Jell Founder, Ade Olonoh, has had a nearly life-long passion for programming and entrepreneurship. He fell in love with programming in a QBasic class back in High School, and paid for his College degrees in Computer Science and Mathematics by writing Perl code. Shortly after graduating, he started not one, but two companies. And that’s just the early part of his bio. Recently we chatted with Ade about his many experiences as a founder, from bootstrapping early startups in Indianapolis, to raising capital in Silicon Valley, and his recent sale of daily standup software, Jell, to SureSwift.
An interview with Ade Olonoh, Founder of Jell
You’re a serial entrepreneur with experience bootstrapping your first startup Formstack, and going through VC funding rounds with its social spin-off, Formspring, and you’re an investor now yourself.
What should founders think about when deciding whether to raise money or stay independent by bootstrapping? You’ve succeeded in both, so it would be great to hear how you would think about those decisions.
I think most companies should default to bootstrapping rather than trying to raise capital at the outset. One of the first questions I’ve asked every founder I’ve invested in is, “Why are you raising money right now?” Almost always, the longer founders wait to raise money, the better things are for them. Even if they decide to raise money down the road, waiting means less dilution, and more traction under their belt to help convince the best investors to come aboard.
One of the first questions I’ve asked every founder I’ve invested in is, ‘Why are you raising money right now?’ Almost always, the longer founders wait to raise money, the better things are for them. Click to Tweet.
That said I’m a big fan of venture capital when applied to the right business, at the right time. It’s often necessary in winner-take-all, competitive markets with high upfront capital needs. And when applied to businesses that have already found some product/market fit, it can be a great way to help founders build a really big company.
Growing Jell must have looked much different than the journey for Formstack and your earlier startups. How do you approach business differently now than you did in those early days?
Every startup’s been pretty different so it’s hard to compare, but the world has changed a lot in the past decade. In a lot of ways building Jell was easier. Modern dev frameworks and platforms like AWS made it a lot easier to build and scale the app quickly. Stripe made it much easier to manage subscriptions and get paid. And so on. But in a lot of ways it’s harder to find customers now than it was 10 years ago. Most marketing channels have become saturated and expensive. And customers can be a bit fatigued by signing up for yet another SaaS product, so you have to work harder to get noticed.
Tell us more about starting Jell. You must have 100+ ideas for businesses at any given time, what inspired you to start this particular company when you did?
Jell actually started as an internal tool we built for ourselves at Formstack. We were a fast-growing remote team and needed a tool like this to help run asynchronous daily standups. So it was easy to jump on this idea since we were scratching our own itch. From there, it made sense to productize it and see if we could grow it as a separate company.
You launched Jell while still working on Formstack. And investing in a dozen other companies. And being a dad to 3 sons. Any secrets to juggling all of that (and do you ever sleep)?
Sleep’s actually pretty important to me. I try to get a solid 7-8 hours every night these days, else I won’t function at my peak.
I think a lot about how to optimize my time and be more productive. I’m pretty guarded of my schedule, and try my hardest to avoid unnecessary meetings.
One of the best productivity “hacks” I’ve used for 15 years now is to start each day creating a list of 2-5 things I want to accomplish each day. It helps me focus on what’s essential, and make progress on the things I care about most.
I’m also pretty fanatic about Inbox Zero, which helps a lot.
You did the whole Silicon Valley scene, successfully raising $16MM for Formspring, and then selling the business. You ultimately decided to move back to Indianapolis — what drove that move?
I loved the Bay Area, but after several years there we decided it wasn’t the best place for us to raise our family. I love Indianapolis — it’s a clean, friendly, affordable city with great food, things to do, and a growing tech scene.
Top 5 differences between life in the Valley and life in the Midwest?
Everything is a lot less expensive
I can drive anywhere in ~20 mins
Lots more space for the kids to run around
It unfortunately gets a lot colder in the winter
And unfortunately I’m not visiting the ocean, mountains, or wine country nearly as much as I used to
Was the goal always to sell Jell, or was there just a point where you knew it was time?
It got to a point where we knew it was time. With other simultaneous ventures, I hadn’t been able to spend as much time on it as I would have liked over the last year or so. It made sense to explore finding a home with a team that could move it forward.
Tell us a bit about the process of selling Jell. What were you looking for in the selling process? How did you know who to trust? You’ve sold companies before — are there any lessons you took into this sale from those previous deals?
The most important thing to me was finding a team that believed in the vision, understood SaaS, and would take care of our customers. It was easier to build trust with SureSwift having seen their track record of acquiring similar companies over time.
From previous deals, I knew it was also important to find a partner who communicated clearly, and would move through the process quickly and efficiently. That helps avoid a lot of headaches on both sides.
Now that your business has been acquired by SureSwift, what are you hoping for with the future of Jell?
I hope to see Jell grow and thrive. I’m still a big believer in the vision and think there’s a lot of opportunity ahead for it. I can’t wait to see what’s next!
What’s next for you?
I’m taking a break from starting new companies, for now. I’m focusing on my work as an investor, and working with the companies in my portfolio. I’m also happy to have some time freed up to play more video games with my kids.
