AZ Tech Podcast
AZ Tech Podcast
Pat Sullivan, Founder & CEO, Defendry
Pat Sullivan has built several successful companies in his almost 40-year career as an entrepreneur. One of his biggest successes was ACT, the very first CRM software. With his newest venture Defendry, Pat is trying to literally save lives by using AI and drones to reduce the number of people killed in mass shootings. Even though the pandemic brought Defendry to a screeching halt, Pat says he'll do what he's doing until he's in the ground. In this episode, Pat shares some of the most important lessons he's learned in his long career.
Watch the interview on YouTube: https://youtu.be/_N1924ec8YM
Hamid: I'm here with Pat Sullivan, founder and CEO of Defendry. Hey, Pat.
Pat: Hamid, it's great to see you, as always.
H: Likewise. So Defendry is your current passion, the startup that you're working on most recently, but you and your co founder Mike Munie invented the CRM space, the CRM industry with the first contact management software called Act.
P: Right.
H: You were a huge part of that.
P: Right.
H: You sold that and started another CRM company, Saleslogix, which went public, right.
P: Correct.
H: So, amazing, pedigree background. You're like an Arizona founder legend, startup legend to a lot of founders here. Where do you want to start? Do you want to start with Defendry?
P: Yeah, if that's where you'd like to start. That'd be fine.
H: Yeah, let's get a scoop on Defendry and what you've been up to. And then we'll go back and forth on your history.
P: Well Defendry really came as a response to me looking for a way to utilize software that we had built, a product that we had built called River, which, unfortunately, we were late to the party versus Slack, and now MS Teams. And it was clear to me that there was no way I was ever going to build a big business there. So I looked for ways to utilize a lot of the technology that we had built there. And I just so happened to meet a guy who had been asked to help figure out how to raise money. He was building a, an AI platform, and one of the things that he was doing or was trying to do was to build the ability for artificial intelligence to recognize weapons. Okay, so that was kind of my introduction to the whole AI world. And obviously, in trying to figure out how to help him raise money, I came to understand, you know, what he had and how we might talk about it. And one day driving, actually to Flagstaff, and it hit me that one of the ways we could use the technology and River, which had a lot of alerting, and notifications, and chat and communications back and forth, was to marry it with what he was doing with artificial intelligence. And basically the idea came all it, you know, full blown sentence really. The idea was why couldn't you use artificial intelligence to recognize a weapon of someone approaching like a school, immediately lock the doors, call the police, and launch drones as the first responders? And so we set about doing that, and within two weeks or so we had built a prototype of it actually doing all those things. And I mean, it was a prototype, right? You know the difference, but we proved we could do it. And on the basis of just that demonstration, we raised a couple million dollars. And we're off and running. And we delivered the first three elements of that, which is the recognition of the weapons, the locking of the doors through access control, software command saying locked doors, right, and calling the police. So we actually managed to get five installations done before the COVID lockdowns and unfortunately, for us, the COVID lockdowns were just a terrible thing. We went from rocking and rolling to literally coming to a screeching halt. I've never seen anything like it.
H: Yeah, it's it's interesting, because COVID affected different businesses in different ways. Some of them, you were just mentioning, your other company, Jigsaw saw a huge increase in sales, and then some just completely destroyed as a result. So the idea behind Defendry is super interesting. Use AI, detect a threat, essentially, and try to prevent that threat from being able to carry out its mission.
P: Right.
H: So by by locking doors, calling police, what did the drones do in that scenario?
P: Well, the drones, you know, was kind of a wild, really out there idea. But police take eight to 12 minutes to arrive once someone has called 911. And often that can take minutes after a shooting starts before anybody thinks to call 911 because they're either running, hiding or fighting.
H: Right, right.
P: So it just, I had actually read a book about drones, a fictional book about kind of the future of drones. And so it was fresh in my mind. And I said, why wouldn't that be the most ideal first responder that you could have? Drones sitting in perches, ready to be charged or are being charged, ready to be launched with a command. The technology behind drones is off the charts, they can find their way to a location totally autonomously. You won't run into a person, or a wall, a ceiling. They can find their way to that location multiple ways. And imagine if you're a shooter and four or five drones fly up to you with lights flashing like crazy blaring sound, and even conceivably tear gas or pepper spray being sprayed at you. It would tend to stop you in your tracks.
H: Yeah. Okay, so in that scenario where you're spraying tear gas or pepper spray, you want to make sure you don't have any false positives, right? Like, what's, how good is the technology to be sort of like foolproof in that respect?
P: Well, false positives are an issue. You know, artificial intelligence isn't 100%, although we've gotten it very close to 100%, for hundreds of different kinds of weapons and lots of different scenarios. But yeah, there could be a false positive. And so we introduced a human in the loop, we partnered with a company called Rapid Response, which is, like the second largest monitoring company, and they've put together a team so that if we see something that we think is a gun, we will typically lock the doors and put images or video in front of a human monitor who makes a decision -- yes, that's a gun, that's not a gun. And they can hit a button and unlock the doors. Yeah, it's a threat. And they can either say, yeah, this is real, keep the doors locked, or hit a button and unlock the doors. So the human in the loop is very, very important.
