Practical Founders Podcast (Greg Head)

Sandeep Kumar quit his job working for an Indian consulting company to start a software company in 2005 when product-focused startups were not common in India. For the next 10 years, they experimented with product features and customer profiles until they finally found an important buyer with budget power who needed their must-have software. 

ProductDossier is now a comprehensive platform for enterprise consulting and IT services companies in India to manage project financials, project resources, and new opportunities in one system. Over 50 large consulting companies in India use ProductDossier to manage their global project portfolios to ensure high-quality and profitable project delivery. 

The company has 100 employees and is growing steadily without any outside funding. Sandeep shares the important lessons he learned in his 15-year journey about product-market fit, building trust with big Indian customers, developing a great organization, and thinking big.

In this episode, Sandeep explains:

• What it was like to create a startup software company in India 15 years ago when it wasn’t common to create product-focused software companies there
• The critical product-market fit lessons learned to eventually build a must-have software for buyers with decision-making power in a specific industry
• How their vertical focus and product feature depth enabled them to sell to their first large enterprise companies as a small startup
• What’s happening in the SaaS startup scene in India right now and how startups are perceived there
• The advantages of not having big outside funding too early, include strategic flexibility, attracting the right talent, and patient growth
• How he defines work-life balance and how he manages time with his family

Read the full interview transcript and check out other interviews at practicalfounders.com. 

Scott McCausland was an experienced software sales leader who decided to go out on his own in 2008 to build a new software business. His technical cofounder built the first version of their new software and Scott started selling it. MVP Systems Software was underway without any outside funding. 

They kept adding name-brand customers who used their JAMS workload automation and scheduling software in their IT departments for a variety of scheduling and automation tasks that saved time and money. It was an unsexy but mission-critical software for their users. Their software grew more powerful and useful and they steadily added sales, development, and support staff. 

The company grew to over $10 million in annual revenues with 70 employees in 4 global offices before being acquired in 2018 by Fortra (formerly Help Systems. Scott left Fortra in early 2020 and is now working on his next software company.

In this episode, Scott explains:

• Why they sold their product aggressively, but grew the business steadily and managed cash conservatively
• How they generously compensated salespeople and employees rather than give incentive stock options
• Why they decided to sell the company rather than raise funding or keep growing organically
• What it was like to join their acquiring company and be part of a much bigger team
• How he helps tech founders understand the basics of selling and what is needed to create an initial sales machine

Check out the details for this episode and find more Practical Founders Podcast episodes at practicalfounders.com. 

Stephanie Betters was a practicing Nurse Practitioner in heart surgery and an active real estate investor when her frustration with disparate real estate CRM and marketing solutions hit a boiling point. Salesforce and a development partner proposed a project so expensive that Stephanie hung up and decided to build the solution herself. She learned to code and build a useful real estate CRM on Salesforce in three months.

Her business thrived with her comprehensive software. Other real estate investors heard about her software and encouraged her to launch the company in 2019 and start selling the software, now called Left Main REI. Word spread in the industry and hundreds of real estate investors signed up in the first year, transforming their businesses. 

In just over three years, Left Main REI now has hundreds of customers, 20 employees, and nearly $3 million in annual recurring revenue. The company has been bootstrapped and profitable from the first day. Stephanie has a big vision for the company and loves her founder/CEO role; she will no longer be practicing as a Nurse Practitioner as of 2022. 

Learn more at practicalfounders.com. 

Nathan Hirsch, co-founder of FreeUp, shares his journey of building and selling the company and his other business adventures. FreeUp provides clients with pre-vetted virtual assistants (VAs) and freelancers in an online marketplace.  

Nathan discusses the importance of niching down and targeting specific industries, such as e-commerce, to attract clients. He also highlights the combination of software and people in FreeUp’s operations, with software handling recruitment and billing and people assisting with matching and customer service.

FreeUp achieved success through organic marketing strategies, niche focus, and great customer service. The business grew to $12 million in revenue in four years before being acquired by The HOTH in 2019. 

Learn more at practicalfounders.com.

Praveen Ghanta graduated from MIT with computer science and economics degrees and worked for various financial services companies after trying his hand at a software startup. Working in his spare time, he built a product and recruited a cofounder to help sell it. After trying to sell it to different types of financial services companies, they finally found a valuable use case with individual wealth managers to help them sell new clients. They quit their jobs and launched HiddenLevers.  

HiddenLevers was as stock portfolio and financial risk management software that helped financial advisors show their clients the potential impact of outside invents on their investments. Despite being bootstrapped and profitable, the company grew steadily to $8M ARR with 25 employees by selling to larger wealth management companies and solving bigger problems. 

Orion Advisor Solutions acquired the company in March 2021 for a strategic valuation of 16X revenues. HiddenLevers is now Orion Risk Intelligence. After helping the acquisition transition, Praveen started Fraction to help software companies hire senior developers looking for ongoing fractional engagements. 

Troy Munson has been a successful enterprise SaaS sales rep for several years, but he wanted more control over his life—and eventual financial independence. So he launched his own small startup on the side. He learned a lot and sold it before launching his second side gig software company, which he sold for a little bit more. 

He started his third side-gig startup, Dimmo, in 2023 to allow enterprise software buyers to watch product demos without talking to sales reps. With the help of co-founders, Dimmo is now live and revenues are growing fast. With a little angel funding, Troy was able to go full-time to make Dimmo successful quickly.

Troy is a fast-start SaaS founder, testing ideas and launching companies when traction starts. He and his cofounders don’t think about running this forever, but they do want to create a valuable company and achieve financial independence as successful practical founders.

Quote from Troy Munson, CEO of Dimmo

"I'm like this fast-starter person. I built Vocul and Refurl, my first two side gigs, from an immediate thought: This is annoying, this should be solved. Let me solve it, let me sell it. And then let me see if there's any interest.

"With Dimmo, I just wanted to create extra income on the side. The hope for Dimmo was to pay my mortgage with a side gig. I knew software buyers just wanted to watch software demos. So let's just make it like a YouTube for software demos and then we'll just take some sort of revenue.

"It blew up on LinkedIn when we launched and grew faster than expected. I had to go full-time and I'm so happy I did. It feels great. I hope I never go back to the side gig guy. I also hope I never go back to any sort of any sort of W-2 work. I'm buying my freedom."

Links

• Troy Munson on LinkedIn
• Dimmo on LinkedIn
• Dimmo.ai website

Podcast Sponsor - Cypress Growth Capital

This week’s podcast is sponsored by my friends at Cypress Growth Capital. For 15 years, Cypress has provided non-dilutive growth funding to bootstrapped SaaS founders, including many successful founders I’ve interviewed here on this podcast.

The Practical Founders Podcast

Tune into the Practical Founders Podcast for weekly in-depth interviews with founders who have built valuable software companies without big funding. Subscribe to the Practical Founders Podcast using your favorite podcast app.

Get the weekly Practical Founders newsletter and podcast updates at practicalfounders.com. 

Oliver Palmer helped start a mobile app development agency in Sydney, Australia that built simple apps for early mobile phones. When the iPhone launched, Tigerspike grew very fast by creating branded mobile apps for large companies with its high-end design and development services.

Tigerspike also created its own software product—a mobile application development platform with subscription fees—to try to transition into a product-based company to grow faster with VC funding. This was difficult as they prioritized their urgent custom software projects for big clients and chronically underfunded their software product development

Tigerspike eventually raised $11M of outside funding from strategic partners and kept growing. The software platform also grew, but Tigerspike never made the full transition to a product-first software company. They sold the company in 2017 for $85 million. Oliver is open about their vision and their challenges as they grew Tigerspike into a large and successful global company.

In this episode, Oliver explains:

• How their mobile app design and development agency grew into a large global provider serving large companies
• Why they created a SaaS software platform product to grow faster and make their company more valuable
• How they struggled to invest in and grow their software app with their “addiction” to services revenue and custom development
• How potential VC investors viewed their services and product revenue streams
• How they sold the company and what it felt like for founders to make that transition
• What he’s working on now to help practically-funded software startup founders in Australia and Southeast Asia

Find more episodes of the Practical Founders Podcast at practicalfounders.com.

Mike Roberts is the founder and CEO of SpyFu, a leading competitive research tool for marketers and entrepreneurs with over 15,000 paid customers and hundreds of thousands of free users. SpyFu was launched in 2006 and has been a profitable and bootstrapped business for almost 18 years. 

Mike is a happy founder who splits his time between leading the business and his personal pursuits, which include surfing and spending time with his family. He is still passionate about innovation, search marketing technologies, big data and AI, and creating new ways to help smaller businesses succeed. 

Learn more at practicalfounders.com.

Ryan Goodman joined the startup in the early days of the business intelligence and analytics market in 2003 as a specialist helping large customers adopt this new technology. This startup was acquired by the successful BI company Business Objects, which was then acquired by the huge software company SAP. Ryan left to start consulting and build niche add-on "feature products" in the SAP Business Objects ecosystem. 

They experimented with product ideas and consulting services before finding an opportunity to help Business Objects users easily visualize data on Google Maps. They grew fast as an add-on product selling to large companies all over the world, reaching 700 customers and $1.4 million ARR. But new BI platforms and technology changes slowed their growth and completely changed the market opportunity. 

Ryan talks about the pivots and experiments they tried before deciding to shut down the company and sunset their core product. He shares his difficult decision process and the emotional journey, including lessons learned and perspective gained in hindsight. 

In this episode, Ryan explains:

• How he started in the pioneering early days of business intelligence and analytics for big customers
• Why he left SAP after being acquired twice to start his own add-on software business in the Business Objects community
• How he experimented and survived long enough to find a compelling product opportunity that quickly grew to over $1M ARR
• How the market changed and how that eventually led him and his cofounder to shut down the business slowly
• How he feels about the successes and failures of his software startup journey

Learn more at practicalfounders.com. 

“My B2B SaaS startup needs just more warm leads. But we have struggled when we hire junior salespeople to call on and email cold prospects to generate qualified leads that the CEO or salespeople can close.”

This is a common frustration for startup and early-stage SaaS founders when they hire sales development reps (SDRs) or business development reps (BDRs) to generate qualified leads. There are many misconceptions and pitfalls that make this even more challenging.

Christine Rogers shares her expertise on what is working and not working when hiring SDRs to generate or warm-up leaders in the modern software business. Christine is an experienced SaaS sales leader who has helped develop thousands of SaaS sales and SDR reps to succeed at growing software companies through her company Aspireship.

In this episode, Christine explains:

• What are the different tasks and roles of sales development reps (SDRs) and business development reps (BDRs) in growing SaaS companies
• What tools, processes, and ideal customer definitions are required before you hire your first SDR
• Which SaaS business models make the most sense to use SDRs in the sales process
• Which outbound lead development approaches are productive in generating qualified discussions
• What compensation ranges are typical for SDRs this year
• How to think about SDR business goals and targets
• If you should hire one SDR or a sales manager-doer as your first sale hire
• When should founders hire “full-cycle” salespeople instead of a lead gen-only SDR

Learn more at practicalfounders.com.

Esben Friis-Jensen was a technology professional in Copenhagen, Denmark before he and three Danish friends moved to San Francisco in 2013 to start a new startup called Cobalt. Cobalt.io grew steadily and raised several rounds of VC funding to become a sizable cybersecurity software company in Silicon Valley. Cobalt serves large businesses with a platform and services for larger companies to efficiently test and find security holes in their websites and web applications. 

