LIFT Speaks Ep 26 with Andrew Kussmaul: The Best Startup Lawyer is an Entrepreneur

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Andrew Kussmaul, lawyer, doesn’t mind doing the dirty work. While he was a working at a law firm in Dallas, he started a business on the weekends for the sole purpose of learning what it was like to be an entrepreneur, to manage the books, hire employees, and work on weekends until the job was done.  Today, Andrew uses his knowledge and experience to help guide and support his business clients through his law practice.

I started my business because . . . I wanted to combine my business and legal experience to help entrepreneurs with issues they might not always see or think about.

The thing I enjoy most about my business is . . . knowing that the services I provide help entrepreneurs achieve their dream in one way or another.

The biggest surprise for me as a business owner is . . . how a small amount of effort each day can produce big results.  

One question people should ask me is . . . what legal structure should my business be in order to help me attract investors and grow.

My older self would coach my younger self to . . . take on as much responsibility as you can handle. Responsibility gives you a purpose and molds you into a successful and competent individual.

One thing I wish I knew when I was younger is . . . the power of action. The only thing standing in your way of being successful is you. You need to act if you want to achieve your dreams.

Introduction

Catherine Miller: Welcome to LIFT Speaks. Today I’m visiting with Andrew Kussmaul. Welcome Andrew.

Andrew Kussmaul: Hi. It’s great to be here.

Catherine Miller: Thank you. Andrew’s last name was very hard for me to learn. I’m really proud that I was able to say it correctly.

Andrew Kussmaul: You did. You did. You did really, really well. Most people like totally mispronounce it, either Koossmaul or Kassmaul. But you did really, really well.

Catherine Miller: Well, thank you. We practiced it.  Andrew is a lawyer.

Andrew Kussmaul: Yeah.

Catherine Miller: He specializes in startup companies and companies looking to seek venture capital. And, Andrew is loads of fun as well. He will even help you practice his name.

Today I want to start with Andrew by hearing a little bit of your background and how you got into law, why you like law.

Andrew Kussmaul: Sure.

Catherine Miller: And how you ended up specifically with startup companies.

Andrew Kussmaul: Sure, yeah. So, I went to undergrad at Oklahoma State University, didn’t know what I wanted to do. I just bounced around from major to major and then it was like, well, I might as well just do business, right? I took my first business law class and fell in love with it. After that, I knew I wanted to do law.

I took every single law class that I could in undergrad, graduated with a pre-law minor. Then went off to law school up in Boston actually.

Catherine Miller: Oh, wow. What school in Boston?

Andrew Kussmaul: Suffolk University Law School.

Catherine Miller: OK.

Andrew Kussmaul: Yeah, yeah. It was a great time being in the city there and it was like right across the street from Boston Common. So, it was a nice change of scenery, yeah.

Catherine Miller: Yeah, very cool area. So that would definitely be a contrast. I have taken business law classes and I can tell you that I didn’t care for it. So I’m glad –

Andrew Kussmaul: You didn’t?

Catherine Miller: No.

Andrew Kussmaul: Oh, man. OK. Well, I must have been the only one because I was just so – I was just enthralled.

Catherine Miller: OK. You graduate in Boston, which is a super cool city. What brought you back down to Texas?

Andrew Kussmaul: So, the market honestly. When I went to law school, it was in ’08, right at the height of the housing crash, market crash, and I heard a very troubling statistic my first year in law school. The stat was that there were more students in law school at the time than there were practicing attorneys throughout the whole United States.

So, I was like, “OK. Well, this is going to be great when I graduate, right?” I think most law students have some kind of delusion of grandeur. I knew I wanted to do something business-related, and I thought I was going to graduate and land some in-house corporate council job somewhere.

Little did I know that one, hardly does any law school grad get that job, and two, it’s like the most coveted position in the legal industry. So, when I graduated, I got my license up in Massachusetts. I decided I wanted to try to make a go of it up there because I met my now wife. She’s from New Hampshire. I met her up there and the market was just so bad. I spent the next couple of years either unemployed or underemployed.

