After exiting NewsGator, an earlier startup, Greg Reinacker was ready for something new, and he started trading. After trying many trading styles, he soon found the hardest part of trading for him was not the numbers, but the emotional side. He needed a way to efficiently keep his trading journal, and also objectively analyze his performance, and no tools existed that he found suitable. So he started building one and Tradervue was born. Unlike the venture-backed NewsGator, he kept Tradervue intentionally smaller and product-focused. It’s been just him since the beginning. Growing Tradervue to serve 100,000+ traders, Greg followed his intuition and then sold into the momentum.
Recently we sat down with Greg to talk about how his past tech company experience informed his approach to Tradervue, how building a product for himself turned into something more, and how he knew it was time to sell.
An Interview with Greg Reinacker
You’ve got a super interesting background. Talk to me about how you went from getting a degree in Electrical Engineering at CU Boulder to founding your first tech company, NewsGator?
Ha! Yeah, there was a little bit in between that.
My first job after graduating from Boulder was in microelectronics and firmware design at NCR microelectronics, which later morphed into application development, which was an adventure and totally not what I thought I was going to be doing.
I actually started my first company while I was still working at NCR. This was back in the day when you’d write a shareware application, upload it on an FTP site, and hope people would somehow find it. I ended up selling that first business to a coworker of mine.
After NCR I ended up going to a consulting company where I did training and custom development.
From there, I went out on my own, consulting. This was back in 2000-ish, and a friend of mine turned me on to blogging and RSS. As I started using an RSS reader, it occurred to me, “you know, I should be able to get all my RSS feeds in Outlook” (that’s what I was using for email at the time).
I wound up building a prototype, and I posted about it on my blog and said, “Hey, what do you guys think?” I got a ton of feedback overnight, saying, “Please, please build this!” That was encouraging, so I started building, turned it into a product and started to sell it. And NewsGator was born.
NewsGator grew really fast, and you took the venture capital path with that business. What were your big takeaways from that experience, and how did it influence your approach when you started Tradervue?
Yeah, about two years after I launched, it was me and one other guy, and we did our first round of venture capital. And the rest was the story of a venture-backed company: Raising tens of millions of dollars and growing very, very fast.
At our peak, I think we grew to 120 people or so. After about 10 years of doing that, I decided that the company was really doing fine without me, and I felt like it was time to move on and find the next thing.
The venture-backed path is just a whole different world — the pressures you feel are much different. And I mean, our investors were great. I talk to our lead investor who started the very first round regularly and had no regrets along the way.
But it’s just a different trajectory for a company.
Bootstrapping a company myself, if we got to say, $100,000 in revenue or something like that, then I could have done things differently and backed off my time, and been happy with things at a certain rate of growth. In a VC-backed situation, that’s just never going to happen.
On Tradervue, building solo meant I had the freedom to build the product I wanted, and the product I thought should be in the market, regardless of how long it took to become successful. That patience isn’t always an option in a situation with outside funding.
Tell me more about building Tradervue. It was a personal project that turned into a business, right?
When I left Newsgator, I decided to take up trading. My philosophy was, “I’m an engineer, right? How hard can this whole trading thing be?”
Well, it turns out the hard part of trading isn’t the engineering and math part. It was trying to find what worked for me, what matched my personality, and the whole emotional side.
You might start a position and have it move against you, and you must have a mindset where that’s either okay, or you need to to snap those positions off and take your quick losses. You have to train yourself to do that.
During that process, one of my goals was to have a way to objectively analyze my performance. Sure, your broker will tell you whether or not you’ve made money that year. But what I really wanted was to be able to dive down deeper to figure out what was working and what wasn’t. That was the start of Tradervue.
So when you built this, you built it for yourself. But I’m sure there were times where you were spending all your time on Tradervue and didn’t really have time for trading, or were you always doing both? How did you balance those two things? Did you eventually move away from day trading and focus more on the company?
It was definitely more of the latter, moving away from day trading and focusing on the company. I think being a successful day trader is a full-time job in itself. It requires preparation before the market opens, lots of time while the market is open, and a bunch of work after the close.
I did that for a solid year, met a lot of people, and got a good feel for what would work for me and what wouldn’t. I knew I needed a tool like Tradervue, so 90 percent of my focus started going towards that. And then in terms of my own trades, I started to slowly migrate to different trading methodologies that required less time. But I tell you what, I am absolutely a better developer than I am a trader. And Tradervue is more than happy to back up that statement and slap me in the face with it!
Ha, so it’s good that you figured that out and shifted your focus?
Yeah, exactly. One of the things I was doing was aggressively trading around the price action after earnings announcements. Apple might announce their earnings, and I might trade them the following morning. I thought I was a genius at this, and I would have told anybody that’s where I made all my money.
And then I looked at Tradervue after getting the data in and realized I’m not making any money doing that after all.
There were a few things like that. I’d be emotionally excited enough that I’d convince myself I was really good at them, but Tradervue would show me that wasn’t the case.
Did you have any idea it would turn into a tool tens of thousands of people would use? When did you first realize it could take off?
I’m not sure there was a specific moment. I just grew it, and I did everything wrong, intentionally. They say, “Don’t just build a product and hope people come.” You’ve got to get out there and drum up all this demand first, and then build a minimal version of your product and give it to all that demand and see if it works.
I just didn’t buy into that. At Newsgator, after we started growing, a big part of my job was being on the road all the time, drumming up awareness and demand at conferences. I liked it at first, but after four out of five consecutive weeks on the road, it got to a point where I just hated it. After that, I spent like seven years in a row without getting on a plane.
So when I started Tradervue, I didn’t want to do those things. I wanted to do the parts that were fun for me. If it turned into a great business, that would be awesome. If it didn’t, that was okay, too. I was just finding the next thing for myself.
So I started out to build this product that I thought would work for me. That was my original intent — just build something for me, because I had this need. And, as many entrepreneurs do, I somehow got distracted during that process and built something for everyone.
When I did the very first launch, I think there were three or four people I was actively talking to that I had met through trading. We all traded in similar ways, and I was bouncing things off them and getting feedback. That’s how the business really started.
I spent the first six months or so giving it away for free. Which was the opposite of NewsGator. It’s kind of funny, I did everything exactly backward. When I launched NewsGator, I charged upfront – there was nothing free available. But that was a product with mass-market potential, so I grew it in a way that forced it to grow pretty slowly.
Fast forward to the Tradervue days and I launched the product as completely free. In hindsight, it wasn’t necessarily the smartest thing to do. It’s a much smaller niche market, so charging for it made a lot more sense. It took me six months to figure that out.
You kept Tradervue a solo project for years. Was that intentional after growing so big so quickly with NewsGator? Did it make the decision to sell it more difficult? How did you evaluate buyers?
Looking back on the early NewsGator days, I found that a lot of the parts that I liked the most were from when we were really small — five people or less. When you’re small you can turn on a dime and do whatever you think you should do for the product. There aren’t all these competing interests and different things to worry about.
When I started Tradervue, I wanted to focus on the parts that I find fun – doing the development and building the product – not being on the road all the time or managing a team. Those aren’t my favorite things.
So I focused on the things I liked and kept it small, intentionally. It’s been just me since the beginning.
As for selling it, it’s sort of twofold. For one, I’ve been doing it for a long time and it feels like it’s time to go find the next thing for me, whatever that is. Also, there was a massive amount of growth over the last six to 12 months. As a momentum trader will tell you, you want to sell into momentum.
Obviously, a private company is a little different than a stock, but intuitively, it makes sense to me to sell into momentum, when things are going great. That doesn’t mean it was an easy decision. Things were doing great. It was a one-person company growing to where it was making a bunch of money, but I really felt like it was the right time.
What are you hoping for with Tradervue as it’s found a new home at SureSwift — if you could look into the future, what would you want to see?
