Scale Like a CEO

Building Generosity-Driven Businesses: Interview with Daryl Hatton, CEO of Connection Point

• Performance Accelerated Learning • Season 1 • Episode 3

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In this episode of 'Scale Like a CEO,' Justin welcomes Daryl Hatton, founder and CEO of Connection Point, to discuss innovative entrepreneurship, the power of generosity in business, and building successful teams. Daryl shares insights into his collaborative commerce platform, which includes brands like FundRazr, Crowdfunder, and CocoPay, that help businesses and causes raise funds and connect with their communities. He shares the challenges faced in the crowdfunding industry, the importance of building digital marketing skills, and why giving away services for free can be a lucrative business model. They also delve into leadership, the significance of trust and transparency, and tips for scaling a startup. Whether you're an experienced business owner or just starting, this episode is packed with valuable lessons on aligning business success with customer success.

Daryl Hatton:

We give away everything we do for free and we actually make a pretty good amount of money on it. I'm not ever going to get rich on this in that way, but what it does do is it really aligns us with the success of our customer. We don't make anything unless they're making something and we're keeping everybody happy.

Announcer:

Welcome to Scale Like a CEO, where we explore the strategies, challenges and triumphs of today's most innovative entrepreneurs and triumphs of today's most innovative entrepreneurs. Today, we're joined by Daryl Hatton, the founder and CEO of ConnectionPoint, a groundbreaking platform that's revolutionizing how businesses and causes connect with their communities. Get ready for an enlightening discussion about entrepreneurship, the power of generosity in business and what it takes to build successful teams. Whether you're a seasoned business owner or just starting your journey, you won't want to miss the valuable insights ahead. Let's dive in.

Justin Reinert:

Thank you so much for joining me on the podcast today. I guess just to get us started, if you wouldn't mind, just give me a 90-second overview of your business and yourself.

Daryl Hatton:

Sure, justin, happy to be here, really looking forward to this. I'm Daryl Hatton. I'm founder and CEO of Connection Point. Connection Point has a collaborative commerce platform. We help causes and corporations work together with consumers to fund impact projects. One of them is Fundraiser, which is for personal, professional charity, kind of like a GoFundMe or GoFundMe Professional. We have Crowdfunder, which is like a Kickstarter and Indiegogo for the creator community, so documentary films, graphic novels and art exhibits of Burning man, things like that. And then we have another brand called Cocopay, and that's using crowdfunding technology to help people pay for health care, medical devices or medical services. And then we've got about 100 other partners that use our platform. But that gives you some idea of what it's all about.

Justin Reinert:

Yeah, that's great. I'm curious what do you see as one of the biggest challenges in your industry and how are you solving it?

Daryl Hatton:

Well, we help people raise money for a project, and one of the things that a lot of our customers have is they don't have the ability to, they don't have a crowd, they don't have a market to go out. So a key capability of our platform is to try and help them build, learn how to do marketing. So there's kind of two parts to the problem. One they don't have the digital marketing skills and one they don't have distribution of their campaign message. So, for the digital marketing skills, we really help coach them and we have some AI help that goes on in the platform. And for the marketing distribution, it's about helping use social media, and particularly their advocates, those that are already working with them, to help get the message out to a much broader audience out there.

Justin Reinert:

So, daryl, I'd love to hear. When we were talking about bringing you into the podcast, you mentioned that you give away what you do for free, yet you make money on it. Tell me more about that.

Daryl Hatton:

Isn't that a fun way to look at it? Well, one of the things is that typically in our industry, the way people make money off this is it's transactional and you make a. One of the things is that typically in our industry, the way people make money off this is it's transactional, and you make a percentage of the transaction as a fee for raising money. So you think of PayPal and Stripe and other companies like that. They are all taking a piece of the transaction as it comes through, and that's pretty typical in our industry and a number of years back, one of the things we worked on is having not taking that fee, but asking people for a tip so we can let anyone use our platform for free. There's no monthly annual maintenance per seat per user, for whatever cost it's just about. Will they use the platform and if they make some money, we ask the donors if they're willing to give us a tip to keep it free for the person or company or cause that's running the campaign, and a surprisingly high number of people will do that because they're invested in trying to get the project funded.

Daryl Hatton:

Like this is mainly about impact related projects. It could be an entrepreneurial impact. Somebody's launching the brand new product for the first time and they're trying to get it out to market and they're trying to cover their initial costs of building out the product. Their first production run things like that. But people want the product so they're willing to help out by keeping it free and helping the company along. There's a little bit of shared benefit here. That goes on. So we give away everything we do for free and we actually make a pretty good amount of money on it.

