MichaelAaron Flicker of XenoPsi Ventures and Wellow on Five Things You Need To Create A Highly Successful Startup

Listen closely to your customers and understand what they are saying and what they are not saying and apply behavioral science to deduce what the underlying issues that motivate their behavior are. For Wellow, we have a corporate structure where consumer feedback is delivered regularly to the senior management team. Listening led us to launch our wildly successful “wide calf” version of Wellow for consumers who relayed to us issues with fit from the original line.

Sartups have such a glamorous reputation. Companies like Facebook, Instagram, Youtube, Uber, and Airbnb once started as scrappy startups with huge dreams and huge obstacles. Yet we of course know that most startups don’t end up as success stories. What does a founder or a founding team need to know to create a highly successful startup? In this series, called “Five Things You Need To Create A Highly Successful Startup” we are talking to experienced and successful founders and business leaders who can share stories from their experiences about what it takes to create a highly successful startup. As a part of this series, we had the pleasure of interviewing Michael Aaron Flicker.

Michael Aaron Flicker is a serial entrepreneur who has been starting, growing and building successful businesses since he was in High School. He’s built a highly successful marketing firm XenoPsi Ventures, now in its 25th year that has evolved over the years to encompass four separate brand offerings. And most recently he applied his learnings as an entrepreneur to disrupt the compression socks market launching Wellow compression socks in late 2021. This bamboo-based “direct-to-consumer” brand introduced a revolutionary level of compression in a sock that is easy to put on and comfortable enough for daily wear. This year, sales are forecast to grow 400% over 2022 levels to $20 million, with a “wide calf” line extension adding to its explosive growth. His view on how to create a successful start-up begins by finding an industry ready for disruption, adopting a “whole brand” approach before launch, partnering with a growth accelerator to provide C-suite experience rather than hiring those roles full time, listening closely to customers to address issues and concerns and constantly evolving your brand to meet new needs. He’d love to talk about these 5 things you need to create a successful start-up.

Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?

XenoPsi was launched when I was in high school. My founding partner and I started the company to perform computer programming on the internet and eventually to help local businesses brace their computer systems for the then impending “Y2K” at the turn of the millennium. “New media,” as we called it, was just coalescing to become the commercial ecosystem we use today. As we matured with the internet, it was a natural transition for us to morph into a professional services firm specializing in advertising and marketing, which we did. We continue to operate in that space via two companies we subsequently launched: Method1 and Function Growth.

What was the “Aha Moment” that led to the idea for your current company? Can you share that story with us?

I came to realize early on that the compensation model for ad agencies made no sense. Typically, remuneration was based on a percentage of the media that was bought to run the ads or some arbitrary hourly pricing model for services rendered. On top of this, revenue streams were always at risk. If your client hired a new Chief Marketing Officer, the chances were better than good that you could expect her or him to fire you and bring on their “own” agency. It is an endless “rinse, repeat” cycle of engagements. I wanted to change that for XenoPsi.

I began negotiating remuneration packages based on performance of outcomes or tied to acquiring equity and revenue shares in our client’s business. This put our “skin in the game” and married our success with the client’s. We became partners, not vendors. Two of our start ups, Function Growth and Method1, work with companies that way. In 2021, I decided to apply decades of learning in building brands for others to doing it for ourselves. XenoPsi Ventures launched a wholly owned brand: Wellow compression socks. Supported by our other operating companies, it is on track to 4x in sales this year. We intend to launch more “owned and operated ‘’ consumer brands in 2024. Our plan is to share risk and rewards with the businesses our professional services companies partner with and to own our own consumer brands.

Was there somebody in your life who inspired or helped you to start your journey with your business? Can you share a story with us?

My father started his own law practice and was his own boss. That inspired me to and want to be my own boss. It was based on the importance of having freedom — both to plot my own path in terms of where to invest my professional and personal time — but also the freedom to pivot as needed to create the best opportunity for myself, my family and my colleagues.

What do you think makes your company stand out? Can you share a story?