I think from launch through today, Tradervue has filled a niche that’s really necessary. Active professional traders (and developing traders) need this kind of tool. We do things in a way that’s designed for a very active trader.
That’s who the product was designed for because that was the guy I was trying to be when I was building it. I think moving forward, I would love for it to expand its functionality, but keep its focus on the really active trader.
As an example, maybe that means expanding the different dimensions against which you might measure your performance — fundamental data as well as technical data and things like that.
Talk to me about being in tech in Denver. I’m in the Twin Cities, and I’d say we’re both in places with a growing reputation for tech startups, but that wasn’t the case for years. Do you feel like that’s changing? Did you ever feel like it was a disadvantage in those earlier days?
It’s kind of funny, right? You hear a lot about that. All the people in the Valley will tell you (especially like 20 years ago) that if you’re not in the Valley, you don’t exist and it doesn’t matter what you’re doing.
That came up when we were fundraising for NewsGator. We had done the first round with Mobius Venture Capital, which was right up the road in Boulder. But after that, we were out in the Valley raising subsequent rounds. There was definitely some of the “Why aren’t you out here?”
Over the years there’s been a great startup community built in the Denver/Boulder area, which has grown like gangbusters. As a result, not only is there a ton of startup activity, which is awesome, but larger tech companies are swooping in trying to take advantage of the talent that’s here. So the Amazons or Googles of the world will build a facility here. It’s become a really great place to build a tech company.
Right. Now the pendulum is coming the other way. There’s a guy that moved down the block from me that has worked for LinkedIn for 10 years. As soon as the job went remote, he’s like, “Alright, we’re leaving. I don’t want to pay San Francisco/Silicon Valley rates for my rent. So yeah, I can live anywhere now.”
Yeah. It’s a really interesting time. I think a lot of companies that normally wouldn’t have even thought of going remote, have to do it. Charles Schwab is right outside my window. Apparently, they didn’t allow anybody to work from home. And now ever since April or May, I look at their parking lot and there’s maybe 40 cars in a lot for thousands. It’s quite striking what’s happened.
Yeah, it’s gonna be interesting to see whether it sticks, or people go back to the office, or go hybrid.
I know you’re a gadget guy and a car guy — what’s your current tech set up at home? Best and worst products you’ve tried out this year?
Ha, well — being a company of one, and this being early in the transition, that’s my focus right now. But with my tech setup, I’m totally an Apple guy recently. I’ve got an iMac Pro, which is a fantastic computer, and there are iPhones and iPads all over the house. It’s kind of a thing.
I’m also super into cars, and motorcycles recently. So that’s fun. I’ve become a Tesla guy.
I saw on Twitter recently that you had backed the Tesla out of the driveway without being in it.
Yeah, it’s always fun to try out what it will do.
You’re also a crazy productive guy. What’s your routine look like? How did you stay motivated as a solo founder for so many years?
You know, I’m not sure exactly, routine-wise. If I get myself excited about something, I can obsess about it for an unlimited amount of time, so there’s no real ‘secret,’ that’s how I stay motivated. Over the days of building Tradervue, I think a lot of it was watching it grow, watching people use it, and hearing people say, “this product really made a change in my trading, and that’s made a change in my life.” I love to hear that sort of thing.
Any sense of what’s next on the horizon for you?
You know, when I left NewsGator, I told anyone who would listen that I had absolutely no interest in starting another tech company. And yeah, after this one, I don’t know. I’m still interested in the trading community. I feel like I get them, and I could imagine doing something there.
If I was to do something not in that community, I have literally no inkling of what that might be. But my last two companies, I had no inkling until about three months before I did them. Right now I’m not in a rush to make any decisions. In fact, it might be good to try not to decide anything big for a little while. It’s kind of a big deal selling your company when you’re the only person running it!
When we acquired the Cross Sell Shopify app, the product hit all of our typical buying criteria. It’s a well-built SaaS product that customers love with a history of growth and more potential.
Our acquisition story for Cross Sell, however, was a bit different than our usual “founded by bootstrapper, bought by SureSwift.” While Cross Sell was initially founded by a bootstrapper, the product had already been through an acquisition back in 2017.
Over 3 years, its second owners Deven Soni and Ryan Kulp rebuilt and redesigned the app from the ground up, took it to its next growth level, and then decided the time was right for them to sell last year.
I’m thrilled that SureSwift was the “win-win” choice when they reached that decision, and I’m very excited to bring you all this interview with Deven and Ryan, who are both seasoned acquirers, investors, and operators in the SaaS space.
An interview with Deven Soni and Ryan Kulp
Tell us a bit about yourselves — what’s your background, how did you wind up owning Cross Sell?
Ryan: So, I moved to New York City after school in 2013, worked for a Techstars company, and over the next few years, I got more and more connected and involved in tech startups, from freelance marketing to product development.
In 2015/2016, I was working at a venture fund in San Francisco. That’s when I got involved with buying and growing companies of my own. And the following year, I met Deven through a business partner, Justin Mares. And that’s when we bought Cross Sell together.
Deven: On my end, I had a pretty traditional finance background early on. I worked in tech M&A in San Francisco, and eventually joined a venture-funded startup. I sort of married those two worlds together and became a Private Equity and Venture Capital Investor at Goldman Sachs for about two years.
After that, I moved to a fund called Highland Capital Partners in Silicon Valley. Then I realized that this whole time that I was kind of a value investor trapped in a technology investor’s body.
And that’s the reason I started a venture/private equity fund called Wired Investors back in 2014, and we bought about 18 digital businesses over the next 3-4 years. About half of those were SaaS, and the other half were media-based. And that’s where I met Ryan and Justin as well.
I know what we liked about Cross Sell, but what stood out to each of you when you bought it?
Ryan: My business partner Justin and I started looking at the Shopify app store in 2016, and we just started creating our own metrics to watch — like the ratio of installs to reviews, and recency and frequency of reviews, and we started plugging them into this spreadsheet model.
Cross Sell hit all the green lights in terms of those metrics as kind of a remarkable product, without even knowing what it was. It was just like, this app has something going on that other apps don’t. And so we kicked the deal over to Deven and said, “this is the one.”
Deven: Yeah, we were talking about Shopify, then like three days later we started looking at Cross Sell.
Ryan: That’s right. We were very careful about not wanting to waste you or your partners’ time, so before we went in on this Cross Sell deal, it had to be the one. So we moved pretty quickly.
But what stood out to me when I found it was the reviews, of course. Then looking at the product, the design wasn’t great. So maybe to one person, they’d say, “I gotta run away because it looks bad to me.” We had a design competency, so I just saw that as a huge opportunity.
Like, you know, the HGTV shows where they see old carpet, and they say, “Oh, we can rip it up and put in hardwood floors.” That was our same approach, how we found the product and why we were able to move so quickly.
I love that home remodeling reference. Did you both already have the idea of a joint venture in mind? Or was it more we’d like to work together and if the right deal comes along, we’ll figure out the structure and how it works?
Deven: It was more the latter. We had a pretty active pool of investors, and Ryan and Justin had a ton of competency in the Shopify ecosystem. We thought that was an area we wanted to dip our toes into more and learn about, so we kind of just started talking.
And from there it was just literally if we find a good deal to work on together that’s big enough to do some cool stuff with, let’s take a look at it together. And that’s what happened with Cross Sell. It ended up being probably four or five weeks from conversation to close.
And what about your goals while you owned it? Every owner approaches things a little differently than the original founder. Give us a snapshot of what it looked like when you bought it, and what your focus was on.
Ryan: For me, as the operator, I needed it to not be the same type of project as Fomo (another Shopify app I was operating), and other projects where I was doing 2 am tickets, fixing bugs, and things like that.
So from day one, I think before we even closed, I created a Trello board “master plan” for the next two years to do everything from rebuild the app from scratch and redesign it, to doubling or tripling the pricing depending on the legacy user.
