by Sureswift Capital | Jul 12, 2022 | Founder Stories
Justin Klemm has a pretty unique story – I don’t know too many Founders who have sold their SaaS twice. Over the last eight years, he founded Ghost Inspector, got acquired, and bought it back. This spring, he sold it to SureSwift (and I don’t think he’s planning on buying it back this time). I had the chance to catch up with Justin recently, and we chatted about his Founder story, maintaining sustainable growth, and how he knew it was time to sell.
An Interview with Ghost Inspector Founder, Justin Klemm
Tell me how you got started with Ghost inspector.
I’m a software engineer by trade. I was, and I’m dating myself here, in sixth grade when we got the internet. I was hooked, I had to figure out how it worked. I was building websites in junior high, the whole thing. I went to college for computer science and worked for a number of different companies afterwards. I always did a lot of freelancing along the way, I was always a builder. I like tinkering.
Then in 2013, 2014, I left kind of a cushy gig that had become more management and started doing contract engineering for different startups. What I found was that a lot of them were really struggling with the quality of their products. Things where a customer couldn’t add a product to their cart, couldn’t log in – things like that. They had sharp engineering teams, there was just a disconnect, there wasn’t the level of testing that needed to be happening.
And you thought, oh, that’s something I could fix?
Well, at first I started looking at tools to do that testing, in an automated way. They were out there, but they’re very technical, and you have to tie a bunch together. Someone would have to spend a month or two getting it all to work. So then the question is, can I take all those pieces and package them up into a more approachable thing?
I started with a browser extension that would let an engineer or a QA person record a process. And instead of this really elaborate code and setting up all these pieces, it would just send it to our service, and our service would launch a browser and run through it. The whole premise was taking this testing that was around, but the technical hurdle was really high, and trying to package it into this all-in-one SAAS product.
And when did you realize you had something, that Ghost Inspector was maybe taking off?
The story is kind of interesting. I started Ghost Inspector just tinkering part time. I launched some pricing. I didn’t raise money or anything, it was just a side project. I started to get a few customers, and felt like there was a little bit of traction. I was sitting around $1,000 a month in revenue.
Then a company in San Francisco called Runscope found me. (Their founder, John Sheehan, actually introduced me to SureSwift.) They were a little further along – they had raised a Series A, and they were focused on API testing. They were looking at what I was doing, and said hey, we’re doing something similar, what if we buy your product and you come on board and work on it with us. They offered me a nice chunk of cash, not life changing, but it came with a good job offer and it seemed like a cool team. So I said, yeah, let’s do it! They acquired Ghost Inspector, and I worked for them for about 18 months.
Things were growing and Ghost Inspector was doing really well. Runscope was also doing well, but the burn was just really high. And when the time came to raise Series B, the markets had tightened, and then suddenly it became impossible, it became clear they weren’t going to be able to raise more money. It was a really difficult time. Ultimately, the runway was gone, we had the meeting. Everyone’s laid off, totally out of money. So it’s just the death of a startup – or seemed like it. It was really hard. And I was really bummed, but the story wasn’t over…
I was talking to one of the teammates, and they suggested that I should see if Runscope would sell Ghost Inspector back to me. At this point it had gone from making maybe 1,000 a month to around 20,000 a month, which is clearly enough to pay me and I was still really the only one working on it. I talked to John and the co-Founder, Frank, and they were very gracious and let me buy the product back. We more or less reversed the deal with a few changes. And I got Ghost Inspector back.
The way John tells it, I saved them – with the buyback price, they were able to pay their bills, rehire some people, and they had a successful exit. But I got Ghost Inspector back, and for me, it was great because I could pull a healthy salary from it.
At that point, I’m thinking I don’t need to raise, I’ve got traction, let me just hire sustainably and see where it goes. That was in 2016. So for the past six years, I basically just focused on sustainable growth, and finding good team members along the way. It’s definitely hard running a business, but I was fortunate that things were pretty calm, a few bumps along the way but mostly up and to the right.
I love the way you gloss over the huge growth for Ghost Inspector in the last few years.
Ha! I think it’s one of those things where when you’re on the journey, you’re kind of like climbing the mountain, and you’re not really looking back that much. That’s not the mentality, to pat yourself on the back. You’re just going and going.
Tell me a little bit about that, I know Ghost Inspector had a price point that made it really hard for competitors to crack? How important was that?
Honestly, I was just really naïve about how businesses spend money when I started. Because I launched at $19 a month, right? And I slowly bumped it up. I know it’s really overstated, especially in B2B SaaS, that you should be charging more. I definitely should have been charging more. But at the same time, it was also really hard for businesses to compete with Ghost Inspector when they went the funding route. When you raise ten million, twenty million dollars, charging $99 a month isn’t going to cut it.
That’s interesting, yeah, did you see copycats pop up? I see that more and more, people follow what the bootstrappers are successfully doing, and just copy that.
Yeah, there’s a few. There were one or two that really blatantly copied me, and I did a Twitter thread calling them out. You could go to the website and see they had basically copied everything and just changed the color scheme.
So that was frustrating, but John Sheehan actually told me early on, don’t even think about it and just focus on the product. He was right. Because people can follow the successful bootstrapper and copy their idea, but at the end of the day, it’s an execution thing, isn’t it? I had to grind this out for eight years on my own. Are you someone who’s going to be working hard every day, or are you this copycat who’s going to get bored or give up?
So yeah, the copycats were annoying, but I can’t think of a single situation where the knock-off was more successful than the original.
I’ve never heard someone articulate that before, that’s a great point. If you have this copycat mentality, then you probably don’t have the Founder mentality that it actually takes to be successful and win.
Yeah. If you can’t even think of your own idea, or at least put your own creativity into it, it probably isn’t going to work out. If step one is rely on somebody else, you know, that’s not a good starting point for a Founder.
Circling back a little bit, I’m curious, because you have such a unique story– what did your days look like during the growth phase with Ghost Inspector, when you were with Runscope and then when you bought it back? Where was your focus?
In both cases, it was primarily engineering. But with Runscope, I didn’t have to worry about the business ownership side of it, like running payroll, and business insurance and all those things. When I got it back, a large portion of my day was still engineering, but I had to take the back end back over, support and things like that. The bulk of the work on the product is engineering and technical support, those are the two things that occupy time.
Then as a business owner, there’s this layer of things that sit on top of that, legal, or compliance or tax or payroll. That layer grows as you hire more people. But I knew for me, I consider myself a product engineer, and I knew if I lost that part of it I wouldn’t be happy. So I tried to devote at least half my day to the building, engineering side of it.
So things are going well, Ghost Inspector is growing, when do you start to think about selling?
Well, I had a kid! But really, there are a couple of reasons that played into thinking maybe it’s time for me to pass over the reins. One was having a kid and realizing, not necessarily that my whole day was taken up by the business, but my whole brain was taken up by the business. I think some Founders have the ability, which I really envy, to shut the laptop at 4 or 5 pm, and turn it off and it’s just gone. Right? But unfortunately, I’m not like that. I’d find myself on the swing set pushing my daughter, and just staring off into the distance thinking about tax compliance or something.
I always knew at some point, I’m going to want to exit the business and get that value that I had built out of it. Things were still going smoothly, but there’s always that chance that things could go south in a year or two and I could be looking at a very different exit. That wasn’t a very strong fear, but it was at the back of my mind.
The other big piece was that I’m truly an engineer, builder – I’m really not a manager type. Things were at the point where the Founder would have to step back and hire the right person to manage this and the right person to manage that. And I’m not great at that. I like all the ground level stuff, I like having all my fingers in it. I couldn’t hand off things to smarter people who would probably do a better job. I realized, sooner or later, this is going to be to the business’ detriment. And I didn’t want to be an unhappy Founder either: someone who’s handed off all the pieces they enjoy and now they just hate their work.
That’s really impressive, that you were able to realize all that and kind of be self aware and looking ahead. I think it’s something a lot of successful builders share, that cycle, you build something great and it gets to the point where you need to hand it off to get back to building again.
Yeah, I can see that cycle in my career. Eventually you just need to reboot and clear the table. You want permission to let go of all that specific product knowledge that’s built up, and sometimes that means taking a break and sometimes it means leaving your job or selling your company.
So when you realized it was maybe time to hand things off, how did you start that process?
I started poking around to understand what it would take. I talked to a lot of Founders I knew who had had exits, asked them what it was like.
I reached out to a broker to see if that was the direction I wanted to go. I think maybe if it had been five, ten years ago then it would have been. But now with the existence of companies like SureSwift, there are other interested buyers for a company doing the kind of revenue Ghost Inspector does. I decided to do some reaching out on my own.
Then John Sheehan referred me to you. I checked SureSwift out, and liked everything I saw. I reached out, and my first conversation right off the bat with SureSwift was great.
What’s next, taking a break or do you have something new in the works?
I’m definitely taking a break. Everybody’s always like, what’s the plan? What’s next? Will you be laying on the beach? I’m probably still going to be waking up at six, taking my kid to the playground, cooking dinner. But those things sound nice to me.
I’m trying to be intentional and take some time, because I know I have that builder mentality, right? I don’t have any fear that I’m gonna sit around for the next 30 years and do nothing. It’s more of the reverse. I have to fight the urge. I’d like to work out a little more, cook a little more, eat a little less take out.
