"Take a 60mo, so you can sleep better"

60mo (pronounced “sixty moe”) is a startup that aims to “to help business owners sleep better at night.” I recently had the privilege to speak with Ed Buchholz, CEO and co-founder, and learned of his own entrepreneurial journey and the mandate that drove he and his two partners to launch into a new market with their new idea.

The Founding Story
To understand what fueled Ed Buchholz to launch 60mo, it’s important to understand Ed and his upbringing. He comes from a family of small business owners; even as far back as two generations before him, Ed’s grandfathers carried on small businesses. Additionally, it’s important to know that Ed comes from the Midwest; Ohio, specifically. Why is this important? You’ll later learn why this is so.

In the year 2000, against his extended family’s vocal concerns over this decision, Ed dropped out of Bowling Green State University and became employee #5 at a startup that launched nearby. That little startup turned into ExpenseWire.com. He recalls that most of his family and friends at the time thought he was crazy to give up on formal education, but he remarks that he would have been nuts to give up on the chance to be part of such a startup; one that, to boot, was headquartered in his own hometown of Wooster, Ohio.

He didn’t “grow up wealthy” and he worked his way through college. Along the way, he “learned a lot about business and the startup process” and became fascinated with it. He saw there was “a lot of steam behind ecommerce and web-based business” and he wanted to be a part of it. He looked up to “luminaries like Steve Jobs and Bill Gates” and envisioned how he could be in the mix. Since he was technically inclined to writing code and designing, he saw it as a “really interesting and great opportunity.”

Needless to say, it doesn’t appear that he’s looked back on that decision with anything but satisfaction and confidence that he made the right move.

During his tenure with ExpenseWire, Ed scaled the company ladder by starting first in customer service, then moving to writing code and SQL—“you know, database stuff”, then growing into a technical role and finally “flipped over into a product role”. In just a few years, ExpenseWire tacked on more than 50 employees and Ed had a clear part in growing the business. All of that was a good challenge and matched his desire to intentionally nurture and cultivate what he was involved with. As he put it, “I was lucky enough to be there and worked really hard with little pay to be part of that rapid growth in those eight years; we were a small and agile company.”

It would have been easy for him to check out along the way, but that goes against the kind of guy he appears to be. Case in point, after Rearden Commerce (a 500 employee company) acquired ExpenseWire in 2008, Ed says that with a larger organization comes a certain level of bureaucracy and added that he’s a “bit of a bulldog, as you might imagine, and [wasn’t] in love with the long decision approval process.”

It wasn’t long after that that his coworkers, John Siladie and Keith Kauffman, became his partners as they launched out into the wild unknown of startup land in 2009. “We had reached a plateau and there wasn’t much opportunity for us to grow with Rearden,” Ed recalls.

Starting Out in 2009
My astute readers, you may be wondering…What was their product? What was their service? What was their go to market strategy? These are all good questions. Ed’s answer:

“We had a few different ideas, but hadn’t settled on one. We had less of a product and more of a mandate. We all came from small business and it’s ingrained in our DNA. We thought, there’s got to be better communication and collaboration for small business owners. We figured ‘it has to be done and we think we’re the best people to do it.’”

He went on to say:

“I enjoy the small business sector and think it is very neglected. It is the lifeblood of the economy. We wanted small business owners to be more empowered and more effective. Our vision is most likely going to disrupt many product and market areas as we continue to grow. HR, payroll, taxes, and many other ways that we can help. This is where I feel passion and helping small business owners do what they do better.”

So with a mandate in mind, but not a clear product to launch, the team “went through product ideas for a year or so.” Following this focus on mandate and delivering value to their chosen market, the team eventually launched GetConfer.com. Ed shares that it was “a good product, but then Yammer started and it was a very competitive marketplace with everyone trying to figure it all out. We didn’t get as much traction as we would have liked.”

At this point in our conversation, Ed uses a word that just works. He says that after raising $250,000 for Confer and launching and not gaining traction, they “pivoted”. Now, my readers, that is a great term. Instead of using the word “fail” or “regroup” or “start over”, he says they chose to pivot. What was the result of this pivot…ah, that’s the beautiful story unfolding. You see, this pivot led to 60mo, a revolutionary new service that’s actually going to help you—yes you, the small business owner—sleep better at night.

Pivoting to 60mo
Did you catch that the founders raised some significant capital for their first launch, GetConfer? How did they do that? Herein lies the genesis of the idea for 60mo.

[Aside: a little primer on new venture financing. As part of the due diligence phase, most investors—okay, all investors—will expect you to provide them with a set of proformas for the next 5 years. As a good entrepreneur you want to be both realistic and optimistic as you forecast your revenue and your expenses (i.e., your P&L). According to Ed, to do this well, “you need to spend hours and hours on Excel to generate a great spreadsheet embedded with lots and lots of formulas.” Then, after working on this spreadsheet and being sure that all the formulas are referencing the correct cells, you—the good entrepreneur—will hand this proforma P&L over to the investors in hopes that they’ll find favor with all your handiwork. Unfortunately, what often happens is the proformas are done incorrectly and with insufficient backup to support the multiyear projections. Okay, now back to the story…]

Since he and his partners had recently gone through the fundraising process, Ed had real-world experience with the need for bulletproof proformas. “It is important for any business to have a forward-looking plan that makes sense” and to have a “good grasp on that plan” if one pitches to VCs or angel investors, says Ed. “We wanted to eliminate the tediousness so that it’s a no-brainer.”

