Forget the Hype! Pathlabs Founder Ryan Hansen's Four Fundamental Pillars to Entrepreneurial Success

@Rose Shimberg - UM College of Business

When Ryan Hansen founded LumenAd in 2014, he had $10,000 and a vision to solve a problem in the world of tech-first advertising. In just 10 years, the company would sell for nine figures, achieving what most startup founders can only dream.

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A graduate of the University of Montana’s College of Business, Ryan returned to campus to share his journey as the spring semester’s Gilkey Executive Lecturer. The lecture series, established by Harold and Priscilla Gilkey in 2004, aims to inspire students, faculty, and community members by connecting them with top business leaders.

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After spending two days interacting with students in classes, Ryan arrived at the Priscilla and Harold Gilkey Building for his talk on January 29: “Forget the Hype: Entrepreneurship is About the Fundamentals. Success Comes from Grounded Traits, Not Flashy Narratives.”

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On the road to founding the company that would become Pathlabs, Ryan admitted he did almost everything wrong. Throughout the lecture, he insisted that his success wasn’t because he was exceptional. Instead, he adhered to some fundamental traits that often get forgotten in overcomplicated narratives of entrepreneurial success.

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1. Logical decision-making

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Ryan risked it all to start his company. As an accounting major, he had no marketing experience. But coming from a family of small business owners, he had always dreamed of taking that path himself.

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In one of his first job after graduating college, he noticed a disparity between what was possible in the world of tech-first advertising and what marketers had access to. He believed there was a way to solve this problem and help companies target their audience in hyper-specific ways. Since he’d identified a problem and a logical solution, he could move forward, confident that he was offering something new.

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2. Calculated risk-taking

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Ryan believed in his idea so much that he sold his car and used the money to buy the domain, hire a designer, and slap together a pitch deck to try to sell it. While this may seem like a big risk, he thought out each move he made. Small bets and experiments eventually paid off— someone took a chance on him.

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That could have been the end of LumenAd’s story. The young company was quickly successful, gaining big clients, including the University of Montana. However, Ryan recognized the risk of customer concentration and kept his eye on trends in the industry. Eventually, he decided that they needed to go all in on software.

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In the short term, it paid off, with LumenAd named as the 29th fastest-growing startup on the Inc. Magazine 5,000 list in 2019.

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However, Ryan and his team came to the realization that they were juggling two sets of customers with different needs. In addition to the software code breaking faster than it could be fixed, and recognizing the heavy tech debt incurred, a decision was made to shut down the software side completely. Combined with COVID-19, this ultimately forced him make the very difficult decision of laying off part of his team.

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Once Ryan and his team recognized that the “software plus services” model wasn’t working, they bought out their investors, returned their capital, and made a clean break from the software side.

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3. Humility

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“You have to have humility to admit to mistakes that have downstream consequences,” Ryan said. But, he added, you can’t stick your head in the sand. While it was a low point for the company, it was also an opportunity to re-think what set them apart.

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They could create something different, blending the control of in-house agencies with the scale and efficiency of outsourcing. Ryan also realized they had two separate customers: those they were selling software to and those they were selling services to. By attempting to do both at the same time, they were spreading themselves too thin.

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The only way forward was to turn their company into two separate businesses. The service side of the operation became known as Pathlabs. It was a complete 180 degree turn for the business - a move away from technology. But, the change worked and the company soared to new heights.

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4. Resilience

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Failure was not only part of Ryan’s process but integral to the innovation that drove him to succeed. Through resilience, Ryan and his company didn’t give up when times became tough, and instead failed forward.

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Ryan concluded with a bright outlook for the entrepreneurs of tomorrow, reminding the audience that success isn’t about flashy narratives or being a genius; it’s about following simple, grounded principles that anyone can access.

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“Exceptional results come from mastering the fundamentals,” he said. “not from exceptional people.”