And we did get through virtually all of that before we transitioned to you guys. That was a plus, for me. And I think also a plus for the product and the customers because when you’re just starting out going from zero to something, you kind of can’t have a plan because the plan is like, don’t die and do what customers tell you to do.
But I think Cross Sell at that time already had 1600+ customers. I didn’t think it needed this shotgun approach of “let’s just do whatever feels good each month.” I thought it needed more long-term planning.
The previous owners, in my opinion, had optimized for minimizing day-to-day work, which is fine for a side project but doesn’t work as well when you’re trying to grow.
So we focused on improving support, because as the product grows, that need grows, and it makes sense to have a Help Center and things like that.
And then on the product side, we wanted to improve it so dramatically that we would begin to stand out from the crowd of these other competitors in the marketplace.
So we kind of inverted some of the day-to-day strategy and operations from the original founder.
And on the pricing front, a lot of times a founder doesn’t know how great something is that they’ve made because they’re humble. We knew we needed to raise prices, and we knew we needed to bolt on some things to future-proof the product.
I think what we tried to do during our stewardship of the product was try to deliver on the vision that was already there, but that the original founder didn’t want to do or didn’t have the time to do since it was a side project for him and he had several other apps he was working on at the same time.
I’m curious when you bought the original code base, did you just buy the Cross Sell code base? Or did you get a bunch of ‘also ran’ apps that weren’t your top priority and you shut them down?
Ryan: I think we got one or two additional free apps or one that was making like $100 a month or something.
The same thing happened when we bought Fomo (it was called Notify when we bought it). We got an app that made $700 a month and had 800 users and it did scheduled Instagram posts, and of course, later, the Instagram API stopped allowing that.
But in both cases, we didn’t bother dealing with the other app, we just shut it down. Because even if we didn’t know exactly what our goals and tactics would be for the app, we knew we needed to do something different than what the previous person was doing, or the app would have taken off for them already. So if the previous person was managing all these little things, then it’s pretty easy to say, “let’s just not do that.” And then figure out how else we can fill our time, focused on a single product.
I think that’s going to be super interesting to both founders and folks who are doing what you’re doing. That’s a really hard call to make. But sometimes when founders take that sort of studio approach, they don’t realize that maybe they should be letting more go and going all-in on one thing sooner.
Ryan: For sure. That’s hard for a founder to do, especially somebody who wrote all the code and had the idea and thinks of it as something super special. It’s easier to do that coming in from the outside.
So you worked through your master plan — how did you decide it was time to sell vs. mapping out the next two to three years?
Deven: With every business, your growth and revenue charts are not always ‘up and to the right.’ It’s more these step functions, right? You tread along until something comes out — like a strong feature, or maybe the market changes in some way, and you get an uptick. And then you kind of tread water again.
That’s not to say that we were treading water, but I think we did a ton of work under the hood to make the product much stronger. And the overall SaaS market was changing. There are more buyers and sellers out there right now.
So, we thought, we have two decisions in front of us. We can go on for the long haul, which wouldn’t have been a bad decision, but things like expanding to a new channel, like BigCommerce or something, felt a lot like starting from scratch. Our other option was to let someone else carry the torch.
And at the time for us that second option just made sense, but I really deferred to Ryan on whether or not it made sense for him and the product. For us, we were broadly exiting our digital portfolio and thinking more about brick-and-mortar, and Ryan was open to selling at that point as well, so I just kind of ran with it and tried to find a win-win relationship.
Ryan: Yeah, that’s right. I think I would summarize it as steam, you know, you have some limited amount of steam. And every project has a different amount of steam. With Fomo, I ran out of steam three months ago — I’m no longer the CEO there. That was a four-and-a-half-year project for me. Our Micro Acquisitions course, I ran out of steam like nine months ago. So someone else is running that now.
Everything has a different kind of half-life. And what if you push through after you’ve run out of steam?
I think in this world, where the reason we have these businesses is to grow them and create jobs, and whatever else, that pushing through after you’ve run out of steam is masochistic. It’s not actually helping anybody. It’s definitely not helping shareholders and partners. And so I think it was the best thing to do for our partners, and for me personally, and I’m really glad it found a new home.
Ryan, you mentioned Fomo, can you give us a quick update on what’s going on there? I think that’s another interesting trend we’re seeing is that people — whether they’re founders who have multiple projects going, or they’re investors/buyers who have a portfolio — are trying to decide how and when to exit one component.
Ryan: Sure. With Fomo, I was working really hard. Basically, that was my full-time thing. And, you know, I got too connected to the growth. I had a good mood if we had an up month and I had a bad mood if we had a down month and I would watch This Is Us for 12 hours. It just got to be a weird relationship with the numbers. And I never thought it would be like that, so I kind of needed to just not do it.
But in terms of more logical reasons, I think there are a few ways to exit a company, right? There’s go public, or sell. There’s shut it down. And then there’s replace yourself.
And I think they could be done in that order, or the opposite order. So many people have tried to go directly to the biggest and the most obvious type of exit, but you kind of need to replace yourself before a good exit can happen, especially for the new owners.
You know, the new owners want to know that the business doesn’t require Ryan Kulp, and Ryan Kulp’s “brand,” and Ryan Kulp’s personal blog newsletter to push things forward.
So for me exiting Fomo a few months ago was a good test of my entrepreneurial chops. Did I create enough systems, enough documentation internally and externally, and enough checks and balances? So far, it’s going well, and they’re still growing. And that’s been a lot more fulfilling to see those monthly stakeholder newsletters where it’s still growing and things are happening when I’m not running it.
It really kind of came down to ego. And I think a lot of founders — maybe bootstrapped founders especially — have more ego because they kind of deserve it. If you started something and made it happen without investors, you sort of feel like, “I’m a Spartan.” And if you raise money with investors, even if you’re really smart, you feel like well, I owe a lot of people my success.
And so I think a lot of bootstrapped founders keep pushing through after their time is up because they have that kind of confidence of being a successful bootstrapper. And that’s great. But being self-aware is even greater.
And for me with Fomo, having that awareness meant knowing I needed to step away. And yeah, it’s been good so far.
Deven, you’re also someone who’s shaken things up throughout your career to find your own version of product/founder fit. Tell me more about moving from the investment side of things to acquisitions?
Deven: I think the reason for the transition was working in finance, you get to meet a lot of companies, and you can see a lot of business models, but it’s transient in nature. You get excited about something, and then you say goodbye and meet the next one. And even if you’re an investor, that’s the same in some ways — you get the quarterly check-in, and that’s the relationship you have with that business.
I think for me there are many benefits to being an owner of companies, and I think part of that is being able to set more strategic direction, and thinking about capital allocation more precisely.
So those were the main reasons I made the switch. But, you know, in hindsight I wish I had done it earlier. It’s one of those things where I did the day job for probably three or four years longer than I would have if I’d known what the other side looked like.
You made another jump recently — from buying software to buying physical businesses under the Kingmakers name. You provide the systems, but an owner buys in. Is that right? Why the move from digital to physical?
Deven: Yeah, around 2018 or so, we just realized that the process we were using to find digital businesses wasn’t working as well, or the businesses were more expensive. So we decided to try the same kind of strategy of small-cap buyouts with brick-and-mortar businesses under the Kingmakers brand. We bought our first brick-and-mortar business in early 2019, and since then have bought or invested in several more.
We’re focusing on plumbing, roofing, and landscaping — really kind of “boring” businesses that we think have a lot of the same characteristics of digital businesses. So that includes things like low multiples, and you know, not a very liquid market. But they’re also easier to finance, and they’re cheaper. So that’s what we’re doing now.
How is running those businesses the same as running SaaS and software companies and how is it different? Anything universal you’ve noticed?