H: Do you feel like you're creating, is there any other sort of solutions out there for something like this? Are you guys the first to be doing this?
P: We were the first but as is typical, it seems like in the technology business, you rarely do something alone. And just because you thought of the idea, you know, it probably is an idea that six other people are working on it in a garage. And, you know, sure enough, there were three or four startups that introduced the same idea within months of us launching. So actually, what it did to me was verify that we were on the right track.
H: Right, right. How funny. Have they gotten any more or less traction than you guys?
P: No, everybody's dead in the water just like we are because of COVID. Yeah. I would guess, in the last 30 to 45 days, they probably, like us, have begun to see activity again.
H: Okay. What are your thoughts about like, you know, like, open carry laws and things of that nature? Like, does that affect you guys? Or does that increase the probability of false positives? And do you see your business being, you know, where in different states, you have to sort of potentially put in different logic?
P: Right. It presents a lot of interesting, the whole idea of open or concealed carry. Typically, though, in an active shooting well, over 60% of the time, they have the weapon drawn out. And most often, it's not a handgun. Right. So recognizing that isn't hard, take the two last year that happened at Walmart, you know, an assault rifle essentially, out in the open as they approached the door. The guy who killed 10 people in Boulder, an assault weapon out, he was actually shooting people in the parking lot before he went in the building. So most of the time the weapon is out.
H: What's your goal with Defendry? Like what are you hoping to do? Are you like trying to eliminate the threat?
P: Well, it'd be nice to think you could eliminate it. But things happen so fast. And often, most often, they've thought through exactly what they're going to do. So we'll take the Boulder one, it began within seconds of that guy arriving. So how do you stop that? The goal is really to save as many lives as possible by mitigating the situation as fast as possible. The sooner that first responders can get there, hopefully, the more people will be saved. You know, our mission, if you will, is we always say if we save just one life, it will all be worth it.
H: Yeah. That's awesome. Now Defendry, it obviously didn't start out as Defendry. You mentioned River, like where you were a Slack competitor. How does that fit into Defendry and before River, was it Contada?
P: Yeah, you know, I don't really like to be reminded of the pivots.
H: But the reason I want to talk about that is because of the resilience that you as an entrepreneur have had. This is a company that you have been at for quite some time.
P: 10 years, actually.
H: 10 years. Okay, so like, talk about that, because that's not normal, right? Like most people would have given up by now. And you're sort of like you are not giving up and you feel like you're close to getting somewhere and what drives you in that way? What is required for an entrepreneur to think like Pat Sullivan?
P: Well, you said it. Most people would agree that I'm not normal. You know, I kind of popped out this way, I was always persistent and resilient. My mom and dad would say, you know, he's the kid that will never take no for an answer. So, it just kind of the way I'm wired. But that doesn't mean, I wouldn't have been willing to quit at one point or another. But each step of the way, in those pivots, I felt like we had something that we could carry forward into something that could be better than what we were doing before. So the resilience, you know, wasn't just like, I woke up and said, I'm making a choice to be resilient. It was, I continued to believe. And even though there were some around me, actually, many who, you know, thought I should have quit. I told somebody the other day, it's not over until I say it's over, you know, and it just was a matter of continued belief, and all that I had something that I could still build a big company around. And so I kept going. It is very stressful, it is a stressful situation.
H: It is an important point, though, it's not over until that the founder says it's over, right, because as long as the founder wants to keep going...
P: And has money to do it.
H: In some cases, even if they don't have money, like, if they are the ones building the product, or whatever, they you know, they can keep it going for some period of time. Which is fascinating, right? I had Clate Mask here a few days ago, and he was talking about they were out of money. He was just like, he was still going and his wife was telling him you gotta go find a job. And he was like, no, I gotta keep working on this.
P: Go back to the Act days, and I distinctly remember being out of money, or about to be out of money, and talking to the guy who ended up being our chairman. And I said, you know, I probably gotta go get a job. And you know, we maybe this will be a success, I don't know. And he said, you know, this would be absolutely the wrong time for you to have to go get a job. And he helped raise additional money. And we kept going, and, you know, it turned into a big success.
H: Speaking of Act, actually, let's talk about that. So Act was a company from the 80s, which sort of dates you a little bit. I wasn't even born then. I'm just kidding. But, so, the contact management space or CRM space as it's known today, customer relationship management space, wasn't even around yet. When you were starting, what were you doing when you started at?
P: Yeah, I was selling microcomputers in the early days.
H: And micro computers are what?
P: Well, I was there when the IBM PC was introduced. I was there when the Mac was introduced in 1984.
H: So micro computers are PCs, right.
P: Yeah.
H: Okay.
P: And I was selling for a retailer. But I never sold on the retail floor. There was always a corporate sales group that went out to companies and sold it, but then you had to have a retail location. So we had a retail location, but I never worked retail. So I was selling computers.
H: What year is this?
