ve learned. It helps if you
have a natural love for learning, but if you don’t, you better be disciplined enough. What you don’t know will get
you every time. I learned long ago I was not as smart as some, but I knew I could outwork my competitors.
I began my professional career as a salesman. I still am, but for the first 11 years I paid my bills entirely by
carrying a bag and a quota. So, how did I go from being a computer salesman to becoming a co-founder and
CEO of ACT? By teaching myself how to write code, that’s how. I had a pretty good idea that the computers I was
selling could be used to better manage my contacts. I also knew no one had done it yet. So I became my first
programmer. I learned enough code to build the forerunner to ACT!
How did we take SalesLogix from nothing to $108 MM in just 5 years? By clearly understanding exactly where
the holes and opportunities were in the market, and then identifying the most effective and efficient way to get
our product to our customers (more on this in Key #4). We had a crystal clear vision so that nothing was left to
chance and little happened by accident.
In Stephen R. Covey’s seminal work, The 7 Habits of Highly Effective People, his second habit is “Begin With the
End in Mind.” You’ve got to know where you are going and then you need a clear roadmap on how to get there.
(By the way, if you haven’t already read Covey’s book, do yourself a favor and read it. There’s a reason it’s sold
over 25 million copies.)
Now, if after all your study and research, there are still
some things you don’t know well enough, find experts
and mentors who do. I’ve been doing this for nearly
three decades, with more than a little bit of success,
and I still seek out the expertise of trusted advisors and
experts. If you have to, hire them. I was fortunate to
have three great mentors in my life. Now, at 60 and in
my 5th venture backed startup, I found a fourth mentor.
There is always someone you can learn more from.
In my companies I always talk about only employing
“A” Players. Now, I know everyone says that they only
hire the best, and I believe most of them believe they
do, but I’m telling you it’s not the same thing. I’m not
talking about good employees; I’m talking about hiring
In every organization there’s an “A” Team, a “B” Team
and a “C” Team, with talented, valuable people filling
an important role. The bigger my companies got, the
more they looked like other companies with “A,” “B”
and “C“ players, but in the early days, all I have working
for me is the “A” Team. Why? Because to be agile and
still produce a great product in the shortest period of
time, requires the very best talent you can get, in every
position. By the way, if you find you also have a “D”
Team in your organization, it’s time for a reorg because
you need to cut the “D” players loose.
I recently had a talented employee working for us, but
in the end it just didn’t work out. His former employer
quickly rehired him, but asked, “What happened at
Contatta? We’ve never found anyone better than you?”
The former employee, a class act, honestly replied,
“You don’t understand, everyone there is in an entirely
different league. I couldn’t keep up.”
When I say “A” Players, I’m talking about the best of the very best.
You probably can’t afford to pay them what they’re worth, so give them stock options. People want to be a
part of something that is going to change the world. They also want to be part owners. A lot of companies talk
about employees “taking ownership,” but are stingy when it comes to actually putting their options where their
mouths are. Talk is cheap, and in the end, you always get what you pay for. If you’re serious about building
something great, invest in an “A” Team. The result is an agile team that does great work, fast.
There are lot of good businesses you can start and be a solopreneur, but if you are going to do something big, it
takes a team. Assemble the best team that you can afford. The more “A” players you can attract, the better. “A”
players outperform “B” players by a factor of 2-10x, especially tech people like programmers, product designers
and marketing experts. It is often hard to find these type of people much less hire them. But it can be done if
you are good at selling! See #8.
I have been very fortunate to work with many people that were much better at something than I could ever
hope to be. You have to be a pretty secure person to hire people better than you in their specific expertise. You
will learn from them and add to your own experience and talent.
It takes a certain amount of humility to work with extremely
talented people. You have to realize you don’t and won’t have all
the answers. You have to be willing and able to be wrong.
Some arrogant leaders think if they don’t originate an idea it can’t
be good. Or they take credit for one of their people’s great ideas.
That really sucks and is a huge mistake. People need to know they
are valued for their experience and talent. They need to know you
are expecting them to contribute with original and often contrarian
ideas. They need to know you have great respect for them. And if
you don’t have great respect for them, you hired the wrong people.
To succeed in a big way it takes a team. A great team. Trust me, you simply cannot do it on your own!
I am known for having very strong opinions, but I learned a long time ago that my opinion is not always right.