Deven: I think what’s universal is you’re still gonna get punched in the face a lot, right? Nothing’s easy. It’s just someone else punching you, whether it’s a faceless organization or a human that doesn’t show up to work. I would probably say that on the brick-and-mortar side, it’s more people drama. Someone doesn’t show up for work, or someone shows up to work high, and you have to deal with that. It’s a lot of these personal, visceral kind of human things. And solving for that kind of stuff is tricky, and building a culture in these businesses is just different.
But the nice part about it, the other different thing is every single human on Earth kind of wants what you’re selling, so it’s almost like selling a commodity in a way. It’s not like, you have to try really hard to differentiate your product. It’s more like if you show up, you do a good job, you clean up after yourself, and say “thank you,” you’ve got more business than you can handle, which is a rarity.
So you know, I think the similarity is that there are going to be problems in any business. The difference is the types of problems.
That’s so true — you have to be willing to get your hands dirty running any type of business. Speaking of those common business problems, growth and marketing come up a lot for bootstrappers, so Ryan, I’m curious what are some of the first things you look at there?
Ryan: I think one thing bootstrappers often leave on the table is extracting the amount of value that they’re providing in terms of pricing. You know, I just had lunch with my tutor in Korea yesterday. He was nervous about raising his prices for his online students. And I asked him, “Why? What is the new pricing?” Are you afraid too many people are going to cancel and you haven’t modeled out how many people you can afford to lose?”
He said, “No, no, I’m just nervous about who will be angry. If people cancel, I’m okay with that. I want more time for other projects.”
It turned out he’d raised prices before and when I asked him what happened, he said “Nothing, nobody complained.”
I think this is someone who has kind of the same mindset as the SaaS bootstrapper. He has a good product — it’s kind of premium tutoring, and he charges a lot more than most tutors here in Korea because his English is at such a high level. And he’s raised prices before successfully. But it doesn’t matter. He still has this fear of raising prices, and the emotional backlash that might happen.
So extrapolate that to SaaS founders with hundreds or thousands of customers, they tend to see the value of the product as whatever their first price was. And on the one hand, I mentioned earlier, I think bootstrappers have some ego. But on the other hand, they have blind spots, too.
So they have some ego, that they’re badass, but they have some blind spots that their product is worth it. Because frankly, a lot of bootstrappers start these little niche tool products to compete with someone that they think is too expensive. So what do they do? Their first step is to make their product cheaper than that competitor.
So as a marketer, one thing I look for is whether a product is worth a lot more than they think it is. And it’s not really about my opinion. It’s about their customers, of course. But if I think the answer is yes, then that’s immediately an opportunity to make something bigger without writing a single line of code.
Deven: That’s almost the number one playbook in our businesses, too — we look for plumbers and HVAC technicians that are underpriced because it’s just really easy to change.
So you’ve both moved out of SaaS for right now. Deven, you’ve gone on to a different business segment, and Ryan, you’ve moved to Seoul and you say you’re retired from SaaS. How are those K-pop aspirations going? And are you definitely retired or just taking a break for now?
Ryan: I’d like to think I’m retired from SaaS, not from working. I’m still very interested in acquisition, and entrepreneurship through acquisition — I think there are unlimited benefits there. Right now I’m looking into acquiring two cafes in Korea. But if I do buy a cafe and totally fail at it, I might have a reality check that I should go back where I belong, and then I’ll probably see you guys on another call soon.
Moritz was one of SureSwift’s earliest founders. In 2016 he sold us Mailparser, which automatically extracts data from emails to automate repetitive business and admin tasks. Then in 2018 he sold us its sister startup, Docparser, which extracts data from PDFs. And those two acquisitions weren’t even his first. He’d previously co-founded and sold a SaaS ticketing startup to a Paris competitor.
Selling three businesses could be an easy road to a big ego and retirement for a different kind of person. But Moritz just launched a new startup called Refiner a couple months ago after working on the project for over a year, and he remains as curious, insightful, and humble as ever.
Recently we caught up to talk about his new project, how he got derailed on the way to launching it, and why he thinks one business success doesn’t guarantee your next.
An Interview with Moritz Dausinger
You’re a pretty popular guy in the bootstrapped SaaS community — Arvid Kahl and Danielle Simpson who sold us FeedbackPanda last year actually heard about SureSwift from your interview with Indie Hackers — but for people who don’t know you, tell us a bit about yourself. What’s your background? How did you become an entrepreneur?
Thanks for the kind introduction! It’s just amazing how many positive things came out of this one Indie Hackers podcast I did back in 2017. I got to know so many great founders thanks to that, and what I said apparently resonated with quite a few people.
My background is in engineering and after all these years I would still consider myself primarily an engineer. I taught myself coding during high school and since then I’ve built countless small websites and apps. I studied electrical engineering, so I’m basically an auto-didact when it comes to web technologies and entrepreneurship.
I started my career as a research associate in Germany but quickly realized that I actually want to build “real” things instead of staying theoretical. So I took the leap into entrepreneurship and founded my first company together with a friend, building a ticketing software for event organizers.
We were able to bootstrap our company to profitability and got acquired by our competitors in Paris (Weezevent.com). After the acquisition, I became their CTO and we spent a couple of amazing years working there. Working in a venture-backed, high-growth startup was a great experience and I learned a ton of things there.
What followed was me becoming a “serial entrepreneur,” even though I don’t like this expression that much.
I was lucky enough to sell both of them to SureSwift Capital, Mailparser in 2016 and Docparser in 2018. After working with SureSwift for nearly a year it was time for me to start building something new though. In 2019 I started working on a new project (Refiner) which I just launched a couple of weeks ago.
That’s interesting, why don’t you like the term “serial entrepreneur?”
I think it’s overused. To me, it implies that you started a lot of businesses, but not necessarily that you had any success with them. So you could constantly be starting projects that never go anywhere, and call yourself a serial entrepreneur.
That’s totally true. Other terms feel like they sell you short though!
One of the common pieces of business advice I think we’ve all heard is that ‘you should know what problem you’re solving before you build anything.’ Do you agree with that, or do you think you just need a passion for exploring problems until you find one that has a business case?
Oh yes, I definitely agree with that when it comes to actually coding something. It just makes sense to first validate an idea by interviewing people, building mock-ups, trying to find first customers who are willing to buy even if there is no product etc. … In theory.
To be honest though, it’s not really how I work.
It’s really difficult for me not to start coding when I’m working on a new idea. For me, building something new is a lot of fun and I’m apparently not disciplined enough to only stick to market research first.
The way I was working in the past looked like this: I had a vague idea of an underserved market or an interesting technical idea. I would then try to build a really reduced first version in a short amount of time and put it online. From then on, I would iterate a lot on the idea based on real user feedback.
When working like this, I think it’s important to have a balance between keeping your ego low and listening to what your early users say, and having your own long-term vision for the product.
I think starting with the right idea is important, but first-time entrepreneurs especially tend to put too much weight on it.
I think it’s better to assume that you don’t know much about the market needs in the beginning of a project, but that you’ll become an expert over time.
In any case, I’m convinced that it’s most important that you are passionate about the project, that you show up every day, iterate, and continuously make small improvements.
Mailparser and Docparser both turned out to have a big business case. Did you ever imagine they would have the success that they have?
Definitely not! Mailparser started as a personal project without any financial goal. I liked the idea from a technical point of view and thought it would be fun to build it.
However, after launching Mailparser on Hackernews I quickly learned that there was actually a business case for it. I then started to think that Mailparser could become a nice revenue-generating side project. I was basically aiming for “a couple of hundred bucks of passive income” in the beginning.
But after a couple of months I started to realize that what I’d built had a lot of potential. A bit more than one year after launching Mailparser, I went full time on it with the goal of growing it into a real company.
Did you always think you would sell Mailparser and Docparser, or was there a specific metric you wanted to hit, or an “a-ha” moment where you just knew it was time for you to work on something else? Tell me a bit about your thought process when you were deciding to sell.