Esben left Cobalt in 2020 to start Userflow to help software companies attract, sell, onboard and support their customers without human touch altogether using a product-led growth approach. Userflow is a no-code onboarding software to easily build in-app explanation guides, checklists, and videos for software product companies to improve free trial conversion and new customer onboarding for expanded retention. Userflow has a free trial and uses its own software to improve conversion and onboard customers without human intervention.

Userflow is profitable and growing with over $3 million in ARR, 600 customers, and just three employees with no outside funding. Esben handles all growth and lives in San Francisco and his cofounder Sebastian builds the product with their UX designer in Denmark, so about $1 million annual recurring revenue per employee.

Learn more at practicalfounders.com.

Dave Savage was a top-producing mortgage loan officer in the early 1990s who used computers and software to help him sell more. He became a software entrepreneur by creating a new software solution for loan officers to help them educate their clients and sell more. He sold $120,000 of Mortgage Coach on stage at a conference on their first day, which started their 25-year growth journey in the software business. 

Mortgage Coach helps loan officers transparently present loan options and educate their clients about the financial impact, which differentiates the loan officer and helps them increase sales and referrals. It started as Windows software then eventually transitioned to the web and mobile devices.. The company grew steadily until the mortgage meltdown in the Great Financial Crisis of 2008-2010 caused its sales to plummet, but it didn’t kill the company. After 2012, they started selling to large lending companies, not just individual loan officers. 

Mortgage Coach was a growing and profitable software company with no outside investors when a majority of the company was acquired by private equity investor LLR Partners in 2021. Dave is no longer the CEO of the new company called Trust Engine but he is still is part-owner and an active executive leader helping to grow the impact of the new company. 

Mike Kovarik is the founder and former CEO of Attribytes, a software company he started, grew, and successfully sold in just over five years. Mike was a data analytics leader at large food distributors, where he discovered a chronic challenge with low-quality product data in their massive e-commerce systems. He quit his job, built a product with a friend, and his former employer became his first customer. 

Attribytes grew steadily in the next few years, serving food distributors and retailers in the US, with Mike making the first sales and slowly adding new employees. He invested his savings in the company and raised just over $2 million from a strategic and several angel investors in Phoenix, Arizona. They grew to nearly $5 million in ARR in 2019 with just over 20 employees. 

In 2020, Mike sold the company to Syndigo, a larger data management provider that served the same industry. He joined Syndigo for over a year to lead the acquisition of other data management companies to expand their product offerings. When their acquisition strategy changed in 2022, Mike left to take a break and then acquire and retool another vertical software company called ShopControlller.

Quote from Mike Kovarik, founder of Attribytes

"I built a little spreadsheet and I put in what our revenue was, what our current valuation was, and then what that exit would look like after taxes for me, just to see what that dollar amount was. We were at almost $5M ARR, and we were getting interest from acquirers, so it was already interesting.

"I created another spreadsheet to show what would happen if we raised big VC funding and invested that lover for 5-10 years to grow. What rate of return would I get? How would we be diluted? What annual recurring revenue would we need to get to, and what valuation would that be? What would my dollar amount be?

"The reality is that the amount for me would be pretty close to the same if we sold now or raised a big VC round. And I'm not trying to risk everything to potentially buy a plane. I could have a big exit now and have a lake house and a place in Flagstaff, and my kids' kids will be good. What else do I need?"

Links

• Mike Kovarik on LinkedIn
• Attribytes on LinkedIn
• Syndigo website
• ShopController website

The Practical Founders Podcast

Tune into the Practical Founders Podcast for weekly in-depth interviews with founders who have built valuable software companies without big funding. Subscribe to the Practical Founders Podcast using your favorite podcast app.

Robin Alex worked in a digital marketing agency in Dallas when he discovered their small business clients struggled to nurture and follow up with their website leads. In 2018, Robin and two developers prototyped a marketing automation and CRM software that could help other agencies solve this problem for their clients. They pitched the product and got a great response. They built their first product and HighLevel grew quickly. 

HighLevel grew fast as word of mouth and referrals spread in the agency community. HighLevel is an all-in-one sales and marketing platform for agencies that serve small businesses. With marketing automation, CRM, and payment tools, HighLevel has an innovative “white-label” platform that their agency customers rebrand to deliver custom solutions to their customers. 

HighLevel has over 60,000 agency customers, over 3 million small business users, and over 700 remote employees. HighLevel is adding 30-50 employees a month, yet they are still “moving fast and breaking things” to move fast and serve their agency customers. The founders took a practical growth equity round of funding in 2021 from PeakEquity.

Learn more at practicalfounders.com.

Last year I interviewed three-time software founder Matt Watson on this podcast about his successful practical founder journeys. Matt leveraged offshore software development talent in his last two SaaS companies to staff up quickly and grow efficiently.

His top developers and designers were offshore in the Philippines, but they weren’t one-off contractors or difficult-to-manage outsourced agencies. He found an endless supply of top tech talent who became savvy members of his team, working hard every day to get things done fast.

So, for his fourth venture, Matt created Full Scale, one of the fastest-growing software development companies in any region. Full Scale vets, employs, and supports over 300 professional developers, designers, and testers in the Philippines who augment and extend your core dev team.

In this expert session with a Practical Founders Podcast sponsor, Matt shares what works and doesn’t work for practical SaaS founders who want to offshore some or all of their software development.

Links

• Matt Watson on LinkedIn
• Full Scale on LinkedIn
• Full Scale website
• Startup Hustle podcast
• Product Driven video channel

The Practical Founders Podcast

Tune into the Practical Founders Podcast for weekly in-depth interviews with founders who have built valuable software companies without big funding. Subscribe to the Practical Founders Podcast using your favorite podcast app.

Dave Whorton is an experienced tech investor and funded founder who spent the first 20 years of his career at the highest levels of Silicon Valley venture capital and tech-boom startups. He started his career at Hewlett Packard and experienced the famous "HP Way" culture firsthand before he attended the Stanford Graduate School of Business. He joined the preeminent tech venture capital firm Kleiner Perkins and worked directly with John Doerr for several years before launching Good Technology and raising $63 million in venture funding in the early 2000s. He brought in a CEO to run the company before it was sold to Motorola. 

Dave joined the large tech private equity firm TPG and directed many investments there before creating his own small venture capital firm and making several investments in the 2000s. Dave started to become disenchanted with the "Get Big Fast" of the venture capital approach. He talked to several founders who were growing businesses without any outside funding and who were building better businesses with better cultures and better outcomes with no intent to ever sell their companies.

In 2013, Dave started the Tugboat Institute, a membership organization that brings together Evergreen® CEOs across industry sectors to share best practices and unique insights, and to develop trusted bonds for their respective Evergreen paths. Evergreen leaders are seasoned entrepreneurs, CEOs, and presidents with the vision, creativity, resourcefulness, patience, and grit to build and scale a business that will stay private indefinitely.

Learn more at practicalfounders.com. 

Bernardo Carvalho Wertheim is a worldly entrepreneur who grew up in Sao Paolo, Brazil, and then moved to the UK to go to school and start his career in advertising. He kept traveling and eventually settled in Santiago, Chile, where he started a tech startup and participated in a tech accelerator. 

The Bridge started as a community and jobs platform connecting UX designers in Latin America to work at startups and large agencies worldwide. They expanded the services offerings and eventually grew to $10 million in revenue by helping to employ hundreds of high-skilled remote creative professionals. 

In 2023, the Bridge was acquired by Gi Group, a large Italian HR services conglomerate that wanted to expand its footprint in Latin America. Bernie stayed on to help The Bridge serve a global audience and work with other Gi Group organizations across Europe and Latin America.

Learn more at practicalfounders.com. 

Raj Bhaskar is a successful two-time practical software founder with one exit. In 2000, he started his first software company, VisualHOMES, to provide a comprehensive financial management software to public housing agencies. With no outside funding, the business grew to serve 65 regional providers serving 2 million residents before Yardi Systems acquired the company in 2010. 

After he left Yardi two years later, Raj and his brother launched Hurdlr to reach the wider small business market with a simpler accounting and tax management software than Quickbooks. They started selling their online accounting software to small businesses, but eventually they returned to their original vision to build embedded (white label) accounting that works inside other software. 

Hurdlr has grown steadily and has served over 1.3 million small businesses in its 13-year history. Raj invested his own money for many years and a little outside investment. The company is now “lifetime profitable” and growing quickly with 25 employees. Raj loves his work and has no intention of selling the business anytime soon.

Quote from Raj Bhaskar, cofounder and CEO of Hurdlr

“I ran my previous software business for 10 years before I sold it. And Hurdlr is now over 10 years old. These days, I’m talking about the next 10 years and the next 10 years after that. The next decade and two decades from now, because it’s relevant and because I think we’re just getting started.

“I’ve seen inflection points in markets, and our market is finally ready. That’s the part we didn’t have any control over. So, in my view, there is no finish line. This is the starting line where we now have all these assets and need to let more people know we exist.

“It’s crazy to say after 10 years that this is just the beginning. So I could say probably 20 years from now, looking backward, OK, these are the phases, but I’m in new territory and I know this will be a sustainable and growing business for a long time.”

Links

• Raj Bhaskar on LinkedIn
• Hurdlr on LinkedIn
• Hurdlr website

The Practical Founders Podcast

Tune into the Practical Founders Podcast for weekly in-depth interviews with founders who have built valuable software companies without big funding. Subscribe to the Practical Founders Podcast using your favorite podcast app.

Get the weekly Practical Founders newsletter and podcast updates at practicalfounders.com/newsletter.

Steve Gelley created two successful businesses and learned important lessons before he and a cofounder self-funded a third startup that was acquired in only 18 months for a big prize.

Steve started his entrepreneurial journey by buying, improving, and then selling CPA accounting services firms in the Eastern U.S. Then he grew his first VC-funded tech startup, Xendoo, to innovate in the small business accounting services space.

He exited Xendoo and worked with a partner to fund and create a new startup called wemlo to automate the manual process of processing mortgage loans for mortgage brokers. Only 18 months from starting, including four strategic pivots, Steve and his cofounder, David Rogove, sold wemlo to a strategic buyer owned by RE/MAX.

Steve says, "Nobody tells you that founders end up spending so much time on funding and the optics of the dog and pony show that no one's running the business. It's actually counterproductive."

In this episode, Steve explains:

• Why he sold his interest in his first startup when the company achieved its first VC funding
• How he and his cofounder built a market-leading solution for a massive industry with a small team
• What the true opportunity cost of raising VC funding is for founders growing vertical software companies
• The simple math that showed him raising big funding would not be better for the founders
• What it takes to design revolutionary software with automated processes that revolutions
• Why he says "timing is the luck factor in a business," especially when you exit a business
• Why money from investors won't solve all your problems and often make things worse

Check out all our episodes and articles at https://practicalfounders.com.

In this expert interview, Vik Thapar of Cypress Growth Capital explains revenue-based financing (RBF) and how it can be very useful for practical SaaS founders. In the last 10 years, Vik and the Cypress team have funded over 50 SaaS and tech-enabled services businesses that have steady recurring revenues and predictable customer acquisition approaches. 