I have been wrong many times. I go out of my way to demonstrate to my team that I know I am not always
right and I expect to be challenged. I can state my opinion very forcefully but then say with sincerity that I may
well be wrong and want everyone else’s view. People who work with me learn that I expect them to make
their opinions known forcefully. Heated discussions can be very valuable as long as everyone knows it’s just a
When I see someone constantly agreeing with me, even though I know they hold a different opinion, I say, “If
you and I always agree then one of us is no longer needed–and I am not going anywhere.” I love to hire strong
people. If I can intimidate someone, they ought to be intimidated. If they are not strong and secure enough in
themselves, they probably don’t fit and need to go.
I go out of my way to get consensus on a significant decision. There are times when I already KNOW the right
thing to do but I’ll still discuss it as long as it takes to get everyone on the same page. I want it to be OUR
decision, not my decision. People need to know they have been heard if they are going to get on board even
though they may think a different decision is the right one. I almost never make arbitrary decisions. There are
times when an unpopular decision has to be made but that should be very rare.
I love it when someone on my team comes up with something brilliant. I am quick to make a big deal of the fact
that it is brilliant. I’m also relieved that a problem has been solved no matter who it is that solved it.
At ACT!, it was my partner Mike Muhney who thought of the name. For months we tried but could not come up
with a great name. It was so frustrating! He got on a plane from NY and said to himself “by the time I land, I am
going to have a name.” When he got home and told me the name and how he had arrived at it, I knew he had
discovered the right name. ACT. An acronym for Activity Control Technology. I added the exclamation point.
At Contatta we wrestled for a very long time about our positioning (see #4). We thought we had built a new and
innovative CRM system. But it became very clear that was not what we had built at all. Everyone we showed it
to said they loved it but “it’s not CRM!” We would ask “well then, what is it?” They replied, “I have no idea.” We
wore out every possible position we could think of. We’d settle on something for about two days and then we’d
all hate it. This went on for months as we were working to finish the product.
Finally one of the co-founders walked into my office and said he had figured it out. He then made the case for
“Collaborative Email.” When he was about halfway through, I KNEW he had nailed it. I was thrilled! Once we
adopted this position, it resonated with everyone inside and outside the company. We had spent two years
reimagining email and the answer was Collaborative Email. I was thrilled that SOMEBODY had figured it out. I
would have liked to have been the one to do it, but it was great that he figured it out!
I recently said to someone that while I get much of the credit for ACT!, SalesLogix and now Contatta, “the great
thing is that I know no single person can take credit for any of them.” It took a team.
The bottom line is, when it comes to entrepreneurial success, knowledge is power. Get it where you can, when
you can, from whomever you can.
ALWAYS HAVE A BIAS TOWARD ACTION
Okay, now that you know everything, know this: you can’t know everything. But that’s no excuse for not acting.
Being a leader means making decisions and taking action. They
should, of course, be informed decisions (see Key #1). If for some
reason you’re in the habit of making uninformed decisions,
please stop reading and close this e-book now. Nothing I write
here can help you succeed if you don’t know what you’re doing. It
seems obvious enough, but it’s shocking how many people fail to
really know their business. Which is why it’s less shocking that so
many of their businesses fail. But, if you put in the time, work and
effort, then you should trust yourself to make the tough calls.
It’s what I call, “being comfortable with ambiguity.” It would be
nice if everything was black and white, but real leadership lies
with what we do in the grey area. And let me tell ya’, there’s A LOT of grey area!
The bottom line is you can’t let problems fester. Sometimes I will let a problem go for awhile as I try to figure
out what is wrong and what should be done about it. Usually though it does not take me long to confront the
problem and deal with it. Fixing problems fast is extremely important. Problems almost never fix themselves.
Say you have an employee, even a co-founder, who just doesn’t seem to be the right fit. It’s seldom an easy
thing to let someone go, but delaying the inevitable doesn’t help them, and it definitely doesn’t help the
company. You need to help that person be successful elsewhere. Be slow to hire, but fast to fire. Like I said,
NEVER let problems fester. Bad fits at a company have a ripple effect on employee morale, company confidence
and performance. If you notice the problem, you can be sure that others do, too. Regarding poor performers I
always say, “The CEO is usually the last one to know.” Dealing with staffing problems not only builds your team’s
“The secret of
success is to be
ready when your
– BENJAMIN DISRAELI
confidence in you as a leader, it also builds their self-confidence as valued employees who are still part of a
And it’s not just staffing issues.
A year into Contatta, my current company, we realized the underlying technology and the user experience just
wasn’t good enough. It was too slow. It wasn’t going to scale. More importantly, we simply couldn’t see how we
could get where we needed to go with the staff and platform we had. Somethings had to radically change.