When I realized that I was sitting on a project with a lot of potential, I was definitely asking myself questions like how big this could become and what the future could look like.
Pretty early on I started reading about small- to medium-scale SaaS acquisition and thought that it would be an ideal outcome to sell the business one day.
Luckily, Mailparser and Docparser were profitable really early on which allowed me to grow the business on my own terms, knowing that I could sell them one day if it made sense.
I also never took any external investment and kept all the decision power to myself. Which meant that there was never a moment where I felt pressured to “go big or go home” as is the case for venture backed companies.
A couple of years in, my personal situation changed in a way that it made sense to think about selling at least one of the two products. The risk was also getting bigger — the bigger the businesses got, the more I had to lose.
With SureSwift, I found the perfect buyer and we agreed on a pretty special deal: You bought Mailparser in an all-cash deal and I kept on growing Docparser. Everyone told me this wouldn’t be possible and I’d have to sell the businesses together. But you got it, and it was always a win-win, “let’s go there together” approach. So I sold Mailparser, and we had a handshake deal that SureSwift would get first refusal if I wanted to sell Docparser later on. Two years later, the business was at a point where a follow-up acquisition made sense for both of us.
Tell us about your new business, Refiner.
Was Refiner a tool you wished you had when you were running Mailparser and Docparser? How did the idea start, and when did you know it was going to be your next business?
The idea for Refiner was born when I was still in charge of growing Docparser. At Docparser we had a very mixed bag of signups, ranging from people who just wanted to look around, to product managers with a clear purchase intent working at a Fortune 500.
Furthermore, Docparser supports a variety of use cases and we wanted to make sure to send the right kind information to the users who could benefit from it.
So we needed a simple tool that would allow us to “profile” our users on the fly by asking them simple questions. I looked at existing in-app survey solutions but ended up developing a popup form myself. This is where Refiner was born.
Is there any way that having had those earlier successes made starting a new business harder? How was starting Refiner the same or different from your previous businesses?
Oh well … I have so many thoughts about this that we could probably do another interview.
There are plenty of things that just get easier the more often you do them. You have a better idea of how long things take, how much work there is to do, and what to expect in the early days.
Being able to properly self-fund Refiner is a great position to be in. I can build Refiner on my own terms, at my own speed, and have the possibility to get outside help whenever needed. It makes things much less stressful.
However… there are also so many things that just keep being really difficult.
Especially the critical things in the beginning like understanding how a market works, what exactly you need to build, etc. stays really, really hard.
When I started with Refiner I thought it would be straightforward and easy to build another SaaS. Guess what, I was wrong about that!
I spent the better part of 2019 building something nobody needed. It took me months to realize that I somehow got derailed on the way and admitting it was not easy.
A couple of months back I decided to scrap most of the code and go back to the initial vision of Refiner. Since then, it’s been on a great trajectory.
I’m a big fan of the author, Seth Godin. He talks a lot about how hard it is for people to “ship” things and consider them done. How do you decide a product is ready for customers to use?
I’m a big believer in “done is better than perfect”. But like most creative professionals, I’m constantly struggling with this.
On the one hand, I want to ship a beautiful product that I can be proud of. I definitely have the tendency to attach my ego to what I’m building.
On the other hand, I know early feedback is crucial. Especially in B2B SaaS, building the right thing based on customer feedback is more important than tweaking color codes for another week.
My answer to this dilemma is building “small” products in terms of functionality, but always trying to make them look nice with a great UX.
You launched Refiner pretty close to the start of COVID-19. What has it been like starting a new business right now?
The timing was a bit unfortunate indeed. I wanted to ship Refiner in early March and then reward myself with a trip to FounderSummit in Mexico.
The launch on ProductHunt went pretty well and I got some great early traction thanks to it. However, a couple of days later things started to get serious around COVID.
It’s difficult to say how much COVID-19 has impacted the early growth of Refiner as I don’t know what things would have looked like without the crisis. What I can say though is that I’m happy with how things are evolving at the moment. I see a handful of signups each day, receive great feedback on the product and things seem to go in the right direction overall.
The bigger issue for me is that I have much less time available for work these days. Turns out, keeping two kids entertained all day long is a lot of work.
My to-do list is getting really, really long these days thanks to feedback I’m getting from early adopters. Obviously, I’m looking forward to when I can put in more hours again.
It’s hard to hire when you’re bootstrapping your first company because you’re quite literally taking money out of your own pocket. One of the luxuries of working on your second, third, or fourth business is hiring earlier. What did you learn about hiring from running Mailparser and Docparser that you’ll use (or have used) at Refiner?
I’m in the lucky position that I don’t need to hire a developer to get started with a new project. I really enjoy that part of the work and I think it allows me to create a lot of value early on by myself. As you know, hiring a great engineer is really difficult and also very expensive.
For Refiner I’ll probably use the same hiring approach that worked for me with Mailparser and Docparser: hire slowly and less.
I like to keep my team very small and work with people who are either already very experienced or who can grow into a role and take ownership after a couple of weeks. Personally, I hate micromanaging people and prefer working with people who can work autonomously on a topic. This is especially true for me in a remote setup.
Any closing advice for other founders out there?
One thing I would like to emphasize is that building a business is never easy, even if you’ve done it several times before.
Having the necessary skills to actually build something and be passionate about what you are doing is for sure a prerequisite. But building a SaaS business has also a lot to do with showing up every day, putting in the hours needed, keeping your ego low, and listening to what people say.
It strikes me each time how much work is involved in just launching something. And launch day is when the journey actually just begins. It’s important to keep this in mind. Building a bootstrapped SaaS business is a rather long marathon and not a quick sprint.
Jell Founder, Ade Olonoh, has had a nearly life-long passion for programming and entrepreneurship. He fell in love with programming in a QBasic class back in High School, and paid for his College degrees in Computer Science and Mathematics by writing Perl code. Shortly after graduating, he started not one, but two companies. And that’s just the early part of his bio. Recently we chatted with Ade about his many experiences as a founder, from bootstrapping early startups in Indianapolis, to raising capital in Silicon Valley, and his recent sale of daily standup software, Jell, to SureSwift.
An interview with Ade Olonoh, Founder of Jell
You’re a serial entrepreneur with experience bootstrapping your first startup Formstack, and going through VC funding rounds with its social spin-off, Formspring, and you’re an investor now yourself.
What should founders think about when deciding whether to raise money or stay independent by bootstrapping? You’ve succeeded in both, so it would be great to hear how you would think about those decisions.
I think most companies should default to bootstrapping rather than trying to raise capital at the outset. One of the first questions I’ve asked every founder I’ve invested in is, “Why are you raising money right now?” Almost always, the longer founders wait to raise money, the better things are for them. Even if they decide to raise money down the road, waiting means less dilution, and more traction under their belt to help convince the best investors to come aboard.
One of the first questions I’ve asked every founder I’ve invested in is, ‘Why are you raising money right now?’ Almost always, the longer founders wait to raise money, the better things are for them. Click to Tweet.
That said I’m a big fan of venture capital when applied to the right business, at the right time. It’s often necessary in winner-take-all, competitive markets with high upfront capital needs. And when applied to businesses that have already found some product/market fit, it can be a great way to help founders build a really big company.
Growing Jell must have looked much different than the journey for Formstack and your earlier startups. How do you approach business differently now than you did in those early days?
Every startup’s been pretty different so it’s hard to compare, but the world has changed a lot in the past decade. In a lot of ways building Jell was easier. Modern dev frameworks and platforms like AWS made it a lot easier to build and scale the app quickly. Stripe made it much easier to manage subscriptions and get paid. And so on. But in a lot of ways it’s harder to find customers now than it was 10 years ago. Most marketing channels have become saturated and expensive. And customers can be a bit fatigued by signing up for yet another SaaS product, so you have to work harder to get noticed.
Tell us more about starting Jell. You must have 100+ ideas for businesses at any given time, what inspired you to start this particular company when you did?