P: This is 1983 through 1987, when Act first shipped, April of 1987. So for four years or so I was selling microcomputers. And it was then that I began to mess around with software. Looking for things for myself to use, actually. And what struck me was there wasn't anything for me to use. You could I could use Lotus 123 somewhat and of course you could use you know a word processor but nothing for sales people per se. And I began to teach myself how to program, starting out at first with Lotus 123's macro language. And then they came out with a product called Symphony, which not a lot of people know about but it was basically a much bigger Lotus 123 with a very significant programming language, and I had taught myself how to do that. So I built a series of programs to help me as a salesperson sell computers, all the way from doing quotes and tracking my contacts. The last thing that I wrote was a contact manager for me. And that was the thing that made me wake up and go, you know, I could, I think I could sell some of this stuff. And people looking over my shoulder saying, boy, that's really, really cool. Can I get a copy of that? And you know, so from there, I said, I think I can sell this. Let's start something. So me and Mike Munie, who was my neighbor and my best friend, we started Act soon thereafter.
H: Very cool. And like, how you mentioned that you guys were almost running out of money, but at the same time, you were in the right place at the right time, where PCs were just taking off. Like, did the product initially like get adopted quickly? And then what happened? Then you almost ran out of money.
P: And well, we're on the verge of quitting. Yeah, multiple things. But the main thing was, you know, you have to think of that timeframe. If we did a demo to someone 99 out of 100 times, they go, oh, that's really cool. I want one, I want to buy it. What computer should I buy? They didn't have a computer, right? So our marketplace, you know, they were using paper, they were using Rolodexes, there was no, you know, widespread use of computers. So it wasn't a $395 decision, which is what Act cost, it was a $5,000 decision.
H: You're essentially causing the sale of the PC to happen. That is in order for them to buy your product, they were buying a PC to run.
P: It was the first reason to buy a computer.
H: For sales people.
P: Yeah.
H: That's pretty incredible. So how long before you you had like runaway success with?
P: It took about three years to be an overnight success.
H: Okay, that's not bad actually.
P: It's not bad. But, you know, obviously, very, very difficult. The other thing that made it difficult was that software was sold through distributors to retailers. So you wouldn't get paid from the distributors for 90 days. So, you know, they place a huge order, and back then you had to actually have a box and you had to have diskettes, and you had to have documentation, and that cost money. So here you are coming up with money. But you know, you're not going to get paid for 90, sometimes 120 days. So that's when I learned an adage that I use is that fast growth consumes cash fast. Yeah, you know, and we were always running out of money, even though our sales were growing. So it didn't make a lot of sense. But we think about it makes a ton of sense.
H: Because you were 90 days behind getting paid. As someone who's seen sort of like the computer industry go from like, literally selling diskettes and shipping to consumers to where you now have a startup that's, you know, detecting, using AI to detect a danger and deploying drones. What are your thoughts about like the shift in technology that has happened over the past 40 years, right, like 35-40 years?
P: Well, it's been fun to watch, to stay nimble, because every seven years or so, everything changes. You know, for instance, with Saleslogix, which we introduced in April of 1997, exactly 10 years after Act.
H: By then you had already sold Act?
P: Yes. And, you know, when we launched that we had a marketing campaign with $4 million behind it. 4 million of 12 million that we had a raised and you were buying $30,000, $40,000 ads, I'm talking about one ad in Fortune magazine or Business Week. Today, think what $30,000 can buy in terms of digital media, you know, so the world changes radically and then take the switch from individual software used by individuals to network then to the cloud. You know, it's just been massive change that entire time. But at the end of the day, it all comes down to still building something that people want to use.
H: Yeah. What do you think the big shift in technology -- you said like everything changes every seven years or so, or let's say 10 years. What do you think the big change that's happening either now or next is? Is AI that big change?
P: AI is a very significant change. AI, machine learning very, very significant. And the applications for it, even within current applications, how could you use AI, like, for instance, to look at the data in CRM and derive useful information out of it. So AI and machine learning is a really, really big deal. You know, there's lots of things but a lot of them are nuance. You deal today with the fact that, gosh, you enter a category, and there's 200 people in that category. It used to be, you know, at one time Act was maybe one of the top seven applications total available, you know, so like Lotus 123, Word Perfect, Word Star, Ashton Tate's dBase, and Act. It was, we were one of the most important today, we would be one of hundreds of contact managers, CRM systems.
H: So crazy.
P: Yes. It's, it is crazy. How do you break through that? Yeah, that's the challenge.
H: Okay, so you've built two highly successful software companies with Act and later with Saleslogix, which went public, right?
P: Yes, 1999.
H: And then, as a public company was acquired...
P: By Sage software in the UK.
H: And then you've gone on to start a company that's currently Defendry. Lots of entrepreneurial experience there. So I wanted to sort of like pick your brain and wisdom and suggestions, and things that you might have for founders. Talk about what was the some of the biggest challenges you've had and how you overcame them? I want to talk about a bunch of different subjects but let's start there. Like raising money?
