Adam Schwartz, a seasoned entrepreneur, shares his journey of building and selling companies for over $40 million.
Adam Schwartz, a seasoned entrepreneur, shares his journey of building and selling companies for over $40 million. He discusses his experiences with the full startup cycle and his current venture into AI with Parable.
Everybody's going to build their business in a different way and there is no exact playbook. And so while it is important to study the masters and to know all of the frameworks, I think that you have to build with some amount of intuition and you can trust that and that's okay. Eventually, you're going to have to trust yourself to go after it and to make the right decision. [Music] All righty. Hello everyone and welcome to the deal maker show. So today we have a really awesome founder you know joining us a founder that has done the full cycle you know and and quite successfully. So, and today, you know, we're also going to be talking about what his latest chapter is. You know, his latest company, you know, we're going to be talking about the building, the scaling, the financing, the exiting, uh also thinking about AI, AI, how it's going to change work, how work works, uh also how the
adoption goes with enterprise as well. So, brace yourself for a very inspiring conversation. And without further ado, let's welcome our guest today, Adam Schwarz. Welcome to the show. Thank you so much. It's great to It's great to be here. I'm excited to speak with you. So, originally born right outside of Boston. Give us a walk through Memory Lane. How was life growing up for you? Yeah, we we my family is all uh native New Yorkers, but but I grew up outside of Boston because there's this uh famous loop called the 128 Loop in Boston where all the sort of uh biotech and high-tech uh companies have their headquarters. and my dad was uh a part of uh the sort of earliest wave of semiconductors in in the 70s and ' 80s. And so uh that's how he ended up there and and that's sort of uh how I grew up with kind of the uh all of this technology uh in my backyard. So obviously you you you eventually
went to Florida uh and then from there you came to New York City. How did you started to get you know your feet wet into the whole venture world because back then you know the whole ecosystem of startups in New York was not that existent. Yeah, it was so this is around 2008 and uh my older brother was here already a couple years older than me in New York and he uh he was working for a startup uh that actually had I think probably the first co-working space in New York. I would guess it was called uh basically the analogy to what it was it was called Angelooft. It's kind of like what Angel List is now. Um and uh there was an organization at that time called the New York Tech meetup which was if you know meetup.com uh it was the first the founder of meetup.com created the New York Tech meetup as the first meetup on meetup.com and the New York Tech meetup uh was essentially you could fit
the whole of the New York tech ecosystem in one room couple hundred people and so I'm 23. I don't really know what I'm going to do. Uh but I always had like an itch to be an entrepreneur that always felt resonant to me. I didn't really know how to do that. And I went into this room uh and everybody was building something on the internet and um it was infectious and really inspiring and I knew like I had found my community and found my people and I was I was really I think lucky to be there at that time because because the community was so small you could talk to anyone. Everyone would help you. Uh and there was a lot of people who were in that room that now today have built um you know multi-billion dollar companies and and some of the most successful venture funds that you that you know of and it but it started you know with that nucleus and so there was a lot of really really
cooperative and collaborative energy at that time that I sort of got swept up in. Now that was back in 2009 you know which is when you also built your first company Leuk. Uh I know that as they say you either succeed or you learn. You know there was a lot of learning with Lassuk. So so tell us what happened there with Lassuk and what were some of those lessons that you had to take with you? Yeah, I mean I started when when we started that company, I think I was 24, you know. Um, and so I think I got over those two or three years like a complete lesson, you know, and in in all of the ways that you can uh you can go wrong. Um I think you know so so to to table set you know we were uh a marketplace an e-commerce marketplace where um fashion brands and designers could source uh sustainable textiles from suppliers. Um and so we were trying to connect these two you know we were trying to
connect a supply side to a buy side. Um the uh but but the supply side which was which was textiles you know which funnily enough my my was my family's business going back you know my grandfather um was in textiles in New York in the ' 40s walking down the same street that my office was then on uh selling textiles and we were and and we were building this company out of an old textile mill that had now been converted to a loft. But this had all just happened sort of organically. Um and and what what we had what we essentially found there was that the the supply side just you know really wasn't ready to change the way that they work to conform uh to this like digital marketplace of doing business. It's a very at least then and I suspect even still a very relationship uh driven business. Um, and so I think we didn't we didn't validate enough. The the demand was real that we were solving.
There was real demand and there was a real problem. There was pain in the in the product that we were building. Um, but the stakeholders were not uh really willing to change you know uh and and or at least we weren't able to get them to. uh we also had misalignment uh among the co-founder group uh about what to do about that and about how to iterate and pivot the business as a result of the feedback that we were getting from the market. Um I had my first experience product managing and running an engineering team and trying to triage and roadmap and um you know leverage resources to build product that would um you know that would have a real impact. I had to do I did a 100% of our sales motion, you know, on the both the supply side and the buy side and got lessons in go to market um and fundraising, you know, we we raised like a seed and then, you know, we're trying to fund raise again
without a lot of traction and and so on all of those sort of pillars of early stage business, we we essentially missed and and and I got um you know, just like a rapid education in how difficult it is to find product market fit and how to spin something up um you know in those kind of very nent and precious first two years and how to how to derisk that um uh so it was extremely informative. No kidding. Obviously uh it sounds like one door closes and and another one opens and in this case one open with a bang because you were able to uh crossroads with another entrepreneur called Josh Abramson who also has been on the show and who maybe you know some people recognize here as the one the one that was the founder you know behind Vimeo. So how did you guys connected? We were introduced uh you know I was leaving and we we were introd looking for my next thing. We were introduced through um
through a mutual mutual friend someone that I met through the New York tech meetup. Um, and he told me that uh he had sold Vimeo and College Humor and Busted Tees to IA and he told me that he wanted to buy Busted Te's back, that it was a profitable cash flow business that he thought had a lot of potential and that he was looking for for a partner to help him run it. Um, and I was and he and I really clicked and connected over the idea of having uh an internet-based business that could be cash flow generative and and profitable that was you have to remember at that time, this is 2011, you know, even the good tech companies, many of many of them didn't even have revenue. This was like pre-revenue days of the internet, no less profit. Um, and so it was a really foreign concept to actually be profitable. Um, and we were both really energized by by like the potential of that. Uh, and and sort
of what we saw in the business, you know, in the more traditional sort of private equity sense of like, well, this is this thing hasn't really been run very well. So anyway, um, he was able to get that, you know, kind of finagle that business out of IA and we went about it. Um and because we were running it as a cash flow business, um the next over the next couple of years was really an exercise in fine-tuning the details of the business. Um and that was also extremely educational because there was no margin for error because we we were profitable. We had a very small team. It's like 10 people. Um, and I personally was was sort of tuning and optimizing every detail of the customer acquisition life cycle, of the web product, of the supply chain, um, to to squeeze out, you know, profitability and and to grow it. And so we it went well. We doubled the business. we were making money but it
was clear to us that…