That sounds like a great plan!
Want to keep up with Justin to see what he does next? Find him on Twitter or LinkedIn.
Interested in selling your SaaS?
If you’re thinking about selling your SaaS we’d love to be on your radar and answer any questions you might have about valuations or our process. Get in touch.
by Sureswift Capital | May 2, 2022 | Founder Stories
I always say that a business takes on the personality of its Founder, for better or worse. It’s a huge part of why “Founder fit” is a big thing for us when we’re deciding whether or not we want to buy a SaaS.
When I think about Vitay, which just recently joined the SureSwift portfolio, it’s really evident to me that its incredible sales strategy and growth is a reflection of Founder, Poya Farighi. Poya had a sales-related background, and had worked as a partner at a recruitment firm, so he was both intimately familiar with the audience he built Vitay for, and able to build a killer sales strategy that created a snowball effect.
Poya also decided to build a team instead of going with a contractor hiring strategy. If you’re curious about direct sales, how to leverage reviews and testimonials, or whether building a team might be right for you as a Founder, this interview’s a must read.
An Interview with Vitay Founder, Poya Farighi
Tell us a bit about your background and how you came to found Vitay?
So, my background is actually in investment management — that’s where my early career started. From that I transitioned into being a partner at a recruitment firm in London (it was my brother’s company actually).
While I was there, I found myself wanting to marry what I had learned in recruitment and what I wanted to do in tech. And that really evolved into building Vitay. We had seen that there was a gap in the market regarding processes for references and job candidate verifications. So we started building a platform in that space.
I decided to move to Canada at that time as well to change up my environment, and built the first MVP of the product around a couple of small recruitment firms there. We got a lot of feedback from those initial customers and from that we massaged the product into what it is today — but really that evolution happened over a long period of time.
In the early days we had a few things we were building but when we were out chatting to recruiters, they were always most interested in a specific feature set that would save them a lot of time. We listened to that and doubled down on the reference checking and feedback features.
And was it something where from the beginning, you saw a gap in the market and you thought, ‘This could be huge,’ or did the potential become apparent over time?
It was pretty clear from the conversations I was having with recruiters that the quickest way of making money was this product. So, we did see a huge opportunity just given how many recruitment firms, staffing agencies, and employers were doing things the old school (and very time consuming) way. There were a few competitors in the space, but we knew we could produce something better, and the market was so big that we could easily get in and slowly chip away, which we did, relatively quickly.
What did the day-to-day look like for you as a Founder? What were you working on, what were you worried about? What was amazing, and what was stressful?
Ha, everything was stressful! Obviously in the early stages of building a company there’s a lot going on and a lot of uncertainty. So there’s a lot of stress, but there’s also a lot of excitement around it and a lot of future opportunity.
And what we were trying to build towards was having a small team that was quite close knit. We really did achieve that and it helped us work hard and have a focus. I really enjoyed that part of it.
There are challenges that come with bootstrapping a company, and those were all true for us, too — we had very limited funding to try and grow it against much bigger competitors. Working our way up from being a very small player to competing with them was difficult. But then again, it was part of the challenge that we enjoyed — as they say, the journey is the fun part, right?
I know our team has been delighted to work with the folks you hired who joined us after the acquisition — we’ve just been really impressed. I’d love to hear more about how you hired for some of those key positions. How did you find the right people, and what did accomplishing that do to change the trajectory of the business?
In the first year, we actually had about seven developers. So, when we were first building out the product, my burn rate was pretty aggressive.
Once the product was more built out, we found a developer who was always the most motivated, the most keen, and he always got the best out of the team. His work ethic was just next to none — it’s amazing.
He was always someone I could throw anything at, and he’d just go work it out. There was never a time he’d say, “No, I’m not doing that,” or “I can’t.” That became a quality we looked for across the whole team. We all had to be comfortable with the idea that we may not always know what we’re doing, but we’ll go work it out.
Being able to come up with ideas yourself rather than being spoon fed was always a key thing, too. We tried to be really clear in interviews that you needed to be comfortable working on your own to do well on our team, and that people who needed a lot of structure weren’t an ideal fit for us.
I think all startups are similar in those ways and you need people with that mentality — they’re excited to figure things out, and they don’t need a lot of structure to do it.
We definitely look for similar traits — being independent and getting things done are actually two of our company values. You mentioned interviewing. Did you feel any pressure to have a ‘perfect’ interviewing and hiring process since Vitay is in the HR space?
Yes and no. Personally, I have a particular hiring style where I don’t always focus on just purely skillset or experience. For me, hiring has a lot to do with people’s motivation.
Money is only the most basic motivation for any particular job. Usually there’s something beyond that. Maybe they want to step up in their career, or they want to get more opportunity in a specific area. Or they want to be in a more autonomous working environment.
I always found that knowing someone’s motivation was the best way to hire — if it aligns with what you want in the business. If those two married together, what they’re motivated by is what you’re offering them, and it’s probably going to be a good hire.
On the flipside, you can hire someone with experience for the role, but maybe it’s not quite the right fit for them, and over time they’re going to get frustrated and then not be a good employee.
So, for me, it was always that motivation factor. And to get to that I always ask in an interview, ‘What are you going to get out of working for us?’ instead of ‘What are we going to get out of you?’
That’s a great interview question. We may steal that.
Sometimes I think bootstrapped Founders go the all-contractor route, and they don’t really develop talent. You seem to have really been focused on developing your team. Was that intentional? Or was that driven first by budget, and then you sort of realized, ‘Hey, this is the right way to go?’
In my heart, I always wanted to find the people who really wanted to be a part of this thing long-term and wanted to grow with the company. That’s different than having contractors. And it does take a lot of interviews, and a lot of conversations. And of course, we also had a couple of hires where we ended up letting people go within a few weeks because it just wasn’t the right fit. So it wasn’t like we were always perfect, but when we found the right people it was great.
For me, the core thing of having my own company was always looking back at the things that motivated me when I was starting out in my career, as well as the things I really hated.
I knew that you could have this great name on your resume, but realistically, you hated the job. In working for a small company — a startup — it’s usually the other way around. No one knows the company you’re working for or what you do, but you probably end up enjoying the job a lot more because of the freedom and opportunities you have. That was something I wanted to create for our team.
I want to switch to talking a bit about your sales strategy. Most of Vitay’s sales came from direct sales outreach, is that right? And I want to point out that at the time we bought the business you were growing 300% YoY, so that’s some impressive outreach!
Well, part of our sales and marketing strategy was just built on the fact that we were relatively limited on budget, so spending a lot of money on advertising aimlessly that we weren’t getting a great result from wasn’t something I wanted to focus on.
And coming from a sort of sales background before, I knew that focusing on direct sales works quickly. And that’s also a spot we saw where we could stand out compared to our competitors because we were constantly doing direct sales, rather than trying to fish for customers with ads.
There’s obviously opportunity and ways of making ads work too, but you need to have time and a budget. And in the early days, having no budget there just made us say, ‘Okay, let’s just hit the phones, hit the emails, do the direct approach.’
I always say that a business takes on the personality of its Founder, and that really comes across in what you just said about having a sales background, and how much success you had with focusing on sales. A lot of bootstrappers we talk to are coming from the technical side, so direct sales aren’t necessarily a strong suit or a comfort zone for them. Do you have any tips for other Founders for how to get started there?
Build a process. Initially I built out the decks and the narrative about what people should say to sell the product. So basically, scripts. I used my experience from what I’d done in sales in the past, but I also used YouTube videos, books, and other things to educate myself on how to craft the perfect script, and hit the right points to explain the benefits of the product rather than features.
With all that work I was able to craft something I could hand off to any salesperson. And then when they came in, the first thing was just to learn the script, and pretty much say that on the phone to potential customers.
As they got more familiar with the product and had more calls and sales under their belts, they could put their own spin on it and adapt it over time. But we always had a script as a solid starting point.
If you just can’t do sales, I’d say bring in someone who has that skillset.
One of the other things that jumped out to us was your product reviews, and how you were leveraging those to get your next customers. When we bought the business you were already at a point where you were starting to knock down nearly all of the Canadian health care industry. How did you think about reviews as part of your overall marketing and sales strategy?
So with reviews, initially it’s like a giant snowball you’re trying to push — it’s really, really hard to get it rolling. But once you get one review and then another, you can leverage those to go to the next sale.
And again, some of the trainings I did and the various books I read when I was working on our deck had taught me that having testimonials and reviews is probably the biggest thing for a purchaser. So from the beginning, as soon as we could get reviews, we got them and we made sure they were good.
We didn’t have a very large client base in the beginning, but they were all happy. So luckily, they were also more than happy to write really positive reviews. We never had any bad ones. And they were genuine — the people who wrote them were happy to be references as well.
So, for example, if we sent a review to someone and they read it but wanted to call the person up, they were happy to pick up the phone and confirm what they had said.
That’s a trust thing, and it makes a big difference. So we really did bake that into that sales process and it did turn out to be a key thing for us.
And you mentioned the healthcare system in Canada, and those clients all know each other, right? So if this Province is using it, that’s immediate validation for the next Province or the next. The same thing was true in other client areas, like U.S. healthcare recruitment firms. We were able to land a client with a really recognizable name in the industry, and that made every other sale after it easier.
So with all the growth, what ultimately made you decide to sell the business?
