Founders and Funders
Startup Horror Stories: Mike Malatesta
The pathway to success is rarely a straight one, and few people understand that as well as those who have achieved success.
On October 30, CSA Partners hosted a panel of some of Milwaukee’s most successful entrepreneurs to discuss their professional setbacks. The event, titled “Startup Horror Stories,” was hosted by serial entrepreneur Chris Abele at Ward4.
Joining him for the discussion was Mike Malatesta, founder of Advanced Waste Services, Lincoln Fowler, one of the founders of Colectivo Coffee, Kyle Weatherly, co-founder of Frontdesk, Ray Seaver, CEO of zizzl, and Giacomo Fallucca, CEO of Palermo Pizza.
“Entrepreneurship can be a lonely journey,” Kathy Henrich, CEO of MKE Tech Hub Coalition, said. “It is critical to have a board of supporters who will lift you up and help guide you to the silver lining of setbacks. That’s also why it’s important to hear the stories of other entrepreneurs. Failures are part of the journey and often lead you to a better place. By being transparent about both our successes and failures, it creates hope for others as they strive to build successful organizations.”
Below is the first in a series of stories shared by Startup Horror Stories panelists.
Mike Malatesta
Mike Malatesta, founder of Advanced Waste Services, the author of Owner Shift: How Getting Selfish Got Me Unstuck and the host of the business podcast How’d It Happen shared the story of how a crisis taught him invaluable lessons about leadership.
In 2007, Advanced Waste Services was ready to expand its profitable business beyond its Midwest base. By September 2008 the company was working to open a new wastewater treatment facility in New Castle, PA.
Before the plant was officially opened, it burned to the ground. When the flames died, there was little left that could be salvaged. The timing was terrible. This blaze occurred in the same month the nation was thrown into an economic tailspin that began with the failure of Lehman Brothers. The future was uncertain.
Malatesta recalled his partner, surveying the charred wreckage simply stated, “it looks like we’ve broken an egg. Now we need to make an omelet.” His calm response set the tone for the chaotic days following the fire.
Despite the difficulty of getting capital during the economic downturn and the fear that employees would leave the company, Malatesta did what was necessary to make the location operational.
During that experience, Malatesta learned the value of staying calm in a crisis and being a clear communicator.
He gathered all of his New Castle employees and told them he did not know what they were going to do, but that the team would gather daily and figure out the next steps together.
“I told the truth,” Malatesta recalled.
Instead of leaving for other companies with more certain futures, the New Castle employees remained on the team and worked hard to rebuild what was lost. Malatesta attributes his candor in his interactions with his team to this positive outcome.
The leadership lessons he received through that crisis are skills he still uses to this day.
In the long-term, he learned the necessity of a strong contingency plan that is supported by legal documents, like real estate agreements and insurance policies. He concluded his statements by reminding the audience that “every contract someone gives you is for them, not you.”
