You need to do some kind of workshop like this to get ready to scale. Do it yourself if you want, but probably a lot more successful with the experience of our coaches.

Joel Martin, COO, VEDA Data Solutions, Madison, WI

How to Steer Clear of Founder Burnout With the Right Support System

Interview with John Manlove, CEO and Rob Fess, Cofounder of Apex Trading

How to Steer Clear of Founder Burnout With the Right Support System

Show Notes

With adult-use cannabis products legal in 11 US states and several countries, the industry is poised for massive growth over the next several years. Tech startup Apex Trading is aiding in that growth by providing a wholesale business management and sales platform for businesses in the US cannabis industry.

In the latest edition of the Silicon Valley Momentum Podcast, Roland Siebelink speaks with Apex Trading co-founders John Manlove and Rob Fess. They discuss the goals and challenges of a young company that was founded in early 2018:



Transcript

Roland Siebelink: Hello and welcome to the Silicon Valley momentum podcast. My name is Roland Siebelink, and I’m a scale-up ally for tech founders and I’m so excited this week to have with me John Manlove and Rob Fess of Apex Trading. Hello, guys.

John Manlove & Rob Fess: Hey Roland, how are you?

Roland Siebelink: Thank you so much for joining this podcast. I’ve heard so much about you and the inroads that you’re making and do the supporting technology for this booming Cannabis and hemp business. I’m all excited to talk more about that. But before I say too much about your company John, can you introduce Apex Trading to people who have not yet heard if possible about your company?

John Manlove: Yeah, absolutely. And thanks for giving us the opportunity to be here and excited to have a chance to talk about our company. So, Apex Trading, we founded Apex Trading in early 2018. And what we provide is, we’re a wholesale business management and sales platform specifically for the cannabis industry that addresses the entire wholesale supply chain from seed all the way to, you know, to your farmers to your processors to your shelf ready products down to retail.

So what we do is we provide a comprehensive platform for wholesale businesses to not only be able to conduct sales in a more efficient and streamlined manner online, but also power those wholesale businesses with back-end features like a CRM and various other Business Management Tools that help teams leverage and streamline their operations to really run their, their operation very efficiently.

Roland Siebelink: That’s awesome. Okay. So, Rob, can you tell us a little bit more about those clients, the wholesale business? That must be a whole new industry that’s come about in since some States started legalizing cannabis and hemp products, would that be right?

Rob Fess: Yeah, absolutely. So you know we solve problems for the wholesale cannabis producers that would be cultivators, extractors, and infuse good makers, genetics and seed companies. And then on the other side, the retailers, the dispensaries, or stores or provisioning centers, as we like to call them in some markets. We’ve created the product to be designed for small or large businesses alike, you know, priced accordingly and able to scale as the business grows

And one of the things that we like to look at is a quote from Bill Gates, where he said “a platform is when the economic value of everybody that uses it exceeds the value of the company that creates it.” And that’s kind of where we like to see ourselves sitting

Roland Siebelink: Really love that. So, John, is this like an industry still very much in flux, I imagine? Are people still figuring out what works and what doesn’t. Can you talk a little bit about that and the stability or the on stability that you work with. John Manlove: Yeah, absolutely. You know, so I’ve been fortunate enough to have been in the cannabis industry, specifically from a technology landscape since early 2014. That’s really when the industry started to kind of gain this momentum that we all kind of know it as today.

And that was with the first adult use market coming on in the state of Colorado. And obviously, we’ve seen so many States come online both the medical and adult use since then. You know, when we look back at how much the industry has matured over the last six years. It’s really been, they’ve made a lot of strides.

I think we’re seeing more of, you know, in the early days, it was a lot of illicit market growers that, you know, wanted to come into the legal market. And I think that, although they, maybe, possessed a lot of knowledge on how to produce a great product or a quality flower, whatever that might be, they sometimes lack some of those business operating skills, right?

They weren’t really having to pay taxes before. They weren’t having to run marketing and sales campaigns and leverage the business, and deal with HR, and everything else that inherently comes with running a company, right?