I was ready for a bit of a break and I wanted to focus on a couple of other projects that I’m interested in. I know we could have kept growing, but I was also moving back to London, and I wanted to start a new product in London and be based here. And it was a good timing — revenue was growing pretty rapidly.
I’ve heard that before from other Founders, that lifestyle changes — whether it’s a physical move, a baby coming, or a new home — can be a trigger to sell.
I’d say it was kind of in tandem. It was always the goal to exit at some point. And then there was just a moment where I was ready.
I’d been in Canada for almost seven years and was ready to come back to London. I could have set up an office here, but I would still have been very tied to the U.S. and Canada since that’s where a lot of Vitay’s customers are.
I’d also just been working quite hard for quite a few years. I felt like it would be nice to have some money in the bank and get stuff settled so the next thing I build doesn’t have as much stress and pressure.
Everything I had was invested in the business, so that’s always a thing in the back of your mind. Even if you’re in a spot where you know things aren’t going wrong, you still worry about things hitting the fan and bringing you back down to zero.
As a buyer you had the resources and experience to take the product to the next level, so I think it’ll be great to see what it can do with a bit more behind it.
So there were really a lot of factors, but it all just combined to make me feel like pulling the chute now was the right choice, and then I can build from here.
When we started Vitay, we started with very minimal capital. So where I’m at now — after selling — puts me in a place where the next thing I build should hopefully be even bigger, because I’ll have more resources, more education, and more experience.
So once you decided it was the right time to exit, how did you go about selling, and how did you decide SureSwift was the right buyer for you?
We had actually started chatting two or three years ago — it was quite early on, actually. I think it was probably in our first year of revenue. We had an initial conversation and I said that we weren’t ready to sell, but let’s have a chat.
I had an idea in mind of what we were aiming to get to, and when he reached out again we were right around that point. We had just started speaking to Corum as well, at that time to help us look at other potential buyers. We’d had a couple of other people reach out to us, and that piqued my interest. It felt like if there were multiple people reaching out to us, it was a good time in the market. So we decided we would see what else was out there.
In terms of choosing SureSwift — once we had engaged Corum and were talking to a few possible buyers, you just seemed to have the cleanest process. You got back to us a lot quicker and you weren’t nitpicking these little things, so it just felt right. It was a gut feeling really.
And what made you take that initial call even though you knew you weren’t ready to sell? I know there’s a school of thought in parts of the bootstrapper community that if you’re making money and growing you shouldn’t even take a call. I think it’s terrible advice, but I’d love to hear about your thought process from the Founder perspective.
I don’t know why anybody would give that advice. I was always open to discussions and the conversation was really just ‘these are the goals we want to get to. So if we get to those, maybe it’s interesting to you.’ And then we did get there, so it worked quite well and you already knew a bit about the business by the time we were ready to sell.
I think I got so open to conversations because you never know what will come from them. Somebody might ask, ‘Hey, did you try x?’ and it could be something I hadn’t thought of, so you can walk away from that with an idea to grow your business.
I know you’re still working on transitioning the business to us and that’s probably taking up most of your mental space, but do you have any immediate plans for what’s next?
We’ve got a couple of ideas at the moment, one of them is potentially doing something in web3 around the HR space — not crypto specifically, but more in the blockchain space. It could be something exciting, or it could be nothing. And there are some other ideas we had when Vitay was starting that I think people will understand a bit more now because the markets have progressed since then, so the timing may be better now.
Having exited one business successfully, do you think it’s more likely that you’ll raise money from other people for the next thing versus bootstrapping? Or do you still want to call the shots?
Initially, I think we’ll build the minimum product ourselves. And then once we have something to show, we may go raise money on this. And hopefully, part of having an exit under my belt will be making that conversation easier because I’ve got some sort of track record. Whereas with Vitay I had zero track record in tech, so it would’ve been harder to raise money if I had wanted to.
London’s network is a lot bigger compared to Vancouver too, in terms of outside investors. So ideally, yeah, on the next thing, I’m probably going to be more aggressive on the raising money side of things. I’d like to build something that’s more expansive than I could bootstrapping. But first we need to build it and see where we end up!
I love that. And I love that the bootstrapper mindset is less black and white than it was a few years ago. Bootstrapping often makes the most sense because of where the Founder’s at or what the product is going to be. But I also like that a lot of really successful Founders are figuring it out on their own first, getting the exit, and then figuring out a good way of using other people’s capital to build something bigger.
It also depends on the product as well, right? So for example, a SaaS product like Vitay — you build it, you pretty immediately sell it to customers, and you’re making revenue. If you’re building something with more of a network-effect type situation, you’re not going to make revenue from it until it’s built out and has various ways of monetizing.
That’s going to take a bit more time and money to kind of have the runway to build it out to a point where it starts making money. That’s more where my head is at on a new product — it’ll be a different kind of product than Vitay was. But again, we’re still really massaging the idea and seeing what’s going to work and what’s not.
Want to keep up with Poya to see what he does next? Find him on Twitter or LinkedIn.
Interested in selling your SaaS?
If you’re thinking about selling your SaaS we’d love to be on your radar and answer any questions you might have about valuations or our process. Get in touch.
by Sureswift Capital | Feb 9, 2022 | Founder Stories
If you don’t know Laura Roeder, let me introduce you with a quick and impressive list of facts:
- Started her first business at 22
- Named one of the top 100 entrepreneurs under 30 in 2011, 2013, and 2014
- Spoke at the White House on entrepreneurship in 2011
- Has way more Twitter followers and email subscribers than all of us
I actually met Laura years ago on my first ever Zoom meeting. Of course, she was a total pro, having run MeetEdgar as a remote-first company for years. I thought we were just having a phone call and was trying to do it from my car when I realized I needed to download an app, and then my camera turned on. So Laura’s first words to me were, “What are you doing? Why don’t you just get settled and call me back?” (This was circa 2017. I promise my Zoom skills have improved a bit since then.)
Apparently, I managed to redeem myself, because in 2021 when she decided she was ready to sell her social media management SaaS, MeetEdgar, she reached out to me by email to see if SureSwift would be interested.
We were, and we acquired MeetEdgar later that year.
Laura recently agreed to get on another Zoom call with me (I think she’ll say I nailed it this time) to share more about founding MeetEdgar, the hard parts of running a business, what no one tells you about SaaS metrics, why she loves bootstrapping, and what she’s teaching her kids about entrepreneurship.
As a veteran entrepreneur, esteemed Tweeter, and outspoken blogger, Laura is a well of inspiration and information for Founders and I especially love that she’s willing to talk about the hard topics. So let’s get to it.
An Interview with MeetEdgar Founder, Laura Roeder
I think a lot of our readers will know you, Laura! You’re a big name in the bootstrapping world. But for anybody who doesn’t, could you tell us about your background and your entrepreneurial story?
Well, I started my first business when I was 22. I was a freelance designer working on logos, websites, and business cards. Then making websites for people kind of turned into giving them advice about everything around online marketing — especially social media marketing, which was a new thing around 2008.
Twitter had just launched and businesses were trying to figure out how to use it. So basically, someone told me, “I would pay you just to tell me how Twitter works.” And I was kind of like, “Why? That sounds like the best business ever.” It felt a lot easier than coding a website, to just tell people how Twitter worked. So I started doing it for free for people whose websites I had made.
And that’s really how I got into social media marketing, which quickly turned into doing online courses. So I had an online course business from 2008 or so to when I launched MeetEdgar in 2014. And MeetEdgar actually came directly from a course I was teaching people to do manually what MeetEdgar does for you automatically.
Even though you were fairly early in the social media management game, it was an established category, so you had to compete with a lot of businesses and a lot of big VC money. How did you really differentiate yourself and grow the company?
What differentiated MeetEdgar then is really still true. It’s a different way to think about social media, where you’re building a library of your content and really viewing it as a body of work that you want to distribute instead of taking an ‘update of the day’ view.
And even though we had competitors like HootSuite who eventually had hundreds of millions in funding, we had a very different workflow. So competitors weren’t able to pop our functionality on top of theirs. It’s just a fundamentally different way to think about your social media marketing.
I also wanted to ask about integrating with these massive companies like Twitter and Facebook, and how that worked for you as a small, bootstrapped team. They have huge dev teams and they roll out a lot of changes.
I kind of knew what I was in for there, because I had been doing social media courses. Some of them were very detailed like “here’s a video of where you click on Facebook to find this setting.”
So I had already felt the pain of Facebook changing that screen. All of a sudden my video would be useless, and I’d have to create the whole thing all over again. So I knew that would be a challenging part of running a business like MeetEdgar.
What I didn’t know is that I wouldn’t ever have a contact at Facebook. I thought maybe there would be some sort of human out of the thousands of Facebook employees who might be interested in talking to us. They’re not.
To this day, people will email me and ask me who my contact there is and I’m like, “Sorry, I don’t have one. Good luck.”
So the integrations part was definitely a challenge. But the way I think of it is that every business has a supply chain of one kind or another that relies on external vendors somewhere. So MeetEdgar did have some parts of it that made it more vulnerable than some businesses, but it’s a bit of a fantasy to think you’re going to have a business where no external forces can cause problems for you.
Tell me about the process of deciding to sell. What did that look like for you?
