E2E Interview

 

The Entrepreneur to Entrepreneur Peer Interview Series

Ryan Money, CEO of HireVue and Shawn Nelson, Chairman of LoveSac

 

The following is a condensed transcript of a peer-to-peer conversation between two of Utah's entrepreneurs. Click here for instructions to download an audio podcast and listen to the entire interview including expanded discussions on the above topics and other topics not discussed in the condensed transcript below.

 

Ryan Money: I am the CEO and founder of HireVue.com, a system that enables you to see a greater pool of job applicants and candidates via video interviews.

Shawn Nelson: I'm the founder, chairman and chief sack of LoveSac - the world's leading alternative furniture brand.

So Ryan, do you think that it's more important for an entrepreneur to be passionate about the subject matter of their endeavor or to be passionate about a profitable endeavor of any kind? In other words, does the subject matter really matter?

The reason I ask is because when I hear you talking about HR or hiring I get the impression that you have either always been passionate about it or you have become really passionate about it. From my standpoint I am a brand builder. Every branding book that you ever read will tell you something that is very counter intuitive about building a brand - don't promote your brand, promote your category. In my case I'm doing the idea of alternative furniture so that people should not be held captive by their lame unchangeable furniture.

When I hear you talk, you have become a captain of HR. It is cool and it really validates your intuition for building a brand. I have noticed that you are really championing the idea of the video interview and the video hiring process particularly as it is done through the HireVue method, which is unique and different.

Can you become passionate about something you are doing simply because that is how you are wired or do you think that the subject matter matters?

Ryan Money: From my own perspective, I have a passion for people in general and I kind of wired into that. I would say that you can be passionate about the dollar or about a business, and you can be passionate about not just "The" business, but "A" business in general. I think that there are people who are that way but they are different stage entrepreneurs. They're the CEO type. There is not a cookie-cutter way. My way is not right and your way is not wrong but I might lead a company different than you might lead it and you might lead it different than Joe might lead it. You have to focus on your strengths.

Shawn Nelson: You bring up a good point about the right fit. I think there are lots of ways to lead a business and I think that the corporate role you hold within your business is pretty darn important to get right because there is a difference to being the founder, the CEO or even the chairman of a brand. This is something I learned from Richard Branson. He made me realize that the role of the chairman, the role of the face of the brand, the role of the founder even is not necessarily by any means connected to the role of the CEO, the COO the head of marketing or whatever. It really has to do with the notion that you are in essence the spiritual leader of that company, but as to your role within the company, it may not be best for you to be the CEO. I think it is something very difficult for entrepreneurs to come to grips with.

Ryan Money: I would say that role does morph over time.

Shawn Nelson: One of the most critical things an entrepreneur can do is to look at himself or herself and say, "What is my right fit?" Sure they can be the founder and everything but do they really belong as CEO? Over a year ago, I hired a CEO to come and run the operations of LoveSac. That allowed me to focus on the brand, be the face and do other things I needed to do. His first day on the job I learned what a professional CEO does. I learned that I have no interest in being that. I would much rather go represent the brand at the X Games.

In the beginning you have to do everything. I ran the factory, I built the factory, I did the marketing. I designed the brochure. I hired. I fired. I paid. I went without pay. I did all those things and along the way what I missed was paying attention to the things that I liked doing the most and leading myself in the beginning. It is almost like you are supposed to be the CEO or the man in charge but you don't have to be the CEO to be the man in charge necessarily.

Ryan Money: Each business is its own individual and when you start a business it is like a newborn baby - if you are not there to do everything for it, it will die. Then it grows up and becomes its own beast. LoveSac is its own beast, it is its own person. If you leave it is still going to be a person and it is still going to carry on its own life. So I think that every person is unique and every business unique.

If I am going to be a company that is installing cabinets in garages, I might not need to take venture funding. If I am going to start a company where there is some kind of tipping point that needs to be met or some kind of a viral aspect to it or somewhere there is a mass that needs to be gained among the public at large then you might have to take venture funding. You need to look at the individual and look at your business and say, "Do I really need this or am I wasting a lot of time thinking about funding and not just getting sales?"

Shawn Nelson: So do you need to raise money for HireVue?