Revenue-based financing is a form of non-dilutive funding that is paid back as a fixed percentage of cash receipts until the investment is paid off. 

Unlike raising funding from VC or other equity investors, founders with $3M-$10M ARR can use RBF as an efficient option to accelerate growth and increase the value of their companies without losing control or diluting their equity.

Royalty-Based Funding Topics Discussed on This Podcast

• What is royalty-based financing and how is it different than other non-dilutive funding options like venture debt or equity funding from VCs?
• When is royalty-based financing useful for practical founders by company size and capital needs?
• When doesn’t royalty-based financing make sense for founders?
• What time frame is typical for founders to use funding to grow and then exit at a much higher price?
• What has happened in the royalty-based financing industry in the last 10 years?
• What’s the typical process and timeline for a founder to receive funding and start paying it back?

Learn more at practicalfounders.com.

Michael McAllister is the founder and former CEO of The CE Shop, the leading provider of pre-licensing and continuing education for real estate professionals in the U.S. Michael started The CE Shop in 2005 by distributing existing training materials from a continuing education provider. They quickly created their own online education solution and proceeded to expand with specific content and compliance elements for each state. 

The CE Shop grew steadily without outside funding for 15 years by building a 5-star team, adding partner channels, expanding to new states, and providing more content for the pre-licensing of new real estate agents. The company grew to over 130 employees and expanded faster during COVID.

Michael successfully sold the company to private equity investors in 2020 for a “9-figure exit,” meaning more than $100 million, to Waud Capital. On this podcast, Michael shares the realities of their growth journey, including their special emphasis on culture, people, and practical expansion as a bootstrapped technology business. 

Podcast Sponsor – Cypress Growth Capital

This week’s podcast is sponsored by my friends at Cypress Growth Capital. For 15 years, Cypress has provided non-dilutive growth funding to bootstrapped SaaS founders, including many successful founders I’ve interviewed here on this podcast.

Quote from Michael McAllister, Founder of the CE Shop

“When founders sell their companies, I'd suggest they need to do it when they hold all the cards. During our first experience with a serious potential buyer, we asked for a lot of information about their business. It was reverse due diligence since I’d be the biggest private investor in their company.

“We were two weeks before closing, and I called our banker and said, this is really frustrating that we’re asking for all this information and not getting it back. Unless we do, we may need to pull the plug on this deal. We held all the cards. We had a great business. We didn’t need to sell like we were completely in the driver’s seat. 

“It was really difficult but we decided to pull the plug on the deal. The biggest thing was that there was a real mismatch in core values. Our core values were foundational to who we were and who we are as a company. One of them was doing what we said we’d do. And it was a $100 million question. It was a big deal.“

Links

• Michael McAllister on LinkedIn
• The CE Shop on LinkedIn
• The CE Shop website
• Waud Capital website (acquirer)

The Practical Founders Podcast

Tune into the Practical Founders Podcast for weekly in-depth interviews with founders who have built valuable software companies without big funding. Subscribe to the Practical Founders Podcast using your favorite podcast app.

Get the weekly Practical Founders newsletter and podcast updates at practicalfounders.com. 

Matt Watson was a two-time software company with two successful exits before he was 40 years old. He started his first company, VinSolutions, in his basement in Kansas City in 2006. VinSolutions started by helping auto dealers upload photos of their cars to sell in the popular Autotrader catalog and website. Matt was the first developer and product visionary who lead a team that build their popular CRM and lead management system to help those dealers manage internet leads and sell cars faster.

Their revenue doubled every year as they grew to eventually serve thousands of auto dealers with their pioneering web-based software.VinSolutions didn’t raise any venture capital or private equity investment as they grew to over 300 employees. In 2011, VinSolutions was acquired by Autotrader.com itself for a reported $150 million. 

Matt started Stackify in 2012 as the CEO funding the startup with his own money. Stackify is a tool for software developers using cloud platforms to manage and optimize application performance, a problem Matt had experienced at VinSolutions. Stackify grew slowly and struggled at first before it grew steadily. Stackify was acquired by Netreo in 2021. 

In this episode, Matt explains:

• How they started by taking photos of cars for auto dealers to sell those cars online, then bootstrapped a CRM software product to help dealers manage internet leads
• What it was like to be the CTO of a pioneer in web-based software with a recurring revenue business model back in 2008 when the auto industry was in a massive recession
• The benefits and drawbacks of growing a large vertical software company in Kansas City
• Why they tried to raise capital but started the process to sell the company instead
• Why Matt started a new company called Stackify as the CEO with a different customer focus, technology stack, and different sales model than his previous company
• Why did he self-funded Stackify and then raised venture debt as they grew, but didn’t raise big VC funding
• What it is like to be a two-time founder of software companies with successful exits before he was 40 years old

Find out more at practicalfounders.com.

Josh Cameron and three university friends started a scrappy software company in Brisbane Australia just after graduating. They had run the popular college bar where they discovered there was no simple software solution to track, onboard, and schedule hourly employees. They started Tanda in 2012 and it grew into a successful workforce management software company in Australia —without any outside funding.

The four founders moved to Chicago in 2019 to expand their North American business. Their product worked fine in the US, but sales, marketing, and operations all had to be rebuilt, which took years to figure out. They acquired the Workforce company and took on that brand and domain name outside of Australia.

Now Workforce.com is a leading workforce management software company that helps improve time and labor management for shift and hourly workforces. Their 130 employees serve 6,000 customers in 80 countries with employee scheduling, time and attendance, employee engagement, analytics, and automated compliance.

In this episode, Josh explains:

• How he and his university friends chose to start a scrappy software startup instead of taking big jobs after they graduated
• How they bootstrapped and grew their company in Brisbane in Australia for 5 years before the founders moved to the US and settled in Chicago to expand their North American business
• How they compete and win in a crowded marketplace against bigger competitors
• The growing pains they experienced growing from a small team in Australia to a global organization with 130 employees with offices in three countries
• The benefits of being frugal, growing at a steady pace, and not taking big VC funding
• Why they bought a 100-year old company to get the Workforce.com domain name and brand 

Check out practicalfounders.com to read the full transcript from this episode.

Deb Muller was an experienced HR executive at a large global company who left her job to start a consultancy specializing in managing important employee incident investigations. Surprisingly, her customers asked her for a software solution that included her best practices, so she mocked up some screens and had someone build the first version in 2009. She started selling it to fellow HR leaders and her software company HR Acuity was born. 

Professional management of employee incident investigations was new when HR Acuity started, but there was no shortage of employee incidents to track, especially in larger companies with more than 1000 employees.

She and her team built a community of HR leaders and led the global discussion about proactive employee relations and transparent HR incident management. Big changes like #MeToo, DE&I awareness, and remote employment during COVID increased the awareness of these HR issues and the tools to manage them. 

HR Acuity is now a fast-growing company with over 100 employees. Deb took a small angel investment from a friend a few years after starting the company. They grew mostly from revenues with no interest in any major funding until 2019, when HR Acuity took a growth equity investment from Growth Street Partners. In 2021, they took additional funding from K1 Investment Management. The company is still independent and growing steadily. 

In this episode, Deb explains:

• How she started her company as a law firm providing employee incident investigation consulting for large companies, then slowly transitioned to being a software-only company.
• Why she grew their community of HR leaders at large companies with roundtable discussions to share ideas, processes, and approaches with each other.
• How she bootstrapped the company with customer sales revenue, but slowly learned that some appropriate funding could help the company grow faster without being crazy about it.
• What has changed in the employee-employer relationship in the last 15 years that has helped them grow
• What women founders should be thinking about when they are serious about creating change in the world with a software company

Find out more at practicalfounders.com. 

Raution Jaiswal grew up in India and then worked in management roles at large companies in the US before he discovered a problem experienced by small insurance agencies. He validated the problem, built an early solution, and didn’t quit his full-time job in 2018 until he had 50 paying customers.

InsuredMine provides an all-in-one sales CRM (customer relationship management) and marketing automation software for independent insurance agencies in the US. InsuredMine helps improve and automate marketing, sales, and service to help insurance agencies sell more, serve customers better, and become more profitable. It also integrates with many popular agency management systems (AMS).

The bootstrapped company is growing up quickly with almost 60 employees, a leadership team, and a growing reputation. In addition to over 1,000 small insurance agency customers, InsuredMine is now being used by some of the largest agency organizations in the US. 

Learn more at practicalfounders.com. 

Steve Wolfe and Nate Grossman are co-founders at Growth Street Partners, a growth equity firm focused on investing in early-stage B2B SaaS companies between $2M-$6M in ARR. They discuss how growth equity funding works for SaaS founders and how it allows entrepreneurs to maintain control while still benefiting from investment and liquidity.

In this expert episode, Steve and Nate get specific and share real examples of how SaaS founders use growth equity to win bigger, when it can be a good fit for founders, and how founders scale their businesses and win with multiple exits. They also describe:

• Why Growth Street Partners focuses on practical founders with growth equity.
• How growth equity is different from traditional private equity and venture capital.
• Why successful founders are “learn-it-alls” with a growth mindset.
• How founders can achieve multiple exits through strategic partnerships.
• Why building a strong team is essential for scale-up success.

Quote from Steve Wolfe, co-founder of Growth Street Partners

“We know that when entrepreneurs have fun, their companies do much better.  When founders continue to feel real ownership in their business and in the success of their company, they do a lot better, too. 

“So we set up our whole firm to enable that. We are investing to own just 20% to 50% of a business, so the founder still controls the company. We go to them with execution ideas and proven frameworks and approaches, but we are really just giving them the tools to make better decisions themselves.

“They know they make the decisions in the end, so they will make sure that it’s successful. There’s something beautiful about that relationship and about helping that founder get to where they want to go while still feeling like they did it.”

Links

• Steve Wolfe on LinkedIn
• Nate Grossman on LinkedIn
• Growth Street Partners on LinkedIn
• Growth Street Partners website

Daniel Yuabov was a 22-year-old IT manager in New York who wanted to buy a new car. He was so frustrated with the buying experience that he started a software company called Carvoy to make it easy for car buyers to find, buy, and finance a new car online. He grew the company for 5 years—without VC funding—and sold it to a giant Fortune 500 company in 2020.

Daniel quit his job in 2015 to build Carvoy's first product using developers in Ukraine. It allowed consumers to choose a new car online and then buy it easily from a dealer. Their first version was interesting to consumers but resisted by most car dealers. Their second solution had them manually arranging the car purchases behind the scenes for their growing crowd of online buyers.

It wasn't until they started automating every step in the car buying process, including choosing a car, getting a confirmed best price from dealers, pre-approved lending, and delivery that they started to sell thousands of cars. They pivoted from a marketplace with transaction revenue to selling it as a SaaS product to car dealers. They grew faster and were acquired by a major car-financing lender for an undisclosed sum in 2020.

In this episode, Daniel explains:

• Why did he quit his job to build an online solution after having a frustrating car buying experience
• How many "gruesome" pivots and experiments they tried in three years before they finally created an amazing online car-buying solution that dealers were excited to pay for
• How he financed the startup phase with his savings, a loan from his father, and credit card debt
• Why he chose to sell his startup to a big industry player rather than get venture funding 
• How he dealt with the long process of selling to a large financial lending company and what it's like to work there now
• What it felt like to sell his company for life-changing wealth and then realize the money wasn't the biggest prize

Perry Rosenbloom moved to Boulder, Colorado in 2011 and started a small business offering digital marketing and custom website services. After building a website for his mother-in-law, an independent therapist, Perry created a scrappy subscription-based website builder platform to make websites for other behavioral health professionals. 

