Explore Derek Canton's journey in the Software Publishing Industry

I think the essential thing about being a Rootless Entrepreneur is: you just don’t give up. One of my mentors uses this analogy, he says “Derek’s like a wind-up toy, he winds up, you put him on the ground, he just keeps running, he hits a wall, bounces off and just continues running”. As an entrepreneur, no matter what you go through, there’s going to be ups and downs, failures and successes, it’s a journey. I remember the first time someone called me an entrepreneur, it was back in high school and I didn’t know what the word meant. Back then I just loved projects, finding things and working on them. Things didn’t always work out the way I thought but it’s all part of the process. I kept finding challenges until I found the right problem that I fell in love with and wanted to solve. That’s what makes me who I am, the determination to just do what I love. – Derek Canton

When I graduated high school, I was either going to go to school for Ministry, Music or Business, three very different areas and professions. I remember I had a mentor who told me to pursue Business because once I had that degree, I could do whatever I wanted with it. So, I decided to study Business and that was one of the best decisions for me because it was a mix of different things I loved doing. The first big project I did was an app I built for my home church and I learned a lot from that experience. I remember when I was in Worcester State University, I fell in love with the whole process of entrepreneurship. My dad once told me “you can be an entrepreneur but you don’t have to be a starving entrepreneur” and so, I decided to get a full-time job. I came out of college working at Dell EMC, got into this corporate world that I learned a hell of a lot from. Meanwhile, I constantly had side projects and things I was working on. In 2016 I participated in ‘Money 20/20 Hackathon’, the world’s largest financial-technology hackathon, where you build an app in twenty-four hours. Those were early stages of Paerpay. Throughout this incredible journey I fell in love with creating stuff. It’s been an exciting process throughout and I’ve enjoyed every second of it. – Derek Canton

I think a lot of times people aren’t able to distinguish whether you’re an entrepreneur or you’re just going to do this one thing where you can go work for a big corporation. I don’t know if I completely agree with that. I think there’s a lot of value in both. My heart told me to go to college, be an entrepreneur, figure it out and make money. I believed I didn’t need a day job. That was where my heart was at but I’m glad I had people that put me in check, saying that I could still do that but that I needed to live, eat and survive too. Also, there are a lot of things you can learn from doing a full-time job. I literally had a 9 to 5 job and had a 5 to 9 of side hustling and studying and learning. I’m so glad I went that path and will definitely say that I’m hopeful I will continue being entrepreneurial but I would never trade the experiences I had working corporate because I met some incredible mentors and advisors, some of them have supported me to this day and I think that’s what’s truly important, the process and perspective of the journey. I would never tell someone to trade their dream for a full-time opportunity. I would tell them that they need to work more hours than anybody else to pursue their dream but it will all pay off. – Derek Canton

It’s definitely a funny story. When I was at Dell, I was recruiting and met some guys at Babson College. When I was done, I went down to get some coffee and talked about my background and what they were doing. Apparently, they were going in Vegas and invited me to go. I told them yes even though they were complete strangers. So, I bought a non-refundable ticket to go to Las Vegas with them, slept on the floor of the Venetian Hotel and showed up for the Hackathon and we had an idea that was around payment hackathon and how do we make the best payment experience. It was a little bit of a joke but I said the best payment experience is the one where you don’t actually have to pay. We laughed at first but then thought how close could we get to that. It’s completely frictionless but very secure and that’s been kind of our North Star, our torch. Our app has been especially useful during the Covid-19 pandemic the world is going through right now. Additionally, you don’t even need to download it. We can get a merchant up and running in days and do the configuration in hours. Accepting frictionless payments by text messages works, it’s super cool and we’re getting positive feedback from customers. – Derek Canton

Number one thing I tell people is: find a co-founder. I’ve always been techy but I don’t know to write code, not in the way that I can brag about it. My co-founder is incredible at what he does and brings a lot of value and compliments me in a lot of ways. So, if you build a HR software and there’s an issue, it’s not that big of a deal but in payments, if I mess up your payment information or mistakenly double-charge you, that’s problematic. I had to find somebody that had a lot of experience with technology, compliances, PAN, payments and all these things. So, I finally found a counterpart who’s a great compliment for me, from the technology side of things. If you can find a co-founder that you can convince that your ideas are enough and they’ll want to jump into it too, that’s fantastic. For us, given the state of the world right now, contactless payment is required by all merchants, so there’s a massive need across our country and we wanted to solve that in a way that’s unique and provide value. It’s important to understand where the world is going and figuring how you can apprehend it and help shape it. – Derek Canton

