Dave Cava co-founded Proactive Technologies in 2007 and currently serves as their COO. Proactive is located in midtown Manhattan and specializes in managed technology support services for alternative investment firms. They currently have around 50 employees, 160 clients, and $10 million in revenue.
How did the concept for Proactive Technologies come about?
My partner and I were working at another firm, and aside from our group, the company was very dysfunctional. We finally had enough and decided to leave. As I pondered what to do next, it occurred to me that I really liked what I was doing and thought I was good at it…I just didn’t like where I was working. We tried to negotiate a graceful exit that would involve us buying out the portion of the business we ran, but those talks fell apart and we wound up striking out on our own with no clients, no employees, no office, no business cards, etc. We announced to our business contacts that we’d left and were starting a new venture. The only capital we had was money we put in, and we didn’t have much to spare. My half came from a credit line on my house and a small settlement from a car accident my wife was in. We were totally bootstrapped and terrified, and we really didn’t have a Plan B.
How was the first year in business?
Wild! We got started in May 2007. My partner severely injured his knee in August of that year, putting him out of work for almost three months. By the end of 2007, we had $1.4 million in sales and twelve employees. To say it was crazy would be a serious understatement. We had all of these ideas about laying good foundations in terms of using software tools optimally and developing standardized processes and procedures, and everything just flew out the window because we were trying to keep up with a massive crush of work. By the end of the year, we had recouped our entire initial investment and we were so busy we were turning away new sales leads. We had lots of problems, but they were GOOD problems.
What was your marketing strategy?
It’s more of an anti-marketing strategy, truth be told. We quickly focused on a narrow vertical market (boutique hedge funds and private equity firms), built our company to deliver services well to that market, and jealously-guarded the reputation of our firm within that market. Sometimes that meant bending over backwards to please a client, sometimes it meant turning away new clients if we were maxed out and feeling like we couldn’t onboard them well. We gradually got the attention of some of the influencers and kingmakers in the space and got real traction. Someone once asked us, “So you just sit around and wait for the phone to ring?” and we replied “That’s right, but we put a lot of effort into making sure it keeps ringing.”
How fast did the company grow during the first few years?
The growth in the first year was amazing and challenging. We basically did in a year what most successful bootstrapped companies in our industry do in four or five years. Then the recession hit in 2008-2009 and all of a sudden we found ourselves just trying to hold the ground we’d gained. At one point, we lost money six months in a row and were just trying to hang in there and not lay off any employees. Our larger competitors laid off approximately 40% of their staff during this time frame. We started doing quarterly company meetings around this time in order to keep employees in the loop as far as the state of the company and the industry overall. We shared financial information. We wanted people to understand the full context as we made tough decisions about compensation in a brutal market.
How do you define success?
Success is doing what God put you on Earth to do and doing it well. For me, right now that means empowering other people and helping them to have good careers, and speaking and teaching as time allows. I want to see my employees buying homes and starting families with confidence they will have a solid, stable income for years to come, and ultimately, I’d also like to help some people who have had hard lives to be self-sufficient when they previously were not.
What is the key to success?
Humility, hard work, relationships, and overcoming fear.
What is the greatest lesson you’ve ever learned?
I’m not invincible. I need to pace myself and appreciate the value of rest and a balanced life.
What are some quotes that you live by?
“Land the plane.” – LL Cool J. Basically, this quote means finishing well is everything. You can have a great business and if success goes to your head and your family is a mess, what did you accomplish? Win at life, not just business.
“I was dead, and right content.” – George McDonald, Phantastes. Death is just a door – get right with God and live without fear of it.
“Though a righteous man falls seven times, he rises again. But the wicked are brought down by their calamity.” – King Solomon, Proverbs 24:16. No matter how bad you blow it, get up and try again.
“Trust in the Lord with all your heart and lean not on your own understanding, and he will make your path straight.” – King Solomon, Proverbs 3:5-6. Ultimately, we’re not in control. Control is an illusion. Surrender to God and let Him lead the way.
“God opposes the proud, but gives grace to the humble.” – Apostle James, James 4:6. People are the same way. If you are humble, everyone will want you to succeed and help you do it.
Tell me about one of the toughest days you’ve had as an entrepreneur.
I had good friend I’ll call Bob who I had worked with at two previous jobs. At one point, my family was living in a pretty dangerous part of Brooklyn and we decided to move out very suddenly due to the escalating violence. One guy dropped everything he was doing, commuted to where I lived from far away, and spent the weekend helping me move. That was Bob. We really should be friends for life. Well, I hired Bob to work at my company not long after we got going. He did well for a while but after a year or so he grew increasingly frustrated with his role. At one point, it boiled over and he threw a chair across the office. I sent him home and fired him the next day. I thought our friendship would recover, but it never did, and to this day I am still sad about it. This experience changed the way I look at hiring friends and family. These days, I usually put those hiring decisions in the hands of other people, and I have a discussion upfront that goes something like this: “The day may come when letting you go is the right thing for the company. If that happens, that is exactly what I’ll do. If you don’t think our relationship is strong enough to withstand that kind of experience, please don’t take this job.”
When faced with adversity, what pushes you to keep moving forward?
There are a lot of people counting on me. I take a lot of inspiration from my grandfather. He fought for Italy in World War II and was a Prisoner of War in North Africa. When the war ended, he got married and moved his family to America. He didn’t know English and had an 8th grade Italian education. That man worked his ass off and put five kids through college. He learned English by taking classes after working double shifts at a gas station. Eventually, he owned a service station with a partner, and then owned his own liquor store for over twenty years. He put an entire family on his shoulders after experiencing the horrific traumas of hand-to-hand combat and a POW camp. All that to say when I need to get through something really hard I pray to God and I remind myself that my grandfather’s blood is running through my veins, and I want to make him proud. You steel your will and go do whatever you gotta do.
What advice would you give to young entrepreneurs?
Find people who have accomplished what you are hoping to accomplish, find a way to get some time with them, and ask them questions and listen, listen, listen. Treat them with respect, show them gratitude, and take the time to process what they’ve said. Everyone needs to learn some things the hard way, but you should learn as many things the easy way as humanly possible. Proverbs 11:14 says, “Where there is no guidance, a people falls, but in an abundance of counselors there is safety.”