Daryl Hatton:

I'm not ever going to get rich on this in that way. It's not going to be a massively profitable business, but what it does do is it really aligns us with the success of our customer. We don't make anything unless they're making something and we're keeping everybody happy. So it's not about kind of being a burden on somebody. It's about trying to increase the effectiveness and the results that we get and we all win. There's a kind of funny side effect of that that comes out, and that is that we invest in our customers. We'll have a customer come to us and we'll put our staff time our digital marketing specialist staff time into helping their project. When we see the potential of what they could do, again back to that problem they don't understand how to do it. The digital marketing skills We'll loan them ours to help them get going and because we can see the upside for us and for them. So it's funny we don't charge anything for some of the best digital marketing talent on the planet in cause-related space and we make money on it.

Justin Reinert:

That's a really interesting concept. I can think it was a year ago In the world that I've worked in most of my career in talent development. There's a lot of intellectual property that gets created that is being protected by either the creator in private companies or within in-housing companies, and so intellectual property is something that I talk about a lot in kind of how do you license it and how do you like, monetize it. But then also, how much do you give away? And I was talking to someone who specializes in consulting with companies and helping them scale their IP and their products and she said, ironically, the more generous you are with your IP, the more you sell.

Daryl Hatton:

I completely agree to the point. We give it all away, all our advanced thinking, everything we do. We publish on our help center and our fundraiser hub different properties that we have, because if we're helping our customer and, by the way, that might help a competitor's customer so now we're competing on, do we do it better? Is our platform better? Is the way we execute some of that stuff better? But I believe one of our foundational principles is generosity. We give away a lot and as a result, we get a lot, and that's sometimes really hard when people are feeling scarcity, like if I give you something, I'm losing, as opposed to when I give you something, I'm winning.

Daryl Hatton:

It's a different mindset and you kind of asked about some of the leadership things. That's pretty important to us, the the culture of that and because it, as I mentioned to you when we were kind of off air or offline, that when we're transparent it's an opportunity to build trust and that's a key component in business going forward. When there's so much distrust in the world, in the way we interact with everybody and we're always assuming that something's someone's trying to take advantage or other things like that, it helps us build trust and it's a great way to respect people along the way. You're fine, you're good, I'll, I can. I can give you my trust. That's the way to actually build trust is to give it away.

Justin Reinert:

Yeah, yeah, it's so interesting, and I think for creators, for founders, it's really scary, because you've got this thing. That is your, what makes you unique, it's the thing that you've created. You've put your, your heart and soul into it, and then you think that's how you're going to add value to the world and get value back from the world, right, and so there's definitely a balance there of finding the right way to do that.

Daryl Hatton:

And it is challenging because you have an idea, you have to be somewhat aware of people who may want to take it from you for sure. But there's also the question of, if you do well, figure out how to execute that better than anybody else and anybody else can take a look at it and still not win compared to you how can you? How can you do that? So I do a lot of startup entrepreneurial advising. We're talking dozens of companies over the course of the last few years. A lot of the time, first-time founders are coming in and they're very protective of their idea. They want to sign NDAs on everything. They're really worried about leaking this out to somebody taking it over and most of the time they find that they're being way too cautious, like they're not really helping themselves. They'll send a thing to an investor and they'll say, hey, but you need to sign an NDA and the investor goes I can't look at it then because I see so many things. There's no way I can be burdened by legal this and legal that all over the place to try and protect that idea.

Daryl Hatton:

But one of the things they can do is pretty much assure you if it's not the team that's doing the good work behind it. The idea doesn't matter. The idea is really not the most important part. It's who are you, what do you stand for, what skills do you bring, who are on your team and what are their skills and why? Together, are you guys going to win with this idea? Because the rough ideas have been out A lot of things. There's not that many really unique ideas. There's things we do new and like old things that we do in a new way, or new things that old things that we do more efficiently, but there's not a whole lot of variation on those kind of things.

Justin Reinert:

Yeah, I'm curious to hear you've been involved in several businesses and scaling businesses, but you think about growing and scaling from the beginning to building a team. What are some challenges that you've encountered as you go about that?

Daryl Hatton:

Just to give everyone a little bit of context of what that is. I've had multiple companies. One of them I had, a small company which we sold into a much larger company, ended up taking it public on NASDAQ in December of 99. So we've gone from an idea in the kitchen to public listing with a billion dollar valuation on the company and billion dollar Canadian got to put that in context. That was the place where we ended up with a pretty large team and some of the lessons of that was, when you're growing incredibly quickly, I think it's a really big risk that you make personnel decisions that are not well thought through. You're trying to go for speed as opposed to effectiveness and what you want is people who are really effective. So when I left that company and kind of sold it to our took a private, sold it to our largest competitor and I started over again with Connection Point, I was really thinking about trying to find the people that were involved, that were going to do the right things to help me. Take a small idea, startup and scale it again. Been there, done it once, maybe can do it again.