The Brighter Vision company grew steadily and efficiently without big outside funding and eventually provided custom mobile-ready websites and marketing tools to over 4,000 therapists. 

The company grew to 35 employees with an all-new website-building platform before being acquired by EverCommerce in 2020 for $17.5 million. 

Shameem Hameed created several companies, including a medical billing services company, before starting ZH Healthcare in 2008 to provide billing and EHR software to innovative healthcare providers. Their BlueBriX software grew into a comprehensive and customizable platform used by hundreds of healthcare organizations around the world. 

ZH Healthcare now has almost 200 employees in the US and India. The company has been profitable every year and has not taken on any outside funding. 

Sam Knight is the co-founder and former president of BOLT Software, a project management and scheduling software for the construction trades that build residential homes. Sam helped lead the BOLT team as it grew before the company was sold and now he guides the BOLT product in the larger company.

BOLT was created in 2015 after years of internal use at a large Dallas-based electrical contractor. Cofounder Josh Causey brought in Sam Knight to spin out and run BOLT as a separate software company and grow the customer base and improve the product. Through 2020, the company grew to over $1M in recurring revenues before it was acquired in 2020 by Fort Worth-based ECI Solutions to expand its construction software offering.

Built by the trades for the trades, BOLT is a SaaS solution that simplifies project management, scheduling, and estimating for new home construction subcontractors (electricians, painters, plumbers, etc.). BOLT helps those subcontractors truly manage their teams: from rescheduling due to unforeseen delays to scheduling out multiple crews simultaneously.

Learn more at practicalfounders.com.

Paul Van Metre was the co-founder of a successful machine shop that manufactured custom parts for the aerospace and medical device industries. Over 15 years, they created and improved software to run their entire business, which created huge efficiencies and helped them manage their growth. They sold that business in 2014 to focus on selling their complete software platform, called ProShop, to other forward-thinking machine shops. 

ProShop is now one of North America's leading ERP (enterprise resource planning) software platforms for machine shops. The software manages every aspect of a machine shop business, from orders, finances, inventory, and shop floor operations. 

The company grew quickly with no outside funding as happy customers spread the word in their industry. Their software company focuses on processes, customer service, and company culture. In 2024, ProShop received a $32 million growth equity investment from Mainsail Partners, which allowed the founders to take money off the table and fund new growth. 

Links

• Paul Van Metre on LinkedIn
• ProShop on LinkedIn
• ProShop website
• Mainsail Partners website

Thomas Brown creatively bootstrapped his software company and ran it as a very small "lifestyle" business before committing to growing his SaaS business with a larger team.

Thomas was an independent insurance claims adjuster in the 1990s in New Orleans, Louisiana before quitting his job to start one of the first insurance claims management software companies called ClickClaims. It grew slowly and profitably as a very small company for over 10 years before Thomas sought help from advisors to see how he could grow to the next level and learn to be a real CEO of a bigger SaaS company.

E-Claim is now a steadily growing vertical SaaS business with 18 employees and over $4 million in ARR. They have helped independent insurance adjusters and insurance carriers process over 2 million claims with their ClickClaims product since he started the company in 1999.

"I know this sounds cliche, but I didn't get into this for the money. I got into it because I'm a guy from South Louisiana who's been through a bunch of hurricanes and knows the horrors that people go through. And I wanted to make it better. So you reach a point in the business where you start to think about not what it means for you, but what it means for others. What can you do for your employees and their careers? What other charities can I go and support with this money someday? And then you think about it, and you say, you know, hell, I want to double it, because I could do a lot of good with a lot more money."

In this episode, Thomas explains:

• How he started his company and built a software solution after experiencing a massive industry problem himself
• How he grew a $4M+ ARR SaaS company without funding with just 50 customers
• Which creative side businesses he started to generate enough cash to build and start his software company
• How trusted business advisors helped him gain the knowledge and the confidence to be the SaaS CEO and team leader required to keep growing his company
• Why he is inspired to make a bigger impact with his employees and in his community by continuing to grow his business

Antony Ceravolo is a successful two-time startup founder from Adelaide, South Australia. He started his career in investment banking but left in 2002 to start a DVD rental business in London that raised funding from big VCs and Amazon. It grew into Lovefilm.com, which was later acquired by Amazon in 2011 to become part of their movie streaming service. 

He moved back to Adelaide and started Sine in 2013 to help schools, businesses, and large office buildings manage guest sign-ins more securely using iPads at their front desks. They also started tracking visiting contractors and vendors with their mobile app, allowing automatic check-ins and tracking for operations managers.  

Sine grew quickly with global customers and large deals, eventually growing to 100 employees, mostly in Adelaide, with no VC funding or institutional investors. Sine was acquired by Honeywell in 2020 and became a critical product in their property management technology suite. 

Antony speaks openly about the benefits and challenges of working with institutional investors and why he avoided raising VC funding with Sine. 

Learn more at practicalfounders.com. 

Rand Fishkin is the founder and former CEO of Moz, a leading SEO software for marketers created in 2007 that grew out of the active followers of Rand’s popular SEOmoz blog. Moz grew quickly to over $30 million in revenue by 2013, having raised $30 million in venture capital investment. When growth slowed in 2014, the company faced many internal difficulties and Rand dealt with mental health challenges, causing him to step down as CEO.

Rand left Moz in 2018 and later that year published his popular book about his difficult startup journey, “Lost and Founder: A Painfully Honest Field Guide to the Startup World.” He described in detail the growth of Moz and the exciting growth years, but he also revealed the painful challenges he and the company faced in their later years. In this podcast discussion, he is frank about the pitfalls and brutal realities of big VC funding for founders and the companies they created. 

Rand created his second software company, SparkToro, in 2018 with an approach that was opposite to the funding, growth, and staffing he used at Moz. We discuss the benefits of practical funding and sustainable profits to create healthy software businesses that support the goals of founders, employees, customers, and investors.

Learn more at PracticalFounders.com. 

Joe Griffin recently left his job of 8 years as co-CEO of ClearVoice, a company that he and co-founder Jay Swanson started in 2014 out of their digital marketing agency business in Phoenix, Arizona. ClearVoice was acquired by Fiverr in 2019 and has been operating as an independent subsidiary since then. Fiverr is now a large public company with a global reach.  

ClearVoice was created in the fast-changing web search marketing industry in 2014 out of the need from larger companies for high-quality content to drive their organic website traffic. Joe and Jay previously ran their search marketing agency iAcquire and used profits to self-fund the first ClearVoice platform. They eventually raised a small amount of practical outside funding, including a seed funding round of $1.5M and venture debt of $2M.

ClearVoice is now a leading platform for brands to hire industry-savvy experts to write useful content that is branded for their communities and customers. Thousands of brands and over 10,000 industry specialist creators use ClearVoice to drive organic marketing efforts with high-quality content.

In this episode, Joe explains:

• How he had created and sold previous internet marketing agencies and technologies before creating ClearVoice
• The difficult transition of creating and funding the ClearVoice marketplace out of an existing services business
• The acquisition by Fiverr before they went public in 2019 and how they operated as an independent subsidiary after that
• Their practical funding with self-funding from their services business, a little angel funding, a small $1.5M seed investment round, and then venture debt before being acquired
• How he led ClearVoice with a co-CEO and how they worked on all big decisions together

Find all the episodes and resources at practicalfounders.com.

Todd Watson is the owner and CEO of Showit, a popular no-code website builder and platform for designers and photographers. Todd is a native of Phoenix, Arizona where he started as a videographer before joining a friend in 2006 to create a scrappy software business that made inexpensive photo-presenting and sharing tools for photographers.

The Showit company was created when Todd took one of their two products and half the small team in 2010 to spin off Showit as an independent business. The small revenue from the small customer base and his own savings allowed them to rewrite Showit for the cloud and then continue their fanatic customer focus to keep growing every year.

Now Showit is used by 35,000 designers, photographers, and small businesses as their website platform using its elegant “Photoshop-like” no-code visual builder. The Showit company is growing quickly every year and is profitable, yet Todd has no interest in taking outside funding or selling his beloved company.

In this episode, you’ll hear how Todd and the Showit team:

• Spun off Showit from a small software company, then rewrote the software from old Flash technology to new cloud software
• Serve and love their customers to create a fanatically loyal community that is expanding quickly without expensive marketing
• Recruit, engage, and empower their employees in creative ways that no funded software company ever would
• Never think about external funding or selling the company despite the company’s extraordinary value and potential
• Started with a fanatic niche focus on an underserved community and then expanded its market as the community grew

Check out all our episodes, articles, and resources at https://practicalfounders.com.

Hamid Shojaee is a technical founder and serial entrepreneur who created several software companies and dozens of products in the last 25 years. He sold his two software companies in 2021—Axosoft and Pure Chat—and now is an active investor and has a new startup to keep him busy.

Axosoft was popular project management and bug-tracking software for developers that he bootstrapped to launch in 2002. It grew profitably for years until it met stiff competition despite active efforts to grow. Dozens of product experiments finally produced a hit, the popular software GitKraken.

In this episode, Hamid shares some hard lessons learned:

• How he and his team experimented to test new product ideas and don’t invest until they prove real user traction (DAUs)
• The challenges of raising money from investors who want faster revenue traction too early in the product-led growth cycle
• The challenges of not being the dominant leader in your market in the long-run
• Selling one business to a strategic buyer without help: selling the other business to a financial buyer using M&A investment bankers
• The modest changes in his life after selling two companies for life-changing wealth in 2021
• Why he’s starting and building another software company

Check out all our episodes and articles at https://practicalfounders.com.

As the host of the Practical Founders Podcast, I have interviewed 46 successful SaaS founders and 6 savvy experts in the first year of weekly episodes. In this episode, I share some of the deeper insights, surprising lessons, and useful perspective that I have learned after so many great conversations. 

Practical founders are building valuable software companies without big funding all over the world and in every corner of the software business. It's an amazing time to be a practical founder. Practical founders are solving problems, changing the world, and doing it their way.

The founder equity value and founder wealth created by just the 46 founders I interviewed this year is over $1 billion. Tune in to this episode where I share what's going on right now and how these founders are succeeding in their own ways.

In this episode, Greg explains:

• What characteristics that all successful practical founders have in common
• Why there are so many variations and ways to create a successful software company when you don’t raise big funding
• What has happened in the last 5 years that makes it better for most new founders to grow a serious software company without big funding
• Why we don’t see the hundreds of billions of founder equity value and wealth that have been created by practical founders who have grown thousands of valuable software companies without big funding

Learn more at practicalfounders.com.

Todd Watson is the owner and CEO of Showit, a popular no-code website builder and platform for designers and photographers. Todd is a native of Phoenix, Arizona where he started as a videographer before joining a friend in 2007 to create a scrappy software business that made inexpensive photo-presenting and sharing tools for photographers.

The Showit company was created when Todd took one of their two products and half the small team in 2010 to spin off Showit as an independent business. The small revenue from the small customer base and his own savings allowed them to rewrite Showit for the cloud and then continue their fanatic customer focus to keep growing every year—without any outside funding.