Firstly, I wish I really understood the value of having a technical co-founder. I’m stubborn, I thought that even if I didn’t find one, it wasn’t a big deal. I went a little while without one and I didn’t put much energy towards it as I should have but it all works out the way is it supposed to. Right now I have an incredible co-founder who’s great at what he does. I wish somebody told me that sooner and drove it home to me the exponential value that was provided to me and my learning experience. Secondly, I would say to my younger self that the fact that you don’t know a lot is one of your advantages. What I mean by that is, if I knew how hard it was going to be, the challenges and adversities, the late nights, the lack of sleep, the tears, the frustration, I honestly don’t know if I would have done it. It would seem like climbing Mount Everest. This analogy feels accurate to me. There were times when I was climbing the mountain and had to go to the side or go around an obstacle and was wondering if I could make it to the next ledge, next peak or if I could pass that valley. I’ve learned a lot but there are some stuff that maybe I would have done differently but if I did it differently back then, maybe I wouldn’t be where I am. I think that’s also encouraging to people who want to start a business, who worry that they don’t have a degree or aren’t smart enough. I tell people to take what they have, where they’re at and just start. Make what you have into a competitive advantage. If people doubt me, if they ask what makes me qualified, I always say payments need not only a technical but a human approach too and what I do really well is help provide a good customer experience. I use that as my advantage. I can say my “ignorance” became my advantage. My technical co-founder looks at everything from a technical perspective but I don’t see it that way so we have some really cool conversations back and forth. – Derek Canton

There’s a couple things I would recommend, actual tools and concepts. The first thing I always tell people is that it’s very important for an entrepreneur to be a storyteller because entrepreneurs are usually very optimistic while investors tend to be pessimist and you have to find a middle ground. Your job as an entrepreneur is to be able to see something that some people can’t see or don’t have the ability to see. You need to share your vision with other people in a way that they can capture it, get excited about it and help build that vision. If you’re able to do that, you get the right people behind you. Early on, when we first got started I had the opportunity to sit down with Roger Berkowitz, the owner of ‘Legal Sea Foods’ and I showed him fancy-looking Photoshop images that I had put together in a way that looked like a real functioning app when it really wasn’t, it was just smoking mirrors. I asked whether we could try it with his customers and he got really excited about it. Some tangible tools you can use, if you’re not a super tech wiz, are PowerPoint, Photoshop (which is more advanced) and Illustrator. I do all my product design on a tool called Sketch.app and I use tools called Marvel, Flinto, InDesign to help animate and tell the story of the app experience itself. These are some technical tools that you can start learning. I designed my first Sketch app when I was a sophomore in university and have been using it ever since. It’s like building muscles, you just keep doing it and it works out in the end. From a non-technology side, I would say learn to tell stories. From a technology side, I would say figure how to communicate vision in a way that is tangible. – Derek Canton

Some of the best advice I ever heard is “done is better than perfect” because you will never reach to perfection. Perception is just an opinion and everyone has one of those. I probably had a million Pitch Decks. You adjust and evolve depending on who you’re talking to. You have to make sure you have a very solid storytelling capability. Sequoia Capital has some really great framework that I follow, from the problem to the solution, from the opportunity to the product, the marketing, etc. There’s definitely no perfect Pitch Deck but again, it’s really about storytelling. If I’m an investor, what do you want me to walk away with? That’s a question I always ask myself. Investors should feel like they want to follow your journey. I tell people, it’s almost like dating, you want to put your best foot forward. That should not be confused with deception or lying but again, it’s just storytelling so you should be very clear on what exactly do you want people to focus on and walk away with. Also, you have to be very technical with that. If you want people to think you have a cool product, you should have really good-looking product slides with you. If you want people to believe you’re offering them is a great financial product or opportunity, you better have a financial model with an appendix that justifies every single number you have with references and resources. You just have to be very intentional with what you want people to focus on. – Derek Canton

