In a two-part blog post, we are highlighting the work and wisdom of local entrepreneur and innovator Doug Dayhoff, former President of Upland Brewing Co. In an interview with our Xtern, Anna Carpenter, Doug reflects on his successful business career thus far and discusses some of the highs and lows that he has encountered in the process.
“When I was first starting out, it was so early in my career that I had a very limited network outside of Bloomington. My first job after graduate school at Dartmouth was for a very large Fortune 100 company, and I did not enjoy it. I was forced out of insanity and unhappiness to leave the Fortune 100 corporate setting as a search for meaning and satisfaction, and by process of elimination I ended up in a space that was inspiring to me.
When I was looking for a new opportunity, the first thing I did was reach back into my network which was largely Bloomington-based. There happened to be an opportunity at that moment, which was very lucky for me. It’s kind of a one in a hundred chance that it lined up that way, given the size of the Bloomington commercial ecosystem and its ability to have mid- and high-level opportunities for professionals.
At the time, I worked with a team that had a greeting card company here, which was step one in getting me to work in small-growth businesses. It also got me out of an analyst level work into leadership work, which I found very rewarding. It took me from predictable commercial situations and pushed me into new, risky and unpredictable commercial situations. From there, we grew the greeting card company up, and ended up selling it to Hallmark Cards.
We later started a software company, grew that up and shrank it back down, then sold it. When we sold our software company, which was after the 2000-2001 tech market collapse, I really think that we had a profitable business but we felt like we weren’t going to be able to meet expectations. We felt so disappointed and deflated by that, and we just kind of gave up. We sold it off at a time in which we probably should’ve just doubled down and rode out the storm.
Looking back, I would now counsel my younger self to do things much differently. We had a lot of smart people around us, and nobody said anything at the time so maybe we really didn’t have any opportunity. But in retrospect we were, after a bunch of layoffs, a cash flow positive company. We just weren’t going to be able to execute in a way we originally envisioned.
There are certain benefits of being in the midwest, but also certain handicaps. I think that Bloomington is a culturally vibrant place, which in and of itself helps drive innovation. I also believe that if you’re intentional about building your own network into high velocity ecosystems on the coast, you can have both the benefit of a midwestern college town lifestyle here in Bloomington and still be tapped into commercial opportunities that are driven out of the 4-5 innovation centers in the country. You just have to bloom where you’re planted.
On a professional level, I think there’s a big challenge with having access to a large number of candidates who are qualified for mid-level to senior-level management positions in growing companies, particularly in a college town like Bloomington. I think that’s a really difficult thing to deal with. In terms of qualified and available talent pool in this town, I’d say it’s pretty limited and sometimes it makes it hard to grow your company.
One way to address this problem is to build your company to enable remote working, which may be easier than recruiting the talent to come to you. There’s a chicken and egg sort of problem here; businesses sometimes don’t grow here because there aren’t that many people to work within those high growth companies. People often feel that it is a risk to move to a small town in the midwest because there aren’t that many options beyond what they know. However, the more mid-sized growth companies that exist in places like Bloomington, the lower the risk people would perceive in moving here.
It’s a cycle that’s really hard to break. It has posed a challenge to all of our companies. I can’t think of a mid- to high-level management position that I’ve hired for in the last 15 years where I felt like I had multiple great options to choose from.
We more or less have made a living out of taking risky bets on people who might not have demonstrated qualifications to do the jobs that we’re asking them to do. Sometimes that works out, sometimes it doesn’t. It was never a situation where I wanted to hire all three of the people who applied, I usually had to pick whoever it was that I thought had the highest probability of being able to grow into that ideal candidate that I wish I had.”
“In my career history, there were two big breaks. One was having an opportunity at a relatively young age to take on a leadership position at a company that was growing rapidly and doing interesting things. That was thanks to one of my early mentors, Michael Fitzgerald. The second big break came as a result of my network coming out of graduate school at Dartmouth. Andy Palmer, my classmate who was both a friend and mentor, connected me with top-tier software entrepreneurs and venture capitalists on the east coast.
Of these two breaks, one allowed me to get promoted into a role that was above my experience level while the other gave me access to some very sophisticated investors and experienced technology entrepreneurs. I was able to learn and grow quite a bit from both experiences.
One of best decisions we made at the brewery was to make a large invest investment in the niche, lambic-style of brewing: wood-aged, mixed-culture fermentation. When we made the decision, it was not evident that there was a big opportunity in it, but it was something that we had been fiddling around with for years and really enjoying. We thought it was a neat expression of our artisanship. That style of brewing has become the point of difference for Upland relative to the 7,000 other breweries in the country, and has allowed us to sell nationally and to be welcomed into events all over as one of the top breweries in the country. You never know it’s a good investment until you have the benefit of hindsight, but that one established a durable point of difference as the market became very crowded.
While the success stories are always great, I would have to say that my growth as an entrepreneur has been a result of both the screw ups that I’ve executed on my own, along with great recommendations and advice that I’ve received from other people. I guess I learn fastest from my own mistakes and other people’s wisdom.
In terms of my entire career so far, I’m proud of how we’ve always focused on creating a good culture and strong team. Getting that right creates an environment for good things to happen. I have worked with some of the same people repeatedly in multiple companies and that has been fantastic. To have the same people working together throughout their 20s, 30s, and 40s in different contexts has been rewarding for me. And one person whom I mentored early on in her career has gone on to become SVP at Salesforce, and now she’s someone I call for advice. I love it – I’m so proud of her success and have no problem reversing the call and asking her for help!
The best advice I have to give people who are looking into pursuing a life of innovation and entrepreneurship is to study finance and accounting in undergrad or in your first job. It doesn’t have to be your major, but you need to know it. If not finance and accounting, try pursuing data science or engineering. And then early in your career, take a job in direct sales. Learn how revenues are really earned.
I also think there’s a lot to be said for working your first 4-6 years out of college in an organization that is well-resourced and has good management systems in place, and not in a small bootstrapped company. If you do this, you can learn what a well-run company looks like and feels like. Later when you’re in an early-stage company that’s not yet developed good systems, you’ll then have some sort of compass that points in a better direction. That will make you an asset in the long run.”
Part 2 of 2 | Read part 1 here