Daryl Hatton:

But there's some things I've learned I want to do differently. One of the big mistakes I made early on was that it took too long to try and find what I would consider co-founder level partners. In doing it bring people onto the team. But doing a startup can be very, very hard and there's a lot of demands on you, a lot of demands on the team, and the stronger the team is, the better you handle it all. And so you're looking for people who are not going to be employees. You're looking for people who are going to be peers in growing the company together.

Daryl Hatton:

I think that's a pretty important point to make is I see most sole founder startups struggle, but the ones that have a strong founding team three, four, five people four seems to be good Three is probably one of the more effective ways to get it going in the beginning. They end up doing much better and are much healthier, much happier and more successful along the way. So spending the time to find those relationships in the beginning is really important. And again, it's back to those things of do you trust these people? Do you work well with them? Can you be transparent and fail in front of them? Can you make a mistake, pick yourself up, dust yourself off, say, well, that was fun, let's go again and and see what can happen and have them go good on you and not, oh my god, in the eye again. Right, they're like I tied myself to this turkey. This is not working out very well. We need to have a safety failings because we're all human.

Justin Reinert:

Yes, it's so common in the conversations that I have that successful companies that scale. It's all about the people and who are the people involved, how we get along and so important. I'm curious you mentioned that the companies that you see as successful typically have a founding team of three to four. I'm curious are there kind of roles that those people are taking on, like is there a magic combo of those three to four people, and what are they bringing or what are they looking at?

Daryl Hatton:

Yeah, it's a good question. If I think about it right from that point of view, I think you've got somebody who has to focus on marketing. What are we going to do to get this product out into the market and help people understand it and want it? So you know, marketing is about demand creation. You're trying to help them understand that they have a need and that you can fulfill it. You're going to want somebody who's focused on product. How do we make this product work really really well? That's frequently in a tech world.

Daryl Hatton:

The original person is thinking about the product, but sometimes it works better when they're thinking about the market or their customers first. So you've got a marketing person. You've got a product person. You need someone who understands money, finance, in order to make it work, because you're going to have to scale up and sometimes you have a really really strong business. You can get going and you bootstrap it and it's all about revenue right from the beginning, but a lot of startups need some sort of investment to kickstart them, and so you want somebody who understands the finance piece.

Daryl Hatton:

And then I kind of put it down as that. You want someone to have vision and the vision for where all these pieces can work together and this is the natural leader that comes out and pretty much adopts the CEO role. I'm going to put myself forward as the person that's going to make this happen, and so you're the leader among peers. If you put it that way and that's one of the why I think kind of four people tends to work is if you've got everybody's sharing too many roles, they get confused and they the priorities because they they gravitate to the one they like the most and that can leave you vulnerable on your growth.

Justin Reinert:

Yeah, it makes me think of I'm sure you're familiar with the EOS system I think it's the enterprise operating, entrepreneur operating system in the book Traction and they talk about the visionary and the implementer and having those. You need those two roles and it's really tough if that's the same person, because it's rare that the visionary can be the one that you know is good at tending to the books, right?

Daryl Hatton:

they require two different approaches to life. One of them is not worried about the details, because in fact you're making a new, a new future. That's the visionary part. You're envisioning something that doesn't exist yet and you're going to go make that happen. That's not about the fine details. That's about the big old brush strokes and painting the picture of where you want to go and understanding it. Like, if you get it so juicy, everybody wants to be there. You're probably going to win. But you need the description is build castles in the sky, but make sure you got somebody laying the bricks for the foundation along the way and those are rarely the same person, because it's just not that compatible. A skill set, what?

Daryl Hatton:

makes you good at the one makes you horrible at the other and vice versa. So you know I've been around founders who go into startups who think they can do it all.

Daryl Hatton:

We believe our own hopes and dreams that we are the person that can make it all happen. You know, in the role I'm in right now, I look at it and go the day we can find somebody who can do this role better. I'm going to step back because it's better for me as an investor, like if they're better at it. I should step out of the way Because it'll be more valuable to me. I love what I'm doing, so I really regret that decision. But it's not about am I the best guy for the job at the moment is all I know.

Justin Reinert:

Tell me along that lines how do you go about deciding, like when you're offloading tasks, like how do you delegate? Because I think that's a tricky thing for a lot of folks as they scale a business, bring new people on and then let others take the reins of some things.

