David Kalt the founder of Reverb.com and Co-founder of optionsXpress, the online marketplace for guitars, gear and musical instruments, and the owner of the Chicago Music Exchange, one of the world’s best-known vintage guitar dealers. He is a technologist and serial entrepreneur, and will be the featured guest at the next Startup Grind Chicago, happening November 18.
I conducted a Q&A session with him and it's included below:
Q: Are there similarities in the businesses you started—ClientBase, OptionsXPress, Reverb, and Chicago Music Exchange? What is the common thread in terms of outcomes the businesses achieve?
A. My focus has always been on multiple businesses, all of which rely on two principles. They focus on technological solutions and engage the audience.
As an entrepreneur, I’ve always chosen the B2C model over B2B, because I’ve always thrived from creating an engaging product for the public. The thread that holds these businesses together is the motivation of customer feedback. When you listen to your people carefully, success becomes easier.
Q: Have you ever been an employee, or have you always been an entrepreneur?
A. I went through a couple of years working “for the man.” I’m 47 now, but for 28 out of 30 years of my working life, I’ve run my own businesses. One key to making startups successful is to never think of anything you do as work. Instead, think of what you’re doing as embarking on an adventure of sorts.
But it’s important to realize that not everyone is an entrepreneur—that takes a special kind of individual, who’s driven, innovative, and willing to put in the time. As I hire and build out teams, not every candidate operates like a startup business owner. I do believe that 9-to-5 roles have their place. But the way I operate is that I make a commitment, and I get it done.
Q: In your mind, what personality traits create a successful startup/business owner?
A. Success is measured by the business itself. Raising money isn’t the goal; building a business is. Serving customers is the point. To do that, it’s important to have a mission and a purpose. If you have those two things, it translates to a successful start up.
Leadership qualities are created by example. I’m not afraid to dive into areas I don’t know about, so I always have to learn.
For example, before I began my businesses, I didn’t know much of anything about accounting, coding, or marketing, but I leapt in feet first, and learned with a tactical approach.
My whole philosophy is to go from 20,000 to 200,000 feet in different areas of my business. Also, I make it a point to hire people with passion, not necessarily skillsets. To me, an enthusiastic drive is much better than a particular kind of training.
Q: What did you study in college? Did your concentration lead you to want to run a successful company? What advice do you have for recent college grads?
I was a Political Science major. I also have a degree in Computer Science. When it comes to Political Science, a lot of students used the degree as a steppingstone to law school, and I couldn’t have cared less about that.
I viewed my education as liberal arts, where the focus is on understanding what makes people tick. To be honest, I’m completely a-political now. The whole thing makes my stomach turn.
As for advice for recent college grads: you have to find the passion in you, and the way to express it. The people that stand out in the hiring process, are the people who are passionate. If you have a generic resume with diverse skillsets but no passion, it’s harder for me to gauge if you can be challenged and motivated.
Q: In a recent speech, you suggested Chicago could be a bit bolder in creating a breakout company like Facebook, Dell, Microsoft and may be limited by it's "Second City" attitude. What is your opinion on why Chicago hasn't yet had that breakout success? Do you think it's possible?
A. You’re referring to Peter Thiel’s article in the Chicago Tribune. I’ve read that article, and there’s some real truth to it, but I can list dozens of incredible and groundbreaking companies right here in Chicago.
Are they as disruptive as Facebook? No. But to me, that doesn’t matter. We can have companies that are important to technology, but they don’t have to be the next Facebook.
Chicago is filled with hardworking and smart startups, who I think will be disruptive without riding another company’s coat tails.
David Kalt is the founder of Reverb.com, the online marketplace for guitars, gear and musical instruments, and the owner of the Chicago Music Exchange, one of the world’s best-known vintage guitar dealers. A technologist and serial entrepreneur, Mr. Kalt was the technical co-founder and CEO of online broker optionsXpress, which launched in 2000. OptionsXpress went public in 2005 and was later acquired by Schwab for $1 billion. His first startup, ClientBase, was the leading CRM solution for travel agents and tour operators, and is now part of Sabre Travel Network.