P: Raising money is one of the most significant. I was going to say, you know, getting the product right, is, in my view, the most important. Can you build something that people want to use and can use for something useful that solves a problem? That's harder to do than it might sound. Raising money is probably the biggest challenge for an entrepreneur to learn. Because first time entrepreneurs probably haven't done that before. I was fortunate that I was from leaving college, my first job was sales. So I've been selling all my life. I, actually in college, I was selling cookware with your in home demonstration, so I've been selling all my life. So and that's kind of interesting, because a lot of entrepreneurs, if you ask them, you know, have you ever sold before? They'll say no. And I've asked entrepreneur classes. One in particular, at ASU, I asked a group of 35 people, well, you know, you're all youngsters, compared to me. You really should get a job first before you go out and try to start something, unless you're Mark Zuckerberg or Bill Gates or something. But you know, how many of you would like to be a salesperson? One person raised their hand. And I said, well, you'll be the one that'll be successful. The, you know, being a salesperson kind of has this bad connotation, like I'm pushing something that nobody wants to buy. But I was fortunate to pick up an attitude early on that someone taught me. I was a servant. And my job was to serve the person I was trying to sell something to. And I learned that I would ask questions on how I might help them until they either told me why they were going to buy or I knew they weren't going to buy. You know, I was there as a servant. And as long as you have an attitude like that, it puts on a different connotation of selling. Selling is a service. Yeah, you know, it's not a terrible job to have. In fact, it's incredibly useful for an entrepreneur to have sales experience.
H: Yeah, for sure. That's a great, that's great piece of advice. So like, if somebody doesn't have sales experience and wants to be an entrepreneur, but is super young, what is the type of sales that they should you think that they should go into? Because I was one of those people who was like, very anti sales, and that has probably hurt me. To be honest, I think you're right.
P: Well, it may not be necessary. Actually, I, if I and I talked to a lot of, you know, engineer, startup founders. And it's clear to me, they'll never learn to sell. So my advice to them is find somebody to be your co founder, your partner, who can sell and there's lots of people out there who can.
H: Right, that's great. But it's funny, because I'm always giving the advice, make sure you have the co founder who can build the product, then your advice is that. Between my advice and your advice, you get the right team of founders, one that can build it, one that can sell it. And then that's your team. Right?
P: Exactly.
H: Okay, awesome. So what's your advice with respect to getting investment? How do you like pitch a investor?
P: Well, it's like any sale. If you've got to, you know, present what is that I have and why is it going to be a big success? Probably the most useful advice I could give would relate to how do you get venture capital money. And the secret there, one is, you know, you have to have a good product, and hopefully you've shown some traction, you've shown that people are buying it, and hopefully you have a sales growth. But the key there is something that people don't often think about, but the key is scarcity. Venture capitalists compete with other venture capitalists, and they're selling you on why you should take their money and not somebody else's. So the mistake a lot of entrepreneurs make is to talk to one VC at a time. And when that one strikes out, okay, I'll start up another conversation with another. No, you have to look at it as a roadshow. I'm setting aside three weeks and I'm getting as many meetings as I possibly can in those three weeks. And, hopefully, four or five, six presentations a day. And you drop hints that, listen, man, I really need to get going, I have another meeting. And they look at you and go, well, who with? I go well, you know, the usual suspects, all your brethren here on Sand Hill Road, or wherever you are. So to let them know that you're talking to a lot of people at one time. I'll even say, listen, you know, I'm gonna get this deal funded. I'd like it to be you. And then I walk out.
H: Mic drop.
P: Kind of, yeah. I mean, the thing they hate most is the idea that somebody else will fund a successful company that they could have funded. And they either passed or were too slow to act on it. So another thing that will happen is okay, they're really, really excited. And they say, well, don't leave, we want to put together a term sheet, you know, and, and I will always answer I'm sorry, I have another meeting. And I'm going to that meeting. I'm happy to come back later. But no, I have to go. Sorry.
H: So you know, like, for someone like Pat Sullivan, who's had a couple of big successes, getting those meetings set up may not be as difficult as a new founder, right? What is your suggestion for a new founder? How do you how do they go about getting those meetings set up? Because you look up VCs on Sand Hill Road or whatever, you come up with a list of 10 of them. How do you get them to respond to you?
P: Well, it's like, anything in selling, you have to get to the right person. You have to get their attention. You have to get the meeting and people that you know, lawyers, accountants, even investment bankers that I'd met along the way who are willing to make introductions. VCs that I have met, perhaps who are later stage VCs and I'm an early stage, they'll often make introductions for you. They want to help you because they'd like to think, you know, three years from now maybe you'll think of them. So it's a matter of doing everything you can imagine to get that meeting, securing that meeting and the venture capitalists, it's their job. It's their job. And if you've had any kind of success with some press, you know, they're tracking you already. So often they're calling you. And so when somebody calls me, and I'm not yet raising money, they'll always say, well, you know, we'd like to have a conversation. Can we do that, you know, early? And I'll usually say, no, I'd rather wait until we're really ready. And so I keep a list of everybody who's called me. And, again, the key is pack it all into three weeks.
H: Right, right. Very cool. All right. So what about hiring and firing? Like one of your biggest challenges must have been like hiring the right people. How do you attract the right people for a founder, like early stage founder, who might be struggling? They can't necessarily pay them Amazon salaries. What do they do to get founder or get good talent come to their companies?