As someone who loves building from scratch, Kishin quickly realized he wanted to sell the app when it grew to needing full-time attention, and he sold the SaaS business to SureSwift in 2018.
Kishin sat down with us recently to talk about what it was like to build ChargeStripe from the ground up, and how he knew it was time to sell it. ChargeStripe’s SureSwift Product Manager, Radu Irava, also chimed in with what’s been going on with the app since our purchase.
An interview with Kishin Manglani, Founder of ChargeStripe
What was the #1 reason that you decided to start your own business? Were you doing it as a side project, or was it your full time gig?
I started ChargeStripe as a side project. I love building things from scratch.
When you were deciding on the tools that you were going to use to run ChargeStripe, how did you pick those? Was it totally through personal research, groups of peers, cost based, a bit of all the above? We’d love to hear more about this.
I mostly chose tools that were simple to use and cost effective. I wanted tools that were straightforward to use, and I could easily integrate into my current workflow, since I was building ChargeStripe as a side project. I also wanted to choose cost-effective tools because ChargeStripe wasn’t making nearly as much money in the early days. Plus, every dollar you save is a dollar earned.
Once you had money coming in and you knew this product just might work, what was your goal? Was it hitting certain MRR number? Was it selling it? Tell me a little about what your plans were once you saw ChargeStripe could generate real revenue.
At first, the goal was to increase the revenue each month. I just wanted a side project that would generate some revenue and keep me excited. Each month, ChargeStripe would shatter my expectations, and I’d meet the goals I had set much earlier than anticipated.
At what point did you know it was time to sell ChargeStripe?
Once ChargeStripe was bringing in significantly more than my day job, I knew I either needed to work on it full-time or sell it. While I was really excited by the prospect of working on it full-time, I also really enjoy working on a business in the early stages, like I mentioned earlier. I had another app in the healthcare space that was just starting to get some traction that I wanted to work on as my new “side project.” At that point, I knew the best thing to do for ChargeStripe and its customers was to leave the app in good hands to a team that cared as much about its users as I did, and that’s when I found SureSwift.
Tell me a bit about the selling process, what were you looking for and how did you know who to trust?
Since this was a side project and I was still working full-time, I was looking for a seamless, hassle-free sale. I was also looking for a team that would really take care of the product and customers like I did. And finally, I wanted someone who was looking to build out more features and improve the processes I had in place to ensure ChargeStripe was in good hands.
While I was nervous about who I could trust early on, everyone I spoke with calmed those nerves — especially SureSwift. When I spoke to the SureSwift team, I told them I was looking for a hassle-free sale and that’s exactly what I got.
Now that your product found a new home with SureSwift Capital, what are you hoping for with the future of ChargeStripe?
I was hoping for someone who would take care of my customers, take the tech to the next level with new features, and keep growing the brand.
The SureSwift team has done a great job of maintaining my high standards for customer support and has continued to grow the customer base. We’ve also launched several new features since the sale and ChargeStripe is continuing to be one of the leaders in the space.
What are you working on now?
I’m currently working on a healthcare app in the diabetes space, called Glucose.
An interview with Radu Irava, SureSwift Product Manager for ChargeStripe
So we chatted with ChargeStripe’s Product Manager, Radu Irava, to hear what it’s like to take on responsibility for a product someone else built, what he’s excited about creating for ChargeStripe in 2020, and what the team supporting ChargeStripe at SureSwift looks like now.
Tell us a bit about what it was like to take over as the Product Manager for ChargeStripe?
I have experience in mobile product management and development, so I thought it would be a great opportunity to jump in and bring the business to the next level.
I joined SureSwift after ChargeStripe was acquired, so I didn’t have the chance to work directly with Kishin, unfortunately. However this didn’t make the transition difficult. The team had good documentation of the existing processes and features so things went smoothly.
In general, I find taking over existing products very exciting because once I make an audit of the business, I can use my experience to suggest product and growth initiatives that really move the needle.
For example, in February 2019, after my first month managing ChargeStripe, revenue was up more than 50% compared to February 2018, making this the best month ever for ChargeStripe. Then March 2019 revenue was up 25% compared to February 2019. Since then we’ve consistently beaten those figures. This wouldn’t have been possible without the great foundation Kishin had built, and the resources the SureSwift team was able to add to the product.
You work on a couple of products across SureSwift’s portfolio, what’s your approach to product management, and what are some of your specific goals with ChargeStripe?
I have a technical background, so for me it’s always easy to work with developers to figure out what can be done from a technical perspective, what it will cost, and to negotiate estimates and scope.
On the other hand I’m very customer oriented and like to go through support tickets, send out surveys and jump on calls for customer interviews.
And I always try to keep in mind the business objectives that I want to optimize for. For ChargeStripe, some important KPIs that I’m always trying to optimize for are: revenue, profitability, labor as percentage of cost, CLTV, and CAC.
I think a good product manager should be able to balance these three domains — the technical side, customer happiness, and business objectives — really well, and combine hard skills and soft skills for the benefit of the customers and the team.
What makes something a great product to work on, from your perspective? What makes you passionate about the work?