So I think as we’ve seen those businesses evolve, so many have made strides, right? so we’ve seen a maturation in this space from a business ops and acumen standpoint. And, they’re bringing in more traditional business operators to help their companies scale and grow into the future, both in their State but also expanding into new markets as they build their brands.

But I think there’s still a lot of challenges. These businesses face, right? I mean, some of it inherently is just created by the landscape we’re in, right?

So there is a lack of accessible banking and insurance, right? So you look at all of the wildfires that have happened. We’ve had several clients who had their dispensaries burned to the ground in Oregon recently. They have no insurance. Because they couldn’t get insured.

So a lot of these businesses are still very much so, while it’s legal in their State and they’re abiding by the rules and regulations that the State has laid out, they’re still very restricted and dealing with a lot of areas that traditional businesses don’t have to go through.

Roland Siebelink: you were telling me in the pre-interview some interesting stories about the previous company and how the founder was not quite mainstream in many ways. Can you talk a little bit about that?

John Manlove: Yeah, you know, when I first jumped in this space back in 2014 as I previously mentioned, you know, I helped start a company called Tradiv and we had the dream of becoming the Amazon of cannabis.

And I wasn’t one of the initial founders of the company, but I was the first employee and brought on for being responsible for growing the operations and sales when we first started out. When you think about the fabric of the founder, especially in a startup, you know, first you have to be able to raise capital.

To be able to raise capital, It’s really, really challenging. Anyone who’s raised capital, myself included, understands how extremely challenging it is.

We were fortunate enough that the founder of this company had a persona that when he walked into a room. Everyone gravitated to him, not only was he like six four, so that helps. I’m a smaller guy. So it’s a little harder for me to gain people’s attention.

But he had an outgoing personality, extremely intelligent. Just could vibe with really anybody. No matter where you came from you’d find something in common, and he would connect with you. And we raised a significant amount of capital, right. So this founder is able to do that.

But I think inversely, right, we think about the pressures that a founder goes under. It’s really lonely at the top.

You have the weight of the world on top of you. Not only responsible with your shareholders but your employees, the community, your clients. And you can sometimes feel like the weight of the world is on top of you.

And unfortunately, back in the Tradiv days, you know this founder, you know, just recently got married and I think he was going through some life changes. He had this company and raised this money. We had scaled the growth of the company of up to 35 employees, were managing three times as many people as we previously had manage

And ultimately, you know he needed a break. So he went to Alaska, did some acid and then literally thought he was the second coming of Jesus on this planet.

Now, I have nothing against organized religion. I think it has its place in society, obviously. And for a lot of people, you know, is really, you know, done wonders for them.

But I would say that, ultimately, right, it didn’t really belong in our work environment. And resulted in, you know, not only the employees losing faith in him, as the founder visionary, the company, but the board, the same. This on top and a few other mistakes within the company ultimately led to the downfall of that.

So I think when we look at founders - personally, me, you know, one of the lessons I really came out of is that – you have to surround yourself with the right support group right, so your co-founders, you got to make sure they always have your back and you can rely on them. So when you’re going through ups and downs, issues, whatever it is you know that you have those people supporting you, right? Just as important in your personal life as well. And whether that’s your spouse or your friend or whoever is you need that support system.

And then from that, you have to create that balance. So you have to get to that, as hard as it is, and especially in American society and our capitalistic driven kind of society. You just want to put in as many hours and as much as it takes it all the time. And always be working. I mean, yesterday I worked a 10… almost 10 hour day, I felt guilty, leaving the office early.

It’s a very unique thing to a start up in a founder, typically. So I think for the, one of the things I really learned from that is I felt like if you create that balance if you’re willing, if you’re able to really force yourself to disconnect and take that time for your personal life and create that balance, maybe not get to the level of that breakdown.

It was a very unique experience to go through. But honestly, I learned so much from that founder CEO as a friend and as an employee.You know, both within business as well, how to navigate that with a board and investors, which I was responsible for after taking over the company.

You know, I learned so much that it really positioned me as a leader and I think us as a company Apex Trading and Bushel44 to be successful, sometimes those failures, while you’re going through them, are the most painful things and horrible.