P: Well, one of the things I've learned is that, more than money, people want a mission. They want to buy into the mission, we're changing the way sales people manage their contacts, we're saving lives.
H: With Defendry.
P: Yeah, with Defendry. We're automating, you know, a company's sales processes. It is, it's my job to sell the vision, sell the mission, more than it is to try to outbid, you know, Amazon who's trying to hire them. And people on a mission are actually more valuable than people who are just looking for the best salary.
H: Yeah, Gregg Scoresby had a great, I mean, he almost word by word said the same thing that you need to have them buy into the into the mission. But it's a little bit different. Like, in a way Defendry's mission is easier to sell someone on, because you're saving lives or like, that's the goal. Right? Whereas, if you are, you know, like, if you are selling automation software for enterprise businesses, like the mission there just does not seem enticing. So how do you make it enticing?
P: Well, in, you know, Saleslogix case, the mission was grow this thing really, really big. Take it public, and everybody's gonna make a lot of money. That can be a mission too. And then they can look at it and say, you know, I think he's right, I think he could just be right.
H: So you could entice them by the financial opportunity that could come down the road.
P: Correct.
H: From like, your company having a major exit.
P: Correct.
H: Okay. Versus Amazon, that's already a $2 trillion company, it's not going to become a $200 trillion company.
P: I mean, if I get stock options on Amazon right now, could it go up triple, quadruple?
H: It's highly unlikely at this point. But I mean, all the quadruple, let's say that's about the limit of where it could go.
P: You'd probably have to be there for another 5, 6, 7 years.
H: Or yeah, 10 plus years. But whereas a startup, you could go 100 fold increase.
P: Yeah, totally.
H: Alright, so you talked about, you know, Defendry's mission being sort of saving lives, right? How important is getting that one tagline of a company down?
P: Positioning, messaging is critical. It ties you to a focus and focus is really, really important. I would recommend everybody get Al Ries' book called Focus. Brilliant, probably the one of the most brilliant marketers in history. And I'm fortunate to call him my friend, but in Act's early days, we had no idea what positioning was, we had no idea what Act was. We would say, well, it's this database, calendar, word processor thing. Oh, and it keeps track of your expenses too. Do you want to buy one? And people go, it what? What does it do? So I knew we had a real serious problem with messaging and so happened to have been reading a book called Marketing Warfare written by Al Ries and Jack Trout. And I when I read it, I was like, I know the answers in here, but I don't know how to apply it to me. So I picked up the phone and called them and they ran an agency, a marketing agency in New York and got Jack Trout on the phone and said I know you guys work with some of the biggest companies in the world. Do you ever work with one of the smallest? And he laughed. He says, yeah, we actually like to because small companies will actually usually listen to us, whereas big companies don't always listen. He said but we have to find it interesting, so send me everything you got, all your software, everything you got, just send it all. Call me back in two weeks. So I call him back in two weeks, he goes, you know, this really is interesting. We want to help you, and you really need our help. And it was true, we really need your help. So we spent the day with Al Ries and Jack Trout in New York. And in 45 minutes, they had nailed it. We spent the whole day, but in 45 minutes, they had nailed it. Al Ries said, okay, well, here's how we see it. You're creating a new category. Doesn't exist. We think the category is contact management. And you are the best selling contact manager. And I said at the time, I said, well, I mean, we've sold 300 copies, you know, I don't know that I feel really good about saying we're the leader, you know, of contact management. He goes, well does anybody else call their software contact management? I said no. He said, well, that makes you the leader.
H: I love that.
P: From then on, you would never say Act by itself, you would always say Act, the best selling contact manager. And it became kind of a self fulfilling prophecy, in a way, that you no longer were talking about it in terms of what it did -- you were talking about in terms of what it was. It's best selling contact manager. And people want to buy from the best selling, the leader, sometimes the first. So figuring out what is that category? What is the positioning statement is really a challenge, especially today, where there's 200 competitors. How do you distinguish yourself from them, but it's really important to have a focus. And if your message, your tagline, whatever can support that. It's great. And they also we at the time, we were called conductor software. And they had us change our name to contact software, which would force all of our future competitors to use our word. We own the word contact. So you know, it was the best money I think I've ever spent on marketing.
H: That's awesome. With Act, at what point did you decide that you want to exit? Or sell the company? Did you have buyers constantly coming to you? Or did you end up going out looking for a buyer? What happened?
P: Well, one of the things I used to say, and I don't know that I believe that that today, but I used to say that the time to sell the company is when more than one company wants to buy you. And so we had we had a company come to us that wanted to buy us. And we, at the time, the whole PC industry was consolidating. And the economy wasn't great. And we kind of, and I had a board that you know, had dollar signs in their eyes. And, you know, when you grew up in a Midwest poor family, and all of a sudden people in some ways, waving, you know, tens of millions of dollars in front of you, and you do the math, you go wow. But the fact is, we shouldn't have sold. We had something that was a rocket, and we sold it to a company that had no idea what to do with it. And from a distance you kind of watch your baby, just flounder. So that's painful. And it's always hard to come up with a second idea. I was still a young guy. And you know, I wasn't finished, I was going to do something else. So I always question entrepreneurs who say, I've got this offer, I want to sell and I go, what are you gonna do? You're 32 years old? What are you going to do next? You know, how hard was it to make this one as success? Do you think the next one will be any easier? Yeah, no, it's probably going to be harder. In fact, it's rare that you have a second success. It's even more rare that you have a third. It's hard, right? It's hard stuff. So if you've got something working, if you if you don't have to sell, keep on going.
