Andy Ory has started, sold, and also taken companies public. Perhaps even more importantly, he has been at the edges of dragging the way we
communicate forward into the future at every major leap for several decades.
When it comes to startups and business, he knows when to raise funds, when to fold, and how to persevere through problem-solving on a large scale. Andy Ory recently appeared as a guest on the DealMakers podcast. During his exclusive interview, he revealed his early start to entrepreneurship, the lessons he’s learned about raising capital, and many more topics.
Born to Code & Run Businesses
Originally from Massachusetts, Andy began in the public schools of Worcester, before going to college in Boston. Today, despite having run several global startups, he says he still tries very hard to do all his engineering, support, and manufacturing in the Massachusetts area. Andy was born into a family of entrepreneurs. That type of real kitchen-table type of entrepreneurship. He got to see his father come home from work every day, and listen to him talk about the things they were making, the trials and tribulations, and the ups and downs of being an entrepreneur. Before that, his grandmother had started her own coat making business.
What really stuck with Andy from that young age was that having a business is about creating community and culture. It’s a group of people banding together to do something. He found that to be quite attractive and enticing. Andy believes that everyone has the capacity to become an entrepreneur. Though, like musical talent, if you aren’t that interested, you aren’t going to go far. If you are and get the right mentorship and cultivation, you can be great at it. Andy himself was always interested in how things are made, how they are sold, and how resources are accumulated. He is a self-described people-person, making the cultural aspect of aligning, motivating, and just reaching goals through business something he always wanted to do.
He also discovered a natural talent for coding, something he believes is much more in your DNA and you are born to do or not, than entrepreneurship.
Ory didn’t have to wait long to get his first taste of entrepreneurship. His first business started in high school. In ninth grade at Doherty High School in Worcester, he would take classes in assembly language, started writing code, and discovered that while more people were getting personal computers there weren’t a lot of programs people could buy. So, he started writing programs and selling them through the back pages of the Wall Street Journal, the New York Times, and USA Today. This first business was Consumer Software Systems. He would get the orders, and have to copy the discs and fulfill the orders. It was a great way to get his feet wet in entrepreneurship. Once he completed high school, this founder decided to go to Harvard to major in film. A move designed to help him broaden his view and landscape with liberal arts to diversify from being too technology-focused.
The Art of The Start
After an eight-week road trip in a VW Microbus after college, Andy ended up as one of the first hires at Boston Technology. They were offering large-scale voice messaging for the telephone companies to sell to residents. Not wanting to be boxed in, he decided that if all of these other 30-year-olds could launch these businesses, why couldn’t he at 22. He met his now cofounder of 30 years, Patrick MeLampy, and began the journey of serial entrepreneurship. Priority Call Management was his first real business which became one of the world‘s leading suppliers of enhanced calling and messaging solutions. Andy says his father gave him a ‘battlefield MBA’ about seven years in. He raised money from family and friends, including about a third of his parent’s retirement fund, before taking that total up to about $17 million raised.
During the journey with this company he developed a critical skillset as an entrepreneur. That is to understand the right time to sell the business based on the data that is in front of you as a founder. With Priority Call Management he took a look at the data he had and understood they had touched the peak with the business. At this point he made the decision to sell the business. He went out and hired investment bankers and the company ended up getting acquired for $162 million in 1999. The big lesson from this journey was to never give up. After having to lay off most of the staff in 1995 there were 11 of them that remained and with no salary went to work 107 days in a row before the sun came up and would not leave work before the sun would go down. During this difficult time, they knew they just couldn‘t fail. They continued to reinvent themselves until they found a value proposition that would turn the business around.
Once You Are Lucky, Twice You Are Good
After a few months in, he got together for breakfast with Patrick MeLampy and brainstormed a few ideas. These ideas led them to launch Acme Packet. The business model of Acme Packet was to provide voice, data and communications services and applications across IP networks for service providers and enterprises. With Acme Packet, Andy and his cofounder Patrick found their rocket ship. The company was growing very fast. Before going public they raised $44 million. Investors included Menlo Ventures, Canaan Partners, and Advanced Technology Ventures. Just like he did with his prior business it came to a point where he saw it was important to explore selling the business as they had ran out of market. Markets make companies so if there is no more market there will be no more company. Once again in his entrepreneurial journey, Andy felt they were at the peak of the business. He then engaged bankers to seek suitors and ended up selling the business to Oracle for $2.1 billion.
From his perspective, you don’t sell things when you see things are wrong. You sell things when you intuitively understand, that even tho it is the best of times, the underlined dynamics are not there for you to continue delivering on your vision over time. At the time of the acquisition, Acme Packet had 1,000 people on staff, $440 million still in the bank, and customers in 110 countries. The business was very profitable.
Storytelling When Pitching Investors
Majoring in film from Harvard has certainly helped Andy to become an effective storyteller. A critical skill for every founder when it comes to hiring, selling, or fundraising. The truth is that ideas are cheap. They’re a dime a dozen. It’s the life and energy that an entrepreneur can breathe into an idea and fill that sail and make it go, that is really the precious, critical, scarce commodity that makes the difference.
From Andy‘s perspective, to enroll investors you need the following.
1) Be able to tell a compelling story
2) Communicate the vision effectively
3) Being knowledgeable, excited, and friendly
4) Address concerns with authenticity
5) Share insights on your market and your customers
When he invests in other startups himself today, he wants to learn something when someone comes in and talks to him. He wants to learn about them, the market, the customer, and why it is a must-have.
When it comes to fundraising storytelling is everything. This is being able to capture the essence of the business in 15 to 20 slides. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Networking As The Next Opportunity
Andy and his cofounder had again free time after the acquisition of Acme Packet by Oracle.
The two friends and cofounders began to dream about the future and new potential opportunities. During one of their brainstorming sessions, they focused their attention on a new exciting problem which led to the birth of their latest company 128 Technology.
128 Technology has the goal of making the millions of networks work a lot better. Their software routers speak the language of applications and services, enabling the network to adapt the network dynamically to deliver what the business needs, when and where it needs it.
So far the company has raised for 128 Technology $67 million from The Perkins Fund and G20 Ventures to name a few.
Listen in to the full podcast episode to find out more, including:
- When to sell your company
- The smoke and mirrors of selling a public company
- How to choose your investors wisely
- Why raise money, even when you don’t need the cash
- Why embrace your mistakes
Alejandro Cremades is Author of The Art of Startup Fundraising & Serial Entrepreneur.
The original article can be found here.