With this pain readily in view and a solution in mind, Ed and his partners built 60mo in only 2mo. [Aside: you’ve likely determined by now that 60mo is short for “sixty months” which is precisely equal to “five years” or the time horizon that matters to investors and entrepreneurs.]

Soon thereafter, 60mo launched on TechCrunch Disrupt’s Startup Alley and gained broader exposure to the marketplace. Ed discloses, “we received incredible feedback and got interest—and subsequent offers—from VC and angel groups.”

Following the initial interest, Ed discovered in the fundraising process that,

“some of the VC groups got our vision, but some of them didn’t. They thought that we couldn’t sell to small business because it is hard to reach that market. We disagreed because we think that small business owners talk and they share with each other what works. Just take a look at the market dominance of QuickBooks. It owns that small business accounting market space.”

Ed went on to explain how 60mo differs from accounting software:

“Accounting tools are more like rear view mirrors and take a hindsight approach as an analytical tool. We don’t think you’ll get far if you’re driving by looking backward. 60mo is a GPS system and we think it helps you take your company where you want it to go.”

Apparently that metaphor worked in convincing investors of the worth of the concept. The founders recently netted just nigh of $1 million through a Series A round with Lightbank, a venture fund most well-known for funding Groupon. Lightbank is headquartered in Chicago and that made a difference to Ed.

“They (Lightbank) have Midwestern values and they are very focused on growing a business that is profitable. Other firms wanted to move us to the Bay Area and do a free services model. The support they (Lightbank) could provide us in the Midwest was remarkable. Their track record speaks to this.”

The Fledgling First Few Months
In less than a year, 60mo has grown to a team of ten staffers with most headquartered in Wooster and a few people scattered around the country. That team is central to the success that they’ve already enjoyed.

Team-building needs to be intentional in a growing business, says Ed. Central to this team-building are the concepts of humility and trust.

“Both of these directly apply to your team. From a humility perspective, I understand that we couldn’t be where we are without the team that we’ve formed; 900% of the credit goes to the team. It’s important that as a founder I understand that it’s not my job to take credit when things go well. Be humble, that’s all you can do.”

“Trust is the number one thing when you’re building a team. Can I trust this person? Do I have evidence that this person is trustworthy? There is nothing worse than having a person on a team that is not trustworthy; one who goes behind your back. Even startups of 3 to 5 people can be political machines, but, you can’t allow that to happen. If you do, you’re in trouble.”

Ed went on to share that the founding team fills in the gaps that a single founder would likely experience on his own:

“I’m a high-level visionary kind of guy and have a tendency to think ahead as much as I can and am in a cloud, as you could imagine. Keith and John are the guys with their feet on the ground. They run architecture and development. They are the ones doing the work; I am extremely lucky to have them. Ultimately, you have to like spending time together and you have to believe, collectively, that you can do it.”

As for growth in their customer base, Ed proudly shares that “we have thousands of paying customers” and increasing interest every day. He is keenly keeping watch of the site’s web traffic and discloses that, during our conversation, site traffic was coming from within the US and abroad.

60mo is aggressively building their product’s capabilities through regular updates and improvements, averaging one release every week. Ed shares that they’ve been told they’re “the fastest and most agile of companies doing this.” That’s the mindset they’re after: “doing whatever it takes to get things done.”

Mint for Business?
Much has been made of how 60mo is “Mint for business.” When I asked Ed about this, he was quick to acknowledge the “phenomenal job” that Aaron Patzer did with Mint. “Aaron and his team took 3rd party data and presented it in an easy to understand way for personal finance and it really changed peoples behavior“. But, he was also quick to relay “our goal is not to be Mint for business.” At this point, I got the sneaking suspicion that what lies ahead for 60mo is much more than just finance information for small businesses. Perhaps we’ll later come to understand that 60mo is really enterprise software tailored to the smaller enterprise.

Parting Thoughts
As I brought our conversation to a close, I asked Ed to share his greatest challenge with his new venture. It didn’t take him long to disclose that what he lost sleep over was

“getting the word out about what we’re doing. We’re in Ohio. We’re not in the larger media markets, so we find it difficult to get coverage of our story. We have no problems with growing and scaling. There really isn’t any competition, so we just need to make sure that people know about us.”

He continued by exhorting fellow entrepreneurs to “remember that there are peaks and valleys and you need to hold on for the rollercoaster ride. You have to be persistent and continue down the path and believe in yourself along the way. You’ll always have down days, but keep your eye on the size on the market and pivot.”

He summed it up well with: “be persistent and focus on the truth behind your mandate.”

About 60mo
60mo is a financial dashboard tool that helps small business owners and entrepreneurs analyze, budget, and manage their resources. The system draws from multiple data sources to bring real-time information to the fore.