Startup Savant (@StartupSavant) recently interviewed Richard Collins, Investor & Chairman/CEO of Istation. Catch the interview here.
Richard Collins is the Chairman and Chief Executive Officer of Istation. With nearly 5 million students enrolled worldwide, Istation is impacting teachers and students globally through ground-breaking education technology that blends direct and systematic instruction with animation, game-like interactions, and unintimidating fun.
As an entrepreneur, Richard has invested in and/or operated businesses in real estate, energy, and media since 1972. He started his career in banking, becoming chairman of two commercial banks early on. He has also acquired and developed ranch, commercial, and residential investment property; participated in oil and gas drilling ventures and acquisitions; and served as a director of privately owned energy companies.
He has served as a principal in several media investments, including motion picture theaters, radio stations, and newspapers. Richard and several partners formed Istation in 1998.
In this interview, Richard tells us a bit about his entrepreneurial story and why he started Istation. He also shares the epic moment he had managing cash flows and what he and his team did to resolve it. Read on, enjoy!
WHAT MADE YOU START ISTATION AND MAKE SIGNIFICANT CHANGES IN THE INDUSTRY? HOW DID THE IDEA FOR YOUR BUSINESS COME ABOUT?
My family has been interested in education, specifically kids who didn’t get every break in the world, for generations. In trying to make a difference, I’ve found that some issues are simply radioactive. For example, vouchers are radioactive on both sides, but everyone is in favor of the effective use of technology in school — that’s a universally positive issue.
In my personal experience, I’ve found that every child has a unique ability — it could be as a student, could be as an athlete — but in order to be successful in life, every child needs to learn how to read. It’s the idea of merging technology with the fundamental need to read that ultimately led to the formation of Istation.
HOW DO YOU FIND PEOPLE THAT TRULY CARE ABOUT YOUR BUSINESS? HOW IMPORTANT IS HAVING GOOD EMPLOYEES?
It’s simple: teamwork makes the dream work. Good employees are absolutely essential to our business. We’re a mission-driven company, with our mission being to support educators, empower kids, and change lives. It’s a job that energizes even the most cynical amongst us. You can’t look at a kid’s proud, smiling face and not realize that you’re making a difference in the world by working for Istation.
A lot of people want to make money, but an equal number want to make enough to get by simply knowing they are making a positive impact on the world.
To turn mission-driven work into a profitable enterprise is the real challenge. In my world, patience plus persistence produces profits.
HOW DID YOU GET ISTATION OFF THE GROUND? DID YOU BOOTSTRAP OR PITCH WITH LOCAL ACCELERATORS OR VCS?
I’m a Texas entrepreneur, and by that I mean I’ve made and lost money in almost every way imaginable. I’m lucky that by the time I came across Istation, I had enough in the bank that we could self-fund a lot of the needs that we have.
At Istation we’ve taken on minimal debt, avoided outside investors, and have only 28 shareholders (all of whom work at the company today). A healthy balance sheet gives us a lot of flexibility that others don’t have. Too many companies take on too high a debt load or trade away equity for impatient investors; part of our success is that we don’t have to deal with those issues.
WHAT WOULD YOU SAY ARE THE TOP 3 SKILLS OR TRAITS NEEDED TO BE A SUCCESSFUL ENTREPRENEUR?
Patience: Success doesn’t happen overnight.
Persistence: There are boundless setbacks. It’s not the falling down that matters, but the getting back up that counts.
Profits: The best way to ensure an enduring business is to focus on the bottom line. A healthy balance sheet makes for a healthy business. It’s also important to gauge the long-term cost effectiveness of a strategy; don’t give up a longer-term opportunity simply because you’re after a quick profit.
WHAT’S YOUR MOST EPIC MOMENT/STORY AS AN ENTREPRENEUR?
In 2008, we were a multimillion-dollar revenue business, but we were losing about a million dollars a year on a cash flow basis. We were about to run out of money, and I knew we needed another $1 million to break even.
I took it upon myself to solicit additional funding from investors and investment banks, but I didn’t like their terms. Outside investors seemed to bring with them a lot of trouble. So I figured out a way to bridge the cash gap — nothing fancy, and no layoffs. We managed our cash ruthlessly, deferred projects for as long as possible, and focused manically on revenue.
Within a year we had doubled revenue, and we were generating positive cash flow. It’s a fun story now, but at the time I felt we were at the brink of collapse.
HOW DO YOU BUILD A SUCCESSFUL CUSTOMER BASE?
Marketing in the field of education is difficult. Teachers don’t want to hear from a company about how amazing it thinks it is; teachers want to hear from other teachers about what really works.
At Istation, we have created a program that’s made by teachers for teachers. Our goal from a marketing perspective is to get teachers so excited about our program (its ability to improve student outcomes and save teachers’ time) that they can’t help but tell their teacher friends about us. That kind of word of mouth can’t be bought, but it can be cultivated with the right program and the right people behind it.
WHO OR WHAT INSPIRES YOU MOST?
My mother is one of my great inspirations. She was the first woman on the Dallas City Council, and in those days it took more than a little guts to debate with the 13 or so other men on the council. She taught me to believe in myself, stand up for the little guy, and never stop fighting for what’s right. I feel very lucky to have had her as an influence in my life.
WHAT’S THE BIGGEST MISTAKE YOU’VE MADE WHILE RUNNING ISTATION?
We’ve been very lucky in that we haven’t made a whole lot of mistakes. When we do make a mistake, we own up to it quickly and fix it as soon as possible.
There’s a saying that goes, “When you win, use ‘we’. When you lose, use ‘me.'” I like that saying and think it fits the Istation culture well.
DO YOU THINK IT’S IMPORTANT FOR AN ENTREPRENEUR TO HAVE HOBBIES OTHER THAN WORK? WHAT DO YOU DO IN YOUR FREE TIME?
Absolutely. Some of my best ideas come from spending time outside of the education space. I’m a big history buff and love to explore the lessons of people and civilizations from ages ago. I was recently in Rome and remarking on both the building and the fall of a great empire. There are many lessons we can apply even today from the Romans.
I don’t think it’s important what your hobbies are, just that you have and pursue them with passion.
I’m using this time away from the office to brainstorm, “What is it that everyone needs to have? What is the breakout move that will create a must-have product?”
WHAT ADVICE WOULD YOU GIVE TO ENTREPRENEURS STARTING A BUSINESS IN TEXAS? WHERE SHOULD THEY START?
Where you start is less important than that you start. Pick a good team and a good idea and see where it takes you. There are ups and downs in any business, but you will never know what they are until you start down that road.