After talking it over with my now wife quite a bit, we decided to move back to Texas because, quite frankly, the economy was doing so much better down here and moved down here. I got a job at a law firm while I studied for the Texas Bar.

Catherine Miller: Oh, cool. So, it was much easier to get a job down here.

Andrew Kussmaul: Oh, yes. Oh, yes. I got a job within a couple of weeks after moving back.

Catherine Miller: Oh, that’s great.

Andrew Kussmaul: Right, yeah. I was pretty happy about that and then was able to study for the Bar Exam as well too.

Catherine Miller: Did this law firm focus on startup companies or was it something totally different?

Andrew Kussmaul: It was something totally different. It was with bankruptcy and creditors’ rights. We worked for the bad guys. We worked for the banks, kicking grandma out of her home.

Catherine Miller: Oh gosh.

Andrew Kussmaul:  We represented the banks in bankruptcy proceedings, and everything associated with that. I knew it wasn’t something that I wanted to do at all. It was really a dead-end job and it was one that I took because I needed it at the time. My student loans were coming due, and I just needed the money.

I was at this dead-end job and just not enjoying it, and I knew I had a vague interest in business. I wanted to do something in business and really began looking around. So I began to ponder . . . what can I do and what do I really want to do?

Catherine Miller: Right. Have you always had an interest in entrepreneurship?

Andrew Kussmaul: Well, I’ve kind of had a general interest in business because that was my major in undergrad. I never really had an interest in entrepreneurship until when I was at this dead-end job.

I was listening to this radio show, and it was the Josh Tolley Show. He was an entrepreneur and kind of like a business coach. My buddy turned him on to me and was like, “Hey, come listen to the show. It’s pretty interesting.”

I was like, “OK.” It was one of the first business shows that I listened to and he said something that really stuck with me about entrepreneurship. He said that the market is not a fixed piece of pie. Anybody can go in there and carve out a slice for themselves.

Catherine Miller: Oh, wow. That’s a good quote.

Andrew Kussmaul: Yeah, and it really stuck with me because beforehand, I used to think that in order to be an entrepreneur, you would have to think of some sort of grand idea, service or product that had never been done before. But what he was really hinting at was that there’s a lot of people making great living having businesses in already established markets, selling the same product or service. Of course, there are some differentiators.

But I was like, wow, OK. Well, it really kind of changed my mindset on what entrepreneurship was and what it took to be an entrepreneur. So I started listening to more and more of his shows and just got more and more inspired and I guess you could say he was kind of like an unofficial business coach for me.

I never met the guy or anything. I just listened to his shows. He also was a big proponent of startup businesses. You know, just kind of like everybody has got a starter house, right? You know, it’s not your dream house.

Well, a starter business is not your dream business because let’s be frank, most businesses fail. It’s like there’s a lot of stats out there. About seven out of ten of startup businesses fail. I’ve seen some stats say nine out of ten fail.

Catherine Miller: Right. Within what time period? First couple of years or something like that?

Andrew Kussmaul: Yeah, exactly.  Josh Tolly’s whole thing with the starter business was, was like OK, well, if you want to start a business, say your dream business is a bed and breakfast, right? Well, if that’s your first business right out the gate and you don’t have enough money to buy the house yourself and convert to a bed and breakfast, you got to go to a bank and take out a loan. It could be half a million dollars right there.

If it’s your first business, you’re really not going to be knowing really honestly what you’re doing.

Catherine Miller: Right.

Andrew Kussmaul: And the risk is just so high that if that bed and breakfast fails, well, OK, well you still owe all that money back to the bank.

Catherine Miller: Yes.