Ryan Money: Yes definitely. I have HireVue 4.0 already concepted out and eventually the HireVue 1.0 that you see it now I want to be free. Our core business will always be helping the right candidate and the right company get together.

I steal a lot of my thoughts from the book "Good to Great." We want to get the right people on the right bus in the right seats because that is beneficial to the company and the individual. If you have ever talked to somebody who hates where they work it is all they talk about. I see HireVue as a benefit to people and that is what I want. I want to help those people that are unhappy in their jobs. I read a statistic the other day that said more than 60 percent of people are or would actively seek a new job. That is crazy to me. I think I am fortunate to find out where I fit in and feel this out. This is what I am passionate about and this is what I like doing. I'm fortunate. I know people who are 40 to 45 years old who are saying, "I don't know what I like to do."

Shawn Nelson: Your passion for what you like to do developed as you got into it. Maybe it wasn't bred in you from the time you were young to be passionate about HR but now you have become that and it is really an offshoot of your general passion for working with people and networking with people and helping people. So it is a good fit for you as a business and as an entrepreneur.

I love that I've come to some of the same conclusions in looking at my own engagement in LoveSac. I did not wake up at 19 years old and become passionate about alternative furniture. In fact the phrase alternative furniture was not even coined until recently. What I was passionate about at that time originally was just doing something stupid. I thought it would be funny to make a big bag of foam and look where it led me. Then I was passionate about overcoming. If people told me, "You can't do it," I'd say, "well watch this!"

If you ever want to get a 21 year old to do anything tell them they can't do it. That is what I was passionate about. I was passionate about seeing what I was capable of.

Through it all I have become passionate about making alternative furniture and liberating people from their lame furniture. That is something that is nice to see in myself because I realize I could get passionate about a lot of things if I was exposed to them and if they lined up with some of my core values as HireVue has lined up with some of your values Ryan.

I think sometimes it can be debilitating to some entrepreneurs in that they are always looking for that one thing that suits them. I like wake boarding, but am I going to create a business that has to do with wake boarding? Not necessarily.

I think it is crucial that you find a niche in business that can actually produce a profit. I think that it is sometimes dangerous to only pursue your passions in a narrow way. I think one needs to look at their passions in a broader way.

For you, Ryan, it wasn't about hiring or HR, it was about people and then the HR niche popped up and happened to fit into that and you were drawn to it naturally and the rest is history. Same thing with LoveSac. I was drawn originally to create something and then I was also drawn to overcome a challenge. LoveSac created both these opportunities for me and the rest is history.

Ryan Money: You, Shawn, have had a lot of good and bad times. You went through a bankruptcy last year, but it looks like LoveSac is going to pull through. Can you talk about some of the ups and downs? It has to be very weighty on your shoulders at times.

Shawn Nelson: I am still paying the price on a lot of these things. It's a crazy story. One day I got an award for the fastest-growing business in Utah and three months later I'm in Chapter 11 for some things that were under my control and a lot of things that weren't.

You should never wish someone's story on you. You have your own story. In my case my story just happened to be very public because my company is the type of company that is in the public eye, my stores are in malls and my products are in peoples' homes. There are companies a million times the size of my company that you have never heard about because they don't make tangible products or they are not interesting to the general public. But it's still all part of my story and, I still love my story.

I've also been on my deathbed at times it seems, I have also been on the brink of insanity due to my story and the way that it has rolled out because it has been crazy.

Ryan Money: How was it going through that?

Shawn Nelson: It is very hard. I don't know how else to put it. What I have been through is hard emotionally and financially. I am going to probably have to sell my home and have a zero or negative net worth for the next few years of my life to pay off some of these debts that I'm personally guaranteed on. I'm going to have to pay the price for a long time.

Frankly that is not the hardest part. The hardest part was the people who I couldn't help that were in the way of the train when it came to the station. They are people who I care deeply about - vendors, people who have sold me things, friends and people who have lost their jobs. There are people who may hate me but no matter what I will continue to love them.

It is so emotionally difficult that my only piece of advice I can boil down that I can take out of this is somehow cherish those who are closest to you. My wife has stuck with me through it all and has never once said anything that would ever undermine my feelings of support from her. In fact she is a lot more up in arms to fight my battles than I am.

My story is not over. I may do it bigger or I may fizzle out or I may go forward. I can tell you that I will never stop pushing.