There’s a couple of things around the whole concept of raising money: determining at what point to raise money, why you need to raise money and who you should be raising money from. Just because there is an opportunity to raise money doesn’t mean you should go for it. Also, you need to understand that nothing in life is free. It’s essential to get to the point where you have something that’s investable. That means it has to be something tangible. I remember one investor I tried to get money from told me “I do not write checks to build technology, I write checks to build businesses”. What he meant was, if someone came to him asking for a 100,000$ to build a product, he would never write a check. If you asked for 100,000$ because you were growing and you needed to support the growth, he would give the money. I always tell people that investors want some type of certainty of the direction that you’re marching in. Telling people you need money to build a product shows you have a lot of uncertainty there. The nice thing about entrepreneurs and investors is that people want to know how scrappy you are. I tell the story of how we didn’t have a lot of money but we were able to get our first customers and build our product and these things show that I hustle and grit. When I needed to raise money, the story was about how I had an opportunity for them to invest, saying that they could write me a check but even if they didn’t, it wasn’t an issue. Nowadays it’s all about hard data and numbers. If the business is good, the numbers will show that. Lastly, I want to talk about evaluation. If I want to go out tomorrow and raise 20million$, what’s that going to cost you? Are you giving up 100% of your business? Are you giving up 1% of your business? Being aware of your value, from a business perspective is important too. So, being intentional about your journey is important because if you’re thinking about going another round of financing you would want to ask a specific value and justify that value. – Derek Canton

The ‘Derek’ I am now and the ‘Derek’ I was when I first started this business are two different people. I remember when we first started, we wanted to determine what kind of systems the people were using so we called a number of restaurants. I used to pick up the phone to call a restaurant and start shaking. I remember asking them what kind of payment system they were using was the scariest thing for me back then, even though I’m an extrovert who likes talking to people. I was able to get my first customer through a referral, someone who knew a large restaurant group. They weren’t going to pay for it but were willing to try the technology. Right now, we’re into enterprise sales so we’re selling to larger restaurant groups, many of them have 5 to 40+ locations. Now it’s a different sales process. Sales is a scary thing if you’ve never done it before. If I went back in time, I would tell myself that I had nothing to lose, they have no idea who you are and even if they hang up on you it’s not a big deal. I remember one of mentors told me “go for no”. What he meant by that was that if you go out searching for noes, getting a yes is a pleasant surprise. Then you find out that for every 5 or 10 noes you get a yes, a maybe or a follow-up. Thinking about hiring someone to sell the product doesn’t work. The founder or the first team members have to go out and find the customers. It takes time, practice, I’ve got hung up on plenty of times but I’ve also had customers who weren’t interested at first change their minds later and are now using our products. Going back to the struggle of being an entrepreneur that is against all odds, I encourage you to think that getting a ‘no’ is great. Keep getting more noes until you get a yes. – Derek Canton

One of the things I was nervous in the beginning was charging restaurants. I was afraid to have people pay for my product, which sounds silly when you think about it. I thought that if I charged them, they would stop using. Then I got into this state of mind that got me thinking I wasn’t going to take money; I was going to add value. At first, I let them use it for a year, then 6 months and now we do thirty-day trials per location. In some cases, there’s no trial, they want to immediately use it and we just roll out. So, it’s really based on the product-market fit. If you know for sure there’s a market fit for your product then you don’t necessarily need to do that trial but if you’re on your early days and don’t know exactly how to sell your product, the more you learn about the product the better. So, just give it away, get people to use it. If you can’t get paid, I would just encourage you to get some exchange of value. For example, our first customer hasn’t paid and is still not paying for it but they’re so small that it really adds value. Whenever we had issues with our technology, they were the first ones we were dealing with and they always called whenever they had a problem and that helped us so much. We were charging the other ones because we knew we solved those issues with those first customers. Sometimes you don’t know the cost of a product so it’s a bit of trial and error and understanding what the market will pay for your product. – Derek Canton

It’s more related to who you are as a person. There’s actually been a new competitor, a guy who runs the company and isn’t a people’s person and I’ve had people come back to me saying that even though the products are similar, they liked me so they chose to work with me. It’s actually kind of comical. Part of the reason we trust people with a 30-day trial is that we’re so confident in our tech, we know they’re going to love it. We’ll charge them later but the value is going to be there. Also, if you’re a founder, you’re the fire star and if you’re not starting the fire every single day then who’s going to carry that torch? It comes to the point where you have to have people excited until you have a product with enough traction and momentum where people are seeking you out. We’re just getting to that point now but there’s still a lot of me talking to customers and doing the co-calling. People think that being the CEO is like in the movies or it’s about being in magazines but most of the time it’s about rowing the seas and just getting in the work. I work more than my employees do. My team sometimes jokes when I send them e-mails at 3 am. It’s definitely about balance. – Derek Canton

I think the answer to this is to just know your audience. If I want to meet with an investor, I’m not going to wear a suit and tie, most of the time I am very casual. If I meet with a customer, I might dress up a little bit. The most important thing is to know what message you want people to walk away with. There’s nothing wrong with wearing khakis and flip-flops, it gives the typical engineer vibe but you should know who your audience is and make them feel the most comfortable. The more relatable you are, the easier the process gets. – Derek Canton