Andrew Kussmaul: So, his thing with the startup business was a low-cost business. It’s not your dream business but something that’s like very low-cost startup. Kind of basically just like as a practice business. And so if you do fail, kind of like a hedge against the financial risk of the business failing, if you do fail, well, you’re not in the hole that much.

Basically, his philosophy was you just work your way up. You make some money from that business. If it’s successful, great. Then you take those proceeds and you start a bigger business.

Catherine Miller: Right.

Andrew Kussmaul: You work your way up to that bed and breakfast.

Catherine Miller: Right. That’s really smart.

Andrew Kussmaul: That is his whole mentality on the process of a startup business.

Catherine Miller: Yeah, that’s really smart because we do have a lot of startups come through here and we’ve had some that we’ve cheered on to victory. We’re like, “Yes!” They’re making it. They’re doing great. But most of them don’t make it.

Andrew Kussmaul: Right.

Catherine Miller: But they’ve tried. It’s a stepping stone to something else.

Andrew Kussmaul: Exactly.

Catherine Miller: They’ve tried. But it’s hard when you don’t make it. It can be very hard, especially if you have a huge investment in what you’re doing.

Andrew Kussmaul: Oh, for sure. That just makes it even worse.

Catherine Miller: So, then you chose to try a startup business. You were at a job that you’re not loving, right? It’s easier to take a step and try something different if you are feeling the need to make a change, right?

Andrew Kussmaul: Yes, yes. So, I knew about the legal side of business, but not the business side of running a business. I didn’t know anything about that. So, I followed his advice and I created a startup business that I worked on the weekends on the side and it was called – well, full permission to laugh here, and I’m going to be dressing it up here. . . it was a pet waste removal service company, which is just a fancy way of saying we scooped dog poop.

Catherine Miller: Oh, gosh.

Andrew Kussmaul: And I called it AK’s Poop Haul.

Catherine Miller: AK’s – OK, so that’s a great name.

Andrew Kussmaul: Right, thank you, thank you and –

Catherine Miller: But I think it would be better to be Kussmaul’s Poop Haul.

Andrew Kussmaul: Well, you know, it would have been –

Catherine Miller: You needed a marketing director.

Andrew Kussmaul: I did. I needed you. That’s what I needed a couple of years when I started that business so many years ago. Yeah, because the reason –

Catherine Miller: So why did you pick that business?

Andrew Kussmaul: Well, I was living in Dallas at the time, and me and my wife, we were living in an apartment complex that allowed pets throughout all the apartment complex. They had the dog waste stations there with all the bags and the trash can. Everything that you needed to pick up after your pet. But nobody did it. Even when the station was like two feet away, you would just see dog poop on the grass everywhere, and I just couldn’t for the life of me get it.

I was like, “Man, some people are lazy with their pets,” and then I was like, “Oh, well, wait a minute there.” Here’s a problem that can be solved, right? Because you know the whole thing about being entrepreneur is identifying a problem and solving it.  I thought, “Well, people don’t want to pick up after their pets. Maybe someone will pay someone to do it,” and that was the idea right there for the business and just kind of started planning it. One day, I was talking to my wife and I’m like, “Hey, I want to do this.” You know, work on the side and she’s like, “OK. Yeah, go for it,” It was a true starter business too because besides the filing fees to incorporate the entity, the equipment cost was only about 25 bucks.

Catherine Miller: Oh, wow. That is a startup.

Andrew Kussmaul: Yeah. So, it was perfect because I didn’t have to sink a lot of money into it at first to get it off the ground and running.

Catherine Miller: How did you like it?

Andrew Kussmaul: You know, I actually enjoyed it because it was mine. I built it up from the ground. My sister and I always had pets.  My dad was a veterinarian. So, we always had pets and we always had to scoop the poop in the backyard. It was always an issue of contention between us, fighting who’s going to do it this time.

Catherine Miller: Because you wanted to pick it up or –?