H: Yeah, that's great advice as well. But like, speaking of how hard it is, talk about now you're 10 years, you said, in Defendry. What has that done? What's the toll on your life? And those around you? And for entrepreneurs who are maybe trying their first one, right, trying to get their first success off the ground, if you will. How should they balance this life? And the startup?
P: Well, it's hard. I mean, because it, it requires so much energy. But one of the things that that I did, I had four children, young, in fact, I had four children when I started Act. And I made sure if I was in town, and they had a soccer game, or a basketball game, they were in a play, meeting with a teacher, I was always there. And they still to this day talk about that, they talk about the fact that I was at some place, or that I rushed back from New York City a day early so that I could be at their play or whatever. That's really, really important. And obviously, your spouse too, to make an effort for us to spend time. I recently said something to someone, they go, oh my gosh, I've never heard that before. But you know, as it relates to your spouse, especially, because we're thinking in terms of technology, and marketing and sales. So this was a marketing thing. And I said to someone, I said probably the most important thing for a guy, an entrepreneur guy, is to stay in marketing mode. And they look, what do you mean? I said, what do you do when you're in marketing? You invent ways to keep selling, you know, keep marketing to your wife that, yeah, I know, I'm not around very much. But you know, I still love you, I still care about you, because it can become all consuming, you know? So, staying in marketing mode is maybe the key to to stay married.
H: How funny. So, are there any sort of like practical stuff? Is there anything that you make sure you do on a day to day basis to sort of stay sane? And keep going, like, 10 years has got to be a tough amount of time. And then you get hit with COVID? Which, on top of that, you know, you are already nine years into it? Like, what is the day to day look like for you, for Pat?
P: Well, I have a really good, I'm fortunate to have a very good team who have bought into the vision, the mission, very talented, so I'm not required to do as much as I would normally do. And that's good, because it allows me to back off enough. For me, I mean, I'm 68 years old, and I intend to keep doing this until I drop, because it's so much fun. But having a good team and being a delegator, being willing to go with somebody else's decision, even if you wouldn't necessarily have gone that way. That's what delegation is trusting someone and I have people that can do things, often better than I would do them, so that's really, really critical.
H: Most people can do stuff better than I can.
P: Well, it's true in a lot of things. But you know, another thing is, is simple. I deliberately work six days a week, most entrepreneurs work seven. But, you know, taking an example out of the Bible, God worked six days and the seventh day he rested. Well, if he meant he had to rest, I do the same thing. So Friday, sundown to Saturday, sundown. I don't do email. I don't do anything. I'll play golf. I'll read. I'll watch TV, I'll do anything but work. And that's a time to recharge. So I only work six days a week, and it's by choice that I've done for decades, and it just worked for me.
H: Yeah, that's cool. You mentioned the Bible. Does religion sort of like help drive a lot of your decision making or a big part of your life?
P: I think that if you're an entrepreneur and you're not praying, either something's just going so right that... but, you know, you get into so many situations where it's not clear. And I've learned to I mean, call it whatever you want, the law of intention, the law of expectation, the universe. There's a certain amount of work as hard as you possibly can but trust as as hard as you can. And there's times where I've seen things that I go, wow, I never would have imagined that would happen the way it did. Was that God? I don't know. I don't know. But there is a faith element to everything that I've done in being an entrepreneur.
H: Very cool. All right. So what are you excited about right now?
P: Well, I'm very excited that about 45 days ago, people started to call us and it started going back, Covid lockdowns began to come off. And unfortunately, there was a rash of shootings. There was one today. There was a period of 10 days where I think like seven, eight days out of those 10, there was a shooting and multiple people killed. It was like, all of a sudden, everybody woke up. And they were happening a lot at retailers. So we suddenly began to get calls from all of the major retailers. And many of whom we already had conversations going with a year ago. But all of a sudden, it was now back top of mind.
H: If a retailer wants to use Defendry's solution, what are they spending per location like approximately?
P: Well, in most cases, they already have cameras, so we we tap into that, because we're trying to see something out into the parking lot. They may have to install a camera, two or three, but you're talking about 1000 bucks, 1200 bucks per camera. So it's irrelevant in terms of the cost of the hardware. The cost of the software, depending on the number of cameras that we're watching, can be less than $500 a month. I always like to say it's typically far less than a $15 an hour employee. It's a lot less than an armed guard. So having software that watches your cameras, 24 hours a day, seven days a week, never takes a break. What's the value in that? And then everybody's becoming aware that when there is a shooting, let's take the one that happened at Kroger. It wasn't called a Kroger, but it was owned by Kroger, that there were 10 people killed. Well, that will cost Kroger, who is self insured, probably between $50 and $100 million to the families of those 10 people that were killed.
H: That's crazy.