But they’re the best experiences to learn from. We got to go through that right and we got to go through it.

From that, It really started with, you know, why did I found this company with Rob and our other founder Willy? Because I knew and I trusted them. I knew that anything if I ever needed something no matter what the time of the day was whether it’s business or personal both those guys were there for me. And I was there for them.

And I think all too often, you end up kind of seeing someone who founded a company, they have a co-founder and the co-founder just doesn’t really hold up their end of the bargain sometimes It’s a very common type of occurrence.

Be very selective of your co-founders and ensure that you know they possess those skills and same ethos that you have.

Roland Siebelink: I wanted to come back a little bit to the co founder dynamic because that’s such a frequent topic when talking to startups, Rob, what do you do as a co-founder and what’s the the mindset that you bring to work as a co founder and being the best that you can possibly be at it?

Rob Fess: So, you know, fortunately, I have several years of background in startups. So I’m kind of familiar with how you have to operate. And because I’ve worked from home now even prior to Covid, for a few years you know I’m based down in San Diego, and the company headquarters is up in Portland.

I’m kind of always on. I’m never really off because I’m in my home and I use my personal phone so like John said, you know, it doesn’t matter if I’m awake. And that’s the only thing that stops me from not answering or talking to, especially John or Willy, is if I’m asleep. Otherwise, if my or my phone’s not there. I do a lot of trail running but I even have my phone there. And I know that John and I have had conversations where I’m breathing heavily and say yeah.

OK, cool. We’ll take care of that. Because you know I’m running along a trail 10 miles out in the wilderness.

So, you know, as he mentioned you just (one), you always need to be there and then (two), there’s this sort of relentless forward progress mindset of you know, even if I don’t necessarily have the skill down 100% or the product if we said it’s going to be finished tomorrow, I will put something up tomorrow.

if I tell him there’s going to be an email going out tomorrow. It’s going to go out tomorrow, no matter what, you know, so that’s how we kind of, you know, just continue to drive forward.

The other thing is we’ve known each other. John, Willy, and I have known each other. I joined Tradiv in 2015 and Willy was there already.

So we’ve known each other now for several years. So we understand each other’s dynamics, you know, I can yell at John. John can yell at me. Willy can yell at both of us. And none of us are really upset. We know why we’re doing it.

It’s all, you know, with good intention. So, you know, just having that understanding of who the person is and you know where our limits are really helps but again just always being there for the other person is the way to get it done like in the opposite.

I can call John anytime I call Willy anytime I can slack them anytime and I know that they will answer. And if they don’t, I know they have a good reason. I don’t doubt or second guess them and I feel that that’s what I’m getting back in return.

Roland Siebelink: That’s awesome. Very good. So let’s switch a little bit too. You know how the company’s doing traction. Let’s maybe start with how many employees do you have, and some other metrics that you may be willing to share how, how are things going John?

John Manlove: Yeah, you know, the company is doing really well. You know, I think that we’ve really caught stride. This year, I’ll be at it all. You know, Covid related issues to the side.

The company’s doing really well. So we’re a team of 12 right now. That includes our engineers sales support staff team, so very small company.

But what’s really exciting about that is, you know, while we’re small we’re supporting over 2,400 clients, licensed clients across 11 state markets.

Roland Siebelink: Wow

John Manlove: we’ve really expanded with our model and technology standpoint and footprint wise, even with a very, very small team; so we look at our last two years, right, the first year was “let’s achieve product market fit.”

The second year which was last year, “let’s begin to scale” and we’ve had revenues since day one of the company. So that’s unique for us to start up but you know let’s begin to look at our revenue model.

Let’s begin to scale and roll out the platform and additional markets and we’re kind of at this exciting phase now where we’ve just rolled out our 2.0 platform or new version of our technology with enhanced feature sets and functionality.

And we’re gearing up for our next raise, which is going to be more growth capital focus. So it’s been a great time for the company and we’re doing really well.