We strive to nurture a culture that fosters a high degree of psychological safety and cognitive diversity. We want team members to feel safe in expressing their opinions — about their experiences, about our work and about the type of company we are becoming. This is crucial to getting the best out of the best and brightest who join our distributed team. With 100+ people working every day together from over 17 countries, we benefit from the cognitive diversity of experiences of people from many races, creeds, traditions and life experiences all around the world. When our teams open a Zoom window, it is common for one person to be in India, another in Pakistan, a third in South Africa and two more in different US cities. To me, that is a level of diversity, equity and inclusion I’m very proud of.

How have you used your success to bring goodness to the world?

XenoPsi Ventures has introduced Wellow compression socks, which brings the circulation benefits of compression to a much wider audience than had ever been reached before. After crossing our first 100,000 customers, we realized there was an underserved market of full-sized people who would benefit from the creation of wide-calf socks. So we designed a new line of compression socks to allow them to experience the benefits of compression socks which have been wildly popular.

Wellow purchasers can also designate a charity to which we will donate a percentage of sales to as part of their purchase.

You are a successful business leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?

Focus, persistence and drive are the antidotes to any setback.

XenoPsi launched when I was in high school and continued when I was in college. One college football game day my alma mater, Boston College, was playing Maryland. That morning, XenoPsi was due to launch a website for a client. I remember vividly enjoying the tailgate before the game. Much fun was had by all. But as the launch struggled, my friends left me and my laptop in the flatbed of a pickup truck to attend the game. For many hours, I worked nonstop to help get the project launched. While I missed the game, the site went up and XenoPsi had delivered another critical project at the time in our history.

Often leaders are asked to share the best advice they received. But let’s reverse the question. Can you share a story about advice you’ve received that you now wish you never followed?

Entrepreneurs tend to believe that there is no one who can do the job the way he or she can. That she is the “secret sauce” behind the success of the company, and the only one who ever will care as much about its success, is a fallacy. It is bad for your staff and likely so intense it’s bad for your own health. It’s a scarcity mindset when there is a wild abundance of opportunity, and of talent in the world. I would steer all leaders away from believing that.

Can you tell us a story about the hard times that you faced when you first started your journey?

One summer in college, my founding partner and I had cleared our entire summer to work on big client projects. We had been lining them up for months and had grand visions of how we’d be filled with super exciting work and tons of financial reward from a summer well hustled. For one reason or another, all of our projects pushed their timing, canceled or changed and we were left with many weeks of sitting in the same room, staring at one another with absolutely nothing to do… and making no money. It was a great learning lesson about always having a backup plan, always having multiple opportunities lined up and not taking it too hard if any one plan doesn’t work out.

Where did you get the drive to continue even though things were so hard? What strategies or techniques did you use to help overcome those challenges?

On this journey of the “discovery of the unknown” (XenoPsi’s loose translation from Greek) I’ve learned to:

• Accentuate the positive moments and don’t dwell on the negatives.
• Create space for yourself.
• Listen with curiosity to others. (This correlates directly to XPV nourishing a culture with a high degree of psychological safety where no one is afraid of being heard.)

The journey of an entrepreneur is never easy and is filled with challenges, failures, setbacks, as well as joys, thrills and celebrations. Can you share a few ideas or stories from your experience about how to successfully ride the emotional highs & lows of being a founder”?

I’ve come to believe a few things since I started as a high school entrepreneur. Among them:

• Being an entrepreneur is a state of mind, not a title you are given.
• The highs are only as high and the lows are only as low as you permit them to be.
• Focus, persistence and drive combine to be the antidote to any setback.
• Don’t fear the decisions you make — very rarely does any single decision drive the extremes of either wild reward or of existential threat.
• If you are facing financial pressures, it’s always a better idea to increase your revenue and prices rather than lower your costs
• Listen with curiosity and believe in the best intent of the other side.

Let’s imagine that a young founder comes to you and asks for your advice about whether venture capital or bootstrapping is best for them? What would you advise them? Can you kindly share a few things a founder should look at to determine if fundraising or bootstrapping is the right choice?

Embrace a “whole brand” approach to the venture before launching. For Wellow, I immersed myself in every conceivable aspect of manufacturing a bamboo-based compression sock overseas. That includes making it, transporting it, importing it, marketing it and then distributing it. It is not just having an idea. Then I engaged Function Growth, a growth accelerator, to create the brand, the marketing and data management and customer service on a “snap in” basis. This gave Wellow seasoned C-suite experience without the cash burn of hiring those positions full time. While Wellow’s situation is unique to XenoPsi Ventures in that we owned both companies, any entrepreneur can and should seek out the “snap in” expertise of a growth accelerator. No startup can achieve the level of sophistication in marketing and data management without one.