I think I always knew I would sell the business at some point — that was actually one of the things that really appealed to me about SaaS. With the course business I had before, I was the teacher and the face of it. So it was a business that didn’t have a lot of value to anyone else. So when I wanted to move on, I didn’t sell it. I basically just shut it down and used its assets for MeetEdgar.
So one of the reasons I wanted to start a SaaS was to create an asset that I could sell at some point down the line. I also think that when you start a social media scheduling tool, you don’t imagine that your grandchildren will run it someday. It’s just not that kind of business.
I know some people feel like they’re getting rid of their baby, and it’s this thing that they’ve been so attached to. But it wasn’t a traumatic decision for me. Obviously, it was important to me, and it was my creation. But I think knowing from the beginning that it wasn’t going to be mine forever and not being too deeply emotionally attached to it was helpful.
And part of why you decided to sell when you did was to focus on a new project, right? Tell me more about your new thing.
It’s called Paperbell, and we launched about a year ago. It’s a tool for coaches — think life coaches, not sports coaches — to run their business. So it does scheduling, billing, contract signing, and client CRM stuff. Usually, coaches are using different tools for all of those things. Paperbell is one place to bring it all together.
How’s it going so far?
It’s going well — it’s grown steadily, but not as fast as MeetEdgar. But what I realize now is that the beauty of MeetEdgar was that we were in an established category, which is interesting, because a lot of people are so scared of that.
But with MeetEdgar, people are looking for a social media scheduling tool. They find a list of them, Edgar is one of them, and they might choose it.
With Paperbell, it’s really a new category. And we’re not the absolute first SaaS in it — others do exist — but none of them have put the force behind it to make it super mainstream. So people are not Googling “which coaching business management tool should I use?” So, the marketing is totally different, where we have to just get in front of coaches with content marketing instead of people looking for us. So, in that way, it’s harder, but I can still do my content marketing thing.
And you’re bootstrapping it, right?
Yeah. We’re currently in the six figures of annual revenue. That was enough for me to feel that this is a thing and it’s working. And that was a big thing in selling MeetEdgar — I wanted to get Paperbell to the point where I knew we at least had baseline product/market fit before I went all in.
I had also listened to a lot of podcasts where people who sold their business and didn’t have their next thing ready just had a major crisis and got super depressed. And in some ways, it would probably be good to have some time in my life where I can have this huge identity crisis because I have to say I’m very attached to my entrepreneur identity. To achieve any enlightenment in this life I probably need to detach from that, but I don’t need to have that crisis right now!
Ha! Yeah, I think you have plenty of time for an existential crisis later. I really love that part of your story — that you had a specific goal for your new business before you sold.
I think there’s a real trap with successful entrepreneurs. You can get some amnesia about how hard it is when in reality doing well once takes a 5% success rate to maybe 10% on your next thing.
I know you as someone who’s really good at optimizing businesses though, and I think that along with product-market fit really gives you a leg up. Talk to me about how you found time to work on MeetEdgar, prep it to sell, and start a new business all at the same time.
Well, a key part of my story is that I was pregnant when we launched MeetEdgar. So I knew I would be taking on maternity leave within the first year of the business. We launched in the summer of 2014 and my son was born in June of 2015. So, it was really quite early in the business.
I talked to a lot of women who had founded startups to get advice on how to handle it. And basically, I decided from a business perspective that I really needed to make sure that I could take two months off. When you have a baby, you don’t know what the early months will be like. The baby could have health problems. You could have health problems.
So purely from a business planning perspective, I planned to be off for at least two months, and that just forced me to optimize things. I always joke that everyone should be pregnant when they launch a business, because it’s a great forcing function for making sure the business does not rely on you. You know the business has to keep not just going but growing. So that set me off right from day one making sure I had a business that was not dependent on me.
That’s great. When we were at Founder Summit in 2021, Moritz Dausinger, who sold us Docparser and Mailparser, said something sort of similar. He lives in France, and many people there take August off. He wants to be able to do that, too, so his business needs to be able to run without him for a month every year. Maybe we’ll change the title of this post to “Why you need to get pregnant or live in France to be a successful entrepreneur” and go viral.
Being serious though, I want to touch on something you said. You said you weren’t attached to MeetEdgar, but you also said you’re very attached to your identity as an entrepreneur. And I think that’s a really important distinction. Being an entrepreneur is different than your identity as the Founder and CEO of MeetEdgar. It’s broader than a single business. That probably makes selling and all sorts of other business decisions easier.
Totally. And I think that definitely ties into the business running without you thing, right? Because if you know that your business can run fine and grow without you, it’s easier to think of it as something that really does exist separately from you. And I think that’s a healthy attitude for any business owner.
I think pretty much every Founder needs that advice (myself included). You ran MeetEdgar for a long time, and your involvement level shifted between being lighter and heavier — especially in the last year of running it. Can you talk a little more about that final year before selling?
Yeah. We actually let the whole MeetEdgar team go at the beginning of 2021 and my plan at that moment was to put the business into a freelancer and maintenance mode. And of course that was a tough decision, and we could talk just about that for hours.
But from my perspective, I was no longer okay with the business being stagnant and I knew something needed to change.
We ran like that for a few months, but finally it just came down to the fact that I’d always planned to sell at some point, and it felt like the moment. I just felt totally ready to move on. I had to make a lot of business decisions in a short time for it to really be ready to sell.
You did a great job of that — if the business had been in decline, we wouldn’t have been able to buy it, so you really showed that it could be turned around and run profitably.
I think it’s good to talk about because you often don’t hear about any kind of ups and downs with SaaS. People just act like every SaaS business just goes up every month, forever. And then when yours stops going up every month, you start talking to other people, and you’re like, wait a minute, a bunch of other people have been through this as well.
No one blogs about it though. But once it happens to you, you can sort of start guessing what happened when the people who were always sharing their MRR stop all of a sudden.
But assuming a SaaS business just always grows forever is a pretty weird assumption, because you don’t assume that about any other business. Especially with these growth rates that we often expect from SaaS businesses — thinking that they’re gonna double every year. If you look around at other businesses, that’s not normally how things go.
So now I know that just like other types of businesses, SaaS businesses can have flat periods. They can have periods where they’re losing revenue. And they can have super high growth periods. And you don’t need to panic when the flat or declining periods come, but you do need to evaluate what your next strategic move is going to be. And that doesn’t mean that the business has failed. The business isn’t over just because you’re not experiencing the growth that you once were.
I think that’s such a great topic that is not talked about a lot in the Founder community. We do all see these charts that just go up and to the right. I can tell you from running a portfolio of SaaS that they don’t all do that forever.
Since we’re talking about hard topics, can we talk a bit about letting the team go?
Sure. I think almost every business owner would agree that letting people go is the worst part of owning a business. But it’s obviously worse for the people you’re letting go. There was just a public thing about the guy who fired like 1,000 people and was talking about himself the whole time, saying, “this is really hard for me.”
I saw that. About 10 seconds in and I was like, nope, swipe away. This is not something I want to see.
I know. I didn’t actually watch it either. We gave people a good severance and tried to help them find their next role, but ultimately, there’s just no nice way to spin it. It sucks for the person or people you’re letting go, but if it’s the right decision for the business and for you as a Founder, sometimes you have to make those hard decisions.
I would say the best thing you can do as a business owner is be really financially savvy. Do financial projections so you can see these things coming. The worst thing to do is to have to tell someone, “We’re doing a layoff and you have to go immediately and you’re not getting any severance because this was a big surprise.” But unfortunately, that happens in businesses all the time, and it doesn’t need to if you’re on top of your financials.
So, you know, it’s something that just has to happen in a business sometimes. But I think as the owner, what you can do is look at things like severance and covering insurance for a period of time. And then obviously whatever you can do to help people find their next role. You don’t have to (and shouldn’t) try to put any kind of positive spin on it. It’s just a crappy thing for anyone to go through, so don’t pretend otherwise.
Thanks for being willing to talk about that. I think a lot of Founders will benefit from hearing about your experience.
I want to switch gears a little and ask what lessons you’re bringing with you from MeetEdgar to your new business. What are you doing the same that you feel like you learned the hard way already? And what are you gonna do differently this time around?
One thing that we are doing very differently is the team structure. We’re doing an agency model, meaning that we’re not hiring full-time employees and plan to continue scaling up working with freelancers and agencies.
That’s very different than how I ran MeetEdgar. We were just always really big on having everyone be on the team full-time. I wanted people who were totally devoted to it, where it was their only thing.
And now I’m doing the total opposite where no one has Paperbell as their only thing. I genuinely don’t feel like one is better or worse. This was just a model that I was interested in exploring for the new business because it’s giving us a lot of flexibility where we can focus on different things for a shorter amount of time.
With a developer, you know your tech stack and maybe it makes sense to hire someone full-time with that skill set. But with marketing, sometimes it’s all about pay-per-click, sometimes it’s all about partnerships, then later we decide we’re going to create a podcast. It can be really hard to find someone who’s going to be able to do an amazing job with all of those roles.
So going with a freelancer model gives us the flexibility to put a ton of budget into something, but maybe just for three months to get it up and running. Or we can decide we’re not focusing on it anymore at all after that. I was really interested in being able to have that flexibility. So that’s something that’s fun to play around with right now.
What about bootstrapping vs. raising? You’ve done both and I think people can get very dedicated to one path or the other — although the conversation is getting a little more nuanced lately. What’s your current take?
