Michael Pavlak – CEO Interview
When did you know you wanted to start your own company?
I have always wanted to run my own company, but finding something that I could build from the ground up was the hard part. We started StashStock in 2015 after we realized that the cannabis industry had a huge need for better technology. With my background in both cannabis cultivation and the technology industry, I knew that there was a lot of room for technology to make an impact in this emerging industry.
What was your original idea for this company, and are you still doing that (or did you pivot, if so, what is the new focus & why)?
Early on, StashStock was focused on retail solutions for dispensaries. Everything from online ordering, managing lobbies full of patients, bringing strain data to bud tenders and consumers to improve their ability to make informed decisions about which strains would be best for each consumer. When the legal Cannabis industry came to Michigan, StockStock turned its focus to cultivation tools to help get the new market off the ground. There are huge gaps in the cannabis tracking systems that are in use today – especially on the cultivation side. Most of the tracking requirements are during the cultivation phase and there is simply a lack of technology helping cultivators track their plants. Many states use a system that requires an RFID tag to be attached to every plant in a cultivation facility. This same system does not provide any tools for consuming RFID tags, let alone in the context of cultivation so we decided to focus on that and built out several RFID based tracking solutions. Now we are a seed-to-sale software service that ensures compliance with state laws in the fastest and cleanest way possible.
How long did it take you to finally take the leap, and what was it that pushed you over the fence?
When I was a sophomore in college, I hurt my back and was basically bedridden for about 9 weeks with ongoing issues over the next several years. Michigan had just passed medical cannabis laws and I was able to qualify for a patient card. At that point, I started growing for myself and expanded to helping 5 patients as well. I continued to grow while working professionally as a software engineer for 5 years. I was approached by a friend and co-worker to assemble a team to build something for the cannabis industry and it immediately resonated with me. I had accumulated enough money that I could go “all-in” on the cannabis industry and that was it – I quit my job and started working on software for the cannabis industry.
Who inspired you to pursue your dream, and why do you think they believed in you?
My mother has always been supportive of me and anything I’ve set out to do – even growing cannabis in my basement. She has always encouraged me to go further and do more and really push myself to get the most out of everything. I’ve also had great support from teachers, friends, and coworkers I’ve met on this journey. I’ve had a successful career leading teams of engineers, building large scale, business critical platforms, along with success in cannabis cultivation so I think it was easy to see this as a natural fit.
Who is your favorite mentor and why?
If we can pick anyone whether they were a direct mentor or not, I’d pick Gordon Ramsey. While yes he can be a bit much on his shows, his life and what he eventually communicates to everyone he helps is spot on. I remember watching Hotel Nightmares and common themes kept emerging. Firstly, there is passion. I am truly passionate about technology – building highly scalable, performant, and valuable software for customers. I am also truly passionate about cannabis and this new industry. This passion fuels late nights, hard work, and a motto of ‘no excuses’. I’m in control of everything so any short cuts are directly my fault. When you’re working at a large company, you can blame that managers don’t understand or whatever, but when you’re running the show, it’s all on you. Secondly, if you’re stuck in the day to day, you can’t grow. You have to find someone to help you, someone you can trust, someone passionate and let them manage the day to day while you focus on the bigger picture. This helped me greatly in taking the first step away from a bi-weekly paycheck and into the role of building a company.
What was the hardest thing about starting your company, and what did you do to make it through the first stage?
The hardest thing for me has been finding and hiring the right people. I believe in empowering employees and setting them up for success. I believe people work best when they have direction, but can execute in the way they best see fit. However, not everyone wants that. There are many folks that want to be told exactly what to do and never put much thought into how, why, or improving. In the end, we decided to partner with a technology company so that we could utilize known talented individuals.
What has been the hardest lesson to learn?
You can’t win them all. No matter how good your product, nor matter what a perfect fit for a customer, no matter the price even, sometimes folks just will not want to work with you for whatever reason. You have to just accept it and move on. Of course if you constantly get negative feedback from customers, that’s probably a sign you need to change something, but you will get an occasional negative response no matter what and you have to be prepare to analyze it for what it is, learn what you can if there’s something to be learned, and continue improving.
What has been the most amazing thing you have experience while running this company?