Andrew Kussmaul: No. I didn’t want to. I didn’t want to. But it was funny. It wasn’t a pretty business, but I enjoyed it because like I said, it was mine. A sense of accomplishment, you know, satisfaction.

Catherine Miller: Right.

Andrew Kussmaul: Like hey, I did this. This is my business and yeah, I mean it was – like I said, it wasn’t pretty. I never threw up or anything like that. I never lost my lunch. But yeah, I had a blast doing it. I really did.

Catherine Miller: Well, good for you. So how many hours – so you’re working fulltime at a law firm.

Andrew Kussmaul: Right.

Catherine Miller: How many hours on the weekend are you spending picking up poop?

Andrew Kussmaul: Oh, gosh, pretty much the whole weekend reall,y and I even expanded it to Fridays too. I was working a fulltime job. But on Fridays I was able to get off of work early. It’s just kind of how my schedule happened. So, I was able to fit in some yards late Friday afternoon and then pretty much all day Saturday and all day Sunday. I serviced yards throughout the whole DFW area and it was getting to the point where it was starting to be just too much for myself.

So, I hired an employee. That was the first time hiring an employee and that’s an experience, man. You talk about a steep learning curve on that.

Catherine Miller: Yes.

Andrew Kussmaul: It’s – wow. You know, for people in the HR field, you know, I have an amount of respect for them because it’s difficult.

Catherine Miller: It is. But not only that, buy finding the right person who’s willing to go pick up dog poop could be tricky.

Andrew Kussmaul: Right.

Catherine Miller: Not everybody is going to say, “I will do that.”

Andrew Kussmaul: Well, yeah, exactly. That’s what I thought too.  I listed the job on one of those online websites where you can post your job and people can apply to it, and I forget which one I did. I was thinking, “No one is going to do want to do this,” but I got quite a few responses because it was a part-time job. It wasn’t fulltime, and I just needed someone to lighten the load.

We just had our first child and I wanted to transition more into the management of it. You know what I mean? I wanted to grow and eventually grow into a full time 40-hour a week job for my employee, and I couldn’t do that with working a fulltime job and then spending all my weekends out there scooping.

There was very little time for business development.

Catherine Miller: Right.

Andrew Kussmaul: And …

Catherine Miller: Was it profitable? Did it turn out to be a business that you could grow and sell?

Andrew Kussmaul: No. So, I operated that business for about two years and eventually had to shut it down. You talked about failure earlier, and the stress of it and everything was huge. Someone said shutting down a business, it’s like going through all the stages of grief. That’s very true. But the good thing about the starter business was I already recouped the whole of my –

Catherine Miller: Your $25.

Andrew Kussmaul: Yeah, exactly. I had recouped my investment a long time ago and so I didn’t lose anything.

Catherine Miller: Right.

Andrew Kussmaul: I wasn’t in the red or anything like that when I had to shut down, which helped. But I really narrowed it down to three issues on why I had to shut it down. To answer your profitability question – the main issue was everybody said don’t compete on price, don’t compete on price. Well, what did I do? First-time business and I made the mistake of competing on price. I undercut the competition. Surprisingly there was competition in the area.

Catherine Miller: Yeah.

Andrew Kussmaul: And it just wasn’t profitable to be honest with you. You know, near the end, I was just racking my brain trying to figure out, “Well, how much more money can I get out of this?”

Catherine Miller: Right.

Andrew Kussmaul: You know, and I couldn’t create a profit. I would have had to have had so many customers. I wasn’t even taking a salary from it. Talk about rookie business mistakes. I didn’t even really plan any of that out. So, I learned the hard way.

Catherine Miller: Right.

Andrew Kussmaul: At least I didn’t owe a bank a big loan for it and everything.

Catherine Miller: Right, right. So, it was a stepping stone.

Andrew Kussmaul: Right.

Catherine Miller: It was a great segue for you to understand what other business owners face when they start up a business.

Andrew Kussmaul: Oh, exactly.

