Check Your Ego at the Door: Interview with Nicholas Longano, Founder of Scuti
I recently went one on one with Nicholas Longano, founder of Scuti.
Adam: Thanks again for taking the time to share your advice. First things first, though, I am sure readers would love to learn more about you. How did you get here? What experiences, failures, setbacks, or challenges have been most instrumental to your growth?
Nicholas: Thanks, Adam. My journey has been full of ups and downs, migration to a new continent and a mix of successes and failures. I started my career in marketing in Australia in the beverage industry with Cadbury Schweppes (CS). Luck has reigned supreme in my life—or it’s just that I’ve been at the right place at the right time. CS enabled me to launch mega brands in the Australia market, including Pepsi, Sunkist and Evian, and with those I realized early on that I enjoyed the excitement of launches. Just like the thrill an engineer gets from watching a rocket launch after years of building it, I got the same rush from launching a product I brought to market.
From beverages I went into beauty, bringing technology to product launches for L’Oreal, Revlon, and Calvin Klein. About 22 years ago, I finally entered the video game industry and more “luck” was on my side, working with amazing teams from Blizzard and Valve, and then launching the world’s first in-game advertising network, Massive - which we sold to Microsoft. The first 19 years of my career saw big successes that I am deeply grateful and humbled to have been a part of.
Then in 2008, feeling like a master of the universe, I decided to create a music virtual world, which functioned as my own vision of the metaverse, and I was doing it at the same time the market was melting. Let’s just say so did that dream.
The challenges along each step were in creating newness in cluttered markets, facing nay-sayers and trying to compete when I went at it alone, as a “David” in a world of “Goliaths”. But the most important element, and one I always clung to, was always addressing a market need with a technological solution in my built products: Need + Emotional Benefit = Success. That is my formula that has worked for 30 years now, and I continue using it today.
Adam: How did you come up with your business idea? What advice do you have for others on how to come up with great ideas?
Nicholas: The idea came from listening, recognizing a problem and developing an idea that could fix the problem. For years I was consulting with game and app makers on their biggest hurdles…namely – player retention, and monetization and brands seeking to market to the player community. Just 20 years earlier, members of our team had helped both parties with the creation of Massive – the company which pioneered in-game advertising.
I recall that the current business idea came to life in 2019. It was a cold winter day in CT, and I was in my son’s room watching him and his friends playing Destiny with them. I overheard one of them say how cool it would be to be able to purchase physical items from their game to use in real life. After further discussions about what else they would be interested in buying from their game and how they would be motivated to purchase and spend, the idea for Scuti was born.
What was perfect is that the solution I had in mind not only addressed the problems faced by game makers, brands and players, but also created new opportunities for them all.
I would advise others to listen to your audience, know your market, understand their needs and how they are presently doing things. Assess how you can do it better, faster, or more conveniently for the end-user. Create a much-needed benefit to an existing or future problem. By addressing a problem and/or an industry’s pain point, there will always be a built-in demand for your idea. The notion of ‘build something’ and can end up being a ‘field of dreams’…sure there are exceptions as always, but the path is much risker and fraught with many challenges, ranging from user acquisition, education, and conversion costs. Adoption is far easier and faster if a baked-in need exists in any given market, and you have the solution.
Adam: How did you know your business idea was worth pursuing? What advice do you have on how to best test a business idea?
Nicholas: Feedback, testing, and iteration are how you build upon your idea. You may think you have stumbled on a solution to a problem or a great idea, but you need to quantify your theory with facts and data. And the best way to do that is to conduct some form or formal or informal research with the constituents who are ultimately going to use your invention. Don’t get stuck obsessing on your original idea. Solicit and accept feedback; and as long as the input you receive is supported quantitatively, then allow your idea to be iterated and then test again.
When I first built the Scuti concept, I tested it with the market…speaking to hundreds of players, advertisers, and game makers to formulate what would be the beta product. Even with the best pre-production, be prepared for further iteration, feedback, and refinement of your idea into something the market wants. They will eagerly embrace and pay or commit their time and energy to something they need.