P: That can buy a lot of technology. And people are very aware of that.
H: Very interesting. Moving off of Defendry, what do you sort of like technology-wise excited about?
P: I'm really excited about drones, and the capabilities of drones. One of the things that we built over the last year since we were trying to figure out how do we use drones as a first responder? Well, that presented a lot of problems. You have to figure out how do you fly them remotely. How could a team of pilots in Phoenix fly drones in Florida? Well, we figured that out and we have software now that does that. We can fly a drone in Hawaii. So trying to figure that out led us to create yet another product related to the drone because we were also trying to figure out is it possible to arm the drone with a non lethal weapon like pepper spray. And that led me to a gentleman who is a world renowned expert in the less lethal weapon world. And he had been, for the last three years, working on arming drones with less lethal weapons. And he had built a couple prototypes. And during COVID we funded going from a prototype to a real product. And we introduced that about 60 days ago to a different audience than we were selling before with Defendry, not that we're not still doing that, but to police agencies to help control riots. Here's the problem that they have. Last year, unfortunately, we saw a lot of riots. Well, they typically to try to control a riot that's, you know, obviously out of hand, they will fire canisters of tear gas, either near or into a crowd where the canisters weigh 5, 6, 7 pounds. If they're almost 100 degrees, people get hurt all the time, people get killed all the time, with canisters being hit in the head. So municipalities are writing checks to the people that they injure. So we armed a drone, with four canisters, and it could be mixed -- smoke, tear gas, pepper spray. They're flown by highly trained police pilots. And they are able to release the tear gas or the pepper spray without releasing the canister. And it makes it far safer for the rioters, and far safer for the policeman who have to get close to the rioters in order to you know, release tear gas or used tear gas. So it's a shame that it's yet another problem that needs to be solved. But we found that because we were building this for active shooters, we could use it in this application and police departments are incredibly excited because it makes their force safer. And the rioters safer.
H: That's interesting. It seems like something that would be up tasers, you know, line of products as well. So you have a potential buyer. Right, right here locally.
P: Literally a mile and a half from my home.
H: Have you talked to those guys?
P: Sure.
H: So what else? What do you think is like a big problem that hasn't been solved yet?
P: Wow. You know, it seems like anything we can think of is being solved and things that, you know, don't even seem worth solving, there's solutions. I'll use another Defendry product that we built over the years as an example of a problem to solve. People can be made part of the active shooter solution, if they have a tool, so we built what something we call SeeSay, Defendry SeeSay, patterned after see something, say something, and it's basically a very, very sophisticated panic button that people would carry around on their end for iPhone and Android. And can, with one button, report that there's an active shooting, and we instantly turn on the the live camera feed and they hold their phone up and that goes directly to police dispatch. So, within seconds of this person hitting that button, dispatch is getting a live feed of what's going on. There's a problem that hasn't been solved. And we're solving that problem.
H: Would that mean that they would have to have the app already downloaded on their phone?
P: Yes.
H: So like, you get the Defendry app, you're sort of ready to go and now you have sort of a live feed to potential police departments.
P: That is correct.
H: Interesting. Very cool. What else do you want to talk about, Pat?
P: I'm yours, Hamid, wherever you'd like to cover.
H: What about investments? What have you been investing in? And are you in any of the cryptocurrency stuff?
P: Well, just as on the sideline, you know, buying Bitcoin, buying Ethereum, watching it go up, watching it go down. It's wild and crazy.
H: 24/7?
P: Yeah, and I happen to believe it's, you know, it's going to wherever, 100,000 you know, a million. I don't know, but I'm just buying it and hanging on.
H: You believe in Bitcoin being this sort of gold replacement?
P: Oh, I don't know that it's the gold replacement. It is an alternative currency for sure. One of many, one of several. But gold and silver, I think are also great investments. Because sooner or later, inflation's going to kick in with you know, the amount of debt we've incurred, and it kind of goes together, at some point in time, it will affect inflation.
H: So, what would be your sort of, I mean, not investment advice, but like because you see inflation as sort of inevitable thing that's going to come as a result of the enormous debt. What are you doing personally? You're buying some Bitcoin, Ethereum. Anything else? Like you're also buying gold and silver? Are you just doing other things or buying property?
P: Actually, I sold property. And you know, the market was hot. I had lots of equity in two different homes. And I said, and unfortunately, I had a divorce, and I call it the COVID divorce. And so, you know, I didn't need these two large homes. And so I sold them and took the equity and invested in the market. And it's sitting there where I could invest either more into Defendry or into some other startup. You know, I haven't decided what I'm going to do. But that's what one thing that I did. Now, I may have been sold too early, I seem to always sell too early. But it would have been the first time or it was going to be the first time I would make money in real estate. Because I always bought high and sold low. This was the first time I could sell high. So it's probably going higher. But that's one of the things I did. I just didn't need the space.
H: But if you sold it and bought Bitcoin and Ethereum, you're set.
P: It has done well. Yes, it has done well.
H: What else? Have you invested in companies as well, startups that you're excited about?