Now Showit is used by 50,000 designers, photographers, and small businesses as their website platform using its elegant “Photoshop-like” no-code visual builder. The Showit company is growing quickly every year and is profitable, yet Todd has no interest in taking outside funding or selling his beloved company.

Links

• Todd Watson on LinkedIn
• Showit website
• Showit website design marketplace:
• Showit on LinkedIn

Guy Rubin is the co-founder and CEO of ebsta, a revenue intelligence platform that works with Salesforce and Hubspot to automatically analyze existing data to improve sales performance. Started in London in 2012, ebsta found success in the early days of the Salesforce marketplace and addon economy as a data tool integrated with customer emails. 

ebsta has since become a complete revenue intelligence platform, serving sales teams with 10-100 sales reps. With 400 customers, 30 employees, and no VC funding, ebsta competes with a focused approach to play in the massive Salesforce ecosystem and against huge competitors. 

Guy talks about their many pivots, running the business with his wife as cofounder, and the benefits and challenges of not being in San Francisco with VC funding. With deep data across thousands of sales reps, ebsta publishes an annual ebsta Sales Benchmark Report with specific data about close rates, quota attainment, and data-driven factors to improve sales performance. 

Podcast Sponsor – Full Scale

This week’s podcast is sponsored by Full Scale, one of the fastest-growing software development companies in any region. Full Scale vets, employs, and supports over 300 professional developers, designers, and testers in the Philippines who can augment and extend your core dev team. Learn more at fullscale.io.

Quote from Guy Rubin, CEO of ebsta

“We found ourselves in a place where we had some amazingly talented, very driven, very focused doers, and they were happy to work together as a common goal and get stuff done.

“What moved the bar for me as the CEO was bringing on board advisors. I’ve now got four board advisors and a chairman sitting around me. We also brought on a CTO, CPO, and CFO, who are very experienced.

“So bring in those experts around you, people independent of those doing the doing. Don’t get me wrong; you need the doers. They’re absolutely vital, but I also needed experts to help me at the running stage.

“That was the best thing I ever did: bringing those expert advisors in. And if you’re small, I would encourage founders to ask different people to be advisors to give you an outside perspective.  You’d be surprised if people love being asked for help and ask you some difficult questions.”

Links

• Guy Rubin on LinkedIn
• ebsta on LinkedIn
• ebsta website
• 2024 ebsta SaaS Sales Benchmarks Report

The Practical Founders Podcast

Tune into the Practical Founders Podcast for weekly in-depth interviews with founders who have built valuable software companies without big funding. Subscribe to the Practical Founders Podcast using your favorite podcast app.

Bryan Clayton is the co-founder and CEO of Greenpal, a leading on-demand marketplace of lawn care services for homeowners across the US. With a team of 25 remote employees, they help 300,000 homeowners connect with 35,000 landscape service providers. 

Greenpal is an “overnight success that took 10 years” while the founding team learned to build a software product and recruit homeowners and services pros to the marketplace. It grew slowly at first as they learned and made mistakes, but they didn’t stop and started to expand regionally. Greenpal has no outside funding. 

Bootstrapped Marketplace Topics Discussed on This Podcast

• How long it took the founders to get the Greenpal marketplace going in his home city before adding other cities and going national
• Why they are laser-focused on one segment of this massive landscape maintenance industry
• How a two-sided marketplace business is different than a B2B SaaS business
• Why they resisted taking outside investment for all the years it took them to become profitable
• Why he has “fun” working so hard for so long to make GreenPal successful

Learn more at practicalfounders.com. 

Justin Hewett started in the software business as a territory sales manager for an education software company in Utah. The company grew and Justin eventually led the sales team as the senior executive. When the company was acquired by PE investors, Justin moved on in 2020 and thought about ideas for a new software business to serve K-12 schools in the US. 

Flashlight Learning helps K-12 teachers in the US to quickly assess the speaking and writing progress of multilingual students who are learning English. The software captures data for teachers to provide students with improved feedback to accelerate language development.

Flashlight Learning grew 300% in 2023 to $4 million in revenue, with a growing team and an outsourced development partner. Justin raised some angel funding to get started and move fast, but they are expecting to be profitable this year with continued growth.

Learn more at practicalfounders.com.

Melissa Kwan created her first software company in 2014 and then sold it in 2019. It was extremely difficult to start and even harder to grow, but it's how she learned what not to do in her next startup and what was really "non-negotiable" in her life. Now she's a nomadic world traveler and the founder of a growing software business.

Melissa started Spacio to provide a technology solution to high-end residential real estate agents to capture visitor names electronically at open houses. It took years to find the right features that someone would pay for while tapping out her savings--and her family support. She sold the business in frustration to find a better business idea and to stop sacrificing everything for her business.

Melissa started her second software business, eWebinar, to solve a painful problem she faced while selling and supporting software. eWebinar is an automated webinar platform that provides interactivity and real-time chat support for software companies. Her business also supports her personal priorities, including traveling around the world and working from anywhere.

In this episode, Melissa explains:

• The hardest lessons she learned from her first software company which helped her design her second startup in a different way
• Why she was frustrated selling to the real estate market and why she chose to serve software companies with eWebinar
• The pervasive myth of big funding, unicorn exits, and ego-driven ecosystems that ultimately rob founders of their own freedom and control
• What success means to her and how she is creating her business to support her version of happiness
• How she bootstrapped eWebinar with small investments from friends and how she is growing it profitably each month
• Why a "5% better" product design and customer experience "that just works beautifully" is their key competitive advantage
• Why nobody wants to talk to a salesperson just to get a demo of a business software product

Learn more about Practical Founders at https://practicalfounders.com.

Karl Swannie was a geographer working in the scenic city of Victoria, British Columbia, Canada, when he started analyzing social media data based on location. He quickly saw there was valuable real-time information that was not being used, so he started Echosec Systems to find a practical use for those insights.

After several years of experiments and hard startup lessons learned, Echosec finally shifted from being an inexpensive news/insights tool to a comprehensive threat intelligence platform for large organizations.

Echosec Systems is now a leading open-source intelligence service (OSINT) that uses publicly available information (PAI) from social media and other sources. They help public and private organizations improve situational awareness and identify threats using geographic insights with real-time data.

Echosec was partially sold to a "search fund" called The Tusker Fund in 2020 and Jeff Oldenburg came in as CEO to scale the company, which he did. In 2022, Flashpoint acquired Echosec completely and the business continues to grow.

In this episode, Karl explains:

• How they started as an inexpensive B2C solution and then pivoted to large B2B deals with big organizations
• What it's like to be a Canadian software company selling a threat detection service to large organizations around the world
• How they finally started to scale when they focused on the largest customers with the biggest needs
• How he worked with a private investor to start the company but used venture debt to grow it when they were profitable
• What a "search fund" is and why this was a great fit to partially acquire the company and bring in an experienced CEO
• What it was like to sell the company and not be the CEO-in-charge any more
• What he learned about himself in this journey that he is applying to his next venture

Find out more at practicalfounders.com. 

Morgan Katz is the founder and CEO of Ticketnology. Morgan was an enthusiastic athlete with a degree in sports management who started her career in ticket sales for sports teams and front-line venue management. Morgan saw how companies with season tickets had difficulty managing their digital tickets after COVID, so she started her own company to solve it with a software solution. 

Ticketnology is a fast-growing leader in the new category of season ticket management software. Started with a mix of hands-on concierge services and a software solution, Ticketnology is now a complete platform that helps season ticket holders manage and distribute tickets to maximize the value of their season ticket investment. 

Ticketnology is a bootstrapped and profitable software company with just over $2 million in revenue, four full-time employees, and an outsourced development team. They doubled revenues this year and expect to double each year for the next few years. Morgan is a member of a Practical Founders Peer Group. 

Learn more at practicalfounders.com.

Jeremy Clarke created, grew, and sold his software company in a most unusual and successful way:

He grew WebMerge to $4M revenue by just himself in 6 years before hiring his first and only employee, a strategic sales rep. It's an incredible "bootstrapped unicorn" success story that ultimately was worth $100M when he sold WebMerge in 2019.

WebMerge was an online service that automates document creation to automatically fill in any documents with merged data from any source. WebMerge automatically generates PDF and Microsoft Word documents. Think of it as "mail merge for the web."

Jeremy's first employer, Formstack, ultimately acquired WebMerge to bring Jeremy back to the Formstack team and renamed the product to Formstack Documents.

In this episode, Jeremy explains:

• How he came up with the idea and pitched it to his employer before building it on his own
• How he grew revenues to $1M ARR before he quit his day job as a full-time software programmer
• What it was like to grow a $5M+ ARR SaaS business without  any other employees or Slack groups or constant meetings
• How many years in a row he raised prices before he found the right price
• How he grew awareness and conversion efficiently by integrating with other apps and appearing in their add-on marketplaces
• What it was like to sell his company to a private equity (PE) buyer in two phases

Check out all our episodes and articles at https://practicalfounders.com.

Mark Abbott was an active investor and board member for 20 years when he realized that most of the 100+ companies he helped were not good a their “business fundamentals.” The fundamentals of setting long-term goals, making short-term plans, and then aligning teams and individuals to make efficient progress. He thought of writing a book but discovered the book “Traction” by Gino Wickman and his branded EOS® (Entrepreneurial Operating System) system. 

Mark worked with his cofounders in 2016 to create a software platform that aligned with the principles and processes of EOS and other “Business Operating Systems.” Soon Ninety.io (now just Ninety) was a popular software used by EOS coaches and business consultants. They licensed the branded terminology from EOS Worldwide, which presented both opportunities and challenges.

The company grew steadily, funded by revenues until Ninety had over a thousand customers and more than 50 employees. In 2021, Mark talked to just one tier 1 venture capital firm, Insight Partners, and then raised $20 million in growth capital from them. Mark and the Ninety team have a big vision to change the way businesses grow and thrive.

In this episode, Mark explains:

• How he discovered the need to manage business fundamentals better as an investor in 100+ companies
• Why he decided to license the EOS-branded terminology and name to get the company started
• The pluses and minuses of partnering with a branded methodology provider
• How they used Ninety software to grow faster and be ready for a major venture investment round 
• Why Mark still participates in CEO peer groups and coaches other leaders in his “spare time”
• Why he decided to raise $20M in capital from a Tier 1 venture fund in 2021
• What are the “business fundamentals” that Ninety leverages to accelerate growth

Read the full interview transcript and find more episodes at practicalfounders.com.

Miles Schwartz a cofounder of Zūm Rails, a fast-growing fintech based in Canada with a growing worldwide presence. In just 3.5 years and without any outside funding, Zūm Rails has grown from a focused startup to a credible open banking and instant payment gateway with $10M in ARR. Zum Rails also integrated KYC (Know Your Customer) technology which reduces fraud across all payment types. 

Miles and his cofounder had experience with fintech payments before they started Zum Rails to improve EFT payment processing in Canada. As they worked with more partners and grew revenues, they expanded the Zum Rails solution and built relationships with larger partners.

Fast-growth, larger partner opportunities, and traction with a US expansion are causing Miles and his cofounders to think differently about the potential for the company and potentially raising growth capital from the right VC investment partner. 