Daryl Hatton:

The idea of delegating. It is ideally you're giving it to somebody who's better at it than you are and you can make an assumption as a CEO that everybody's better at something than you are and you should get them to do those things. So that's firstly a kind of a faith-based position that they're going to be. They need to be given the reign, trusted there's a trust word again into being able to do the work. But it's a trust but verify kind of scenario. You want to give them a task and help see if you can give them the resources to make sure that they can accomplish that task. But it's not about checking in and making sure it's getting done exactly the way you want it to be done. You want the result. You don't necessarily want to control the entire process. So in picking somebody, it's really about your building in. To my mind, a lot of the time when you're working with a leadership team, it's about building the trust in the leadership team that they are competent, that they're, that they know what they need to do. That's your job. You need to be able to communicate the vision of what's needed to be done at a high level, not the details, not micromanaging, but you want to get them out there and give them the reign kind of the room to maneuver to deliver the results that you're looking for, and then you check in on those results all the time. I think understanding when to delegate something is pretty easy when you can see they're very competent at it. I mean, for me it was easy, for like a lot of the finance side it was great here. Please take this off of me. I don't want to do this part anymore. Right, this is not my strong suit, but what is challenging is when you have someone who you're not confident has the skillset and they are what you have. This is all you've got and you're not swapping them out for somebody right now, for whatever reason. How do I make it work with this person?

Daryl Hatton:

And, funny enough, that's when you have to lean in on the trust piece a lot more and talk about the kind of trust in the transparency piece, Talk about what you're concerned with with them and say look, I'd like to give you this opportunity. I'm nervous that we haven't yet got you the skill set that you need. So how do we go about getting the skill set, getting into solution mode on that and saying I want you to run this. I really want it to work for both of us. So how do we make that work? And that's where you're giving them some guidance on what kind of leadership building they need, what skills building they need to help them be a better leader. In the end, you want all of your people who are working for you to be the best that they possibly be, Because you look like a rock star. When you do that, You're the head of a team and at that point, if you've helped all their careers along, they're likely very supportive of you because they see what's happening. Synergistically work together. That's what makes great teams, yeah.

Daryl Hatton:

I love that I'm going to soundbite answers for you here, but hopefully this is good.

Justin Reinert:

It's good so, as you look forward in the growth of ConnectionPoint and potentially finding a new CEO who's better at the job than you are. If you look at the future of that, what do you see as the evolution of the organization into the future?

Daryl Hatton:

we did a lot of bootstrapping with friends and family and I put in some money from the first company that I had in order to kickstart the whole thing. So we have to likely find them a path for to help them get value out of it, and so that will likely be a sale or merger with another company along the way. So my role in that is to try and find good prospects that are out there that we could do that with and that would ideally take care of. A transaction like that is about everybody getting a win, and it's not just the investors. We're maybe one of those radical groups that we're a B corporation, so the whole point is that all stakeholders have a say in what's going on and need to be respected in the process.

Daryl Hatton:

So I start with things. When I think about a merger and people go why do you start with customers? But it's got to be a win for the customers. It's got to be a win for your supply chain partners. It's got to be a win for your staff. It's got to be a win for the acquiring company.

Daryl Hatton:

It's got to be a win for your executive team, which is different sometimes than the win for the staff, because they may end up not having a job when they go forward and they may want to, but they still want to do the deal because the deal is good for their career in some way. It's a different kind of scenario than a lot of employees would look at, but the point is you got to and then somewhere in there you got to make sure you have a win for the investors too. So modern kind of deals are harder because we're not quite as willing to just kind of throw everybody else on the bus to make the investors happy anymore. Yeah, At least I'm not, but I know a lot more people are starting to lean on this kind of concept because it's just so so it's the worst parts of capitalism.

Justin Reinert:

Yeah, I've seen lots of transactions that were strip it down, make a bunch of money off of it and don't care about what happens in the process, which is not great. So I love that you have the opposite perspective of caring for everyone involved. I think that's great.

Daryl Hatton:

It's an aspirational goal. It's hard to do. Well, you know, this one hasn't happened, so we'll see. I did reasonably well at trying to do some of that when we did the last company and what we did when we were moving it out, Worked really hard to kind of settle everybody whether or not they were going to be with us or not.

Justin Reinert:

Great Well, Daryl, I want to thank you so much for joining me today. If people want to find you or reach out to you, what's the best way?

Daryl Hatton:

Hit me up on LinkedIn and there's the in-mail function on LinkedIn is an easy way to get directly into my inbox. Don't request a connection right now because I have a lot of connections, but that's. I'm not a LinkedIn kind of floozy and just connect with everybody. I actually want to know everybody. I say it a little differently in other environments. I want to have a know you as a relationship before you add you to the network, because it's really tough to manage. I've got like 5,000 people in there that I've had really good conversations with and it's really. I use that initial conversation set to understand what I recommend you to somebody before. So I want to know that before I add you to the network, because I trust you for your, my network I'll recommend you and that makes it a lot easier to make connections and not have to remember everybody which I'm pretty shy, that, yeah, I respect that and I love this.

Justin Reinert:

I'm going to reuse the LinkedIn floozy term.

Daryl Hatton:

It's yours, I love it.

Justin Reinert:

Well, thank you so much, Daryl Justin.

Daryl Hatton:

this has been a lot of fun. Thanks for letting me spout off about stuff. Thank you.