Jell actually started as an internal tool we built for ourselves at Formstack. We were a fast-growing remote team and needed a tool like this to help run asynchronous daily standups. So it was easy to jump on this idea since we were scratching our own itch. From there, it made sense to productize it and see if we could grow it as a separate company.
You launched Jell while still working on Formstack. And investing in a dozen other companies. And being a dad to 3 sons. Any secrets to juggling all of that (and do you ever sleep)?
Sleep’s actually pretty important to me. I try to get a solid 7-8 hours every night these days, else I won’t function at my peak.
I think a lot about how to optimize my time and be more productive. I’m pretty guarded of my schedule, and try my hardest to avoid unnecessary meetings.
One of the best productivity “hacks” I’ve used for 15 years now is to start each day creating a list of 2-5 things I want to accomplish each day. It helps me focus on what’s essential, and make progress on the things I care about most.
I’m also pretty fanatic about Inbox Zero, which helps a lot.
You did the whole Silicon Valley scene, successfully raising $16MM for Formspring, and then selling the business. You ultimately decided to move back to Indianapolis — what drove that move?
I loved the Bay Area, but after several years there we decided it wasn’t the best place for us to raise our family. I love Indianapolis — it’s a clean, friendly, affordable city with great food, things to do, and a growing tech scene.
Top 5 differences between life in the Valley and life in the Midwest?
Everything is a lot less expensive
I can drive anywhere in ~20 mins
Lots more space for the kids to run around
It unfortunately gets a lot colder in the winter
And unfortunately I’m not visiting the ocean, mountains, or wine country nearly as much as I used to
Was the goal always to sell Jell, or was there just a point where you knew it was time?
It got to a point where we knew it was time. With other simultaneous ventures, I hadn’t been able to spend as much time on it as I would have liked over the last year or so. It made sense to explore finding a home with a team that could move it forward.
Tell us a bit about the process of selling Jell. What were you looking for in the selling process? How did you know who to trust? You’ve sold companies before — are there any lessons you took into this sale from those previous deals?
The most important thing to me was finding a team that believed in the vision, understood SaaS, and would take care of our customers. It was easier to build trust with SureSwift having seen their track record of acquiring similar companies over time.
From previous deals, I knew it was also important to find a partner who communicated clearly, and would move through the process quickly and efficiently. That helps avoid a lot of headaches on both sides.
Now that your business has been acquired by SureSwift, what are you hoping for with the future of Jell?
I hope to see Jell grow and thrive. I’m still a big believer in the vision and think there’s a lot of opportunity ahead for it. I can’t wait to see what’s next!
What’s next for you?
I’m taking a break from starting new companies, for now. I’m focusing on my work as an investor, and working with the companies in my portfolio. I’m also happy to have some time freed up to play more video games with my kids.
As someone who loves building from scratch, Kishin quickly realized he wanted to sell the app when it grew to needing full-time attention, and he sold the SaaS business to SureSwift in 2018.
Kishin sat down with us recently to talk about what it was like to build ChargeStripe from the ground up, and how he knew it was time to sell it. ChargeStripe’s SureSwift Product Manager, Radu Irava, also chimed in with what’s been going on with the app since our purchase.
An interview with Kishin Manglani, Founder of ChargeStripe
What was the #1 reason that you decided to start your own business? Were you doing it as a side project, or was it your full time gig?
I started ChargeStripe as a side project. I love building things from scratch.
When you were deciding on the tools that you were going to use to run ChargeStripe, how did you pick those? Was it totally through personal research, groups of peers, cost based, a bit of all the above? We’d love to hear more about this.
I mostly chose tools that were simple to use and cost effective. I wanted tools that were straightforward to use, and I could easily integrate into my current workflow, since I was building ChargeStripe as a side project. I also wanted to choose cost-effective tools because ChargeStripe wasn’t making nearly as much money in the early days. Plus, every dollar you save is a dollar earned.
Once you had money coming in and you knew this product just might work, what was your goal? Was it hitting certain MRR number? Was it selling it? Tell me a little about what your plans were once you saw ChargeStripe could generate real revenue.
At first, the goal was to increase the revenue each month. I just wanted a side project that would generate some revenue and keep me excited. Each month, ChargeStripe would shatter my expectations, and I’d meet the goals I had set much earlier than anticipated.
At what point did you know it was time to sell ChargeStripe?
Once ChargeStripe was bringing in significantly more than my day job, I knew I either needed to work on it full-time or sell it. While I was really excited by the prospect of working on it full-time, I also really enjoy working on a business in the early stages, like I mentioned earlier. I had another app in the healthcare space that was just starting to get some traction that I wanted to work on as my new “side project.” At that point, I knew the best thing to do for ChargeStripe and its customers was to leave the app in good hands to a team that cared as much about its users as I did, and that’s when I found SureSwift.
Tell me a bit about the selling process, what were you looking for and how did you know who to trust?
Since this was a side project and I was still working full-time, I was looking for a seamless, hassle-free sale. I was also looking for a team that would really take care of the product and customers like I did. And finally, I wanted someone who was looking to build out more features and improve the processes I had in place to ensure ChargeStripe was in good hands.
While I was nervous about who I could trust early on, everyone I spoke with calmed those nerves — especially SureSwift. When I spoke to the SureSwift team, I told them I was looking for a hassle-free sale and that’s exactly what I got.
Now that your product found a new home with SureSwift Capital, what are you hoping for with the future of ChargeStripe?
I was hoping for someone who would take care of my customers, take the tech to the next level with new features, and keep growing the brand.
The SureSwift team has done a great job of maintaining my high standards for customer support and has continued to grow the customer base. We’ve also launched several new features since the sale and ChargeStripe is continuing to be one of the leaders in the space.
An interview with Radu Irava, SureSwift Product Manager for ChargeStripe
So we chatted with ChargeStripe’s Product Manager, Radu Irava, to hear what it’s like to take on responsibility for a product someone else built, what he’s excited about creating for ChargeStripe in 2020, and what the team supporting ChargeStripe at SureSwift looks like now.
Tell us a bit about what it was like to take over as the Product Manager for ChargeStripe?
I have experience in mobile product management and development, so I thought it would be a great opportunity to jump in and bring the business to the next level.
I joined SureSwift after ChargeStripe was acquired, so I didn’t have the chance to work directly with Kishin, unfortunately. However this didn’t make the transition difficult. The team had good documentation of the existing processes and features so things went smoothly.
In general, I find taking over existing products very exciting because once I make an audit of the business, I can use my experience to suggest product and growth initiatives that really move the needle.
For example, in February 2019, after my first month managing ChargeStripe, revenue was up more than 50% compared to February 2018, making this the best month ever for ChargeStripe. Then March 2019 revenue was up 25% compared to February 2019. Since then we’ve consistently beaten those figures. This wouldn’t have been possible without the great foundation Kishin had built, and the resources the SureSwift team was able to add to the product.
You work on a couple of products across SureSwift’s portfolio, what’s your approach to product management, and what are some of your specific goals with ChargeStripe?
I have a technical background, so for me it’s always easy to work with developers to figure out what can be done from a technical perspective, what it will cost, and to negotiate estimates and scope.
On the other hand I’m very customer oriented and like to go through support tickets, send out surveys and jump on calls for customer interviews.
And I always try to keep in mind the business objectives that I want to optimize for. For ChargeStripe, some important KPIs that I’m always trying to optimize for are: revenue, profitability, labor as percentage of cost, CLTV, and CAC.
I think a good product manager should be able to balance these three domains — the technical side, customer happiness, and business objectives — really well, and combine hard skills and soft skills for the benefit of the customers and the team.
What makes something a great product to work on, from your perspective? What makes you passionate about the work?
I love connecting the dots and solving problems. I consider myself a creative person but I’m also very logical. Product management gives me the opportunity to use these skills effectively while enjoying every single moment.
