Eric Jackson, who headed the marketing team at PayPal and is now CEO and co-founder of CapLinked, a, platform for securely managing business transactions, complex deals and projects in the cloud, has strong positions and key insights on many areas, which led to this podcast interview — portions of which are extracted here.
You will have to listen to the podcast to get the full extent of his valuable experiences. I would support Tom Peters’ view on Eric’s book, The PayPal Wars, as “the best description of business strategy unfolding in a world changing at warp speed,” but go further to say when he talks on any area, Eric is a must listen since he continues to shape the world, much like his PayPal Mafia colleagues, Peter Thiel, Reid Hoffman, Elon Musk and many others.
Q: Can you profile your prior top roles and useful lessons from those roles?
A: “….The lessons of speed, flexibility, being responsive to data and to try to see the world as it is, not as you hope it would be were lessons that followed me from PayPal through World Ahead, up to my venture today, CapLinked … That has been useful and has really been applicable across the course of my career.”
Q: How did your past experiences lead to the founding of CapLinked?
A: “It’s hard enough to just negotiate a deal and all the terms, but the due diligence (the information that had to go back and forth), that process took several months and for a small-sized company, it was extremely onerous. At the end of that process I thought there should be a better way….There should be a simple way that is portable, that multiple parties could use online technology in order to exchange information and ask questions back and forth and make that entire processing of doing a business transaction a lot easier….”
Q: Please overview the business and revenue model for Caplinked and why people should get involved?
A: “….We offer our customers a simple subscription and what we’re providing is a simple service where you can use the cloud to carefully manage the exchange of sensitive information and enhance the workflow that goes into managing a business transaction.
“It’s a really simple model, very economical, very easy to use and that ability for local parties to come together and use a simple technology for a complicated process like this is a big part of the value proposition of why people use Caplinked for managing transactions.”
Q: I know that you are constantly monitoring this amazing business that you have. Do you have any idea of how many people from different countries are involved in your platform and the number of people who have registered?
A: “….Last year we had users from over forty countries across the world that were using CapLinked….In terms of the number of users and the number of businesses and deals we don’t publically release that information other than to say that transactions that are in the millions of dollars are being done on CapLinked on a daily basis, and all of the major investment banks and all of the major law firms have been on the platform and have used it with their clients for transactions….”
Q: From your long term perspective, do you believe crowdfunding will supplement traditional funding approaches or be totally disruptive and significantly replace traditional funding approaches?
A: “Crowdfunding might provide an alternative financing route that goes along side more traditional growth financing, so I think that would be my outlook. I don’t know that it is necessarily so disruptive that old forms of financing go away, but I think it could supplement them well. I’m also curious to see if crowdfunding ever becomes a tool that could be helpful for other types of businesses that are not necessarily high growth. Here in the U.S. we have the constant problem of funding small to medium sized businesses that might otherwise be good companies but are not high-growth (like a technology startup for example). Traditionally those have been financed by some form of bank loans so if there are alternative financing vehicles that come out of crowdfunding over the years to come, that will certainly be interesting to see if that opens up for small to medium sized business growth….”
Q: For CapLinked, how does fundraising and social networking interlink and to what degree?
A: “….Fundraising is an activity which is often done on Caplinked. Not so frequently for startups and early stage companies, but more frequently for companies who are looking to stand or to grow, and sometimes actually for private equity funds as well….As far as social networking and that ability to broadcast publicly fundraising or transaction activities, that’s not something that’s really integrated with Caplinked because we find our customers want privacy and they are typically at a point where they’ve found people who they want to do business with, so what they want is the ability for prospective buyers or investors to come and review materials, ask questions, communicate back and forth, include due diligence process and safely share that data or track where it goes. To that extent, privacy and security are top concerns and the networking per se that’s going on at Caplinked is not so much public, it is really private exchanging of information….”
Q: Can you comment on the ‘PayPal mafia’?
A: “….It’s such a remarkable collection of talent that we’ve seen come out of PayPal and I think that’s the reason it’s been given this ‘PayPal mafia’ term, because people from PayPal that are alumni tend to know each other, trust each other, give each other advice, sometimes make investments in each other’s company, so that’s how the term got coined….It has certainly been an honour to have that support and also to have their ongoing advice in terms of what we do….”
Q: You are a noted writer/author. How do you believe your skills as an author contribute to your success as an entrepreneur and leader?
A: “….I would actually turn it around a little bit and I think that my experience as an entrepreneur and a leader and somebody who was fortunate enough to be part of that PayPal team are what helped me as an author….I think that first-hand account, that very deliberate attempt to pull the reader back into that point in time, right in the middle of what was going on in PayPal I think has helped make that a useful story for entrepreneurs and leaders today that really want to understand what it’s like to start a business, what it’s like to start a technology company and the challenges that you face along the way creating a company like that….”
Q: What is the value of big data in financial services, the marketplace that you’re in and how it can be used?
A: “First I think it relates to the knowledge that has to be shared when due diligence is being performed and that is the tricky part. If there’s more and more data available there’s going to be increasing demands to share that data during due diligence, and being prepared to share that data and having a secure mechanism is going to become quite important….Another aspect, particularly regarding financial services and transactions that relate to big data, is having analytics to understand what’s going on inside of a deal….Having embedded analytics into an application like CapLinked that helps you monitor and manage that is quite critical. It’s going to play an increasingly important role in the process of due diligence and closing financial transactions….”
Q: What are the implications if in the West we don’t wake up to the fact that innovation, education, risk taking and sponsoring entrepreneurship are key, vital areas to stay ahead of the game?
A: “I think that (broadly speaking) in the U.S. we need to return to more of a risk taking and self-reliance posture in the way we think about these things….That has to be done at a policy level and hopefully can be supplemented by some societal changes as well; that encourages nuclear families, that encourages savings and helps people to think about preparing for the future as opposed to thinking that somehow the government or some other entity is going to be what takes care of them….”
From his extensive speaking, travels, and work, Eric shared some stories (perhaps amusing, surprising, unexpected or amazing).
A: “….So I put my own desk together and it really was a great way to start that journey of entrepreneurship because it gives you the sense of humility, practicality, and the ability to address whatever the situation is in front of you; not to think that somehow you are above whatever that problem is and that you shouldn’t have to be dealing with it. That was a great baptism by fire….”
Big Data Opens the Door for Prescriptive Analytics
Making customer-level decisions that balance risk and profit just keeps getting harder. And when you think you have it right, turning them into actions can be even trickier. You also need to consider the factors that make smart decisions difficult. Big data. Regulations. Customers who want an offer, fast, or else you’re going to lose them. No doubt some of these challenges sound familiar. And this is where prescriptive analytics represents the next step in the analytic journey.