Tomer Kagan and Jacob Orrin of Merit: 5 Things I Wish Someone Told Me Before I Became A Founder

Thank you so much for joining us in this interview series! Can you tell us a story about what brought you to this specific career path?

We both came into the startup world by accident. I (Tomer) started a screen printing business to help pay the bills while studying for medical school and quickly realized I liked it more than the possibility of actually going to medical school. Jake was always an innovator making things happen for companies and looking for the next chance to create something big. He came from the nonprofit world and even had a stint in the fashion industry.

When we met, we were both energized by the pace at which startups move. We wanted to scale and solve big, diverse problems. That kind of speed was not possible in a nonprofit organization or larger company. Startups provide a unique opportunity to move fast, solve problems, scale, and help people along the way.

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

As any founder will know, there are many, but one stands out in particular. When we were first starting out, we moved into a shared office space building in San Francisco. One morning when we arrived at the office, we saw that someone had thrown a brick through the window and stolen all our monitors, tech, etc. Essentially, anything of value was gone. Thankfully, we had replacement value insurance on our equipment and we were able to get everything replaced. This ended up working out in our favor because insurance replaced everything at the current market price, and, amusingly, that was sort of our first funding round. All that goes to say, we certainly do not wish anything like that to happen to any founder, but we have learned that when something bad happens, you will find a way of sorting things out.

Where did you get the drive to continue even though things were so hard?

We both firmly believe that you have not lost until you give up and we have proved that time and time again. Merit was not handed to us and we have worked for every win and success. That level of investment in something fuels the drive to stick with it even when the going gets tough. While yes, things get hard, it is important to realize that you will get out of something what you put into it, a startup included.

So, how are things going today? How did grit and resilience lead to your eventual success?

Grit is a good adjective to describe our company and our attitude. Even when the odds seem outrageous (a small startup like us taking on supporting people through a hurricane) and stacked against us, we always find a way forward. The kinds of programs we work with, including educational savings accounts, are some of the most complex government programs out there and we have never shied away from them. A lot of our work involves selling our software with services to the government which means complexity in timelines and pricing frameworks. That is not always the most attractive quality to a venture capital firm but we stick with it.

Another thing that has led to our success is our strong north star. Our vision and values have served us well over the years and there have been times we have made extreme decisions based on them. Some of those decisions might not be great in the short term, but in the long term they prove to be the right thing. We have low attrition and a lot of that has to do with the fact that we are upfront about what we stand for.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

As it so happens, Merit started because of a funny mistake. The idea for Merit began during a winter holiday trip in 2014. We set out to go scuba diving and realized that I (Jacob) forgot my PADI dive card. Am I a certified scuba diver? Yes, I passed, but without the paper card, I was not allowed to dive.

At the time we were both working for other organizations, but the notion of digitized (aka portable) proof of certification stuck with us and more examples of scenarios popped up: employment verification, nursing licenses (Jake’s wife is a nurse)– a wide range of industries/sectors.

In February 2016, what is now Merit began as just an idea, and we reached out to a handful of organizations that provide certifications to see where the need was, and worked on a prototype that launched that summer. We saw real interest. College clubs, nonprofits, sky divers and so on started using Merit to digitize personal qualification data so that we can make them more actionable. The lesson learned? A forgotten PADI dive card can be the beginning of a hugely successful company.

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

Here at Merit, we are not only selling software, we are selling a solution and services to problems that real people face across the country. One example of this is the work we did in Florida when Hurricane Ian struck. We were working with the state to track and manage first responder activity in real-time, including billable hours, shelter activities, and other access points. Our team was on the ground and those working in other parts of the country jumped in quickly to help. Within 48 hours, the Merit Tech Incident Management Team (IMT) was issuing badges and merits to hundreds of responders. We located workers who were missing that otherwise would not have been found. Over 1.1 million hours from 7,218 people were tracked using verified credentials.

Another story about our work exemplifies how quickly we can act to get needed relief and resources to families. We won an RFP with the state of Ohio to launch their education service accounts program (ESA). ESAs allow parents to access public funds from a government authorized savings account for things like learning enrichment programs. Long story short, the previous vendor had failed to launch the program and they were up against legislation requiring them to go live by a certain date. By the time our contract was signed, we had 8 weeks to get the program up and running. Our team got to work and successfully launched the program by the deadline; we were told by our client that had they done this in house it would have taken 18–24 months. These examples highlight our key differentiators. We have a robust platform for not only how we deliver technology, but how we deliver service. Everything is systemized to the point where we can deploy things in weeks that would take other organizations months or years. We have exceptionally smart people working together as a team to solve problems. It is inspiring to come to work every day knowing we can solve bigger and bigger problems together.

Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?