I love connecting the dots and solving problems. I consider myself a creative person but I’m also very logical. Product management gives me the opportunity to use these skills effectively while enjoying every single moment.
For me a great product to work on is a software product with a great team behind it. By “great team,” I don’t mean it has to have a lot of people, but the group should be open, communicative, willing to grow and improve. I found that this is the environment in which I perform best, and SureSwift has been a great place for that.
What feature or accomplishment are you proudest of since you’ve been working on ChargeStripe and what are your next goals for ChargeStripe?
The three accomplishments I’m most proud of are consistent revenue growth, great customer reviews, and building team synergy.
There are a lot of exciting things coming for ChargeStripe: new features, better serving our customer base, and improving our online presence are all things we’ll be working on in the next 12-18 months.
Tell me a bit about the team who supports ChargeStripe now. Who are they, and what do they do?
The core team of ChargeStripe consists of: Joey, who is in charge of Customer Happiness, Brian, our iOS and backend developer, Jerome, our Android developer, and me, the Product Manager.
The nice part about working at SureSwift is that there is a great talent pool of specialized people that you can bring on board for a few hours per week or per month to help with various activities, or just to exchange some ideas with. We’re able to tap content writers, marketing and SEO experts, UI/UX designers, and other people who work across our SaaS portfolio to make ChargeStripe the best product it can be.
Back in 2017 Danielle Simpson had an unlikely bio for a SaaS founder. She was an opera singer auditioning for roles and side hustling as an online ESL teacher. That side hustle quickly turned into the startup FeedbackPanda, when she realized how inefficient and time consuming it was to track course work and feedback for dozens of students. In about a week, her boyfriend (and software engineer) Arvid Kahl built a prototype to help her create feedback templates she could reuse, and reports to track courses and students. They opened up the platform to other teachers, and let them share their templates with the whole community. In just a couple of years, they had a bootstrapped, $55k/month SaaS business. Earlier this year they made the decision to sell, and in July it became official: FeedbackPanda is the newest member of the SureSwift portfolio.
Recently we sat down with Danielle and Arvid to chat about what it was like to build their business from the ground up, how they knew it was time to sell it, and what they’re planning next.
An Interview with FeedbackPanda founders, Danielle Simpson and Arvid Kahl
What was the #1 reason that you decided to start your own business?
Danielle: Arvid and I are both very entrepreneurial, so we always had our eyes peeled for an opportunity that could combine our skills. What immediately set FeedbackPanda apart from any other ideas we had was that it was born out of a real need. So when Arvid and I saw the opportunity for this product, we seized it.
One of my gigs was teaching English online. The coolest part of that work is that the teacher gets to act as a freelancer. Teachers are flexible to work as much or little as they want and choose the times that work for them. For these reasons, teaching online quickly became my main gig. It was amazing and so exciting to be able to work from home, to sing and smile at students all the way in China!
There was just one catch. As an online teacher, you’re only paid for the time in front of the camera. Any time preparing, getting organized, and giving feedback to students is not paid. This may seem like no big deal, but this responsibility adds up quickly in both time and mental load. Feedback after classes would take me hours and not leave me with much time to prepare for the next day’s classes.
I tried cutting the repetitive part of the work down by using templates and a spreadsheet, but it was still quite complicated. Of course, I knew that software products could be built to automate things, but I didn’t know how it could possibly stay organized. Then I found the magic ingredient, the student and course ID numbers were exposed. I pulled Arvid in right away and asked him to double check that I was seeing this correctly. When he confirmed, I explained my idea.
Admittedly, I still had little knowledge of what Arvid’s skills were and what the limits of what could work technically were, so I just explained my ideal scenario. When he said, “Sure, I can build that,” I could have cried. I was so relieved but also excited. This was something that all teachers needed, not just me.
For this reason, FeedbackPanda was different than any other business we started. I immediately saw the potential, the market was new and growing rapidly, and there was an obvious need for the tool.
This wasn’t a luxury product or something we’d need to convince people they could benefit from. It was actually going to make people’s lives better in such a significant way that once we knew how to solve the problem, it felt more like a duty we needed to fulfill.
Tell us more about the process of building FeedbackPanda? What did it look like to go from having the idea, to actually building it?
Arvid: Once we realized what was possible, I set to work on the prototype. The first version was finished in about a week. Although it was basic, it was already able to solve Danielle’s problem and cut down her time giving feedback from hours to minutes. This was our first success, but we wanted to keep improving on it. Danielle kept prodding me to see what else was possible and we worked closely in a constant feedback loop of Danielle dogfooding the product for about three months.
Since we were hopeful that Danielle wouldn’t be the only teacher using this system, I set FeedbackPanda up to be used as a Software-as-a-Service (SaaS) product. I integrated services that would eventually take care of authentication and payment for us quite early, but I made sure only to build out the parts that were relevant to capture revenue. Features like account management, up- and downgrading subscriptions or changing login methods were omitted. There’s no point in working on features for customers you don’t even have yet. Instead, we focused on things that would help out teachers and attract them to our tool.
