Surviving Shark Tank: How One Entrepreneur Passed on Mark Cuban and Launched a Successful SaaS Startup
Editor’s note: This article is based on a conversation with Ryan Naylor, Founder and CEO of VIVAHR. VIVAHR offers a SaaS-based job posting automation software.
While almost every entrepreneur feels the sting of rejection during their innovation journey, it always bites that much deeper when the rejection happens under the public eye. Overcoming that takes tremendous conviction and an implicit belief in the value and potential of your product – something Ryan Naylor, founder of VIVAHR, has in spades.
If the financial performance of VIVAHR is any indication, Naylor’s sense of conviction is paying off. Speaking with Financial Flight founder and CEO Brian Zapf, Ryan reveals not only the secrets to growing and incubating a successful SaaS startup – but also the importance of tracking financial statements and evaluating overall financial performance analysis metrics in a world of work that never seems to stop changing.
How Ryan Naylor survived the Shark Tank sharks
The story behind how Ryan Naylor grew beyond the criticism of Mark Cuban on Shark Tank has been told before – yet its lessons bear repeating. Anyone for whom entrepreneurship is a way of life will find that their inventiveness and out of the box thinking is questioned from all sides – disrupting the status quo seldom receives a warm welcome.
Nevertheless, the key lesson that Ryan Naylor took from his harrowing experience on the popular TV show was one of passion and belief in his product. Criticism for even the most well-meaning of innovations is part and parcel of the founders’ experience. Since his time on the show, Ryan has moved on from consumer wellness products to a SaaS-based solution, but his deep appreciation for the value proposition of his work remains.
This sense of passion has gone directly into the formation of the VIVAHR concept, too. Ryan understands that different people are passionate about different things, and thrive when their vocations are best aligned with those deep drives and feelings.
However, letting our passions run away with themselves doesn’t always lead to the wisest business choices. Fortunately for both Ryan and for VIVAHR, the SaaS startup’s financial performance analysis processes ensure that cooler heads prevail – even in the midst of truly exciting growth.
Scaling to accommodate SME talent
In a recent conversation with Brian Zapf of Flight Financial, Ryan Naylor recapped not only the founding value proposition for VIVAHR, but also its target demographics. “VIVAHR is job posting automation software” he summarized. “Historically, in the world of HR software, companies use applicant tracking systems in order to manage the candidate journey.”
Yet, through either a lack of knowledge, the costs, or teams being at capacity in managing their businesses in other verticals, Ryan discovered throughout his career that this level of control over the application process wasn’t being used to SMEs’ advantage. “There are a lot of ways that small businesses didn’t capitalize on those tools, oftentimes due to the enterprise level cost structures they had.”
VIVAHR, through automation and transparent talent tracking frameworks, has opened the door for companies to more successfully and sustainably grow. Ryan’s business forms a solid rapport with companies at around the 12 employee size, and works with them in scaling up – often through to, and beyond, the thousands. “It's an affordable applicant tracking system that can help automate job postings,” Ryan explained.
The seed idea for what would become VIVAHR began a decade ago. At that time, Ryan was witnessing double-digit unemployment figures in his home state of Alabama – and began creating platforms and job boards to help the community.
Connecting employers and jobseekers more effectively
The challenges that Ryan and his team witnessed a decade ago have, perhaps, a haunting resemblance to the post-pandemic job hunting and recruitment landscape of today.
“It didn’t make sense, because unemployment was so bad, yet organizations were having such a difficult time hiring,” Ryan expanded. “What was great about the platform that we created – which helped over 100,000 people into work – was that we were able to find out a lot about what worked and what didn’t as we went along.”
The proving ground of the recruitment landscape of a decade ago became a testbed of sorts for the best practices that would inspire VIVAHR as it is today – both in candidate journey and SME engagement, but also in Ryan’s own business management and financial performance capabilities.
Viva the Great Resignation?
The aftershocks of America’s Great Resignation are arguably still being felt – many hold that the labor movement in question is actually still ongoing.
While the global health crisis had a seismic effect on the company culture and startup feel of the VIVAHR team – as with every business – Ryan also took the opportunity to tailor his startup’s offering to enlighten and educate employers on where they were missing the mark when it came to attracting and retaining talent.