For me a great product to work on is a software product with a great team behind it. By “great team,” I don’t mean it has to have a lot of people, but the group should be open, communicative, willing to grow and improve. I found that this is the environment in which I perform best, and SureSwift has been a great place for that.
What feature or accomplishment are you proudest of since you’ve been working on ChargeStripe and what are your next goals for ChargeStripe?
The three accomplishments I’m most proud of are consistent revenue growth, great customer reviews, and building team synergy.
There are a lot of exciting things coming for ChargeStripe: new features, better serving our customer base, and improving our online presence are all things we’ll be working on in the next 12-18 months.
Tell me a bit about the team who supports ChargeStripe now. Who are they, and what do they do?
The core team of ChargeStripe consists of: Joey, who is in charge of Customer Happiness, Brian, our iOS and backend developer, Jerome, our Android developer, and me, the Product Manager.
The nice part about working at SureSwift is that there is a great talent pool of specialized people that you can bring on board for a few hours per week or per month to help with various activities, or just to exchange some ideas with. We’re able to tap content writers, marketing and SEO experts, UI/UX designers, and other people who work across our SaaS portfolio to make ChargeStripe the best product it can be.
Back in 2017 Danielle Simpson had an unlikely bio for a SaaS founder. She was an opera singer auditioning for roles and side hustling as an online ESL teacher. That side hustle quickly turned into the startup FeedbackPanda, when she realized how inefficient and time consuming it was to track course work and feedback for dozens of students. In about a week, her boyfriend (and software engineer) Arvid Kahl built a prototype to help her create feedback templates she could reuse, and reports to track courses and students. They opened up the platform to other teachers, and let them share their templates with the whole community. In just a couple of years, they had a bootstrapped, $55k/month SaaS business. Earlier this year they made the decision to sell, and in July it became official: FeedbackPanda is the newest member of the SureSwift portfolio.
Recently we sat down with Danielle and Arvid to chat about what it was like to build their business from the ground up, how they knew it was time to sell it, and what they’re planning next.
An Interview with FeedbackPanda founders, Danielle Simpson and Arvid Kahl
What was the #1 reason that you decided to start your own business?
Danielle: Arvid and I are both very entrepreneurial, so we always had our eyes peeled for an opportunity that could combine our skills. What immediately set FeedbackPanda apart from any other ideas we had was that it was born out of a real need. So when Arvid and I saw the opportunity for this product, we seized it.
One of my gigs was teaching English online. The coolest part of that work is that the teacher gets to act as a freelancer. Teachers are flexible to work as much or little as they want and choose the times that work for them. For these reasons, teaching online quickly became my main gig. It was amazing and so exciting to be able to work from home, to sing and smile at students all the way in China!
There was just one catch. As an online teacher, you’re only paid for the time in front of the camera. Any time preparing, getting organized, and giving feedback to students is not paid. This may seem like no big deal, but this responsibility adds up quickly in both time and mental load. Feedback after classes would take me hours and not leave me with much time to prepare for the next day’s classes.
I tried cutting the repetitive part of the work down by using templates and a spreadsheet, but it was still quite complicated. Of course, I knew that software products could be built to automate things, but I didn’t know how it could possibly stay organized. Then I found the magic ingredient, the student and course ID numbers were exposed. I pulled Arvid in right away and asked him to double check that I was seeing this correctly. When he confirmed, I explained my idea.
Admittedly, I still had little knowledge of what Arvid’s skills were and what the limits of what could work technically were, so I just explained my ideal scenario. When he said, “Sure, I can build that,” I could have cried. I was so relieved but also excited. This was something that all teachers needed, not just me.
For this reason, FeedbackPanda was different than any other business we started. I immediately saw the potential, the market was new and growing rapidly, and there was an obvious need for the tool.
This wasn’t a luxury product or something we’d need to convince people they could benefit from. It was actually going to make people’s lives better in such a significant way that once we knew how to solve the problem, it felt more like a duty we needed to fulfill.
Tell us more about the process of building FeedbackPanda? What did it look like to go from having the idea, to actually building it?
Arvid: Once we realized what was possible, I set to work on the prototype. The first version was finished in about a week. Although it was basic, it was already able to solve Danielle’s problem and cut down her time giving feedback from hours to minutes. This was our first success, but we wanted to keep improving on it. Danielle kept prodding me to see what else was possible and we worked closely in a constant feedback loop of Danielle dogfooding the product for about three months.
Since we were hopeful that Danielle wouldn’t be the only teacher using this system, I set FeedbackPanda up to be used as a Software-as-a-Service (SaaS) product. I integrated services that would eventually take care of authentication and payment for us quite early, but I made sure only to build out the parts that were relevant to capture revenue. Features like account management, up- and downgrading subscriptions or changing login methods were omitted. There’s no point in working on features for customers you don’t even have yet. Instead, we focused on things that would help out teachers and attract them to our tool.
Once Danielle told other teachers about FeedbackPanda, they came to check out the product. The best thing we did then (and still do now) was having a direct line of communication with each teacher using the product. Many teachers commented on what they expected and how FeedbackPanda could be even more helpful. They had even more wonderful ideas and so the next stage of FeedbackPanda became considering these ideas, and building it out to an even more helpful system.
FeedbackPanda is such a great name. Is there a story behind it?
Danielle: Kind of… but it’s more strategy than a story. Feedback is the biggest pain point that teachers have, so choosing to put that front and center in the name was our best branding strategy in the early days to help create awareness around how we help teachers. As someone who’s obsessed with sounds, it was also important to me that the name sounded good.
The first time we said, “FeedbackPanda,” I immediately loved the repetition of the short “a” vowels on the “back” of “Feedback” and “Pan” of “panda”. It may seem a bit obsessive, and I could totally nerd out about phonetics here, but it was the first name that really sounded good to us.
Also, who doesn’t love a cute Panda? Adding the animal to our name gave us a clear mascot, which makes teachers super happy when they see it. Even teachers who don’t use FeedbackPanda recognize our panda and may even be convinced to check us out due to the cuteness factor.
When you were deciding on the tools that you were going to use to build and run FeedbackPanda, how did you pick those? We’d love to hear more about this.
Arvid: I worked on the prototype at night and on the weekends while I was working full-time as a software engineer in the industrial IoT space. The company I was working for was very progressive, building an IoT platform using the Elixir programming language on the backend and Vue.js on the frontend, so we decided to use the same tech for our own product.
If you have a clear vision of how you want to solve someone’s problem, you want to use the tools you know.
Many people use side projects to learn new technology, and that’s a great use for learning. But those projects aren’t businesses, they’re learning projects. We knew this would be a business, so we stuck with what would allow us to build as efficiently as possible.
Before we released it to the public, we also made sure to offload as much of the complicated tech to other SaaS tools so we weren’t reinventing the wheel on components like billing or user management. We integrated with Stripe for payments, Intercom for customer communication and Auth0 for handling our user management, among many others. All of those services have a trial or startup plan, so we could easily bootstrap the company and never took any funding.
We wanted our tech stack to be as simple and portable as possible. So I decided to make the application cloud-native. I knew from prior experience that at some point in any successful software product’s lifecycle the system might need to migrate from one infrastructure to another, for many possible reasons. To make this easier, the application was dockerized and hosted with cloud providers from the beginning.
You had really impressive growth in a short period of time — can you tell us more about the business model, and how you grew so rapidly?
Danielle: Ya! Overall, our growth has been pretty stable, around 10% over the many months the company has been live. We use a simple subscription model for the software, offering a monthly plan and a slightly cheaper yearly plan, both with a no-strings-attached 30-day trial.
From the beginning, our subscriptions came in reliably through word of mouth. Teachers love to share helpful information so all of our growth was organic. Our strategy was to give teachers a great experience once they made it to our product and help them see the value we provide.