Once Danielle told other teachers about FeedbackPanda, they came to check out the product. The best thing we did then (and still do now) was having a direct line of communication with each teacher using the product. Many teachers commented on what they expected and how FeedbackPanda could be even more helpful. They had even more wonderful ideas and so the next stage of FeedbackPanda became considering these ideas, and building it out to an even more helpful system.
FeedbackPanda is such a great name. Is there a story behind it?
Danielle: Kind of… but it’s more strategy than a story. Feedback is the biggest pain point that teachers have, so choosing to put that front and center in the name was our best branding strategy in the early days to help create awareness around how we help teachers. As someone who’s obsessed with sounds, it was also important to me that the name sounded good.
The first time we said, “FeedbackPanda,” I immediately loved the repetition of the short “a” vowels on the “back” of “Feedback” and “Pan” of “panda”. It may seem a bit obsessive, and I could totally nerd out about phonetics here, but it was the first name that really sounded good to us.
Also, who doesn’t love a cute Panda? Adding the animal to our name gave us a clear mascot, which makes teachers super happy when they see it. Even teachers who don’t use FeedbackPanda recognize our panda and may even be convinced to check us out due to the cuteness factor.
When you were deciding on the tools that you were going to use to build and run FeedbackPanda, how did you pick those? We’d love to hear more about this.
Arvid: I worked on the prototype at night and on the weekends while I was working full-time as a software engineer in the industrial IoT space. The company I was working for was very progressive, building an IoT platform using the Elixir programming language on the backend and Vue.js on the frontend, so we decided to use the same tech for our own product.
If you have a clear vision of how you want to solve someone’s problem, you want to use the tools you know.
Many people use side projects to learn new technology, and that’s a great use for learning. But those projects aren’t businesses, they’re learning projects. We knew this would be a business, so we stuck with what would allow us to build as efficiently as possible. Click to Tweet.
Before we released it to the public, we also made sure to offload as much of the complicated tech to other SaaS tools so we weren’t reinventing the wheel on components like billing or user management. We integrated with Stripe for payments, Intercom for customer communication and Auth0 for handling our user management, among many others. All of those services have a trial or startup plan, so we could easily bootstrap the company and never took any funding.
We wanted our tech stack to be as simple and portable as possible. So I decided to make the application cloud-native. I knew from prior experience that at some point in any successful software product’s lifecycle the system might need to migrate from one infrastructure to another, for many possible reasons. To make this easier, the application was dockerized and hosted with cloud providers from the beginning.
You had really impressive growth in a short period of time — can you tell us more about the business model, and how you grew so rapidly?
Danielle: Ya! Overall, our growth has been pretty stable, around 10% over the many months the company has been live. We use a simple subscription model for the software, offering a monthly plan and a slightly cheaper yearly plan, both with a no-strings-attached 30-day trial.
From the beginning, our subscriptions came in reliably through word of mouth. Teachers love to share helpful information so all of our growth was organic. Our strategy was to give teachers a great experience once they made it to our product and help them see the value we provide.
The price of the monthly plan is equivalent to most teachers’ pay for teaching a single 30-minute class session. The benefit of using the product equates to much more than 30 minutes of time, so the price makes it easy for customers to understand that the value we provide far surpasses the cost.
The 30-day trial is another great way to show them that value. Some teachers loved the product so much, they paid a few days into their trial. However, most take advantage of their free access for the full 30 days. In that time they’ve seen the value and invested their time and energy into the product. They’ve also created the habit of using the product and by the end of their trial, they can’t imagine teaching without FeedbackPanda. This enabled us to reach a conversion rate of over 25%.
Our churn is also quite low, below 1%, as most teachers heavily invest into the product by putting in their personal, unique records. The churn occurs when our customers switch jobs or take parental leave.
A huge advantage for us has been that the Chinese education market is picking up speed, and we were lucky to recognize a niche in that market that we could not only fill but also benefit from the growth. In 2017, the largest competitor in the online English market, VIPKID had less than 15,000 teachers, now they have around 70,000. It’s really exciting to be a tiny part of this trend.
A huge part of Danielle and Arvid’s success as founders is how well they listen to and take care of their teachers.
Once you had money coming in and you knew this product just might work, what was your goal? Was it hitting certain MRR number was it selling it? Tell us a little about what your plans were once you saw FeedbackPanda could generate real revenue.
Arvid: Looking back at the last two years, the business had three distinct stages and three goals that I had personally set for each. Overall, I had always wanted to build a business that would make over $50,000 USD in a month. So that became the overarching goal, with step goals for each stage.
The first stage was the “survival” stage, and there, the goal was for the business to pay for itself and create enough revenue for us to feel confident that it might go somewhere. As we bootstrapped the business and were careful to spend as little as possible, that was reached 45 days after we started marketing the product to our customer niche at an MRR of around $2,500 USD.
The second stage was the “stability” stage, where the goal was to be able to work on the product full time and feel safe enough to quit our previous jobs. We reached this goal of an MRR of $20,000 USD nine months after launching the product. At that point, we could dedicate our full attention to FeedbackPanda, and we felt safe that its trajectory would sustain us for a long time.