Roland Siebelink: I have to jump on the product market fit that you mentioned, because every single founder that I talked to always wants to know how do you know when you have product-market-fit. What would be your answer, John?

John Manlove: You know, I think, simply put, especially from a platform standpoint is increased usage over time.

Right. So if we start to see that incrementally each client that we sign up, whether that’s a seller or buyer is using the platform more as they get used to it over time. Right. You’re starting to see that you’ve achieved some product market fit, you know.

For us, you know, we’re in this very unique position where you know our software isn’t required to be used. Right. So in cannabis right if you’re running a retail operation, you have to have a point of sale software.

If you’re running a wholesale company, you have to have the state track and trace system right that tracking software. Everything else is just kind of tangibles that depending on what you know what the business might want right so we’re not required, but we are very much so needed.

So i think we’re kind of in this unique position where we had to come up with number one:

Where do we want to fit within the niche? What are the needs of your problems within that specific part of the supply chain? and then how do you build a product to address those?

And I think we’ve been really successful at doing that And that really comes back to, you know, our plant first mentality of, you know, very much so.

Being part of the community caring about the plant, caring about the individuals who have, you know, pioneered legalization and ensuring that we’re not forgetting about those individuals saying and ensuring that, you know, we’re really listening to the client. Understand the markets and build the best product possible to address those nuances.

Roland Siebelink: I mean plant-first mentality. Can you expand a little bit on that.

John Manlove: Yeah. You know, I think all too often, um, you know, you kind of get in these gold rush mentalities

Look at cannabis. This is where a lot of people from Silicon Valley and nothing wrong with that, jumping in at right you have a great tech there’s so much talent and and knowledge and expertise in in the Silicon Valley area. Like, why wouldn’t you come and build technology for cannabis right

The other is you have people, you know, kind of commodity or hedge fund people or out of New York base that are coming in and let’s build a commodity exchange just do these things right. I think traditionally, you know, that works in a lot of industries.

And in cannabis, I think it does to an extent, but you have to keep in mind that, you know, it’s still a very small tight knit community. The owners and operators who and then this space are still extremely anti corporate you’re worried about corporate takeover of the industry.

Roland Siebelink: Right.

John Manlove: And I think from a technology standpoint for us to come at is You have to be able to put yourself in their shoes, right? So I’ve cultivated, I’ve run a distribution company, I’ve gone and stayed on the farms and stayed humble. To understand the culture, the people and what it is right? I’m very passionate about that.

So when we think about plant-first. Plant-first means that everything we do from a decision standpoint of a company is with regard and we’re still considering the plant.

So how is this feature. How can this enhance the small business in the large business alike?

What are we doing from a messaging standpoint to connect with the community. So we don’t come across as this outside kind of money grab company coming in.

How do we really identify? How do we support them? Whether that’s donating to certain causes being involved in local fundraisers or events, etc. Like, how do we become part of that?

Really identify with us. So I think when we think about plant-first It’s this thing of yes we’re a tech company. Yes, we’ve raised venture capital. Yes, we have people in our team that haven’t been cultivators their whole lives or even really in that part of the business.

But from a sales standpoint, from a marketing output from an engineering standpoint, right, everything we have. We do have to be in consideration of that plan and ultimately right that tends to create a community or well we like to call our Apex Trading family, right, which is our clients as well as us.

So it’s creating this family atmosphere. This community atmosphere is inherently part of cannabis. It’s such a tight knit community. It takes a lot to get into that community. But once you’re in it. It really is where they’ll support you and they’re your biggest advocates.

Roland Siebelink: also in terms of the description of all the big trends that we’re seeing and, Rob or John, what does this mean for Apex Trading? How big will it be? How many plants will be under management? How many clients do you envision having 10 years down the road?

Rob Fess: Let me start out with that one and then I’ll let John give a serious answer.

I think hemp and cannabis will be so large in 10 years that you know the Superbowl Budweiser commercials are going to be, you know, rocky garden commercials or you know, you never know who’s going to be putting something out there, right. So, you will have that, you know, there’s also the food side of it, you know, the protein coming out of the hemp side. So, curing world hunger and all these different things.