For me, the tipping point was the co-founder. We even made some momentum but we pivoted once Covid-19 hit and within two weeks we built up a new product, signed by 65 restaurants and it has been growing like crazy. I couldn’t do that without him. We pulled maybe four or five all-nighters back to back, drank way too much coffee but we knew that if we got this right pretty early on, we could really have a hold in this industry long-term. So, having someone that could help me through that process was a game-changer. In business, you either have a lot of potential or have a lot of proof and people invest in either potential or proof. But there’s a point where the potential has to convert. If it never converts, you won’t be able to raise another ground of financing. So, part of the challenge is to first raise capital based on potential. Given the state of the world right now, we are focused on determining our revenue trajectory, our profitability, our growth and whether our is business sustainable. So, I tell people, the more proof you have on growth rates, monthly recurring revenue, act of users, whatever you are KPIs (key performance indicators) are, the better. You have to be very clear on those and keep writing those updates. If you don’t have those yet, figure how long is it going to get to get there. One advice I would give if people are thinking about raising money is to think of it as a relationship. Before I got my first check from an investor, I spent six months of “courting”, keeping monthly updates, checking in with them, making phone calls, grabing beers and being really good friends and now most of my investors are just friends. You realize that most of the challenges are more common than not and it’s about finding the right people that will help out through the process. – Derek Canton

There were a couple of moments in this business that were game-changing. The first one was when our first live transaction came in from a random person we never knew before. We say the first payment coming from a new restaurant and we were so happy that it worked, it felt like it was the best thing ever. This world of contactless payment has currently become a requirement. Before Covid-19, having 2%-3% of the transactions go through Paerpay used to be great but right now we’re seeing that 65-80% of transactions are using our platform, which is incredible. So, the feedback we get from customers and restaurants expressing how happy they are with this experience is honestly the best feeling in the world. It’s a little addicting but I love it. Don’t get me wrong, the money and the revenue are really cool but I like looking at numbers, how many transactions and volumes are happening in our platform. People are using and coming back and loving it. I feel like I’ve created a baby and the baby’s growing up. – Derek Canton

I’d definitely be lying if I said my attitude is always optimistic. I’ve had some emotional breakdowns while doing this. There’s been tears, frustration, plenty of times I almost gave up and quit the business. From a mental health perspective, I always tell people it’s important to find people you can rely on and lean on because it’s a lot of stress. I’ve had loved ones who have written me big checks and I would never want to lose their money. You’ll worry about failing and there’s a lot of stress and anxiety that comes with it. A couple of things I would advise is to take your time to step away and breath. Also, you have to be determined. I tell myself “I can, I will, I must” all the time. Muhamad Ali says “I told myself I was a champion before I was”. Often times, you don’t feel like you’re a champion until you are a champion. – Derek Canton

That’s a tough one. I would say that not having a technical co-founder was something that was challenging for me. But I didn’t know that. There are also some poor decisions I made and when I look back, I don’t know what I was thinking. I think understanding that you will fail is just part of it, realizing that not every idea is a good idea. We’ve pivoted our core product three or four times. The mission is still the same, the execution is a bit different. Now we have something that needs no app, no new hardware, no integration and you can pay with a text message. But it didn’t start that way. If I only insisted on my idea and didn’t change it at all I would have been stubborn and ignorant and I wouldn’t be successful. You should understand that failure is inevitable. I failed on many steps of this journey. I remember getting through a round of financing and I managed to get in one of the final stages. Long story short is that my financial story was not necessary where it should have been and I got shoot out for a little bit. I remember someone once told me “The only thing that can fix a first impression is a second impression”. So, I walked out of the room, thanked everybody for their feedback and told them I was going to make adjustments and follow up with them. I immediately called my advisors, my team and I said to them that the story was wrong, those people knew it and we had to fix it. Luckily, some of them ended up writing some checks, investing later on, but it was embarrassing when it happened. What others want to see is coachability and that mentality makes you an investable entrepreneur. – Derek Canton