The third and last pre-acquisition stage was the “growth” stage. Here, we set the goal of reaching the $50,000 USD in MRR that I’d had in the back of my mind the whole time. We steadily grew the company by doing what worked and experimented with systems and ideas to solidify our processes. Shortly before SureSwift reached out to us, we reached that goal, less than two years after having started the business.
At what point did you know it was time to sell FeedbackPanda?
Danielle: We had reached all of our goals for this product, so when SureSwift approached us it just seemed like a natural progression.
Reaching our goals, although thrilling, shifted our risk level to an uncomfortable height where we suddenly felt that we had something to lose. I noticed that we were no longer making smart business decisions, but decisions rooted more in comfort and safety.
This was not good for us, and definitely wouldn’t translate to good things for a business. This gradual fear began to hold us both back. So when the opportunity presented itself, we were ready to handover the company to someone with a higher risk tolerance who could make strategic, calculated risks to continue to grow FeedbackPanda.
Tell us more about how you connected with SureSwift? I hear there was some serendipity with IndieHackers?
Arvid: Before working on FeedbackPanda, I was working as a software engineer for a company in another city, and I would commute from Berlin to Hamburg multiple times a week. An almost three-hour train commute allowed me to read a large number of books and listen to many podcasts regularly. I didn’t know it back then, but all this knowledge prepared me for building our SaaS business efficiently without having to make all the potential rookie mistakes.
I started listening to the IndieHackers podcast and worked my way through the catalog of episodes whenever I would travel. I remember one very serendipitous experience with that particular podcast. I was on my way to the bank to open an account for our company when I was listening to yet another IndieHackers podcast episode. The guest was Moritz Dausinger, a German developer, just like me. Moritz talked about how he had built DocParser and MailParser, and I found a lot of interesting similarities in how he and I approached software and business.
At the end of the episode, he mentioned that he had sold his company to SureSwift Capital, and that piqued my interest, as I’d never heard of this kind of company before.
Danielle: You and the SureSwift team were the most straightforward and easygoing team we spoke to and your business model is so exciting, which made us want to join in. You understood us as bootstrappers, but more importantly, you understood our clients, the teachers. Seeing the other companies on your portfolio with similar value propositions to FeedbackPanda gave us the confidence that you would remain focused on serving a great product to teachers.
What’s the transition been like? What kinds of things are you helping the team with? How has it lined up with what you expected?
Arvid: In preparation for the handover and the transition, I was reading a lot and listened to dozens of episodes of the Built to Sell Radio podcast by John Warrillow. There were a lot of stories of complicated interactions and extensive back-and-forths in those episodes. I prepared for the worst, for days if not weeks of hard and exhausting work.
I was pleasantly surprised to find that working with SureSwift was painless, pragmatic, and enjoyable. The handover was done extremely fast, and the following weeks were a breath of fresh air for me, as both the main developer and the point of contact for Customer Service for FeedbackPanda. The SureSwift team jumped in immediately, and I was able to start training people. Hiring was something we had painfully neglected while running FeedbackPanda, and I learned the value of asking for help very quickly.
All in all, the transition has been a very professional affair. It was a very human, very friendly and open-minded process, with people and ideas being much more important than numbers or graphs.
Now that your product found a new home with SureSwift Capital, what are you hoping for with the future of FeedbackPanda?
Danielle: I’m excited for FeedbackPanda! One of the things I love about SureSwift is the diverse range of products and people within the portfolio. Everyone is coming from a slightly different angle and is able to see things a bit differently, which is incredibly valuable and creates just the right amount of friction to create great work together.
There are many people with diverse skill sets working together and FeedbackPanda has already benefited from having some fresh perspectives.
What are you planning to do when the transition is complete?
Danielle: We’re working on getting back into some healthy routines and planning a nice vacation. Any traveling we’ve done in the past 2 years has always included working on the side, so I’m looking forward to being fully present to experience new things.
Having some time to unplug and build up our physical and mental health is on the agenda so that we can do this all again!
What’s your best advice for fellow or aspiring SaaS founders?
Arvid: In the past, I’ve been a part of many projects that were solutions looking for a problem. With FeedbackPanda, I finally experienced it the right way: We found a problem first — a real, very painful problem. We then solved that problem and that problem alone. We wanted to help teachers in a particular niche with their feedback. We didn’t set out to revolutionize teaching as we know it. That reduced scope allowed us to zero in on the core of the problem and solve it in a very direct way.
It was very helpful that I felt the consequences of Danielle working hours of overtime every day. That was such a clear and real pain. Solving that problem not only made her life better, it also affected me directly. Whenever I would add a feature, it would immediately translate into me being able to spend more time with her.
Finding a pain you can understand is hard for developers, particularly if we look outside building tools for software development. Many programmers have strong opinions about how their job could be improved but have a hard time relating to the struggles of people in other industries. Asking friends and family about their most annoying problem at work can often give you an insight into markets you may not yet understand. However, working with people directly affected by real problems will lead you to insights very quickly.