Adam: What key steps have you taken to grow your business? What advice do you have for others on how to take their businesses to the next level?
Nicholas: The best step I’ve ever taken is to hire the best talent to help grow the business. A great idea goes nowhere without a team that can execute against it. I recommend refraining from making costly and unnecessary mistakes. Hiring blindly can work sometimes, but most times, it leads to many failures or high sunk costs. Build a team around you that has relevant experience rather than one that is learning at your expense. Bring on their talent and their knowledge and use it to optimize the product and build a roadmap that everyone is clear on without ambiguity.
Organic growth of a business is noble, but it takes a long time, and the cost of capital is high. There are ways to grow your business faster and more effectively, using strategic partnerships to help catapult your business rather than trying to do it yourself. The video game industry, for example, learned a long time to stop building a new game engine for every new title. There is no sense in doing so. Better to utilize proven tools and assemble what you are making in that manner…your secret sauce is the differentiation of your product and how you are using those parts to build a better machine, per se. It’s the reason influencers took off on social media. Brands can certainly spend money to chase new users and try to convert them…but partnering with the right influencer who already has an engaged audience is a quicker path.
I prefer speedy growth at a lower margin today, over, and above slow and painful organic growth…but that’s just a preference. I always remind folks that you don’t pay bills with %’s…you pay them with dollars…so it's better to have immediate and positive cash flow at a lower margin today than wait and chase a higher margin some time down the road…if it time ever comes at all, or unless a competitor has stolen your growth from you. Seize the opportunities quickly, strategically, and effectively.
Adam: What are the most important trends in technology that leaders should be aware of and
understand? What should they understand about them?
Nicholas: The Democratization of technology. The industry needs a standard set of tools to create a truly global infrastructure from which all creators can draw from, for the good of all. This way, it assures that power is in the hands of many, rather than in the hands of a few, such as is the case with Web2.0.
When technology has become fully democratized, we will see collaborations like never before…and what will be born will serve humanity in a positive way, rather than technology built to spy on, track and capitalize on the many for the benefit of a few. This exploitative approach has turned tech companies into the ‘bad actors’ that were born from the last technology phase. We have created technological oligarchs when we need open and democratized technologies.
A more open technology platform and approach for all will translate to better, more creative solutions developed to help, educate, and improve our daily lives and health – both mental and physical. That doesn’t mean pursuing profit is wrong; there is enough to go around for everyone.
Adam: What should everyone understand about the metaverse?
Nicholas: The metaverse is not a dystopian dream. Components of the metaverse are here today in virtual worlds. They’ve been here for 20 years. Once creators of these worlds can agree on best practices and universal tools which allow interoperability, the metaverse will start to exist.
The metaverse needs to have interoperability, or the ability to traverse seamlessly from one experience to another. The ability to use the same digital persona and wallet across the world.…allowing the only thing to change is the setting, what they are doing, and how they want their avatar to dress and behave for the occasion. It’s why I believe that today's games and virtual worlds will lead to the adoption of the metaverse of tomorrow.
Adam: In your experience, what are the defining qualities of an effective leader? How can leaders and aspiring leaders take their leadership skills to the next level?
Nicholas: An effective leader sets the vision and articulates the path for a company clearly and allows their team to execute - providing the tools, the resources, and the guidance to enable them to get the job done. Someone who can listen to feedback and make definitive and clear decisions.
Transparency is also key, so that team members are not second-guessing or vague on the direction. Ambiguity serves no one well. A leader is someone who has earned the team's respect and is deemed fair in the manner they operate, yet decisive. Indecisiveness can cripple a vision. Someone who rallies the support of the team they have built - a team who believes in their leader’s vision and is ready to execute against it. Sure, they can challenge that vision and decision, but once a course is set, they will support it for the betterment of the company and their fellow team members. A strong leader embraces input, ideas, and innovation…is not afraid to break a few eggs to make the perfect omelet… is resilient against obstacles and despite some failures can rally the team to brush off such mistakes, of course, assess each one and learn from them, and march forward.