Learn more at practicalfounders.com. 

Windermere Real Estate is a large and well-known residential real estate broker in the Seattle area. In the late 1990s, they invested to build an internal software system to power their own business and differentiate their services. After using and improving their software for over 10 years, the family owners of Windermere spun out the software as a new company called MoxiWorks. They hired experienced tech entrepreneur and marketer York Baur to lead the new MoxiWorks business as CEO in 2012.

After rewriting the software from scratch, they started selling their solution to other large brokers in the US. They grew steadily and expanded their product platform and their team. MoxiWorks is now a leading platform system for large residential real estate brokerages, serving over 800 brokerages and 400,000 agents nationwide, which account for more than 20% of transactions in the U.S. 

MoxiWorks started as an internal technology investment at Windermere Real Estate, but their early growth years were funded by the Windermere owners and customer sales. In 2019, Vector Capital made a major investment to help MoxiWorks expand beyond its current $50 million in revenue and 300 employees.

See the full-text transcript and show notes at practicalfounders.com.

Gregory Shepard is a serial entrepreneur who has created and sold 12 companies, including marketing software and ad technology companies. In 2016, he sold two of his bootstrapped software companies, AffiliateTraction and AdAssured to eBay for an undisclosed "f*ck-ton of money," as he describes it. He is now an author, speaker, philanthropist, investor, and the creator of Startup Science and BOSS, an open-source business operating system to help more startups succeed.

Gregory faced monumental challenges as a child growing up in poverty with a rare combination of autism, dyslexia, synesthesia, savant syndrome, and other neurodivergent conditions. He learned to develop himself and overcome big challenges, including creating, growing, and running many software companies over three decades. 

In this interview, Greg shares his difficult personal challenges and his successful entrepreneurial journey as an experienced practical founder. He also shares several powerful insights and approaches for bootstrapped software founders that you won't hear from investors or the current startup education.

Learn more at practicalfounders.com. 

Raj Khera is an experienced practical SaaS founder who has used search engine optimization (SEO) to grow businesses very efficiently. Now he coaches entrepreneurs at MoreBusiness on how to use organic SEO as a core part of their marketing engine. 

In this expert interview, I ask Raj to explain the basics of SEO for SaaS founders, what tools and techniques are most useful, and how SaaS founders can make the most of SEO investments to drive revenue faster.

SEO for Bootstrapped SaaS Topics Discussed on this Podcast

• How he used SEO to grow his previous software companies
• The basic concepts of search engine optimization (SEO) for SaaS founders
• Simple tactics for identifying search terms that would create qualified traffic
• His favorite tactic for gaining authority from Google for your organic website content
• Which search engine marketing tools are most useful to maximize your time and investment
• The simple ROI math that founders can use to measure their investment return with SEO

Learn more at practicalfounders.com. 

Brad Redding calls his first startup a "successful failure." It didn't end well, but he learned several very important lessons that helped him be more successful with his second startup, Elevar. Now the bootstrapped SaaS company is growing steadily with 45 remote employees. And Brad is learning fast to be a capable CEO of a larger SaaS software company. 

Brad's deep experience with e-commerce advertising data and conversation tracking analytics helped him find a problem to solve. He and his cofounder funded the development of the first product by providing consulting services to the same customers they were trying to serve with their new software product.

It took three years before they found product-market fit and started to grow steadily and profitably. Now Elevar is a growing SaaS business that helps 6,500 e-commerce and direct-to-consumer brands that use Shopify to ensure the accuracy of their conversion tracking data and analytics. Brad has never raised outside funding and he has no intention of raising money or selling the company.

"I am certainly evolving as a leader through reading. Leaders are readers. And through coaching and through surrounding myself with other leaders who have grown companies to the size we are growing into. 

"The way I look at is that no longer can I just assume that I'm going to figure it out on my own. I need to invest in myself, invest in my leaders, invest in my brain and my habits, and improve everything. Not necessarily all at once, but over time.

"It's all about the team. You build the people and bring in the right team and the team is going to build the business and that business is going to evolve. If you just stay in the game long enough and have the right team and the right people leading, you'll follow the customers and solve their problems."

In this episode, Brad explains:

• The painful lessons of his first startup that he was able to apply and do differently with Elevar, his second startup
• Why he bootstrapped Elevar instead of raising VC funding
• Why he doesn't think of products and services as two different things when solving customers' problems
• How he is intentionally investing in self-development to learn to be the CEO he needs to be to continue to grow the company
• Why it took three years to find product-market fit despite being a domain expert in his industry  

Learn more at practicalfounders.com.

Sean Meister was a sales professional and leader with a successful career selling hospital and medical supplies before he left to join his long-time friend who had a vision for a new software company serving smaller trucking fleets with simple GPS-tracking fleet management software.

Sean was a co-founder and COO of M2M in Motion, a self-funded software company based in the Chicago area. Sean wasn't the trucking industry expert, the crazy entrepreneur, or the visionary salesperson. He provided the savvy help to get the company started and the operational leadership to build a scalable sales team, reliable product development, and quality customer operations.

M2M in Motion was bootstrapped with founder funding, then customer funding (revenue), to grow to over $5M in revenues before being acquired in 2021 by a larger vehicle telematics company, AAMP Global. M2M in Motion allowed small and mid-sized fleets to track their vehicles with a simple software solution and GPS-tracking devices.

"I think another reason we were successful is that we identified our ideal customer profile early, and we owned it, and then we really targeted that. In the beginning, you're just so desperate for anything, that you don't realize you're actually hurting yourself," Sean says.

"I think that was a big lesson for us. When you can start saying NO is when your trajectory starts taking off."

In this episode, Sean explains:

• Why he quit his successful sales career to join his long-time friend who had an idea for a software startup in the transportation technology industry
• How long it took to get to breakeven revenue after spending their personal savings to get the company started
• How the US "ELD" government trucking safety mandate helped them grow fast
• How they introduced device financing to bundle the GPS-tracking hardware and software for a simple monthly fee
• How they successfully competed in a very active, well-funded industry as a small, bootstrapped company by keeping things simple and narrowing their focus
• How their multi-channel growth strategy included "white-labeling" their software to strategic reseller partners and how one of those relationships led to their acquisition

Check out the show notes and links for this episode at practicalfounders.com. 

Rob Farrow was an experienced marketing executive and his wife Christina Farrow was a successful professional wedding planner. They discovered there was no good software for wedding planner pros, so they decided to build software themselves. They invested their savings, built a loyal team, and started Aisle Planner to serve other wedding planner pros with a complete solution to power their businesses. 

Aisle Planner grew slowly as they overcame huge obstacles, listened to their customers, and built world-class software that changed how events are managed. Aisle Planner is now the leading all-in-one software for wedding planners and event professionals with over 4000 customers. 

After struggling through the COVID-19 shutdown several times, Rob and Christina decided to sell Aisle Planner to Fullsteam, a software holding company. They stayed for several years to meet their earn-out commitments and run the company with the same team. 

Quote from Rob Farrow, co-founder of Aisle Planner

”There’s a very fine line between arrogance and ignorance. And somewhere in there is where I was living in this. When we started, I was so sure we would succeed that I ignored obvious signs of failure. I just believed wholeheartedly. I believe in myself, I believe in my wife, and I believe in our team. 

“If you have that belief, you can achieve things. And I know that sounds very cliche, but you have to have that belief. If you’re doing it for the right reasons, you’ll have that belief. If you’re doing it to get rich quick, you won’t.

“There’s a bunch of obstacles that you don’t even know are coming our way. With that mindset of belief and just forging ahead, you’re ready for any obstacle. They’re not obstacles; they’re just things you deal with.”

The Practical Founders Podcast

Tune into the Practical Founders Podcast for weekly in-depth interviews with founders who have built valuable software companies without big funding. Subscribe to the Practical Founders Podcast using your favorite podcast app.

Scott Pickard didn’t know he was embarking on a 15-year software entrepreneurial journey when he signed on to manage a horse veterinary practice in Calgary, Canada. But they had built some internal software to help them manage their large practice that drastically improved their business results. Soon other horse vets wanted their HVMS software and the Business Infusions software business was created with Scott leading the small team. 

Business Infusions grew steadily without big budgets, big funding, or a big team since 2006. Equine (horse) veterinary and hospital practices all over the world heard about their software and lined up to buy it. Now Business Infusions powers over 400 sizable veterinary practices all over the world. The company was acquired for cash by Merit Holdings in 2021 to run as a standalone company to expand its solutions to continue serving its clients. 

Scott and his dedicated team weren’t in a glamorous industry with fancy modern technology, SaaS best practices, and big funding. They just served their loyal veterinarian customers and built a reputation in their tight-knit community for dedication, support, and focus on equine vets who have specialized needs.

In this episode, Scott explains:

• How their popular HVMS software was first created for internal use by a successful horse veterinary practice in Calgary, Canada
• How they grew steadily and efficiently with vet-to-vet referrals by their existing customers
• Challenges with board members who know their industry but weren’t savvy about the software business
• How Business Infusions grew to be the global market leader for large equine veterinary practices around the world
• The process of how they were acquired in 2021 and what happened to the company after that

Find out more and read the full interview transcript at practicalfounders.com. 

Stuart Draper founded Stukent, an innovative ed-tech company that provides simulated internships for business students. Stukent started by focusing on high-quality digital marketing education for colleges and universities using up-to-date digital textbooks and content. They then added a simulation system for students to practice their digital marketing skills.

Stukent grew steadily with less than $1M in outside funding, which helped them bridge the long and seasonal buying cycles of big schools. The team grew to over 100 employees and nearly $10 million in revenue serving marketing professors and their students. 

In 2021, they engaged with Vista Point Advisors, an M&A advisor firm, to shop the company to prospective buyers and investors, eventually getting a majority investment from Tritium Partners. Stuart describes the M&A process, what worked well, and how he transitioned out of the company after two years of continued growth. 

Podcast Sponsor – Cypress Growth Capital

This week’s podcast is sponsored by my friends at Cypress Growth Capital. For 15 years, Cypress has provided non-dilutive growth funding to bootstrapped SaaS founders, including many successful founders I’ve interviewed here on this podcast.

Quote from Stuart Draper, founder of Stukent

“When we officially sold a major part of our company to investors, we had a brief celebration. My CFO and I called each other and screamed as loud as we could on the phone in a fun moment. We got there, we did this. My family also took a big trip and I got a break.

“But then it was back to work. I was still the CEO and I still run this thing and I’ve got new investors that also need returns. I’m going to go deliver for these guys. They gave me a big payday, so I’m going to make sure they have a win too.

“After the second board meeting with our investors, I realized this is way harder than I thought. After eight board meetings and doubling the business again, I wasn’t enjoying this as much anymore. The board meetings were hard for me. Prepping for them was super stressful.

“So we found a new CEO for Stukent, and he’s doing great. Now I get to sit back in my chair at the board meeting, listen in, share my advice and opinions and come back in three months.”

Links

• Stuart Draper on LinkedIn
• Stukent on LinkedIn
• Stukent website
• Tritium Partners website

The Practical Founders Podcast

Tune into the Practical Founders Podcast for weekly in-depth interviews with founders who have built valuable software companies without big funding. Subscribe to the Practical Founders Podcast using your favorite podcast app.