Building a startup business used to be all about the VC world in the last decade. Hockey-stick growth, incubators, and raising a lot of money were things that “founders did because that’s what founders do.” I believe differently. Having a steadily growing, bootstrapped business without Venture Capital is a desirable business to build. Not falling into the trap of having to scale quickly and living a fast-paced life means that you can build a business that aligns with your own values, not those of a large VC fund. Staying mentally healthy is so much easier when you’re in control of your business and can set your own goals and expectations.
What are your favorite books/podcasts/sites for entrepreneurs?
Arvid: There are so many great books for aspiring founders. One book that had a tremendous impact on how we designed FeedbackPanda to retain customers is Hooked by Nir Eyal. I also read Built to Sell by John Warrillow before founding the business, and we took a lot of steps outlined in that book, which made selling the company very straightforward. Finally, The E-Myth by Michael E. Gerber has been instrumental in understanding the different roles you have to play in your business, particularly when you are alone, or just a really small team.
When you talk to Mack McConnell, it’s clear that he’s a guy who was never going to have a “traditional” career trajectory. He’s traveled the world (ask him what his weekend plans are and he’ll probably say, “Actually, I’m just about to get on a flight to Morocco!”), he’s pretty much always starting a new side project or business, and he drops phrases like, “… so then I just moved to Paris.”
But if you hear those things and think he’s full of bluster or ego, you’d be 100% wrong. He’s all hustle, humility, and curiosity — qualities that helped him build his craft spirits subscription club business, Taster’s Club from an idea into six figures of MRR over the course of several years. We caught him recently between trips to exotic locales to chat a bit about how he started and grew Taster’s Club, why he ultimately decided to sell it, and what he’s up to now.
An Interview with Taster’s Club founder, Mack McConnell
What was the #1 reason that you decided to start your own business? Were you doing it as a side project, or was it your full time gig?
I had gotten obsessed with trying and learning all about new spirits when I was living in San Francisco, and I had this little standing get together with a couple of friends. We would all buy whiskey and learn about what made it special, and then bring the bottle and drink it together. And that was really fascinating to me.
I sort of have this tick where I get obsessed with the things I’m into, so I started to learn everything I could about spirits. I thought if I could just package this experience and give it to people, I might be able to get people as lit up about this stuff as I was.
It was also clear to me pretty quickly that the industry needed a bit of an update. I did my best to create a new way to experience the world’s most exciting spirits, giving people a deeper relationship with what they were drinking.
I was working at Intuit as a product manager when I started hacking around on different projects, which ultimately led to Taster’s Club. Then, for the first year or so of the business I was working as a developer for a startup in Paris.
So Taster’s Club began as a passion and was purely side project while I was working for other people, but it quickly became my full-time job.
When you were deciding on the tools that you were going to use to run and manage Taster’s Club, how did you pick those? Was it totally through personal research, groups of peers, cost based, a bit off all the above? We’d love to hear more about this.
I’ve found that the startup community is helpful and happy to lend a hand. My favorite method is to find people in the community that I respect and then occasionally turn to them for advice, including whether they know the right tool for a job.
Once you had money coming in and you knew this product just might work, what was your goal? Was it hitting a certain MRR number? Was it selling it? Tell me a little about what your plans were once you saw Taster’s Club could generate real revenue.
After we had established ourselves and I knew this was a real business, I had an aggressive goal of 100% top line revenue growth year over year. At the time, “established” to me really just meant being able to quit my day job and focus on Taster’s Club full time. Once I was able to get free from other responsibilities was when I was able to make those clearer growth goals.
How did you know it was time to make your first hire? What role were you looking to fill, and where did you go to find that person?
I knew it was time to make my first hire when I was simply being spread too thin. As an entrepreneur you want to be challenging yourself to rethink what you’re working on to find higher value, but in the early days of a business — particularly one that’s bootstrapped — it’s hard to think through that filter because you need to be all hands on deck just to get the thing to work.
A strength of mine is that I can wear a lot of hats, but once we got that initial success it actually became a weakness because I was constraining our growth.
The model where I was working 60 hours a week wearing all the hats (customer support, web developer, designer, operations manager, writer, everything) definitely got us from zero to one, but it was driving me crazy and I knew if I didn’t change it we would just stay at one! I wouldn’t say there was a particular day or moment, more of a slow boil that at some point I couldn’t ignore any longer.
Our first major hire was a director of operations which requires a pretty particular profile. I was lucky because he came to us after hearing what we were doing and wanted to get involved. The timing couldn’t have been better.
At what point did you know it was time to sell Taster’s Club?
At some point I knew Taster’s Club needed a fresh perspective. At that point I had been behind the wheel for about six years and was proud of our growth. We had mostly hit all of our growth targets, but more importantly, I felt like we had done a great job at our original goal: Getting people lit up about craft spirits. It was time for me to hand it over and work on something new.
Tell me a bit about the selling process, what were you looking for? How did you know who to trust?
I was mostly looking for someone who would continue to build on what we’d made, a buyer who understood our vision and wanted to keep pushing it forward while treating our customers and team right.