Adam: What are your three best tips applicable to entrepreneurs, executives, and civic leaders?
Nicholas: I’m sure there are more than three, but these have served me well, and I believe they have universal application for all.
(1) Check your ego at the door and listen to those you have given the responsibility to execute your vision. That means you need to hire effectively and surround yourself with those who not only believe in your vision but can lead alongside you and execute against it. A team which is willing to challenge you when needed, rather than “yes” your business into your ground. Know that you don’t have all the answers but be sure to only take the advice from those you trust and can support their ideas with data rather than ‘gut-feelings’. Gut feelings have served some well…but many times it’s the exception rather than the norm.
(2) Change and the ability to adapt is inevitable and is often good for any business and idea. It’s an unfortunate reality that with every dynamic shift in any given sector, the current leaders are never the ones to adapt earl…and often get left behind – unless they acquire those earlier innovators at what is usually exorbitant prices. Don’t be afraid of changing a course or the fabric of an idea if it means earlier or faster adoption and acceptance, or gives you a leg up in a changing market. Don’t fight change – embrace iteration. Too often, people allow themselves to be swayed by other opinions or chase other ideas down an endless rabbit hole. Assess the information you get and decide whether the direction is, in fact, sage or just another rabbit hole. Lean on quantitative support to warrant a shift or change and be very wary of advice or opinions unsupported by quantitative data. It helps to be in constant contact with your customers.
(3) Research your market - take the time, like all good pre-production, to understand the market, the players, and the needs. Be prepared to invest in the time to assess markets, test ideas, and iterate until you get it right. Understand not just where they are today, but where they want or prefer to be, and how you can build what it takes to get them there.
Adam: What is the single best piece of advice you have ever received?
Nicholas: Don’t ever use your own money to fund your business. I didn’t take that advice, and it took me a decade to recover. Aside from that, avoid being so fixated on an idea that you cannot see the forest for the trees. Be prepared to iterate and know there is a strong probability that the final product you bring to market may differ from the one you started conceptualizing. Build against a market's needs rather than building on a dream – it’s more effective. Don’t believe the hype – there is no overnight success and many eggs are broken for every great omelet. If it’s based on your vision…be prepared for the painstaking journey of finding those who also happen to believe in your dream…whether it’s investors, partners, employees or end-users. It’s easier to sell people on the vision that we need to colonize Mars when they understand the need…. because we are near depleting the Earth’s resources, and we must find a new nest for the human race before this planet dries up and our kind is extinct. That is a commercial and executable need…rather than…” I always wanted to go to Mars as a kid”.
Adam: Is there anything else you would like to share?
Nicholas: Aside from not using your own money…a good business person is always one who knows when to get out. You can’t be so blind on your idea and chase that execution to the very end that you are so blind to the telltale signs signaling you to abort. Know when you can’t finish the race and get out when you still can. This requires setting milestones and having the courage to walk before you reach the point of no return. Each business has a different marker for such, and you need to know your business, your market, and the resources you have, and know when you have to hit the eject button before it’s too late and the only thing you hit is the ground.
Adam Mendler is the CEO of The Veloz Group, where he co-founded and oversees ventures across a wide variety of industries. Adam is also the creator and host of the business and leadership podcast Thirty Minute Mentors, where he goes one on one with America's most successful people - Fortune 500 CEOs, founders of household name companies, Hall of Fame and Olympic gold medal winning athletes, political and military leaders - for intimate half-hour conversations each week. Adam has written extensively on leadership, management, entrepreneurship, marketing and sales, having authored over 70 articles published in major media outlets including Forbes, Inc. and HuffPost, and has conducted more than 500 one on one interviews with America’s top leaders through his collective media projects. A top leadership speaker, Adam draws upon his insights building and leading businesses and interviewing hundreds of America's top leaders as a top keynote speaker to businesses, universities and non-profit organizations.
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