I’m actually hardcore for bootstrapping. Even though I have raised, going down that route just made me love bootstrapping even more. But yeah, I do agree with you that the conversation is starting to change, and I think it’s a good thing that it’s starting to get less black and white and that we’re seeing more options for Founders.
But I just really value the freedom in bootstrapping. When I raised money, I felt so beholden to my investors. And that wasn’t because of them at all — my investors were angel investors that were friends of mine. So none of them were reaching out bothering me or anything.
But I found it inherently stressful knowing that I was responsible for their money. And I can’t imagine raising 100 million of someone else’s money. It would just make me feel like I couldn’t take a day or a week off because I’m supposed to be creating this outcome for someone else as quickly as possible.
So for me, I love bootstrapping. And for Paperbell, I didn’t consider taking outside money. Now I see people doing things like crowdfunding, just to get people on board. It’s sort of like a marketing channel, which I think can be a really creative way to do it. Or sometimes you have someone you want to partner with, so you give them a little bit of equity. It can mean a lot of different things. For me, I just know I love the total freedom of not having any shareholders.
Also, I have to say, when you sell your business, it makes it a lot easier. One person, one vote, you have an agreement, and that’s that.
Ha, I thought maybe Chris had at least half a vote with MeetEdgar. Maybe I read that wrong.
We did talk about it. Legally I was the 100% owner though, and he really likes to own the development side of things and I own the business and marketing sides.
He was really on board with selling the business, though. Honestly working in it was more stressful for him than for me, because as the developer if something broke, he was the one who had to fix it. And that was especially true when we didn’t have a team to support him anymore and he was just on call for anything code related.
I should back up for our readers. Chris is your husband, and he was the dev lead for MeetEdgar, and I’m assuming for Paperbell now. What’s it like running a business with your spouse? How do you keep your personal and business relationships separate?
It works really well for us. We do have very different skill sets. He’s totally happy to let me run the business. He wants to code and he does not want to worry about this stuff. He’s interested in business, but he’s not listening to business podcasts and reading business books, which is what I’m doing 24/7. He reads a lot of Hacker News and super technical articles about code and he loves that stuff.
So we have a really good partnership as far as having very different strengths. And definitely for us — and I think this is advice that applies to a lot of people, whether or not you’re also married to your business partner — the more you can separate out your areas of the business, the better.
Having very clear boundaries of what you own and what the other person owns makes things so much easier because you don’t have to discuss everything. Like if you know, ‘I own product and finance decisions, and you own marketing decisions,’ you won’t feel the need to hash out all the details with your business partner every time you need to decide something.
And in terms of our personal lives, we don’t try to not talk about work at certain times. I know some people in the same situation set rules about not talking about work during certain hours. But we’re excited about our work, so we do talk about it all the time.
Sometimes though, we do have to shut it down. We’ll start this little side conversation and then it becomes like this thing where I’m like, oh my god, we need like a wall chart right now, and we need to read all this customer research… and here we are at the dinner table with our kids and it’s gone too far.
So sometimes I think you have to put a box around if you accidentally start having this really detailed, serious discussion. But I never felt like we needed to have super clear boundaries or rules around when we can talk about work.
So you definitely talk about work around your kids, but I’m curious how do you talk about business with them? Do you want them to be entrepreneurs someday?
My kids are super young. They’re three, and then one is just about to be seven. But I do try to plant the seeds. Actually, Chris disagrees with me about this. I think that they should be entrepreneurs. He’s very much in the camp that they should just do whatever they want. And I’m like… sorta. Ha! I just think it’s really compelling to be able to earn money without being ‘at work.’
And of course I want to be respectful of how other families do things, too. I don’t want to come across as thinking, ‘it’s so much better to work for yourself and it’s terrible to have a job.’ So I don’t want to plant that idea in their heads.
But I do try to talk to them about how their dad and I run a business. Our son’s a bit older, so I’ve told him before that our business makes money all the time — when we’re asleep, and on the weekend — people are buying things from us, because they can just buy it on the internet. And I tell him that’s how we get money for our family to buy things like our groceries.
And I’ll definitely keep talking to them about it as they get older. I do genuinely think that anyone who works should know how to freelance. I just think that every person should know how to sell a skill and get money for it. So definitely when they’re teenagers, I’m gonna make sure that they start thinking about what skill that might be for them. It could be doing hair — it doesn’t have to be on the internet.
Well, I’ll give it 10-15 years, but I’ll keep an eye out for more Roeders we can buy businesses from!
Want to hear more from Laura? Follow her on Twitter, Instagram, LinkedIn and Medium.
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by Sureswift Capital | Nov 17, 2021 | Founder Stories
It’s a good time to be a bootstrapped SaaS Founder, and it’s not unusual to meet serial entrepreneurs in my line of work — one of the main reasons bootstrapped Founders sell to SureSwift is because they have another project they want to work on. It is pretty unusual to meet a group of three bootstrapped Co-Founders, though.
Mike Machado, Brett Owens, and Carson Gross are the founding team behind LeadDyno, and they leveraged their diverse set of talents over the course of nearly a decade to build this powerhouse of a product in the affiliate marketing space.
I got to chat with the trio recently about the story behind building LeadDyno, all the way up through their decision to sell the business.
An interview with LeadDyno Founders, Mike Machado, Carson Gross, and Brett Owens
Tell us a bit about your background. How did you all meet, and how did LeadDyno become a business?
Brett and Carson were actually working together on a different project when I first met them. And I was working on my own startup along with Matt, who works for SureSwift now. We all got to know each other around the local entrepreneurial circles in Sacramento. As we got to know each other better, the opportunity came up to start a new project.
It was something that Carson and Brett wanted to build, but rather than build it as an internal project Carson really championed the idea of starting it as a new entity. Matt and I were winding down our startup, so it was perfect timing.
Yeah, Brett and I wanted to build out software for a reseller/affiliate program and I said, “Hey, we might as well build this as an external system, and maybe we can sell it to other people, too — who knows.”
I also really wanted to work with Mike as an engineer because I thought he had a really good skill set and I like that collaborative aspect.
The idea of it being a three-person startup was definitely intriguing to me, too. Most of the startups I’d worked on before were just two people. So, the fact that Carson and I were both developers, and having that second engineering mind on the product at the very early stages was something that was really interesting to me. That was a big part of what made me want to take the leap to join them.
The full background is that a Co-Founder and I founded that original company, Chrometa , in 2008 and then maybe around 2011 we started having conversations about resellers, like Carson mentioned.
We were in the legal software industry. And the customers we were trying to tap into were solo and small firm attorneys. They were all not only running the same software they had been since the 90s, but they would also listen to this old-school reseller model.
Imagine a lawyer’s office in a shopping strip mall in Nebraska (or wherever), and there’s an IT person who will physically go into that office and tell them what software to run. We wanted that IT guy to tell them to run our software. We knew it wasn’t as simple as getting a website up to acquire subscribers — we really needed a boots on the ground approach.
So the question became, how do we do that? How do we get these established resellers who are making money selling their existing products to sell ours? How do we incentivize them? That’s when we knew we needed a reseller/affiliate program.
And then I guess fortunately for us we were all stubborn software guys. We could have just gone out and bought something, but Carson and I checked out the landscape and just didn’t find anything we cared for much, so we decided to build it ourselves.
How did the product evolve over time?
Well, initially Chrometa, and the startup I had that was going to be a customer of LeadDyno were really what drove the feature set. We had this initial vision that software and SaaS would be big for us, but when the rubber hit the road, we found there was a better market fit in the e-commerce world.
Well, I want to throw in here — I think you may have been early, not wrong, when it comes to affiliate marketing for software. I’ve had a couple conversations recently where people are sort of realizing that all the headaches that come with a traditional reseller relationship are no longer worth the hassle. So from my personal perspective, part of the excitement about LeadDyno is that I think affiliate marketing is continuing to become more and more mainstream as a marketing channel.
Yeah, for sure. We basically reacted to what was driving revenue immediately. For us, it was a no-brainer to at least build out the initial feature set for e-commerce, and then there was some more development to do in that space once we started getting that product-market fit signal. But absolutely — I definitely see that SaaS could be a big part of it going forward. That was always the vision.
What did that discovery phase look like? You built something for a certain type of customer that looked a lot like your own business. But then you wound up discovering maybe e-comm was the bigger market, and those customers had different needs. What was the point when you started noticing that, or what were you looking at to get those signals?
That discovery really came from working with marketplaces. One of the first marketplaces that we integrated with was Salesforce, because initially we were looking for marketplaces where SaaS people lived.
As part of that research on what marketplaces were out there, we came across Shopify, which was pretty new at the time. We looked at what we could build on their API. And since we were already doing integrations to other third-party platforms and marketplaces, we said, ‘Hey, why not?’
But that’s what really started to move the needle and Shopify started really eclipsing all of the signups from the other platforms. That really cemented the idea of e-commerce, but it also really cemented the idea of building for marketplaces. Then we started looking at BigCommerce and all the different e-commerce platforms that we integrate with now.
Do you think having three Co-Founders lent itself to being able to do that? Working across multiple APIs for all those integrations definitely adds some complexity.