Catherine Miller: Even though it was gentle as far as what your outlay was. Still it took you tons of hours. For two years, you didn’t have a weekend off.

Andrew Kussmaul: Right.

Catherine Miller: You poured your heart and soul into trying to make this thing work.  So, you can understand when people go through the phases of business. You have some understanding of how they feel when it doesn’t work out, and possibly what they need to do in the process.

Andrew Kussmaul: Yeah.

Catherine Miller: I love that. You learned from you business experience, and now you’ve moved into helping people set up their own businesses and grow their own businesses.

Andrew Kussmaul: Yes, yes. Yes, I have. The reason why I started that business was because I wanted to – like I mentioned earlier – to get that business experience. I knew I wanted to start advising businesses and I was like, “Well, the best way to know what a business is going through is to start one.”

So now that I’ve had that experience, and I learned a lot, we could talk for hours about what I learned from that business if we had the time. And I was like, “OK. Well, now is the time to start my law firm.”  At the beginning of this year, I was talking to my wife, and I was working at a big firm at the time.  The opportunity came up, and this was something that I had always wanted to do, and talked to my wife about it and she’s like, “Yeah, go for it. This is what you want to do.”

So now I have my own firm, my own boss again, which is great. You know, ever since I shut down that business, I had a hole in me. I’m fulfilling it now and so yeah, I help startups and entrepreneurs get their businesses off the ground.

Catherine Miller: Right. And then once they’re off the ground, do you also help them in the processes?  Can they come to you for other advice or legal help with their business? Do you support them from start to finish?

Andrew Kussmaul: Yes, yes, throughout the whole life cycle of the business. I help them get started and then any sort of corporate law issues that they have, contracts that need to be reviewed, contracts that need to be drafted, I handle that. But what I really like to focus on too are companies that want to go the whole angel and venture capital investment route.

Catherine Miller: OK.

Andrew Kussmaul: I love helping people and helping businesses and help people achieve their dreams and out of all the services that I offer from entity formation, just general corporate law. I even do some trademarks and copyrights, mergers and acquisitions. You know, all that boring legal stuff.

They all help businesses and they all help them achieve their dreams. But I feel the one area that has the most direct impact on them is the investor financing and being able to help them get that money that they need because these are companies that have ambitious goals, that want to scale quickly and they need – to succeed, they need that money.

Catherine Miller: Yeah.

Andrew Kussmaul: And if they don’t have confident legal representation or legal representation at all, those term sheets can get kind of tricky. There’s a lot of math and finance in there as well as just legalese, which it’s – it can be hard to interpret sometimes.

Catherine Miller: Right.

Andrew Kussmaul: And if you’re not careful, you can – I hate to say it, but get taken advantage of.

Catherine Miller: Right, right. So we’re thankful for people like you who like to read contracts.

Andrew Kussmaul: Yeah. I’m the guy who whenever you – that you go to a place and you had to sign a waiver, I’m the one who reads every single line before signing and most people just sign in. I’m the only one still standing there with the clipboard. Yeah.

Catherine Miller: Yes, yes. Best success story then. Since you’ve been in business now and you’ve helped some people lay the foundation for their business. Which is the story that you’ve helped that you’re like, “Oh, that’s cool”?

Andrew Kussmaul: Right, yeah. So I have one and it’s really exciting. I had this client. He worked for a major airline in the area and he had this great idea to create this device to be used in cockpits for pilots, to hold iPads for them to access their – all their flight books because beforehand, before this app got created on the iPads for pilots to use, they had to carry these big, old, huge like briefcase bags into the cockpit with them.

If you’ve seen inside a cockpit, it’s pretty cramped.

Catherine Miller: Yes.