Patrick Fingles grew a successful roofing company with hundreds of employees in the Baltimore-Washington DC area. In 2013, they created their own software to help new salespeople estimate, quote, and close new roofing sales. They started selling the software to other contractors in 2016 and called it Leap. 

Leap grew fast to $7 million ARR in 2021 with Patrick as the CEO. In 2021, they decided to take some growth funding from Nexa Equity to give Patrick and his cofounders their "first bite" of successful liquidity and support future growth and acquisitions.

Leap is now the leading contractor management software with CRM, project management, and point-of-sale functionality specifically designed for the unique needs of home improvement contractor and remodelers in the U.S. Leap is now over $20 million in ARR with over 150 employees and full-time contractors and is still growing fast. 

Learn more at practicalfounders.com. 

Patrick Campbell wasn't expecting to be an entrepreneur when he grew up, but after his first few jobs, he struck out on his own in 2012 to create a software company to help SaaS businesses optimize their pricing. Price Intelligently quickly evolved into a tech-enabled service that allowed him to grow, build a team, and ultimately launch ProfitWell.

ProfitWell is a free and powerful SaaS metrics product that automatically calculates MRR, ARR, churn, and other import financial measures for SaaS and subscription companies from their payments data. It is now used by over 35,000 subscription businesses. Profitwell now offers paid products for managing churn, credit card failure, revenue recognition, and price optimization.

Patrick bootstrapped ProfitWell with no outside funding, but they grew fast to 100 employees before being acquired by UK-based Paddle for $200 million in 2022. He openly shares the story of how they started, grew, survived, and eventually sold the company—and how the acquisition is going one year after the acquisition.

In this episode, Patrick explains:

• How it grew in the early day as Price Intelligently, a tech-enabled pricing strategy service for SaaS companies
• How they bootstrapped for 10 years with efficient growth and savvy pricing
• Why Patrick thinks now that he should have raised some funding and why they didn't at the time
• How they created Profitwell and gave it away for free, then created upsell products to monetize their large and loyal user base
• How they grew fast with an extensive inbound media model with episodic content on top of their inbound middle-of-funnel content
• Why he chose to stay with Paddle and contribute to achieving the big vision instead of selling for cash and moving on
• What it's like now for him and his team a year after their acquisition by Paddle, a UK company

Learn more at practicalfounders.com.

Wissam Tabbara is a serial entrepreneur who has created multiple software startups in Seattle since 2009 when he left Microsoft where he was a software development manager. He led multiple startup technology teams and now is an experienced CEO and business builder. In 2021 he founded Truebase, a B2B prospecting platform for revenue teams using the power of generative AI accelerates the prospecting journey. 

Wissam steps back to assess his startup adventures more objectively and shares his biggest learnings around leveraging the latest technologies, funding, and acquisitions, and staying ahead of giant tech companies in the same space. He talks about his biggest learning as a technical founder: how the revenue and growth side of the business is where “all the action is at” when creating a valuable software company. 

Learn more at practicalfounders.com.

Jafar Owainati was a mechanical engineer before he got an MBA in entrepreneurship and decided to start a software company with two friends. They looked at many ideas before building software to help sales engineers respond to Requests for Proposals (RFPs) faster and easier. They launched Loopio in 2014 and had paying customers within one year. 

The three founders built the software and sold the first customers before adding more employees as they approached $1M ARR. They kept growing faster with a disciplined and frugal approach to $3M ARR before raising a round of VC funding from OpenView Ventures, a practical investor that aligned with the vision and approach of Loopio’s founders. 

Loopio now has hundreds of employees and Sumeru Equity Partners made a strategic $200 million private equity investment in 2021. Jafar left to start a compensation management software company called Barley which is starting to grow quickly now.  

Learn more at practicalfounders.com. 

Massimo Arrigoni grew up in Milan, Italy, and moved to California 27 years ago to create software products and start a family, eventually moving to the San Francisco area in Silicon Valley. While leading product at the software company MailUp, a popular Italian email marketing software, his team built and tested a better visual editor for creating email templates and website landing pages. The free software tool called BEE ("Best Email Editor") became popular and a new product line was born. 

BEE end users love the modern and easy-to-use no-code editor which doesn't require email or credit card to use the product for free. The company also sells to SaaS developers who want to embed the BEE builder into their own apps instead of building their own visual editors. BEE is growing with no paid advertising or marketing spend. New users find their free template library and start to use the product instantly with a frictionless experience. 

Businesses now pay for the BEE Pro solution making up about half of company revenue and embedded plug-in makes up the rest. BEE is now a standalone company owned by parent Growens with 80 employees and over $10M in revenues. BEE has over 40.000 monthly users and 10,000 paying customers. 

Learn more at practicalfounders.com.

Seth Radman created, grew, and sold two music app startups in his twenties. A saxophone player in his college marching band, Seth was passionate about helping musicians and school band directors to improve how they learn music using technology.

Seth was the founder and CEO of Crescendo, an interactive music trainer that provides real-time performance assessment feedback using acoustic pitch detection and machine learning as a mobile app. With a little angel funding, Crescendo grew to over 1M users and 7,000 schools before being acquired by Ultimate Guitar in 2018.

He was also co-founder and CEO of Upbeat, a bootstrapped startup providing a virtual music collaboration platform for school music departments. When schools shut down during COVID, Upbeat allowed musicians to rehearse and perform music virtually with others in real-time without sound delays. Upbeat grew to over  200,000 users in 12 months and was purchased by 5,000 schools before being acquired in 2021 by MakeMusic.

"Having a company acquired seemed like this big elusive goal that every founder wants to achieve. And then I did it. And then I wasn't sure what to do next at all, I was completely shocked on the first day," Seth says. 

"I say it was one of the happiest days of my life when I saw the money hit the bank. And then the day after, that was probably one of the most depressing days of my life, because I was like, whoa, what do I do now? I definitely thought there was a little bit of loss of identity for me going through that.

"And I spent the next several months kind of doing nothing. I was honestly just depressed. I just felt super lost and was not sure what to do. And that was a really tough period. "

In this episode, Seth explains:

• How he had hundreds of product ideas, did hundreds of customer interviews, and ran dozens of experiments to eventually find problems that customers would actually pay to solve
• What product-market fit really means to him and why it's so important to experiment before you invest lots of time and money
• Why he felt that he wasn't the right person to scale up his first company and the deep anxiety he felt when he successfully sold it
• How he's managing the emotional ups and downs of being an entrepreneur now after experiencing mental health challenges
• How he leveraged an existing customer base and channel to rapidly grow his second startup as COVID lockdowns created an acute problem in the music teaching industry
• How he developed a strong persistence habit as a musician that helped him do hard things every day that he didn't want to do

Chris Savage is the co-founder of Wistia, a leading video marketing platform for businesses. Wistia was started in 2007 by Chris and a college friend when inexpensive cloud hosting and easy web video encoding became available. They created the first easy way to host and share videos with deep analytics and no ads for marketers to use on their websites. 

With a bootstrapped approach and just $1.2 million in angel funding, Wistia grew quickly and profitably, becoming a leading video hosting platform used by thousands of small and mid-sized business customers. The company experienced typical internal challenges with leadership, culture, and focus as it grew to 80 employees by 2015. 

In 2017, Chris and his cofounder Brendan received several significant offers to buy the company. They decided not to sell the business, and the company made a tender offer to buy out their angel investors’ shares and some employee options. Wistia got back to profitability the following year by refocusing on its core business and aligning its team around efficient long-term growth. 

Wistia is still growing, with 180 employees, tens of thousands of customers, and millions of users. It is very profitable. The founders still love what they do and have no intention of selling the company any time soon. 

Learn more at practicalfounders.com.

Joe McMenemon and his college roommate, Brendan, knew they wanted to start a business together. They had run their college fraternity chapter and saw the problem of managing members and collecting payments. So they lived frugally and built a software solution  for fraternities and sororities to solve this problem.

ChapterSpot grew slowly over several years as they sold to local chapters. Eventually, the national associations came calling, requesting an enterprise solution to manage hundreds of chapters in one system. They rewrote the platform to run on Salesforce and grew faster with more employees. 

ChapterSpot grew profitably to over 30 employees, with 40 large organizations managing thousands of chapters and millions of members on the platform. ChapterSpot was acquired in early 2024 by BillHighway, a strategic acquirer with a payments platform.

Quote from Joe McMenemon, CEO of ChapterSpot

"Long shots are probably not as crazy as you may think they are, but they're just going to require time. If you think you'll make a bunch of money in three years, it's probably very unlikely. But if you're willing to put in the time and work at it every day, you're most likely going to be able to figure out the right path to success.

"My favorite quote is from James Clear: It's the courage to start, a few lucky breaks along the way, and a ton of hard work. That's the formula.

"Once you get started, are you putting yourself in a position where you can do it at a level that's best in the world for the problem you are solving? If you're the only one trying to solve the problem and you do it long enough to catch a few lucky breaks, well, eventually, you'll get there."

Links

• Joe McMenemon on LinkedIn
• ChapterSpot on LinkedIn
• ChapterSpot website
• BillHighway website

The Practical Founders Podcast

Tune into the Practical Founders Podcast for weekly in-depth interviews with founders who have built valuable software companies without big funding. Subscribe to the Practical Founders Podcast using your favorite podcast app.

Dougal Cameron created Golden Section to provide support and practical funding to SaaS founders with deep experience in select vertical markets. Their founder-first approach is different than the traditional VC or private equity investment model which often doesn't work out well for founders in the end.

Dougal's family had been investing in software companies for over 20 years through their Houston-based family office. Now Golden Section includes a founders studio for venture development, a world-class software product development service, and optional equity funding for B2B SaaS founders with deep domain experience in their industries.

This is an example of one of many possible ways that funding can be practical and helpful for founders who want to accelerate growth but don't want to play the unicorn-hunting grow-or-die game required by most venture capital investors.

"Our capital needs to look very different than the traditional venture capital side, where 66% of the time venture-backed founders make nothing when their company sells. And that's companies that get to an exit," says Dougal.

"I think that's a horrible statistic that really reveals some of the problems in the venture capital industry. It doesn't make a ton of sense for founders who see a clear problem that they know very well and they know people are going to buy their solution."

In this episode, Dougal explains:

• Why traditional venture capital investment is not a good fit for certain kinds of software businesses
• The hard lessons he has learned from years of investing in software companies and running software companies himself
• How they have designed their investment model to support founder-friendly exits where everyone can win: founders, investors, employees, vendors, and customers
• How they provide deep support for the founders they partner with, including software development services, growth advisory, and execution advice in every aspect of the company
• What Golden Section does to support the brutally hard emotional journey that all founders go through as they grow their companies

Find the show notes for this episode at practicalfounders.com. 

Ben Murray is a former SaaS CFO and finance professional who helps SaaS founders understand the basics of SaaS accounting, finance, and metrics for their growing businesses. Ben has a popular blog and podcast with free educational resources to learn advanced SaaS metrics, learn finance best practices, and hear stories from other founders. 

In this expert interview, I ask Ben all the questions that I hear from startup founders and SaaS CEOs about finance and accounting operations. Ben is very experienced and very practical about doing the simple practices that help software companies grow efficiently and confidently. 

Learn more at practicalfounders.com. 