For sure. Having that product-market fit signal was great for the company. And it really led me to focus on additional integrations, Brett took the lead on the relationship side of that, and Carson took on the hardcore algorithmic architecture of the affiliate compensation models.
So Brett would reach out to the new marketplaces that we were exploring. And then Carson, and I could focus on the technology and the actual implementation of it. It was a great multi-pronged approach. Carson and I could focus on the tech side, and Brett could focus on the relationships and the product side.
Was there a specific moment where you realized that you had built something that could be big? What were your early goals?
Personally, my first goal was just to finally work on one of my own startups full-time. I’d started a number of businesses over the years and I’d always let my business partners take the full-time role first. I’d also always maintained other contracts and income sources. So, I was really ready to just focus on one thing.
How long was it from launch to where you are all working full time on the product?
We all did it at different times. I was one of the earlier ones — for me, I think it was about two and a half, three years. So it took awhile to reach that goal.
And how about for you, Brett? Were your goals the same — to work on it full time?
Focus was a definite thing, because I had two startups and I was bouncing between the two. On the LeadDyno side, my initial goal was to get to market as soon as we could. And we did a really good job there. I think sometimes startups spend too much time on the details. We got the LLC going in December 2012. And we had something out to market around mid-2013, with a few paying customers.
Customers don’t know how new you are, or how many other people are using the tool. But we literally still had watermarks on the stock photos on our website, and I think one of our earliest customers sniffed that out. There’s just a huge value in getting there and getting established and being a part of the market, though. Once you’re there, then everything else makes a lot more sense for the product decisions that you’re trying to make.
So, for me that was the first big thing — just get to market.
Then it became — can we get some better economics? We knew there were established competitors in the space charging up in the multi $100 range for plans. In the early days we used traffic as a proxy for willingness to pay, and we felt like if we could get to a $70 or so average price point, everything would fall into place.
You just have to kind of feel your way through that stage. It was my second time through, so I knew I just needed to take it one step at a time and get the model established, then get the marketing working, then figure out what channels people were coming in through.
Well you definitely got established. By the time you sold to us this year, you had a team of eight that moved over to SureSwift. I was curious what hiring looked like for you over the years and what it took to build that team? And then on the flip side, how did that impact your decision to sell and your conversations around selling?
I wouldn’t say we should write any books on hiring. We built a really good team, but we kind of fell into it. I can’t say there was any rhyme or reason, and a lot of it was just the chaotic emergence of a good team.
The one thing I do think that we did a good job of is that all three of us felt that we were going to stay a Founder-only company, so we knew we were going to stick to a contractor model. But we still really wanted to treat people right and pay well. We wanted to keep equity with the Founders, though. We were just hesitant to make that move to where we would become a company that needed an HR department. There are good things and bad things about the model we used. You end up paying a little bit more for your team — at least in cash — but it did give us a lot more flexibility and it made the exit a lot cleaner.
For the first four to five years of the business, Carson was the CEO and I was the CTO, and we ended up switching roles some years back. So, for the early days I don’t have the perspective he had, but hiring has always been a challenge.
I can tell you that it’s always one of those things where you try to find that talent early on, and then you have to try to balance compensation with growth. But in terms of the acquisition, one of the challenges was trying to feel that we were making a good decision for the team and that they were all going to have the opportunity to continue on with the product. Knowing that was your goal certainly made it easier.
And did you ever consider raising money vs. selling? I was curious, because starting to scale a team is often a decision point, and you’d already done a good amount of work there.
We did look at raising a little bit in the early days, but not too seriously. And I know you always hear about success bias, but I just think bootstrapping makes a lot of sense. As a Founder it gives you the opportunity to grow and optimize the way you want to.
Tell me about deciding to sell — what did that decision and conversation between the three of you look like?
I don’t want to speak for Brett and Carson, but I’m more of an early-stage guy. So going on seven or eight years into the business, I was starting to think about the next thing. And then I think we all had different ideas of where we wanted to take the company. Rather than trying to tug each other in any particular direction, the simpler solution was to sell. Those two things are what really drove the decision for me.
Yeah, I had similar sentiments and when Mike met your team and introduced us, it just seemed like a no brainer. That was the best-case scenario from my standpoint — being able to sell but get the company in good hands.
I had gone through the sale roadshow process a little bit with my first company, and back then I was playing the role Mike did this time around — taking the calls. Those calls ranged from people you’re comfortable selling to, to people you’re terrified of selling to where you can tell they’re just going to take as much cash flow as they can get, but the product and the team are going to be in trouble. So that was my main concern with selling this time as well.
I was probably the least motivated to sell since I really like the idea of a cash-flow based company, but I also understood that it’s just different when you hit a certain point where the technology is mature. It’s a different company at that point than it is at the earlier stages. And if the other Founders want to exit, it’s probably time.
I was very happy to find out that SureSwift had done this before, and no one else we talked to had the engineering infrastructure that you had.
So for me personally, it was a best-case scenario too for an acquisition by someone who isn’t just going to ride it into the ground and extract as much money as they can. They’re actually going to take it and try to grow it.
It sounds like you all got aligned before talking to us, which we always think is really important in a situation where there’s more than one Founder — the sale process just can’t run smoothly if you haven’t had those conversations.
Yeah, we had the luxury (if you can call it that) of going through a couple sale/acquisition attempts before this, but we were all fairly aligned on what we wanted so I think that that certainly made it a cleaner, easier process.
One process thing that surprised me that I think is worth mentioning is that Mike went through the MicroAcquire marketplace for the sale, and that just worked out so well. I’m a technical guy, and I just kind of expected that to not work, but I was pleasantly surprised by how well it did work, and it really provided a much higher-quality acquirer.
Yeah, I was initially concerned that maybe we were a little too big for a marketplace sale, but I actually reached out to Andrew Gazdecki (the Founder of MicroAcquire) directly to get his input. He was able to point us to other listings that were a similar size and who’d had success, so that’s what convinced us to go forward with it, and I’m glad we did.
Carson, I know the most about what you’ve been up to since you’ve been working with us briefly to roll out your passion project, htmx, out to more of our products. But what about you, Brett and Mike? What’s next for each of you?
I’ve always been fascinated with finance and cryptocurrencies and blockchain stuff. So I’m doing a little bit of investing and playing in the crypto world, and then I also have some ideas for a new project around some of the new business structures that are starting to evolve out of the crypto world called the decentralized autonomous organization. It’s a new concept around business formation that really fascinates me, so I’m going to spend the next six months or so exploring possible projects in that space.
I actually already have another project going in an adjacent space — it was something we had kicked around doing with LeadDyno for years — it’s an affiliate network where we connect merchants with affiliates in their space, and it’s called Afluencer.
With the new project, we’re building a stable of influencers, especially people in a specialized niche — for example, someone in the U.S. with 10,000 or more followers who has a skincare focus, their engagement rate is above 2%, and they’re on TikTok and YouTube.
E-commerce brands are all looking for ways to get out, be visible, and get more coverage right now — especially on social media. (We all know Google and Facebook are doing really well on their ads by their earnings, but it’s really expensive to run ads there.)
So we’ve got that built out both from a platform technology standpoint, but then also the influencer database. Right now we have an app in the Shopify store and a web app and we’re building up both sides, so it’s interesting. It’s different from the early days of LeadDyno because when you have a SaaS tool you can just sell the tool, and if you only have two customers they don’t know they’re the only two.
But if you have a network it’s really obvious if there’s nobody in it. So you try to balance both sides of the network and make sure everyone’s engaged and having someone to talk to. We also have a lot of LeadDyno links from brands in there too, so there is a little bit of that overlap, which is cool.
Want to hear more from these Founders?
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by Sureswift Capital | Aug 31, 2021 | Founder Stories
Many of the Founders we buy SaaS products from are selling because they already have another business they want to work on, so in my line of work I meet a lot of serial entrepreneurs. While GrowthHero Founder Mike Janeczek says he doesn’t have the next idea yet, I’d bet good money on reading another exit story about him in the future.
Mike has a unique blend of development skills and business acumen. Rather than approaching a startup with the typical idea > build an MVP > find product/market fit, he flipped the approach and set out to look for product/market fit on the Shopify platform before writing a single-line of code.
Nothing in business is a sure bet, but building your MVP based on a big data set and thorough research will definitely improve your odds of success.
I had the pleasure of chatting with Mike recently to go back over his story of founding and growing GrowthHero, and to talk about why he ultimately decided to sell the business to SureSwift.
An interview with GrowthHero Founder, Mike Janeczek
It’s nice to get to chat with you again. Could you tell our readers about your background and the story of building GrowthHero?
For me, building GrowthHero wasn’t a typical startup story where you say “Hey, I have this idea, and I’m going to try to build it.” It was more going in reverse — I knew I wanted to start my own thing and it made sense to build my own Shopify app because I had some experience working on apps for that platform as a developer.
So I did a ton of research on Shopify app categories and what was popular, and then I’d dive into what competitors were doing and where I felt like there were gaps or a niche that I could fill. I kind of had a formula in my head for figuring out how big a market there might be for a category based on reviews and some rough metrics like that.
Eventually all of that research led me to affiliate marketing, and I just thought there was an opportunity to fill that need and build something really great around it. That “something” turned into GrowthHero.
What attracted you to building GrowthHero on the Shopify platform vs. another eCommerce system, or just building a platform agnostic affiliate marketing app?