It depends on the state of where you’re at, how much money you have, what your team looks like. I’m working, on average, probably around a 15-hour day right now. It’s a little unhealthy, I work too much. I’m being more intentional about carving time in, like sleeping in, some days I just have to. I’ve had a bunch of coaches and mentors in my life and one of them told me about the importance of seasons. Some seasons require sprint, some seasons you can relax a little bit but you have to understand the momentum of each season. You don’t want to sprint a marathon; it’s not going to work. You might need to pick up the pace at the beginning of the marathon to get ahead of the pack so you’re not caught up in the thick of it but you have to stay in that momentum. Right now, because of the pandemic, we’re doing crazy hours, getting everything ready for what’s to come because the restaurants are supposed to be opening the next coming weeks and contactless payments is a must. What I tell people is: pick three things that have to get done every single day and do those three things. Make sure they’re the most important things out there, everything else can just fade away. Our team is growing right now, which is exciting and there’s a lot of stuff that is important but not urgent. Some days I decide I’m not going to work and I take the day off.  Figure out your milestones and road map and march towards that. Once again, working a million hours, with no sleep, lots of coffee is over glorified. You need to do that some times, but you have to remember the momentum of each season. Also, you need to stay healthy because I repeat, you’re the fire starter and if you burn out, so will your business. – Derek Canton

If I had to pick my greatest achievement, I would say it’s more of a mentality achievement rather than a physical one. For me, my life really changed when I made the decision to go to Las Vegas to be in that Hackathon. Everyone in my circle though I was crazy, there were people who told me not to go. I even decided not to go to a close one’s birthday weekend party. So, I made the conscious decision of believing in myself. It got to the point where I was confident that I was going to make the jump against all odds. I think that’s truly my greatest achievement. There are so many people with so much potential that never make the leap for one reason or the other. Whether my business is successful or fails, I know the person I’ve become today is someone who will make another leap in the future and will continue to take chances that are worthwhile. – Derek Canton

That’s a really good question. The number one thing I would disagree with is thinking that raising money is easy. I used to think that if you have an idea, get in front of a board room, you give them the pitch, they’ll pull up their pen, write a check, slide it across the table and then you have a founded business. In real life, it’s not like that at all, only if you’re a repeat entrepreneur or have had a successful exit before. However, 99.9% of the time that’s not the case. For me, raising money was a struggle, a challenge. If I had had someone who literally told me what I had to do to get someone to write me a check, I don’t know how I’d be able to raise money. The number one advice I would say about raising money is, no one will write you a check unless they have to write you a check. Raising money is hard, until it’s not. Given the state of the world right now, it’s probably going to be even harder. – Derek Canton

I would say there’s two sides of it. One, be very attentive to what your circle looks like. When I first started, no one in my circle were entrepreneurs so no one understood my drive. It was very fortunate my dad knew someone who took a similar journey and became very successful. That guy has become a mentor, an investor and board member in my current business. So, that introduced me to a whole community of other entrepreneurs and right now my circle is composed of people who do entrepreneurial stuff. Early on though, there were plenty things I missed out on and I made a conscious choice to do what I love. So, my circle of friends isn’t necessarily the biggest circle but the quality is absolutely there. A lot of people get my hustle, my drive. I’m also part of this community called ‘Future Founders’ and they have this program I am part of, a fellowship in Chicago and the purpose of it is to work more as a founder accelerator than a business accelerator. It’s focused on the mental health of the founder, the community and how to grow sustainable founders that are lifetime founders beyond just running a single business. We have monthly check-ins and mastermind, which is an incredible community. One member was talking about how she was struggling with her idea because she got her dream job offer and turned it down to pursue her business and a lot of her family members didn’t get it. She didn’t know what to do because people didn’t get it. Luckily, everyone in the network encouraged her, helped her out. So, finding those people that support, understand you and lift you up is really important. The second side of it is that people knew you for who you were, not necessarily for where you’re going. Don’t let the previous patterns that people have seen be a determining factor for your future. My discipline as a high school student is very different from the discipline I have now. If I let the people who spoke in my life in high school speak in my life now, my life will probably look a little bit different to them. – Derek Canton

I would say, Derek is really good at being Derek but he’s always growing as a leader. There’s a lot of things I can point out and think I should’ve handled differently but I’ve accepted that there’s this concept called the ‘law of the lead’. It’s basically about how an organization won’t be able to grow beyond its leadership capabilities. There’s a lot of things I’m great at but there are some things I’m bad at and I acknowledge them both. So, I know where to focus my energy. I’m constantly looking to grow and improve and I’m always looking for feedback. That has helped me to actually get funding from people. If I mess up, I’m totally owning it. I think that’s the right mentality. The second you think you’ve made it or that you’re the best, you’ve truly lost at that point. In short, I stay true to who I am as a person but am always looking to grow as a leader. – Derek Canton

All I’ll say is this: next time you go to a restaurant, keep an eye open for text-to-pay. – Derek Canton