The price of the monthly plan is equivalent to most teachers’ pay for teaching a single 30-minute class session. The benefit of using the product equates to much more than 30 minutes of time, so the price makes it easy for customers to understand that the value we provide far surpasses the cost.
The 30-day trial is another great way to show them that value. Some teachers loved the product so much, they paid a few days into their trial. However, most take advantage of their free access for the full 30 days. In that time they’ve seen the value and invested their time and energy into the product. They’ve also created the habit of using the product and by the end of their trial, they can’t imagine teaching without FeedbackPanda. This enabled us to reach a conversion rate of over 25%.
Our churn is also quite low, below 1%, as most teachers heavily invest into the product by putting in their personal, unique records. The churn occurs when our customers switch jobs or take parental leave.
A huge advantage for us has been that the Chinese education market is picking up speed, and we were lucky to recognize a niche in that market that we could not only fill but also benefit from the growth. In 2017, the largest competitor in the online English market, VIPKID had less than 15,000 teachers, now they have around 70,000. It’s really exciting to be a tiny part of this trend.
Once you had money coming in and you knew this product just might work, what was your goal? Was it hitting certain MRR number was it selling it? Tell us a little about what your plans were once you saw FeedbackPanda could generate real revenue.
Arvid: Looking back at the last two years, the business had three distinct stages and three goals that I had personally set for each. Overall, I had always wanted to build a business that would make over $50,000 USD in a month. So that became the overarching goal, with step goals for each stage.
The first stage was the “survival” stage, and there, the goal was for the business to pay for itself and create enough revenue for us to feel confident that it might go somewhere. As we bootstrapped the business and were careful to spend as little as possible, that was reached 45 days after we started marketing the product to our customer niche at an MRR of around $2,500 USD.
The second stage was the “stability” stage, where the goal was to be able to work on the product full time and feel safe enough to quit our previous jobs. We reached this goal of an MRR of $20,000 USD nine months after launching the product. At that point, we could dedicate our full attention to FeedbackPanda, and we felt safe that its trajectory would sustain us for a long time.
The third and last pre-acquisition stage was the “growth” stage. Here, we set the goal of reaching the $50,000 USD in MRR that I’d had in the back of my mind the whole time. We steadily grew the company by doing what worked and experimented with systems and ideas to solidify our processes. Shortly before SureSwift reached out to us, we reached that goal, less than two years after having started the business.
At what point did you know it was time to sell FeedbackPanda?
Danielle: We had reached all of our goals for this product, so when SureSwift approached us it just seemed like a natural progression.
Reaching our goals, although thrilling, shifted our risk level to an uncomfortable height where we suddenly felt that we had something to lose. I noticed that we were no longer making smart business decisions, but decisions rooted more in comfort and safety.
This was not good for us, and definitely wouldn’t translate to good things for a business. This gradual fear began to hold us both back. So when the opportunity presented itself, we were ready to handover the company to someone with a higher risk tolerance who could make strategic, calculated risks to continue to grow FeedbackPanda.
Tell us more about how you connected with SureSwift? I hear there was some serendipity with IndieHackers?
Arvid: Before working on FeedbackPanda, I was working as a software engineer for a company in another city, and I would commute from Berlin to Hamburg multiple times a week. An almost three-hour train commute allowed me to read a large number of books and listen to many podcasts regularly. I didn’t know it back then, but all this knowledge prepared me for building our SaaS business efficiently without having to make all the potential rookie mistakes.
I started listening to the IndieHackers podcast and worked my way through the catalog of episodes whenever I would travel. I remember one very serendipitous experience with that particular podcast. I was on my way to the bank to open an account for our company when I was listening to yet another IndieHackers podcast episode. The guest was Moritz Dausinger, a German developer, just like me. Moritz talked about how he had built DocParser and MailParser, and I found a lot of interesting similarities in how he and I approached software and business.
At the end of the episode, he mentioned that he had sold his company to SureSwift Capital, and that piqued my interest, as I’d never heard of this kind of company before.
Danielle: You and the SureSwift team were the most straightforward and easygoing team we spoke to and your business model is so exciting, which made us want to join in. You understood us as bootstrappers, but more importantly, you understood our clients, the teachers. Seeing the other companies on your portfolio with similar value propositions to FeedbackPanda gave us the confidence that you would remain focused on serving a great product to teachers.
What’s the transition been like? What kinds of things are you helping the team with? How has it lined up with what you expected?
Arvid: In preparation for the handover and the transition, I was reading a lot and listened to dozens of episodes of the Built to Sell Radio podcast by John Warrillow. There were a lot of stories of complicated interactions and extensive back-and-forths in those episodes. I prepared for the worst, for days if not weeks of hard and exhausting work.
I was pleasantly surprised to find that working with SureSwift was painless, pragmatic, and enjoyable. The handover was done extremely fast, and the following weeks were a breath of fresh air for me, as both the main developer and the point of contact for Customer Service for FeedbackPanda. The SureSwift team jumped in immediately, and I was able to start training people. Hiring was something we had painfully neglected while running FeedbackPanda, and I learned the value of asking for help very quickly.
All in all, the transition has been a very professional affair. It was a very human, very friendly and open-minded process, with people and ideas being much more important than numbers or graphs.
Now that your product found a new home with SureSwift Capital, what are you hoping for with the future of FeedbackPanda?
Danielle: I’m excited for FeedbackPanda! One of the things I love about SureSwift is the diverse range of products and people within the portfolio. Everyone is coming from a slightly different angle and is able to see things a bit differently, which is incredibly valuable and creates just the right amount of friction to create great work together.
There are many people with diverse skill sets working together and FeedbackPanda has already benefited from having some fresh perspectives.
What are you planning to do when the transition is complete?
Danielle: We’re working on getting back into some healthy routines and planning a nice vacation. Any traveling we’ve done in the past 2 years has always included working on the side, so I’m looking forward to being fully present to experience new things.
Having some time to unplug and build up our physical and mental health is on the agenda so that we can do this all again!
What’s your best advice for fellow or aspiring SaaS founders?
Arvid: In the past, I’ve been a part of many projects that were solutions looking for a problem. With FeedbackPanda, I finally experienced it the right way: We found a problem first — a real, very painful problem. We then solved that problem and that problem alone. We wanted to help teachers in a particular niche with their feedback. We didn’t set out to revolutionize teaching as we know it. That reduced scope allowed us to zero in on the core of the problem and solve it in a very direct way.
It was very helpful that I felt the consequences of Danielle working hours of overtime every day. That was such a clear and real pain. Solving that problem not only made her life better, it also affected me directly. Whenever I would add a feature, it would immediately translate into me being able to spend more time with her.
Finding a pain you can understand is hard for developers, particularly if we look outside building tools for software development. Many programmers have strong opinions about how their job could be improved but have a hard time relating to the struggles of people in other industries. Asking friends and family about their most annoying problem at work can often give you an insight into markets you may not yet understand. However, working with people directly affected by real problems will lead you to insights very quickly.
Building a startup business used to be all about the VC world in the last decade. Hockey-stick growth, incubators, and raising a lot of money were things that “founders did because that’s what founders do.” I believe differently. Having a steadily growing, bootstrapped business without Venture Capital is a desirable business to build. Not falling into the trap of having to scale quickly and living a fast-paced life means that you can build a business that aligns with your own values, not those of a large VC fund. Staying mentally healthy is so much easier when you’re in control of your business and can set your own goals and expectations.
What are your favorite books/podcasts/sites for entrepreneurs?
Arvid: There are so many great books for aspiring founders. One book that had a tremendous impact on how we designed FeedbackPanda to retain customers is Hooked by Nir Eyal. I also read Built to Sell by John Warrillow before founding the business, and we took a lot of steps outlined in that book, which made selling the company very straightforward. Finally, The E-Myth by Michael E. Gerber has been instrumental in understanding the different roles you have to play in your business, particularly when you are alone, or just a really small team.
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