I had learned about Shopify, their API, and their customers from previous work. In terms of eCommerce, I just think their app marketplace is valued higher than others. I’ve seen apps come out for a platform like WooCommerce with a $40 price tag, and people just don’t want to pay for it — they want it for free.
But in the Shopify ecosystem it’s very standard to add apps and add-ons to your store that you pay for monthly. If the app does something specific that people need, and it makes more money for their store, they value it and they’ll pay for it.
I think for people who can’t — or don’t want to — do their own development, Shopify’s a great system because there are a lot of solid developers building apps for it, and Shopify’s been very supportive of those app developers because they know it adds value to their platform. It’s really a win for everyone.
I love that research and data-driven approach to building a company. You’re right — so many people start a business and then go out and look for a market — and you looked for the market and then built the business.
One thing I remember hearing from our VP of Acquisitions, was that he asked how you track churn — which is not easy in Shopify — and you pulled this very methodical, systematic view of all the data.
So clearly with all this research and data tracking you wanted to start a business that would bring in revenue. But did you have a specific goal in mind when you started the app? When did you realize it could turn into something big?
Well even after all that research, I knew that a big percentage of startups that are built are dead before they even get started. So my first goal was just not to do that. I didn’t want to spend half a year developing something and then find out nobody wants to use it. I wanted to build pretty quickly, and get some traffic and some real users to make sure I was building a product they wanted.
I think that’s something I really want to share with other developers out there, because so many programmers are so focused on the code and improving the code. And yeah, that’s fun. But if you want to build a business, you really want to get those first 10 customers who are paying 20 bucks or something for your product. Because even if you’re just making $200 a month, you have a real business and real people’s feedback to help you build it and improve it. You’re not just sitting around refactoring code no one is using.
So my early expectation for growth was just to build something that actually made some decent profit. And then it was, “Hey, now this can pay for my flat.” And then it was like, “Now maybe I can quit my job.” And then it was like “Maybe I can make more with this than I ever did with my job.”
You’re a bit of an outlier for a bootstrapped founder when it comes to your pricing plans, I think you’re actually the first bootstrapped Founder I’ve seen with a double-digit starting plan — your plans started at $39.99. Tell me about your pricing strategy and how it evolved? Was it hard to set a value and was that a process you stressed over at all?
When I launched, I honestly just looked at what other apps were out there for affiliate marketing and made sure I was competitive or at least in line with those. That’s the reality when you launch a new business — if there’s competition, you’re going to look at them and do something pretty similar for pricing.
As time went on though, I was doing everything on my own and I found that the number of leads coming in were driving more technical support requests than I really had time to manage.
And on Shopify lead quality can be all over the place. You can get a request for a ton of support and customization for a no- or low-revenue store that may only be around for a few months, and then you have these big brands doing hundreds of thousands in revenue who are going to be around for a long time.
Of course you want to provide great service to everyone, but it just doesn’t make sense to put a ton of time into a customer who’ll never convert to paid, or who’ll churn after one month.
So at a certain point I just decided that adding $10 to each pricing plan would lower the number of leads and technical requests I was handling to what I could manage and I’d be able to keep my revenue per install metrics steady.
Customer reviews are so important — especially on Shopify. Was your app rating or your number of reviews something you were focused on, or did that happen pretty organically?
I didn’t have any magic way of generating reviews. On Shopify I’d just noticed that something like 90% of the reviews on apps happen after someone gets help from support, so I focused on doing a good job on those early support requests.
The other things I’d say about reviews are that they’re a great place to research your competitors and it’s worth tagging or categorizing all of your own feedback and reviews to help develop your product roadmap.
On the competitor front, I checked 1-star reviews for everything in GrowthHero’s category, and you can really get some insight from those on what not to do or what to improve in your own app.
For GrowthHero, any time I got feedback I’d log it and tag it on a Trello board so if I had time to build a new feature, I could go check how many customers had mentioned it. So I had a high level of detail on why customers had uninstalled — like I would know that seven people had uninstalled because there was no multi-level marketing feature — so when we built that I could contact them and say “hey, this is now available.”
I think that’s especially important in the early stages when you have a pretty basic MVP and you’re figuring out how to improve the product and make it more competitive.
So is that how you built your whole product roadmap?
That was a part of it, but being totally honest, sometimes consumers want something that they don’t actually need, or they think they want something but they really need something else.
So again, there’s no magic way of doing it. But it does help to know the things that a lot of people want, and if it’s easy to build, you can just ship it.
Something else I think it’s worth mentioning specifically for other Shopify developers is that the customers on that platform love to have features around their brand, like changing the colors and adding their own logo. So if you’re working on the Shopify platform, that’s definitely something to consider adding to your app/roadmap.
Talk to me about hiring. You had a couple of part-time team members who joined the SureSwift team. When did you know it was time to make your first hire, and what was your hiring process like?
Yeah, once we grew I figured since I’m a developer, my time was best spent on development. So I made an investment and hired a couple students who were studying IT to work on the support team.
They were both remote and a support role is a great remote job, because as long as someone can respond within your response time goals they can have a really flexible schedule and work from anywhere.
So basically when I hired them I started breaking things down into two categories of tickets. If something was really critical or really technical, I worked on it. All the basic onboarding and styling stuff I had them handle.
Tell me about selling the business. I think we actually reached out to you first. Did you know anything about SureSwift, or had you ever thought about selling before we contacted you? What was your first thought when we reached out?
Yeah, SureSwift reached out, and I actually didn’t respond at first. I was following this guide called “23 rules to run a software startup with minimum hassle.” And one of the steps basically said “no acquisitions talks — if you’re growing, you’re good.”
But I wound up changing my mind on that part, because as a solo entrepreneur, and someone with a background as a developer, all the stuff related to being a CEO — managing people, hiring people — that was something I just didn’t enjoy doing and I realized I didn’t want to do it.
So really my options were to keep it small enough that I could run it on my own and not do those things, or I could sell it to someone who has a team and wants to do those things to grow it.
SureSwift wound up reaching back out again a few months later and I decided to get back to him, and we just went from there.
Yeah, we hear that theme a lot, actually. I think there are a lot of people who hit that point where they realize the work that it’s going to take to keep growing their business is different than the work it took to build it, and they don’t actually like doing that type of work.
Yeah, and the truth is that by selling now I moved the risk of growing it to you. And that’s okay because you’re a bigger company, so that risk is smaller for you than it was for me as a solo Founder.
That’s totally true, and a great point. I know you’re probably focused on the transition and I’m guessing that’s taking up most of your mental space, but do you have any immediate plans for what’s next?
I have no idea right now to be totally honest! I’m researching my options, and thinking about what to do next and how to invest some of the money from the sale into something new with decent year-to-year profit — I’m not sure about another business yet though.
by Sureswift Capital | Apr 29, 2021 | Founder Stories
Ben Latz is a self-described finance nerd who fell for software. (I can relate: My first job was teaching high school Math, and I really love a good spreadsheet.)
He also caught the entrepreneurial bug early on, and the combination of those three passions — finance, software, and business — led him to starting Wingman with Piyush Puri shortly before they graduated from Carnegie Mellon in 2017.
In late 2018, he also teamed up with a friend from high school to work on The TIE, a startup in the crypto currency data niche, where he’s currently a Co-Founder and Chief Product Officer.
As often happens when a Founder is working on multiple businesses at the same time, Ben realized that The TIE had a much greater potential market and upside.
Wingman on the other hand, was fairly easy to run and bringing in revenue, but answering support tickets at 11:00 at night after a full day was draining.
So Ben started to think about selling and suddenly we were aware of Wingman and saw a potential fit after both seeing it listed on MicroAcquire and getting a heads-up from Nathan Latka, who knew both of us.
The rest of the story got written very quickly. We had acquired Tradervue in 2020, and had hired an amazing team to run the trade journaling software and replace solo Founder, Greg Reinacker.
One of the Product Managers we had hired to manage Tradervue was an options-focused trader himself, and Ben had already recruited a software engineer from his customer base who was interested in joining the SureSwift team.
Ben liked that we had a team ready to go who would understand his customers and what he had built. We loved how well Wingman filled a specific SaaS niche, its stats, and its well-designed interface.
An Interview with Wingman Co-Founder, Ben Latz
Ben, you graduated in 2017 from Carnegie Mellon and since then you’ve been working on not one, but two successful startups. That’s beyond impressive. Tell us more about yourself — when did you get the entrepreneurial bug?
I’ve had the bug since middle school. I got my start selling candy. And later I hopped into Amazon Affiliates for e-commerce (I had no idea what I was doing). Then I ran a pretty successful business selling custom duct tape wallets for a couple years and went to a couple summer entrepreneurship programs in high school.
It was really in college when I got interested in trading. And I wasn’t running a business at the time. But whenever I wasn’t running something, I was always trying to think of what to build next.
Throughout college I got into options trading and that community. And because I wanted to analyze how I was doing, I made a custom spreadsheet to track my trading. It became very clear after engaging in the community that everyone runs into this problem.
I had foundational exposure to programming at Carnegie Mellon, because everyone has to take a programming class in freshman year, regardless of the school that you’re in. And I had the inclination that what I was doing with my spreadsheets was something that should be automated, because it was really structured.
