A been there, done that tech entrepreneur relies on some old standbys to build and grow businesses: outwork the completion and hyper-focus.
In several ways, Tom Wallace is the godfather of the burgeoning Tampa Bay tech startup scene. He’s had lots of successes, a few failures and tells great war stories about the business. He loves to mentor young up-and-coming entrepreneurs and, significantly, recently had a Michael Corleone “just when I thought I was out, they pull me back in” moment.
Wallace, 59, is also driven, partially, by the vision of making sure Florida flexes its muscles in early stage funding for myriad tech companies for generations to come. He oversees that mission as managing partner and chairman of the board of managers for Tampa-based Florida Funders, which calls itself a hybrid of a venture capital fund and a crowd-funding platform. It’s invested more than $10 million in a dozen or so companies statewide, from an augmented reality firm to an LED lighting company.
“We want to be a state where we are known for technology and innovation as much as we are for tourism and strawberries,” Wallace says. “We want to be a state where the best and brightest come back here and stay here to start companies, not go to Silicon Valley. And we want Silicon Valley to come here.”
Wallace has a wealth of success — and failures — to choose from in his role at Florida Funders, in both analyzing companies to invest in and coaching startup founders and others. A major success in his career is the Waldec Group, a Tampa-based network integration and services firm. That company grew to 300 employees and $75 million in annual sales before he sold it to IKON Office Solutions.
Wallace’s most recent success — and one of the biggest of his 30-year investing career — is Vector Solutions, parent entity of RedVector and other online software education brands.
While he didn’t start the company, he came on board early, as an investor in 2003 and CEO in 2004 when it was VectorLearning and RedVector.com He helped lead a turnaround at the business that included a shift from selling to consumers to businesses, using a software as a service model. He also helped the company raise $100 million. When it was sold in 2014, the business had a valuation of at least $250 million. “We had a great run,” says Wallace.
The co-founder and former president of the Tampa Bay Technology Forum, Wallace next sat out of the business for a year or so. “I wasn’t looking for something to do,” he says.
Then came the Florida Funders opportunity — and a chance to get back in the game.
In what he calls Florida Funders 2.0, Wallace, joined by entrepreneur Marc Blumenthal, former head of business development at Tampa-based Tribridge and others at Florida Funders, has spent the past year barnstorming Florida. The crew seeks to grow its portfolio of accredited investors — people with more than $1 million in assets. Wallace says at least 300,000 Floridians are in that coveted, targeted group.
“One of the things Florida doesn’t do well is early stage funding,” Wallace says. “That’s the problem, challenge and opportunity.”
In addition to finding investors, Wallace spends a chunk of his time mentoring young entrepreneurs and startup executives. One is Doug Schaedler, co-founder and CEO of Homee, a Tampa firm that connects homeowners and property managers with instant access to electricians, plumbers and AC technicians over a smartphone app. Florida Funders was an early investor in Homee.
“Tom is very well-thought of in the tech community here, having seen it all and done a lot," says Schaedler, who meets with Wallace at least once a quarter. Two nuggets Schaedler learned from Wallace stand out. One is to maintain hyperfocus on the mission of the company. With the software platform behind Homee, says Schaedler, it could have sought other revenue streams, say in car repair. But Wallace cautioned the firm should get good at its core mission, first.
A second Wallace tidbit: don’t hire too many people, especially senior-level managers, until it’s absolutely necessary. “A lot of new companies hire before they are ready,” Schaedler says.
Wallace, who brings a dog to work and sometimes comes to the office in shorts, says he’s into pay-it-forward when it comes to his work. “A lot of people helped me along the way,” Wallace says. “I look at helping others as a way of returning the passion.”
In a recent interview, Wallace also talked about the reasons behind his biggest successes and failures, and the lessons he learned from both.
• A Pittsburgh native, Wallace had a corporate job at industrial company Alcoa after college — a golden opportunity for the son of blue-collar parents. But he stayed at that gig for less than a year before he left to start his own company, Waldec Systems, which helped small businesses find, buy and install computer systems — a novel concept in 1982.
Not everyone in Wallace’s life backed the move. “My dad thought I was crazy,” he recalls. “He thought I was out of my mind.”
• Wallace, too, had doubts starting from scratch with no experience. “There were no entrepreneurs in my neighborhood” growing up, says Wallace. “There were no incubators, nothing for startups. I didn’t even know what an entrepreneur was.”
• Wallace preserved, powering through with a Rust Belt work ethic. The company eventually grew to $20 million in annual sales and 75 employees. He sold the business when he was 30. “We came from families that worked hard,” he says, “so we knew how to work hard.”
Not only hard work Wallace adds, but focused. One of the biggest things he tells budding entrepreneurs today is to not be part time or halfway into something — but to be all-out into the venture.
• The flip side, he adds, is he learned in that role the value of having some semblance of a work-life balance, a lesson he tries to adhere to today. Says Wallace: “All we did was work.”
‘One of the things Florida doesn’t do well is early stage funding. That’s the problem, challenge and opportunity.’ Tom Wallace, Florida Funders
• One lesson he learned with the company, or was forced into, was to avoid debt and maintain a cash-is-king approach to growth. “There were no banks that would give us loans,” he recalls. “We grew the business by collecting receivables from customers and reinvesting it back into the business.”
• Wallace jumped into the then budding Voice-over-Internet-Protocol sector in the late 1990s, when he invested in a company called NetCubed. The internet telephone company’s plan was to install the systems in businesses, using Cisco hardware. NetCubed would handle the IT side.
But the mission — and the company — crashed. Wallace cites a list of problems, summed up, he says, by “timing is everything.”
Adds Wallace: “We were too early to the market space, and also the product sucked. The product wasn’t ready yet.”
• That venture, even with its too-early issues, also taught Wallace the 100% focus lesson. He had his own money in the business, and helped out, but didn’t get into the daily grind, something he calls a big mistake looking back. “I wasn’t all in,” says Wallace “I had somebody else run the business and make a lot of the decisions.”