Naturally, any sizable shift in workers seeking better prospects is excellent news for the recruitment industry, yet it would be cynical to assume that better financial performance was the sole motivator for VIVAHR’s proactivity.
In fact, in Ryan’s experience, the drivers behind workers seeking better prospects have less to do with the financial side of the employee-employer relationship than many are inclined to believe.
“I don’t have a single conversation with any employee that doesn’t revolve around core values,” Ryan outlined. “It breaks my heart to know that people who are unemployed, or feel underemployed, bring that tension home into their personal lives.”
Strong cultures in which workers feel valued have never more been the golden ticket to keeping employees engaged than they are today. VIVAHR works with organizations to promote those values – and likewise keeps them front and center in its own hiring philosophy as it grows.
A financial performance backed by ambition
They don’t measure financial statements on the basis of the passion behind a given company – but if they did, Ryan Naylor and his team would enjoy an outstanding balance sheet. That said, the financial performance of VIVAHR is in a very healthy place today – yet it has attained this level of consistency and comfort largely through Ryan and his team’s own efforts.
From the outset, Ryan chose to grow VIVAHR without outside capital funding, stating that doing so would have an undue potential influence on his organization’s culture and its expectations for growth.
Preferring the freedom with which to chart the future of the startup as he sees fit – with greater flexibility to the machinations of the market as the world keeps changing – also gives VIVAHR the freedom to go at its own pace.
“Our customers appreciate that we don’t have that pedal to the metal mentality of a lot of VC backed startups,” Ryan said of his organization’s culture and financial performance. “They love the authenticity that comes with having built a brand that is purpose-first.”
Financial performance doesn’t have to be a dirty word
While Ryan sustains a somewhat levelheaded outlook on the interplay between purpose and profit in any given organization, his conversation with Brian indicated that the often heavy-handed narrative that going after money is bad is not the wisest approach either.
“People often believe that profitable companies are bad,” Ryan remarked. “I think they’re missing the mark. For example, at VIVAHR we donate a percentage of our profits every year to fund scholarships and higher learning opportunities that help people move through trade schools.”
Having the freedom to do so means consistent financial performance analysis, of course – yet Ryan’s philosophy maintains that a healthy business and a healthy sense of what’s right for the community can comfortably coexist.
Financial performance analysis when future-proofing a business
What’s more, because his organization has gained such a positive financial performance on the basis of its own merits and use cases, Ryan and his team at VIVAHR enjoy a high level of freedom in both forward planning and discretionary spending.
That means those instances in which VIVAHR invests in upskilling the community don’t need to be justified in financial statements as perused by investors – they’re free to simply happen.
And similarly, as Ryan illustrated to Brian at Flight Financial, the future direction of VIVAHR is that much more freeform too. Of course, that does not always mean the road ahead will be simple either.
“Being a non-VC-backed tech startup means that at our company, cash is critical – both to be able to measure it, and to manage it,” Ryan highlighted. “At other companies I created in the past, every month we operated a break even spot, and with VIVAHR we're operating kind of on that cash basis.”
Growth for VIVAHR is rapid, but it is also measured. Ryan has a philosophy for financial performance in his startups, in which a monthly break even rate of income and burn-through is sustained – but that a war chest of sorts is also built up over time. With this self sustained capital, VIVAHR is able to weather downturns in the market, shrug off unexpected economic happenings and grow the business in a very deliberate way – while remaining flexible to the emergent needs of the recruitment market.
Brian and Ryan agree that, in a post-pandemic international business climate, the appetite for mile a minute growth strategies to become the next big startup unicorn simply aren’t as sustainable – or even as alluring – as they used to be.
However, even to maintain the kind of direction and drive that Ryan and his team have at VIVAHR demands both financial performance analysis and a level of self discipline – as well as a few techniques to keep eyes on the prize, but feet on the ground.
How VIVAHR manages financial statements
While every entrepreneur has their own favorite tool when it comes to successful financial performance analysis, Ryan and the VIVAHR team use a mix of traditional and in-house systems to their advantage.
Excel spreadsheets breaking down revenues and metrics proved almost intoxicating in their detailed simplicity when the organization first came to be. Over time, Ryan and his colleagues have fine-tuned their financial performance analysis strategy, as well as taking the time to develop internal tools that further enhance their perspective on business growth.