I was afraid that a buyer would want to replace my team and change the company in other fundamental ways, sort of losing what I thought made Taster’s Club special. From day one SureSwift totally understood what I was trying to do and they made it clear they weren’t trying to rock the boat.
They were also very decisive, which was refreshing. After they did their analysis on our growth, etc., they decided they wanted the company in their portfolio and were ready to make moves.
Now that your product found a new home with SureSwift Capital, what are you hoping for with the future of Taster’s Club?
I’m not involved with Taster’s Club anymore, but my hopes for it remain the same: Maintain our position as a market leader by staying squarely focused on the company’s original goal to help people get people excited and passionate about craft spirits. If we can continue to deliver on that mission, I know growth will follow.
SureSwift has done a great job delivering on this promise to our customers, primarily through launching new clubs, and improved processes and content for members. I’m excited to see what happens next!
What are you working on now?
I’m working on growth with a couple of SureSwift’s other portfolio companies and trying to develop a few of my own ideas on the side. I started working on something recently that I’m not ready to share, but I’m really excited about! Traveling is something that has always been important to me too, and I’m doing much more of it these days.
A little over four years ago, SureSwift was just a couple of co-founders with an idea. Today it’s a rapidly growing portfolio of more than 30 online businesses, managed by a fully remote team of 80 people working across 14 timezones. Hear from co-founder and CEO, Kevin McArdle, about how we got from there to here.
Today I’m turning the tables, and sharing the story of how I became an entrepreneur, and how we built SureSwift into the company that acquired those businesses from Marvin, Tristan, Nick, and Lilia, and gave dream exits to more than 30 other independent, bootstrapped founders.
My Winding Path: From Math Teacher to Entrepreneur
You could say entrepreneurship runs in my blood. My grandfather passed on some major investment opportunities, including one in a new football team called the New England Patriots. Seeing this, my father started several businesses during my childhood, but he never did hit it big.
I wanted more stability, but after putting my Mathematics and Secondary Education degrees to work as a High School Math teacher, I found that effort and merit seemed to have nothing to do with pay and results, and I realized it wasn’t the right field for me.
My next role was at Cerner Corporation, a global provider of healthcare software, where I worked my way up to become one of the youngest VPs in the history of the company. I also got my MBA during my time there, and that’s when I really developed the entrepreneurial bug. But although I had the itch to start my own thing, I never had the right idea.
Eventually, I faced the choice of staying at Cerner, taking a position with a competitor, or starting up a medical device company with a doctor I’d met in Victoria, B.C..
I sought advice from an acquaintance, Don Wharton, who had co-founded three successful companies, to help me evaluate each opportunity. After several meetings, he said, “I don’t want to make your decision more complicated, but I have an idea for a company, and you’d be perfect to run it.” That idea became SureSwift, and I never looked back.
What Does SureSwift Actually Do?
To put it simply, we acquire bootstrapped, online businesses, and then we take them to the next stage of growth — so in business terms, we’re a holding company that exchanges capital for cash flow.
But our mission, and the thing that gets me out of bed in the morning, is to create dream exit opportunities for independent founders so they can move on to their next great idea.
Because typically, the founders we acquire businesses from are selling because they have a new idea or project they want to focus on, but they want to find the best home for their customers and their team before they move on. (And yes, the big payday of an exit never hurts, but we find that isn’t always a great founder’s primary reason for selling.)
What Specific Kinds of Businesses Does SureSwift Buy?
We started out acquiring content-based websites that made money via advertising. Within the first year, we realized Software as a Service (SaaS) had a greater upside and you could control and scale the business with much more precision, and our focus now is on B2B SaaS.
A few highlights from our portfolio include:
DocParser: Automation software that replaces manual data entry
ChargeStripe: An app that turns your smartphone into a pocket payment processor
BackInStock: A Shopify app that increases sales by notifying customers when a product they wanted is back in stock
Storemapper: A store locator app that helps retailers connect customers with their products
BigContacts: A CRM and email marketing platform for small business
What’s It Like to Run 30+ Startups at the Same Time?
Running any business is hard. Running more than 30 distinct internet businesses is extremely hard. We excel by taking a data-driven, lean, and scalable approach. Any success we have or lesson we learn in one business gets translated across the portfolio, which leads to very cost-effective growth opportunities.
For example, if we find out having an easy-to-find support phone number is a major win when it comes to building customer trust, we put one on all of our apps’ sites. When we tweak a blog design to optimize for free trial signups and find something that works, we do it everywhere. We use the same services, and a pretty consistent tech stack across our portfolio, too.
We approach talent the same way, sharing it across the portfolio. Our Finance, Accounting, HR, and Tech Teams are centralized, while positions like writing, design, and marketing work across several businesses.
This allows us to operate and grow with a remote team of 80 people (or just 2.5 people per business) working across 14 timezones. Our “Remote First” model is a major innovation with a lot of benefits. It makes us more productive — we measure results, not face time. Diversity is built in because we hire across the globe, and everyone loves the flexible hours and lack of commuting. Being remote also saves the cost of office space, and allows for 24/7 customer support.