We could either do the easy thing and continue doing what we were doing and hope for a different outcome (the
definition of insanity), or we could assemble a new team and start all over on a platform that actually could get
us where we needed to go. We chose to start over, and thank God we did! We have ended up with a product that
is stunning in so many ways especially the technology behind the scenes. Despite the success of both ACT! and
SalesLogix, I believe Contatta will prove my greatest success and accomplishment, but it wouldn’t have been
possible if we didn’t have the courage to make the hard decision.
In Good to Great, Jim Collins wrote, “Greatness is not a function of circumstance. Greatness, it turns out, is
largely a matter of conscious choice, and discipline.” In the world of entrepreneurship, indecision is death. To
succeed you have to have the discipline to make the tough calls.
SOLVE FOR AN EXISTING PROBLEM
When I look out over the landscape of new product offerings, what I tend to see is a lot of more-of-the-same,
or a bunch of pseudo-innovative solutions looking for a problem. Maybe that works for some, but I have my
doubts. For me, success in product development has always come from solving for one of my own existing
It was the case with ACT!, SalesLogix, Jigsaw Health, and my
current company, Contatta. Let’s take a quick look at each.
ACT! was never the result of my desire to build the world’s
best-selling contact manager. It was born out of my desire to
be a better salesman. I was selling computers, and realized
I could probably use the very product I was selling to better
manage my contacts. So I taught myself how to write code.
When co-workers began wanting to use it, I knew I had
something. That prototype would eventually become ACT!
(which fortunately did turn out to become the world’s bestselling
contact manager, despite its humble beginnings).
The point is, our problems are almost never our own. When I
solved for the problem of managing my own contacts, I was also
solving for the same problem experienced by salespeople everywhere. On average, people found their number
of contacts went from 50 to 500 after just six months of using ACT!. That’s why six million salespeople paid for
ACT! – a $395 price tag in the late 1980s – out of their own pockets.
SalesLogix was created to fill the need for a real mid-market CRM product. I’ll go into more detail about the
specifics of SalesLogix in Success Key #4, but for now it’s enough to know there was an obvious hole in the
Jigsaw Health, my premium dietary supplements company, along with my
book, Wellness Piece by Piece, were both the result of my personal 30-year
struggle to solve the puzzle of my own recurring chronic health issues. More
than 125 million Americans suffer with chronic illness. I’m one of them. My
search for the supplements that worked best for me led me to co-found Jigsaw
Health, where we now produce the most effective and bioavailable magnesium
supplement in the world.
Contatta is for the nearly 1 billion of us who spend a third of our work week
trying to force email into unnatural acts it was never designed for. We live in
email. I always say that email is the real CRM because it’s where salespeople
spend most of their time. The problem is, email didn’t keep up with all the
changes in how we communicate and collaborate today. Other technology has made dramatic leaps forward
over the past 20 years, but email looks and acts almost exactly the same. So we created Collaborative Email
because it’s the only email actually built and designed for how I communicate and collaborate today. We built it
because it’s the email I want to use.
Necessity will always be the mother of invention, and solving for an existing problem will always be preferable
to creating a “solution in search of a problem” if for no other reason than the obvious – it solves for MY existing
SUCCESS KEY #4.
Somehow “positioning” logically fell into position #4, but know that for me it may be the single most important
key. I strongly believe having a clear and simple statement that describes the one thing that separates my
company from everyone else’s has played a huge role in my repeated successes.
And it almost always begins with getting rid of the word “and.”
Most entrepreneurs believe it’s better for everyone to know everything their product or service does and
provides, but they’re wrong. Trust me, I know, because at the start of ACT! I was no exception. In the early days
you would hear us try to describe ACT! as a “contact database and a word processor and a calendar, and a
report writer, and an expense manager, and it dials the phone and automatically addresses your letters and
faxes, and, and, and…. would you like to buy one please” It was a great product that really did do everything, so
why wasn’t it selling as fast as we thought it should?
Remember in Key #1 when I wrote that if you don’t know
something, find someone who does. Well, that’s what I did,
and when it comes to positioning, Al Ries and Jack Trout wrote
the book. Literally. The first book to really deal in depth with
the problem of how to be heard in an already overcrowded
marketplace, Positioning: The Battle For Your Mind, was all about
how to position your product in the mind of the customer. I’d read Positioning (you should read it too), and felt
the solution to our problem was in its pages. I just didn’t know how to apply it specifically to ACT!.
So I called Jack Trout and few weeks later we were in New York to meet with Jack and Al.
In Positioning it says, “The easiest way to get into a person’s mind is to be first.” It goes on to say that in
advertising it is “best to have the best product in your particular field. But it’s even better to be first.” Fortunately
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