It’s been an amazing experience meeting folks from all kinds of backgrounds coming together in cannabis especially in a leading role within my own company. It’s a completely different experience than working for someone and carrying the banner of that company. For me, it’s truly and extension of myself and it’s such an amazing feeling.
What is the weirdest thing you have experienced while running this company, and how did you react to it?
Probably the weirdest thing that’s happened would be customers not wanting to use our services because of other customers that we have. I never expected that a company would not want to work with us because of another customer that we work with. This made us much more careful about explaining who we work with. Instead, we try to describe market share, or licenses under management.
What is the best decision you’ve ever made while running this company?
Most decisions we make as a team, so I can’t take complete credit for most things, but the best decision we made was to identify a very specific pain point in the industry and focus on that and continuing to focus on that as we pivoted between solutions until we landed on a very specific set of tools and functionality that we can provide at a very high level of proficiency that brings huge value to customers. It’s extremely easy to just keep building things in reaction to potential customers and deals. It takes a lot of focused effort to make sure you stay true to your founding principles. Of course, you have to keep and eye out for new opportunities, but you also have to be able to identify which of those opportunities is in alignment with your mission and vision.
What is the biggest mistake you made while running this company, and why do you think it happened?
The biggest mistake was being under capitalized. The founders bootstrapped the first several years of product development and sales until we couldn’t go any further without outside help. Also, the initial structure of the company and parameters to ensure that all parties maintain continual contributions to the company either by money, time & expertise, connections, etc. The founding members have a background in technology and building solutions. This was the first venture into entrepreneurship for most of us and we were just not prepared or did not want to believe we needed to have more parameters in place and better investments early on.
How has the coronavirus pandemic affected your company?
There have been a few impacts that we have seen from the pandemic. In the beginning it made it harder to get in front of new clients. While Cannabis was an essential business in Michigan, that wasn’t the case in all states. We lost a few potential customers during the initial lockdown periods, however we were able to continue to service our current customer base. Trade Shows have been a big source of meeting new customers and with them all being cancelled this year we have found sourcing leads much more difficult in some instances.
What keeps you passionate about your company?
I’m passionate about technology and I’m passionate about cannabis. This company brings together these passions and I have always believed in what the company can become. There are definitely struggles day to day, but I love what I do so it’s a different kind of pain. Being in control of the product, the vision, and building what I know will provide value to customers keeps me going.
What daily routine have you developed to help you take care of your mind, body, and soul?
Being in the office with my team is definitely the best environment for me, but especially with COVID this year has been a mess. It’s easy to fall into a bad routine, but having routine allows you to balance your life in a predictable way. I typically start the day with some coffee, play with my dogs, and take time to wake up without worrying about work. Once I’m awake, I check email, slack, texts, etc for any updates. Once communications have been reviewed and answered, then I focus on tasks that require the most attention and effort so I can really sink into my day. I make sure to take at least 45 minutes away from my desk for lunch where I may think about work or may just unwind with the dogs. In the afternoon, I try to focus on outreach and explore future opportunities or review the company roadmap. Once regular business hours are over, I make sure to have an hour for dinner, maybe another hour with the dogs, and then back into the tasks that require a lot of concentration and focused attention. I’m often guilty of working late into the night, but it’s important to know when to stop. Working exhausted is not working smart. Getting well rested and having time to unwind before bed is critical. Have distractions like group hobbies or animals is also very important to having a balance mind.
What one thing would you like people to take away from this interview?
Make sure everyone you are partnering with is on the same page with everything and there are clear parameters in place to force people to stay involved or get reduced. You must be on the same page for the product, the principals of the company, when and why you would pivot, have the same appetite for risk (having one risk averse and one risk included partner may not work well), have the same endgame in mind (IPO, long term ownership, buy out, …). Also, make sure you understand fully the capital structure and requirements for the company to become successful. Definitely shop around for investment, but make sure that’s a focus for someone – finding money with the best strings attached.
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On the podcast, Sean talks with entrepreneurs about the reality of their struggle to succeed, as well as answering questions from the community, and sharing nuggets of wisdom from his own life.
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Sean is an entrepreneur, investor, and advisor based in SE Asia for over 12 years. He is passionate about Psychology and helping others improve themselves.