As to funding, regardless of the way you go, I’d always advise young founders to ensure your successes are aligned with anyone who is giving you money. The worst problems comes from when folks don’t have the same desired outcomes. Then, as for whether you should bootstrap or take outside funding — it should really determine the type of business you are starting. Product companies with millions of dollars of start-up capital required to launch will likely need outside funding. Professional services start-ups that can be profitable from day one might not need outside funds.

We have been fortunate that we bootstrap our launches from our other company’s profits. XPV’s growth accelerator — Function Growth — works on an equity-based and revenue share partnership model with young companies. Seeking out partners willing to share risks and rewards is a great thing to consider.

Ok super. Here is the main question of our interview. Many startups are not successful, and some are very successful. From your experience or perspective, what are the main factors that distinguish successful startups from unsuccessful ones? What are your “Five Things You Need To Create A Highly Successful Startup”? If you can, please share a story or an example for each.

1. You need to thread the needle among three overlapping circles: What you are good at, what the world needs and what someone will pay you for. This is Jim Collin’s hedgehog concept from his book “Good to Great.” We are good at selling DTC brands. I saw the need for a compression sock that delivered the circulation benefits of compression, is easy to put on and can be worn all day. There was an undeserved and ignored market of those who could benefit from compression and would buy our socks. Wellow threads the needle.
2. Target an industry ripe for disruption. In the case of Wellow, personal experience taught me that standard compression socks were ugly, hard to put on and difficult to wear. I invented a product that addressed those issues.
3. Embrace the “whole brand” before launching any product or service. I did this with Wellow, but also with marketing companies Method1 and Function Growth. This means being planful about all the elements that drive its success (from customer experience, to team member satisfaction, to the sustainability of the packaging). Building a whole brand is a lot more than just the area of expertise you might have or the thing you are most excited by.
   
   And then look at the market to tell you if you’re on the right track. Function Growth is an Advertising Age newcomer agency of the year and also received an OMMA award from Mediapost (both leading titles covering the ad industry) for its work on Wellow, while Method1’s top-line revenues grew 24% in 2022.
4. Find the right partners and expertise to “snap in” to help you grow. In Wellow’s case, that is Function Growth.
5. Listen closely to your customers and understand what they are saying and what they are not saying and apply behavioral science to deduce what the underlying issues that motivate their behavior are. For Wellow, we have a corporate structure where consumer feedback is delivered regularly to the senior management team. Listening led us to launch our wildly successful “wide calf” version of Wellow for consumers who relayed to us issues with fit from the original line.

What are the most common mistakes you have seen CEOs & founders make when they start a business? What can be done to avoid those errors?

They don’t embrace the “whole brand” approach before launching. They believe they are the secret sauce to the business and it can’t run without them so they don’t trust anyone

Startup founders often work extremely long hours and it’s easy to burn the candle at both ends. What would you recommend to founders about how to best take care of their physical and mental wellness when starting a company?

Personally, absent a crisis, I don’t think about XenoPsi from Friday evening until Monday morning. On Monday, I am refreshed and enthusiastic to engage again. I encourage my managers to do the same, and relay that on to their team.

Whatever your trick is — every leader needs their rest-and-recharge model that allows them to be their best self for their customers, staffs and companies

You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.

We have a deepening anxiety and depression problem in this country. Some stats show that up to 1 out of 2 college students are in therapy and feel inhibited in their daily lives because of this. If I could do anything, to help anyone in the world, I would love to help those affected by this.

We are blessed that some very prominent names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US with whom you would love to have a private breakfast or lunch, and why? He or she might just see this if we tag them.

How can our readers further follow your work online?

Follow us on LinkedIn at:

https://www.linkedin.com/company/wearwellow/

https://www.linkedin.com/company/function-growth-agency/

https://www.linkedin.com/company/xenopsi/

https://www.linkedin.com/company/meetmethod1/

This was very inspiring. Thank you so much for the time you spent with this. We wish you continued success and good health!

 

Read from Authority Magazine.