Finding success with his first two startups, Pat Ryan sets his sights on No. 3
10/5/2015 - Editor's Note: In the Start Me Up series, the Kellogg School spotlights members of the Kellogg community who are bringing bold entrepreneurial visions to life.
Swinging for the fences—that’s how serial entrepreneur Pat Ryan characterizes his forthcoming venture, a still-secret digital startup that will be the third he has founded in 15 years.
Perhaps Ryan’s definition of swinging for the fences is different from the norm. At 47, the JD-MBA graduate seems to have already hit a home run: His second company, MAX Digital
, was recently named the number one fastest-growing company in Chicago — and the number three fastest-growing software company in the United States — on the Inc.
500 list. Founded in 2010, MAX Digital made close to $7 million in revenue in 2013, according to Inc.
magazine, and reportedly did $20 million in revenue in 2014.
Ryan recently left MAX Digital to devote his full attention to a new company he’s spinning out from the incubator he founded in 2009, INCISENT Labs
. “We’re living in such interesting times,” he says. “Why wouldn’t you want to be a part of shaping what the world looks like?”
The seeds for MAX Digital came out of Ryan’s first startup. Called FirstLook Systems, it was an analytics company and one of its products was a pricing tool for the auto industry. “Friends would hear about our pricing tool and they would beg us to have access to the same pricing tool the dealerships were using,” Ryan says. “We started to see that even with the Internet, consumers still had a horrible experience in shopping for and buying a car. Comparing vehicles to one another and pricing transparency were still challenging, a real problem since consumers don’t trust car dealers.” What might happen, Ryan wondered, if the same robust data about vehicles that was available to the auto industry was also available to people shopping for cars?
The answer was MAX Digital, a cloud-based digital marketing and retailing system that re-imagined the way people bought cars. The old model, that of newspaper classified ads, was merely migrated to the Internet. The method Ryan’s MAX Digital team proposed was a massive data engine that created structured data to present car information found in ads more intuitively. People shopping for cars could access data from their smart phones, and employees at dealerships could become consultants instead of pushing for a hard sell. BMW of North America became MAX Digital’s first manufacturing partner, and the startup soared from there.
“Analytics is about anticipating what customers want, and data turns out to be a great way to figure that out,” says Ryan.
The changing face of entrepreneurship
Ryan says it wasn’t really until 2001, four years after he gradated from Kellogg, that he became an entrepreneur, learning as he went, he says. But Ryan has learned from the example of his father, Aon Founder Pat Ryan ’59. And as a trustee for Northwestern University, Ryan sits on the Innovation and Entrepreneurship Committee and chairs the group responsible for creating The Garage
, the university’s entrepreneurship hub, which opened in June 2015.
“Part of my motivation for leading that sub-committee is to try and pay it forward in the sense of giving students even more opportunities,” he says. “Thinking about what Kellogg’s done in the last five years, I almost wish I could go back.”
As for his third startup, Ryan is tight-lipped about what it is, but he does share that it will focus on making a consumer-facing product-search technology that combines innovations in semantic web and mobile technology. In other words: a startup totally unlike his first two, both business-to-business companies. “What’s made MAX so successful was innovating around the consumer and providing that to businesses. There’s a lot more innovation we could’ve brought for consumers, but the industry wasn’t ready even though the consumer was,” Ryan says. “I’m frankly tired of being constrained by the rate of change of traditional industry.”
He says he’s received some pressure to build this new business in Silicon Valley, but for now, he plans on staying in Chicago. So far, he has 10 employees for startup No. three — four in Austin and six in Chicago.
“This is the benefit of being a third-time entrepreneur,” Ryan says. “I’ve found people who are incredibly talented and passionate and work well with. We’re putting the band back together and doing it again, but aiming higher.”
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