So it was as simple as thinking, “Hey, this seems like it could be automated.” I didn’t know how to make it a web app. But I knew that it could be done. And I thought maybe I could charge a monthly subscription. I didn’t even know what SaaS was or how hard it would be.
Then in my final year of college, I teamed up with my close friend Piyush, who was studying Information Systems, so he knew how to build web apps and fortunately had the excitement to not only build it from scratch, but the patience to teach me Ruby on Rails for me to contribute. So together, we built Wingman starting in our senior year, and we both graduated a semester early.
That was at the end of 2017. After that we both moved up to Chicago to start our full time jobs, and we worked on Wingman every night and weekend.
I left my full-time job after six months in order to launch Wingman, and months later it was humming along but far from paying my bills. I had a good friend, Josh, who I met at a Babson summer entrepreneurship program for high schoolers. In 2018, he also started his company and later needed help with product and development, which I could help with thanks to the skills I learned from Wingman.
Josh is someone with very big ambition and he’s a bigger thinker than I am in terms of opportunity. So I joined him part-time at the end of 2018. Soon after, I moved back to NY and it quickly turned into full-time.
So that’s how I got my hands full with two things at the same time and I was able to balance them for a while.
When did you realize for both businesses that they could take off? And when did you have that moment where you realized that one was going to require your full-time focus?
Wingman was sort of a success out of the gate, because our initial goals for it were pretty small. It was really just, “Wouldn’t it be cool if we could pay our living expenses with it and get another experience under our belts?”
Piyush and I didn’t show up on nights and weekends to chase a big MRR or an exit, but rather to gain the confidence and practical experience that comes with building a product and running a business.
The early goal was to get to $5,000 a month so we could leave our day jobs. But really from the start, I knew it solved the problem. People were using it, even though it was the most janky user experience, because the page refreshed every time you clicked any button. “If you’re not embarrassed by the first version, you’re launching too late…” so they say.
It was in 2019 that we rebuilt the site to be a lot faster and more enjoyable to use, because I significantly improved my web development through better practices and learning Vue.js. And the word of mouth really started picking up after that rebuild. I started to see all these trials come in, without me posting on Twitter, or doing any marketing.
I think that’s when we realized that, sure, it may take a while, but it’s very clear that this is something that people are going to start adopting.
And then for The TIE, I started working on that full-time in early 2019. I’d moved back to New York, and Josh was there as well, so I’d work out of our two-person office. And then working on Wingman was extra time needed on top of that. So I was always thinking about them or working on them pretty much all day.
We knew that the opportunity in the crypto industry was huge, but it took us awhile to get our first dollar. Then all of a sudden we started doing deals where one deal would be bigger than Wingman’s revenue. And that made the decision to put my focus on The TIE pretty clear, even though Wingman offered an easier lifestyle.
Hey, I get it. Sometimes it makes sense to take the risk for the bigger opportunity. You’ve made a lot of decisions that I think many Founders can take years to get to. You hired really early for being a bootstrapper, bringing on someone to take over some work on support. Tell me more about that.
I actually first tried to hire one of my best friends who’s an options trader to help me with support tickets. He was also starting his own business, and we both came to a very quick conclusion that it was not worth his time to onboard and learn all the ins and outs to provide good support.
A few weeks later, John had signed up as a customer. And he reached out asking how he could support the community — if there was a public GitHub, what he could do to contribute, etc.
I said, “Well, it’s funny you asked, because it would be great to have someone help me with all these support emails.” At that point I was feeling tired of wanting to go to sleep at 11pm just to have to pull up Wingman’s inbox and answer 10 or 15 emails. After doing that every day for three years, it weighs on you.
So it was a jackpot to find someone who actually wanted to do support, and was also a Ruby developer who understood options. That’s a very hard combination to find.
It was very easy to onboard him to be part-time. We agreed to an hour a day, because that’s all I really needed. So it was low-cost relative to the revenue. And it took away the one bottleneck that I felt. It was a no-brainer to give it a shot.
But, I also knew that it would be a waste if I just had him answer tickets. So from the start, we were focusing way more on basically treating him as if he was buying Wingman and documenting what he would need to know to be able to take over.
I knew I’d rather have him produce helpful assets than just answer support emails. So he wrote help articles, and started documenting the code base and infrastructure.
I think a lot of people don’t realize how much work it is to transition the business to get it ready to sell — you were smart about getting ready by hiring. And then you don’t get to just walk away and hand over the keys. Or you could, but that would be a bad outcome. So I really appreciate the work you put in to make it a success.
Were you always building Wingman with a mind to sell? Or was there a specific moment where it just became clear that an exit would be something you would want?
You know, we didn’t think we would actually really ever sell it. It was just too easy to run. Until it wasn’t.
We had explored the idea about a year ago, I guess around when COVID started. I was burned out and The TIE was also overwhelming, even though we were still in early-revenue days.
So it wasn’t really the game plan to sell. It just sort of happened. There was a tipping point, and I was starting to value my time and energy more and realizing that I can’t do everything.
Once you did decide, I know you had options for buyers. How was that process for you of fielding offers? And why were we the lucky winners?
Yeah, so just as an experiment, we listed on MicroAcquire. Andrew’s a cool guy, and I thought it was a great marketplace. So we just listed it to see what interest we would get.
We got a decent amount of inbound, as the revenue was meaningful but still accessible for buyers. One of the first buyers with interest seemed very serious. He was an individual, but a really sharp guy and we felt good about it. So we were moving along with that, and received an offer from him.
But I decided to text Nathan Latka because I’d been on his podcast and knew about his experience selling one of his companies. I just asked for his advice on handling my situation, because we weren’t sure if we were selling it short .
He made the intro to you guys, and SureSwift reached out. And that’s how things got started.
The biggest filter (and I was upfront about this with people) was you really had to actually understand options. Wingman’s not really something that you can operate without that domain knowledge. So it was really good to hear that you guys already had people on your team that had that, and another acquisition in a similar space.
And of course, just the fact of working with a fund who does this all the time with standard procedures and a reputation on the line. It’s a lot easier to feel good about that vs. an individual you just met for the first time who’s just doing personal capital and a loan.
I also had a brief conversation with Tyler Tringas (I’m an LP in Earnest), who’d sold to you guys and he had really good things to say so that also really helped.
Oh, nice. We’re LPs in Earnest, too, I didn’t even realize we had that connection. SaaS is such a small world.
What are you hoping for with Wingman now that it’s found a new home with us?
My hope from the start was just to build something that solved the problem options traders faced, and it’s done that for a few years. I think it could be well-positioned as the highest quality tracker in the industry, for options traders.
As long as it continues serving customers well and it does as well as you guys want it to, I’m happy. I don’t have ego tied up in how big it gets.
I wanted to ask you about the crypto space too, because I talk a lot about trying to professionalize the SaaS buying space, and it feels like you guys are trying to do something similar in crypto with The TIE, and it’s another young market. What’s your perspective on that?
Both of us and our other Co-Founding advisors are all from a traditional finance background. So it was really just, “Okay, how do we take pieces that we know work in that industry and bring it over because they’re gonna need that infrastructure at some point.”
But the industry is changing every week. So the challenge is committing to something that is going to be needed through the changing market while still keeping up and not losing focus.
So we’ve really stuck to what type of data we can do differently that we know no one else is really going to do well. We’ve seen a lot of data companies go out of business because they focused on one type of data set that wasn’t commercially viable in the market. So we’ve always tried to stick to what we do differently, and then just form great long-term relationships.
It’s a tough industry. But over the past six months, the tide has risen so much that everyone is doing better. And there’s so much opportunity now that we just keep hiring because there’s just more and more that we could do.
I think the best way to survive is having those deep relationships though, and to work with other companies and lift each other up as the industry grows.
So in your blog, I noticed you were kind of into the FIRE movement and, and living frugally. And I was wondering how that impacts how you approach an exit, and also just if you felt like that allowed you to go out on your own so early?
I think for personal finance it’s important to go to one extreme, and then come back a little bit. I was really into FIRE in college. But being a business owner is very different for the concept of FIRE than being an employee, because employees usually have no upside other than investing all their money in the stock market. And that’s fine. But as a business owner, you can create so much more upside.
So, it helped that I was able to live very lean when I needed to. And, you know, part of that is carried over to not needing much. But I’m looser with expenses nowadays.
If something can make my life easier, or do something quicker or better, I buy without thinking about it nearly as much as I used to.
Obviously, the acquisition has helped. But I’d already been transitioning to more of a business owner’s mindset from FIRE, where you can not need that much, but focus more on building upside, as opposed to incrementally saving a few thousand extra dollars a year, which doesn’t move the needle.
In terms of starting my own business, when I was at my first job, I was saving 60% of my salary. I knew that the amount I’d saved up in six months would carry me through the next eight months or so of living expenses. And that made it a no-brainer to leave and just see what happens. Because the worst case was, I’d get better at web development, and then if the business failed I’d get a developer job.
You sound like somebody who’s very good at having an idea and then kind of testing it out and validating it and going back to adjust. Is that part of your process that’s conscious or is that just something that comes naturally?
When it comes to my life path, I’m in a position to make choices that may seem risky. Even though I’m an analytical person, I don’t obsess over optimizations anymore. Most decisions can be undone, and when they can’t, I’m more careful. Things seem to work out in their own interesting ways even when they appear to fail at first, which makes it easier to go with my intuition.