And I just want us to be there along the way to support it in whatever capacity, the industry needs us to support them. So that may mean we are a massive you know multinational conglomerate company or that means we just dominate a specific market or a specific aspect of the market and maybe we kind of refocus and say let’s not look at that big giant picture. And let’s just really support the craft industry or lack of support. So it just depends. I mean, but yeah, that’s kind of where I see it going

Roland Siebelink: Very good, and then we expect the serious answer from John right?

John Manlove: Yeah, right, with somebody I know and say,

You know what I think about the future of our company. You know, obviously, we’re very much so focused on the now as a startup, we have to ensure that each day we’re taking the steps we need to drive things for an ultimate outcome that results in long term success. You know, I do very much expect us and the next year to expand across the entire country. So up opening offices on the east coast and in, you know, entering all legal US state markets.

From a hemp standpoint and from a cannabis standpoint, there’s great international opportunities. I think the biggest market still remains to be the United States and it will continue to do so for, I think, a period of time. But ultimately, right. I think there’s a great opportunity for national expansion for us as a company and really connecting those global supply chains.

From an exit, public, M&A standpoint, I mean every. that’s the dream of every founder of a startup, right? Whether you remain private and you just continue to do what you love and you have a great company and you’re paying dividends to shareholders and they’re excited because you’re profitable and life’s good right maybe we continue down that path right maybe that’s where we want to be.

Maybe it’s something where a merger acquisition or an excellent opportunity comes across that is just too good to pass up right or makes a lot of strategic sense for us as a company, and whoever that acquire would be.

You know, I think, for us, you know, I don’t, I’m not tired of this space by any stretch of imagination. I love what we do. I love getting to innovate and build an amazing product to address this ever evolving and changing industry. I couldn’t really imagine going back to a kind of a nine to five desk job, right? I love what we do.

But in the same sense right is as the future, you know, there’s so many things up in the air. We just have to ensure that we remain focused on today.

You know, looking at those opportunities and take advantage as they as they come along and we’ll see you know we’ll continue our current success. And hopefully, you know, expand upon it and the future should be very bright for the company and all of our employees and of course our clients as well as we continue to innovate.

Roland Siebelink: I’m going to ask both of you as well. In closing, what is one one key goal or challenge that you’re currently looking at and how can listeners to this podcast potentially help you with that.

John Manlove: For us and our success, right, we’ve, you know, it’s going to come down, of course, to our next fundraise right so we’re dumping into our series A here in January.

And, you know, for us it’s a growth capital raise so you know we’ve been able to build a phenomenal product and will continue to innovate, build features and functionality within our system and enhance it more and more as you have to do as a platform, right.

But on the other side, right, is, you know, if you’re interested in this opportunity of what we do and it’s intriguing and you’d like to learn more, especially about our upcoming raise right as we raise capital is growth capital, being able to use that money to expand and continued exponential growth of, you know, between two and 500% of every KPI year over year that we’ve hit.

That’s a great opportunity. Right. So as a startup obviously for us to continue growing and be successful comes the injection of capital. As a technology company right were like many not profitable out the gate right so investors to to support us right and be part of this be part of this this ride that we’re on and take advantage opportunity that cannabis presents and uniquely our position our company provides so uh yeah if there’s any investors out there be interested in that piece. I would definitely encourage them to reach out and would love to have the conversation and speak more about what we’re up to here.

Roland Siebelink: That’s awesome. And of course, investors. If you know me, I’m happy to provide an intro directly to John as well.

Well, thank you so much Rob Fess and John Manlove of Apex Trading Bushel44 for joining this week’s podcast Silicon Valley momentum. I really enjoyed this interview and I wish you all the best of luck with your fundraise and with the changes in society. We all need to see

John Manlove: Thank you so much Roland it’s a pleasure.


Roland Siebelink talks all things tech startup and bring you interviews with tech cofounders across the world.

This [scaleup] stage is critical to long term success and it was very valuable to hear the insights from someone who has actually been an active member of a scale up.

Rebecca Klor, Co-founder, Roady, Chicago, IL