Diversifying the metrics being tracked is, in Ryan’s experience, a key performance indicator that even experienced entrepreneurs can often run the risk of accidentally overlooking.
Analysis of new customers subscribing to VIVAHR, their retention and churn rates, as well as profitability per customer are all incredibly valuable financial performance indicators that Ryan can use to hone in on where the business ought to shore up, grow further or hold steady.
“I think a lot of companies don't measure their costs of retention,” Ryan advised. “They look at their customer acquisition costs, but they forget about retention costs and their direct impact on longevity, and increasing the lifetime value of that. We make sure we always track those internal metrics.”
Why financial statements are about more than money
The decision to not just track the dollars and cents leaving the business, but also customer retention, onboarding and churn rates, all converge into a far more comprehensive series of metrics by which VIVAHR is able to track its financial performance.
Having an extra pair of eyes or two on hand can often help too. Ryan is a member of Entrepreneurs Organism Arizona, a networking and advisory group in which startup entrepreneurs meet and discuss strategies in the community.
Another great way to get help understanding your numbers is by working with a fractional strategic CFO service, like Flight Financial.
This kind of networking has proven pivotally important to VIVAHR. Ryan has brought onboard not only fresh perspectives to help him understand how and why some numbers go up where others go down, why one area of the business is growing and the other is stagnant, and so on – but the lesson that he has taken away is that key indicators of financial performance in any business always relate to more than simply cashflow.
Furthermore, the deeper an entrepreneur is able to sink into those metrics and indicators, the more proactive he or she is in both choosing a direction for the business to go in, but also forecasting the growth ahead.
More than simply resting easy when the month’s burn-through of expenses and savings are locked in, entrepreneurs are advised to instead look to where they need to shore up, strengthen business performance or simply review ongoing processes and metrics.
As Ryan explained, it’s about identifying and admitting to those gaps in one’s own knowledge and seeking the appropriate advice – even when it’s more humbling to do so than we would like.
“I would say the most stressful times of my 14 year entrepreneurial journey have been when I didn't know the numbers,” Ryan said. ”It took kind of a meltdown moment to recognize that and to change how I approached it.”
Moving beyond meltdown
The ‘meltdown moment’ that Ryan describes happened when, while packing his car to head to a trade show, he began experiencing abdominal pains so severe that he could barely stand up straight, let alone load his vehicle.
Every entrepreneur probably knows the guilty twinge of a body fighting back against the stressors of going into business. For Ryan, despite a clean and healthy lifestyle – no liquor, decent diet – he discovered upon seeking urgent medical care that he was experiencing liver failure. Without immediate intervention, it could have proven fatal.
“I had a doctor sit down at my bedside,” Ryan recounted. “He said, ‘There's not a medical explanation as to why this has happened – but just based on getting to know you for the last few days, I think you're overworked’.”
The stress and rigors of running a company had run their course on Ryan, despite his youth and active lifestyle. As is sadly often the case, a health scare gave him all the time he needed to slow down and think over his choices.
By prioritizing financial performance in the wrong way – and by growing unsustainably in his early career, hiring fast and buying offices just because it was the ‘done thing’ – Ryan had overstretched both his own capacities and those of his fledgling startup businesses before VIVAHR as we know it today.
Ambition is a powerful driver, but it simply cannot defeat the laws of physics and biology. Through this humbling experience – from which he luckily made a complete recovery – Ryan learned which financial statements and metrics were true measures of success – and which were just the hyperbole of the entrepreneurial world.
Healthy financial statements come from healthy entrepreneurs
The whirlwind of the startup space can become a giddying ride that is difficult to slow down – especially when success comes knocking. Ryan Naylor’s journey in creating, successfully marketing and now proactively growing VIVAHR has a unique undercurrent – his televised appearance on Shark Tank.
Yet for all the verbal sparring between himself and Mark Cuban on that episode, there simply is no substitute for intelligent financial performance analysis, born from a grounded yet ambitious approach.
To achieve that, Ryan and those around him have certainly had to learn to roll with the punches – from televised takedowns to health scares and, indeed, the global pandemic.
The key takeaway here is the same as so much in business – it’s about people. Happy customers and engaged employees yield healthy financial performance time and time again – but don’t be afraid to let that ambition loose and use your metrics to plan your next leap forward either. If you want help applying these lessons to your business the easy way, schedule a quick call with one of our strategic CFOs.