P: I really pulled back there. I think I was really kind of leery of the COVID situation. And it was so difficult to predict what was what was happening, what was going to happen. And so now I've really, really backed off and again, only in the last 30 days have those begin to come off and they haven't really fully come off. So I'm leery at this point in time.
H: What do you think about the way that, what do you think about COVID? Do you think Arizona's response to COVID has been pretty good? Are you vaccinated personally?
P: Oh, now you're really asking a personal question here. Now am I an anti vaxxer or whatever?
H: Should I have not gone there?
P: Oh, I mean, I'm happy to. I mean, I really don't care what somebody thinks. I haven't yet been vaccinated. That doesn't mean I won't. But I struggle with our response to it. It's like we think, you know, success is that nobody gets infected, nobody dies. That's, you know, people get a cold and it turns into pneumonia and die. They, you know, it's impossible to take it to zero. And so at what point do you stop? And I also was very, I was very much in disagreement with shutting down the world's economy. Never in the history of the world have we quarantined the healthy. You always quarantine those who are sick, or those who are most at risk. And, you know, there's 28 million small businesses out there where people depend on their livelihoods for that, and how many of those 28 million small businesses died? And, yes, it's a terrible thing that people died from COVID. But how do you weigh that against the millions of people, millions and millions of people who lost their job? I have 12 people could have lost their job, had I not been able to raise money right at the beginning of COVID to keep us alive. So, you know, it's one of those, you know, damned if you do, damned if you don't. I can't say that, you know, it's been totally wrong. But it doesn't make a lot of sense to me. And in terms of the vaccine, you know, I read where it's somewhere between 90 and 95% effective. Well, I have this thing called an immune system. You may not have heard about it, but you know, it's kept us alive for eons. It's 99.99% effective. I don't understand why, you know, I can't rely on that. So, you know, my son and my daughter in law got COVID and I went and hung out with them, because I actually wanted to get it because I felt like that would be the best way to be vaccinated. I'm in great health, my immune system would have been fine. And and if it was my time to go, well then it was my time to go.
H: Did you get it?
P: I didn't. I don't know. I don't know why. You know, I got the test, like dang it. I didn't. I didn't, I don't have the antibodies. So yeah, you know, go back to what you first started out with. Yeah, I am a bit crazy but again, that's not to say I won't get the vaccine, I may do it. But right now, I don't see a real need to.
H: Do you think the vaccines are responsible for the numbers going down?
P: Well, they were going down before the vaccines were really catching on. Oh, unquestionably, they are a big part of it. And it's kind of weird. You know, I grew up being vaccinated for everything and when you got vaccinated, you were immune. Today, they tell you to get vaccinated, but you're really not immune, you still gotta wear masks, you still gotta social distance? You're like, well, am I immune or not?
H: Yeah, you know, so some of it is just, you know, them trying to make policies on the fly. And it's just yeah, they got it wrong at the beginning, don't wear masks, leave the masks for the professionals or whatever. I mean, but that aside, if you think that the vaccinations are helping, like reduce the numbers significantly, essentially, vaccinations are saving lives. And the argument is that if you get enough vaccinations to where you build herd immunity, then the virus doesn't have an opportunity to mutate to the point where the vaccination is no longer effective, right? Because it needs the virus, needs hosts to sort of replicate. So you know, like, from that standpoint, is why I think that the vaccination movement seems to be working, especially in countries that have been largely vaccinated. Like India is going crazy right now, because it's not vaccinated. You know, aside from the shutdowns and not, or wear masks or whatever, you know, do you think that like, us getting back to normal relies on vaccinations to some degree or is it a mindset?
P: I think it's a mindset, you know, that virus is not going away. No matter what we do, and there are people they say, you can get vaccinated and still get COVID. Well, I happen to have a doctor who had over 600 patients, not one went to the hospital, not one died. And when I found out what his protocol was, I said, that makes perfect sense. It's highly treatable. So if I were to get it, I'd go to my doctor, and I think I'd be the 601. So, you know, maybe I'm being a rebel, maybe, you know, maybe I'm contributing to the thing, the lack of herd immunity. I read an article, I read some arguments that we kind of already reached herd immunity. I don't know, you know, it's we've gotten to the place where you don't know what to believe, because they change the story, kind of every week or so. So, I don't know, I'm not hard and fast. I don't tell people they shouldn't get it. But I also feel like don't tell me to get it. You know, it's kind of a personal choice now.
H: I can see that. Yeah. All right. What else should we talk about?
P: I don't know, Hamid. I'm kind of out of words here.
H: You know, you've been a huge supporter of the startup community. Locally, you've met with founders, myself included, from many years ago. And I want to thank you for having done that for the community for having done your startups and having had successes in Arizona. I'm a huge Arizona fan. I'm a huge founder, startup fan. So I just want to say thanks, Pat.
P: You're welcome, man. And you know, I never refuse an entrepreneur who emails me or contacts me on LinkedIn, to meet with them. And one, it's partly I want to give back the things that I've been fortunate to learn. But I can guarantee you, I will always walk away with something I didn't know from that person. So it's not all altruistic.
H: Yeah. Awesome. Well, thank you very much for spending time with me.
P: Thanks for having me.
H: Appreciate it. Thanks Pat.