Andrew Kussmaul: So they were using this app. But there was no place to store it in the cockpit because everything in the cockpit has its purpose and its proper placement. So they’re trying to fly and they have this iPad and they’re trying to look and it was just too confusing and just difficult too and annoying. He created this ingenious device where basically it would hold the iPad and you could just mount it onto the cockpit there. They could – while they’re flying, they could easily look up the charts or whatever they needed to look at without having to take their hands off the controls or anything.

Catherine Miller: That’s cool.

Andrew Kussmaul: Yeah.

Catherine Miller: So he called me up and explained the idea to me. He’s just – the one reason why I love working with entrepreneurs is just their passion and their energy and I just feed off it and it’s great.

He called me up with that whole idea there and explained it to me. You know, got me really excited about them. Like, oh, this is great. He’s like, “All right,” and he’s like, “What do I need to do next?” Then he’s like, “I know I need to be something besides just a sole proprietorship.”

He’s like, “This is really what’s stopping me from my business.” Then he’s like, “I don’t know what to do next.” I was like, “Well, you’re smart enough to know that you shouldn’t be a sole proprietorship,” and I was like, “Well, there’s quite a few business entities that you can be here in Texas, that you can operate your business as.”

So what I did was I went through each single entity with him, explained the pros and the cons, especially related to what he wanted to do with his business, what his long term goals were.

At the end of the day, advised him, “Well, I think a limited liability company is going to be best for you and your business,” and he agreed. So I drafted the certificate of formation for him. You know, filed that with the state and he was off and running from there and what that did was it just gave the legal foundation to – took away all the unknowns of like liability, gave him protection and it gave him the confidence to quite literally have his business take off.

Catherine Miller: That’s cool.

Andrew Kussmaul: I check in with him every now and again and he’s doing great because of it. You know, just something as simple as that because like now, he has got – other major airlines are using his product, airlines in Europe are using his product. He has got licensing agreements with other airlines to make them and use them in their planes too.

Catherine Miller: Very cool.

Andrew Kussmaul: Yeah, his business has quite literally taken off.

Catherine Miller: Yeah, yeah, literally and figuratively and it’s cool that you can look at that and say, “I helped lay that foundation and support that –”

Andrew Kussmaul: Right, right. Yeah. You know, as small as it might sound, it was what he needed. It was that confidence boost that he needed to know that he was …

Catherine Miller: Heading in the right direction.

Andrew Kussmaul: Yeah, exactly.

Catherine Miller: Yeah, cool. So Andrew, there’s someone out there who wants to say, “Hey, I want to meet with this guy and talk to him about my business idea and see what it would take to get it set up.” How can they reach you? How can they find you?

Andrew Kussmaul: So, the – so again my website, it’s www.KussmaulLegal.com. You can also email me at andrew.kussmaul@kussmaullegal.com or give me a call at 817-438-0294.

Catherine Miller: Yeah, or you can call us at the LIFT Office. You’re a member here.

Andrew Kussmaul: Yes, I am.

Catherine Miller: So the last question is probably the most important one is, “What do you love about being a member at LIFT?”

Andrew Kussmaul: Oh, just the sense of community and how welcoming people are because like you said, I have a membership here. It’s a virtual membership. So I’m not here all the time. But when I do come in, it’s just how welcoming everybody is and how friendly and just willing to just help and just smile and say hi and – because like I’ve been to other co-working spaces before and it’s just not the same atmosphere. I mean it’s just – it just feels like everybody is friends here and just wants to help and I love it.

Catherine Miller: Yeah. We love our members. Our members are the best part and we’re glad that you’re a member here.

Andrew Kussmaul: Well, thank you, thank you. I’m glad.

Catherine Miller: So thank you. Thank you for joining us. I’m so glad you’re here. I love the work that you do and it’s fun to have someone that we could point to. I love your story of how you started. It’s perfect. I mean there’s not many lawyers out there who could say, “I know what you’re going through. Let me tell you my story.”

Andrew Kussmaul: Right, right, right.

Catherine Miller: Thank you.

Andrew Kussmaul: Thank you.

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