Getting perspective is key. You can quickly find yourself stuck in some large weeds and a change of perspective, outside of the normal advice you get, can be incredibly useful. In addition to getting out of what you are stuck on, we have learned through our work with various government agencies across the country that most people, regardless of their politics, believe they are there for the right reasons and to help people. This reminds us that there is a middle ground to be found and has inspired us to be hopeful about our future. We also deeply believe that our services are helping people, which is a must for any startup.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?

Tomer: I have to say Dan Appleman. He was my first investor and has been a constant support alongside me through every endeavor I have tackled over the last few years. I actually met him when I was in high school; he was an advisor on a youth trip I went on and quickly became a mentor. When I was working one of my first jobs out of college he was quick to see that I was not happy. He told me that if I ever left to start my own business he would be the first to write me a check. Flash forward, he kept that promise and I am grateful for his continual guidance and support.

Jake: About 15 years ago I was at an organization and very passionate about something we were working on. I was convinced that if only others could see it from my point of view we would finally “get there.” Thankfully, two of my colleagues David Hytha and Richard Gregory gave me the opportunity to present my ideas to them at a sort of mini offsite. They gave me feedback and by end of the day we had a strategic and tactical way to move forward. Only later I realized they could tell I was unhappy and wanted to give me a space to complain where I would not embarrass myself in the process. The day was also used to refocus my ideas. At their core, they were listening to me, a key part of the equation when trying to understand someone.

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

At Merit, we solve problems for millions of people every day. That is what is so great about startups, they are nimble. You get to make things happen all day, everyday. For us, people who want to make a difference all the time, that kind of ability is critical. Speaking from our own experience, at bigger organizations things can get stuck in processes and pipelines. There is good work being done, but sometimes the scale or frequency is a bit smaller. We have used our combined experiences and brainpower to create a startup that can mobilize quickly to help first responders, distribute needed education funds, and get nurses and other critical workers into the workplace faster.

What are your “5 things I wish someone told me before I started leading my company” and why. Please share a story or example for each.

First, it doesn’t get “easier.” 

Too often founders get caught in the trap of thinking “once I get my product out to market, then it will be easier” or “once I get this round of funding, I will be able to do this faster” and so on. Success breeds complexity. Running your company will get harder and the stakes will get higher. That is not said to scare anyone out of starting a company, but perspective and honesty is key to being successful and pacing yourself to succeed.

Fix it if people are not a fit. 

If you are thinking about letting an employee go it is already too late. Speaking from experience, most employers are good and honest people who never want to see anyone let go from their organization. You certainly don’t hire anyone with the intention of parting ways with them. That being said, for something to stand out so much that it bubbles up from your subconscious, there is likely something to it that needs to be addressed quickly. This is especially true at the beginning when money and the people you bring on are critical to the success of the organization.

Work with people you enjoy.

You should be friendly with everyone you work with. Colleagues spend a significant amount of time with one another and it is important that you have a relationship with them. Sometimes, being a good friend may mean telling them when they are wrong and being there to help them grow. Being a friend does not always mean you are a pushover. Be the friend that shows them what their flaws are and how to fix them. If you really care about someone, you want to see them succeed.

Verify and trust. 

Oftentimes you will hear people talk about the concept of “trust and verify.” That makes sense in a large organization. But when you are small it should really be “verify and trust.” Simple mistakes are magnified when you are starting out. While it is easy and often tempting to move fast, you need to keep everyone in the loop and triple check your output.

Finally, fail fast.

When you realize something is not working out the way you planned it, recognize the failure, and take action immediately to remedy the issue and figure out a way out of it. Nothing is more detrimental to an organization than failing to recognize when something is not working or failing to realize something is failing!

Can you share a few ideas or stories from your experience about how to successfully ride the emotional highs & lows of being a founder”?

We are both incredibly grateful that we have had each other to lean on during the highs and lows of being founders. From our perspective, the most critical aspect of being a co-founder is being someone your partner can talk to freely. Oftentimes, founders need someone to bounce ideas off of. Those ideas or worries or thoughts might be a bit messy and not fully fleshed out. That kind of conversation is not one you want to bring up with external parties who need to see you as organized with a clear direction, which is where a true partner and equal comes into play.

Beyond having a co-founder, we have found that leading with humility makes all the difference. Get to know your people and learn what makes them strive for success. Be willing to admit when you fail and learn from it, otherwise nobody else will.

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 both care deeply about children and the role that they play in our world and are passionate about reforming the foster care system in the United States and expanding free school lunch programs. Both of these issues stem from the need to empower our children to be the best that they can be by ensuring they are invested in and can live and learn in an environment where they can thrive.

How can our readers further follow your work online?

We can be found on LinkedIn here and here. You can also follow Merit on LinkedIn and Twitter and check out our blog for some exciting announcements and interesting case studies.

This was very inspiring. Thank you so much for joining us!

Disclaimer: This originally appeared on Authority Magazine, read it here.