It’s been a crazy and exciting journey over the last four years, and I can’t wait to see where the next four take us. In general, we plan to continue growing our existing businesses, acquiring new ones, and adding talent to our team. A few specific things coming up that we’re excited about are MicroConf Europe in October. It’s one of the best gatherings out there for indie makers and we’re proud to be supporting it as sponsors this year. We’re also digging our new partnership as investors and mentors with Earnest Capital, which gives bootstrapped startup founders who aren’t looking for an exit better funding options. And we’ll be linking up with Earnest to host a Founder Summit in Mexico City in March 2020. But the best part of running any startup (and especially 30 of them) is that you never know exactly where it will take you next. If you’d like to keep up with us, give us a follow on Twitter.
When Tristan Gamilis and Nicholas Firth-McCoy launched their SaaS startup, Paydirt, an online time-tracking and invoicing tool for freelancers, they were also running a website and app development company. Later, they added another SaaS usability startup to their already busy lives. Eventually they faced the question many entrepreneurs will: Which business ventures to dedicate their attention to? And what to do with the rest?
It’s tempting to think you can do it all, but early-stage SaaS startups take a lot of focus, and having too many ventures that require a high-level of dedication is a quick path to burnout.
Smart entrepreneurs are relentless about editing when it comes to their attention. Click to Tweet.
Selling Paydirt allowed Tristan and Nick to fully focus on that amazing business growth, and Paydirt now has a team at SureSwift fully focused on its growth. It’s a true win-win.
Recently our CEO, Kevin McArdle chatted with Tristan and Nick about what it was like to start and run Paydirt, when they knew it was time to sell it, plus how things are going at UsabilityHub.
An Interview with Entrepreneurs, and Paydirt Founders, Tristan Gamilis and Nicholas Firth-McCoy
What was the number one reason you decided to start your own business?
We started Paydirt as a side hustle while doing contract website and web app development together. We’d always wanted to build a product. We knew we’d learn a lot about design, development, product, marketing, sales, support, and running a company.
We also wanted to build a recurring source of income, and be able to focus on a single product for an extensive period of time, rather than shipping a web app that we’d been contracted to build for a customer, then moving on to the next thing.
When you were deciding on the tools that you were going to use to run Paydirt, how did you pick those? We’d love to hear more about this.
Most of the tools we used to run Paydirt were ones that we’d used previously when doing contract web app development. Cost was definitely a consideration, but we were also looking for tools and services that were easy to use, well known, and reliable.
Once you had money coming in and you knew this product just might work, what was your goal? Was it hitting certain MRR number was it selling it? Tell me a little about what your plans were once you saw that Paydirt could generate real revenue.
Our initial goal was to grow MRR to a point where it could provide us with a stable income source, and allow us to stop doing contract work to supplement our income. We wanted to be able to focus on Paydirt full-time.
When did you know it was time to sell Paydirt?
Our other product, UsabilityHub, was needing more and more of our attention every day. We had a third co-founder working with us full-time on that project, and a full-time employee, and it got difficult juggling both products.
As a result, we ended up neglecting Paydirt for over six months. We were still handling customer support, but we didn’t have the bandwidth to do anything more than that. We didn’t want to leave the product to stagnate, so we decided to pass it over to someone who could give it the time and attention it needed.
Tell me a bit about the selling process, what were you looking for? How did you know who to trust?
The selling process was extremely straightforward. We’d set the business up so that it would be as easy as possible to sell and hand over. All the books were in order, the tech we were using was pretty standard, and our back-end architecture was very simple.
We worked with a business broker (Joe Valley from Quiet Light Brokerage) to find potential buyers, and he facilitated the sale to SureSwift. The SureSwift team handled the due diligence and handover very professionally, and everything went extremely smoothly.
We assisted with answering the team’s questions for the first couple months, but there was really very little involvement from us, which meant we were able to focus on UsabilityHub fully pretty soon after the sale.
We’d expected that finding a buyer, doing due diligence, and handing over the day-to-day operations was going to be very difficult. If we’d known it would be as simple as it turned out to be, we probably would have started the process of selling Paydirt sooner than we did!
SureSwift acquired the SaaS startup, Paydirt, a time tracking and invoicing tool for freelancers, from Tristan Gamilis and Nicholas Firth-McCoy in 2017.
When Paydirt found a new home with SureSwift, what were you hoping for its future?
We were looking for someone who would take care of our customers and grow the business, while taking the technology to the next level. Through those two things, we hoped to see it really become a leader in the freelancer market.
Really, we were looking for someone to pick up where we’d left off, and continue to grow and improve the business. We knew that Paydirt had a lot of potential, but we just weren’t able to take advantage of that ourselves as we lacked experience in key areas (marketing and sales), and couldn’t justify taking our attention away from UsabilityHub. We didn’t want to continue neglecting our existing customer base.
It’s great to know that the team at SureSwift has been taking care of both the business and customers, and keeping things ticking along nicely.
What are you working on now?
We’re fully focused on UsabilityHub, an online user experience research platform that helps designers, product teams, and marketers learn more about their customers and validate their decisions. We’re currently expanding our product team, and have an exciting roadmap lined up for the next iteration of the product.
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