Rafael Zimberoff was CEO of ShipRush, a software company he founded in 2001, then grew, and eventually sold in 2017 to Descartes Systems Group for $17 million. Rafael started ShipRush as an add-on product for popular CRM and accounting software and was a pioneer in shipping technology for small businesses.

ShipRush is now a comprehensive shipping platform for small ecommerce providers so they can easily process shipment orders and carrier labels for USPS, Fedex, and UPS. ShipRush integrates with popular ecommerce and accounting platforms, including Shopify, Amazon, eBay, Quickbooks, and more.

In this episode, you'll hear how Rafael:

• Boostrapped his tech services company to fund their first software product then grew without outside investors
• Created a popular add-on software product for bigger software ecosystems as an efficient way to find customers and grow revenues quickly
• Managed complexities of being an early pioneer in shipping technology working with large carriers like Fedex, USPS, and UPS
• Ran a profitable software company for more than 15 years with a small and amazing team
• Learn hard lessons then succeeded in working with M&A investment bankers to sell his company

Check out all our episodes, articles, and resources at https://practicalfounders.com.

Craig Letton quit his corporate sales job in 2011 to take over his parents’ small printing business in Scotland. It was his first time running a business and he learned hard business lessons quickly. Eventually, he discovered a huge need for custom-printed promotional materials by frontline salespeople in the global drinks and beverage industry. He sold their printing equipment to focus just on the software to solve this tricky problem for those salespeople, marketing departments, and regional printers. 

Running the business for revenue and profit with no outside funding, Craig grew the MRM Global business slowly with big brands in the alcoholic beverage industry all over Europe. They worked hard and stayed frugal and started to grow. Then COVID hit and revenues evaporated. Their survival tactics helped them keep going and even grow faster when restrictions were lifted. They raised some practical funding from BGF Capital in the UK to stay alive during COVID lockdowns and expand quickly after that.

MRM Global is now a fast-growing marketing technology software company serving many of the largest global beverage brands in 20 different countries. This is a great example of a “small niche vertical market” with a very specific problem presenting a massive opportunity to create a large and valuable company. It’s also the story of grit, perseverance, frugality, and intense customer focus creating a huge opportunity for growth.

In this episode, Craig explains:

• Why he took over his parents’ small printing business in Scotland after he left a corporate sales job
• How he uncovered a major opportunity in the global drinks (beer and liquor) industry for salespeople to easily create custom, branded promotional materials for their customers using software
• How the small company grew profitably and steadily until COVID shut down restaurants and hotels, taking their revenue to zero
• What they did to survive the COVID shutdown and  how he defines entrepreneurial resilience
• Why he decided to take some practical funding to survive the downturn and prepare for growth
• Why he thinks this business will be a £100 million business someday

Read the text transcript of this interview and find other Practical Founder Podcast episodes at practicalfounders.com.

Gopal Krishnamurthy was an early BI and data analytics expert working for a large company when he left to start a BI consulting company called Visual BI in 2010. Visual BI grew to over 300 employees serving enterprise customers as an evangelist to push emerging Data & Analytics trends with SAP HANA, SAP Lumira, SAP Analytics Cloud, Snowflake, DBT, and Microsoft Power BI. They also created several add-on products, which Gopal and his partner Jay retained when he sold the Visual BI consulting company in 2021 to Atos.

Gopal and Jay now lead the growing team in Lumel, the leading provider of add-on products for the massive Microsoft Power BI ecosystem which was carved out from Visual BI. Lumel gets continuous growth funding with the proceeds of the sale of the services business, but the company is on track to be profitable by end of 2023 with almost 200 employees in the US and India. Lumel products (Inforiver, ValQ, and xViz) gaining momentum and adoption from numerous large enterprises worldwide, and their paying subscribers have crossed 2,000+ organizations already.

Gopal shares his transformational story of growing from technical employee to successful consulting company CEO to now product CEO. Gopal has been a pioneer in establishing the new software category of add-on solutions to existing BI platforms. He believes that in the coming years, customers will continue to gravitate towards consolidating and maximizing their cloud and BI investments vs. buying best-of-the-breed stand-alone software.

 this episode, Gopal shares:

• How he grew a fast-growing consulting services business called Visual BI by serving large companies in the US using SAP software
• Why they started to build add-on products for the SAP Business Objects ecosystem, then invested in cloud-based add-on products for Microsoft PowerBI 
• How they sold their consulting business to Atos in 2021 and kept their products to start Lumel
• How they are transitioning from a portfolio of point solution products to a family of integrated solutions for large enterprises
• Why Gopal doesn’t think VC investment makes sense for Lumel even as they grow faster with marketing efforts, despite his big and bold vision that wouldn’t be a good fit for “get big fast” VCs

Find out more at practicalfounders.com.

Sarah Hum studied graphic design at university before she discovered she loved to help software startups create new products. She moved to Silicon Valley to work at Facebook as a product designer, but a side project helped her find a problem she wanted to solve. So she quit her job and built an initial software product called Canny with her technical cofounder while traveling the world together as nomading entrepreneurs. Within a year, Canny created enough revenue for them to live and travel frugally. 

Canny is a customer feedback management software for product managers at SaaS companies to collect useful product feedback inside their products, then prioritize requests and communicate with customers about their requested features. The Canny product has evolved quickly using its own product to engage with customers and make decisions about the next product features and improvements.

Canny is growing steadily with over $3 million in annual recurring revenue and 13 remote employees. They continue to experiment with substantial pricing experiments for different customer segments. Sarah openly blogs about the ups and downs of their startup journey and their unique approaches to hiring, designing, and testing new tactics.

Gregg Scoresby founded CampusLogic in Phoenix in 2021 to provide software for colleges and universities in the US to make it easier for students to apply for college loans and grants online. Initially self-funded, CampusLogic raised investment and grew faster, becoming a leading provider of software to universities with $50 million in revenue. In 2022, CampusLogic was acquired by Ellucian for an undisclosed amount. 

In 2023, Gregg launched PHX Ventures, a $27 million seed-funded supporting early-stage B2B SaaS founders in Phoenix, Arizona. Unlike the traditional VC approach, PHX Ventures supports startups that are growing fast with a capital-efficient approach. PHX Ventures also helps the larger software community in Phoenix with educational events and networks to connect founders, talent, experts, and capital.

In this expert episode, Gregg answers common questions about when practical venture funding can be useful for founders and what it means to be capital efficient. 

Learn more at practicalfounders.com. 

Bill Spruill had a successful sales and executive career with two exits before he and his cofounder struck out on their own in the location verification market serving financial and e-commerce companies. Sales grew slowly for several years as they scraped by and kept going. Eventually, they pivoted the company to focus on identity verification and know-your-customer (KYC) with a new approach, and sales grew steadily every month. 

Global Data Consortium (GDC) partnered with data providers and fintech companies who became loyal customers, trusted partners, and potential acquirers. The company grew over 100% for several years, acquiring new partners and adding experienced leaders to their small team. In 2022, the London Stock Exchange Group (LSEG) acquired GDC for $300 million in an all-cash deal. 

Bill talks about the lessons he learned in their patient growth journey, the challenges of trying and failing to raise startup capital, their frugal focus, their incredible acquisition story, and what he is doing now as a successful former founder. 

Quote from Bill Spruill, founder of Global Data Consortium (GDC)

“There was a low point in the business where we were just struggling with, Why are we doing this? Are we going to make it? So we stepped back and said, We’re gonna do something very simple. We’re gonna focus on 10% growth every month, which wasn’t a big number then.

“We focused on moving the needle 10% every month with revenue. And then you get into the power of compounding. Every month we moved it 10% and we would celebrate. We kept moving that needle 10%, 10%, 10%.

“Eventually, that number got to be very sizable where we cracked through $5 million in revenue and we paid off all of our debt. And we became profitable and we kept growing fast. That unleashed the ability to accelerate our growth, growing 100% a year as we got bigger.”

Links

• Bill Spruill on LinkedIn
• Global Data Consortium (GDC) on LinkedIn
• Global Data Consortium (GDC)  website, now called LSEG Risk Intelligence
• London Stock Exchange Group (LSEG) website

The Practical Founders Podcast

Tune into the Practical Founders Podcast for weekly in-depth interviews with founders who have built valuable software companies without big funding. Subscribe to the Practical Founders Podcast using your favorite podcast app.

Get the weekly Practical Founders newsletter and podcast updates at practicalfounders.com/newsletter.

Kevin McArdle spent 15 years working in large software companies before becoming a practical investor and acquirer of smaller SaaS businesses. Kevin is the CEO and co-founder of Big Band Software, a holding company that buys and holds small, profitable, and growing SaaS businesses—with no intent of selling those businesses. Kevin has acquired over 40 businesses in the last 10 years with this buy-and-hold model. 

As an expert guest on the podcast, Kevin answers common questions from practical founders about the holding company approach as an exit path. Holding companies are common in other industries, including Warren Buffet's Berkshire Hathaway, but relatively new to the software industry.

Learn more at practicalfounders.com.

Zach Moreno was a full-stack developer and coding instructor in Northern California in 2015 when he discovered audio podcasts. There wasn't a remote podcast software for recording high-quality audio over the Internet, so he decided to create one. He and his childhood friend Rock Felder started working on their product and startup idea while they still had full-time jobs, with Zach as the CEO and CTO.

Now Squadcast is one of the leading podcast recording studio platforms used by tens of thousands of audio podcasters all over the world, including me. Squadcast has since added high-quality video recording for YouTubers and other creators to easily generate professional-quality video content without using a professional studio.

With 15 employees and over 10,000 customers, Squadcast is growing steadily and scaling up, but they are still a bootstrapped company with no outside investors. This is unusual in such a fast-growing market like podcasting tools and also because the co-founders live in the heart of big VC funding—Silicon Valley in Northern California.

In this episode, Zach explains:

• How they prototyped their idea and launched their MVP at a podcasting conference before it was really ready
• Why his timing was perfect to solve this problem with the explosion in podcasting and technical changes in browsers
• How he gets advice, support, and insights as a first-time CEO by reading books, meeting with VCs, and participating in a bootstrapped accelerator called TinySeed
• How he thinks about bootstrapping in Silicon Valley and why he hasn't raised outside funding so far
• What he thinks the future looks like for audio and video content creators and how the market will change as it matures

Find other Practical Founders Podcast episodes and get my weekly email at practicalfounders.com.

Raj Khera has had three exits as a software entrepreneur and leader in his long career. His first company, GovCon, grew in the late 1990s to help government contractors easily access new contracts up for bid by the US government. Their advertising and subscription revenues grew quickly, and he sold GovCon in 1999 for $12.5 million. 

He bootstrapped one of the first email marketing software businesses in the early 2000s called MailerMailer to help small businesses send emails. Raj and his brother Vik ran this as a profitable small business for many years, giving them an interesting business challenge while not sacrificing time with their families. After running the business for 15 years, Raj sold MailerMailer to a public software company, J2 Global, in 2017.

Then Raj joined a struggling VC-funded software company called WealthEngine to help grow sales, create new products and exit. Wealth Engine was successfully sold in late 2020. Raj is now an active advisor to software founders. At MoreBusiness.com, he coaches software founders to efficiently acquire customers using advanced search engine optimization and marketing techniques. 

Learn more at practicalfounders.com.

Luke Hohmann was an engineering and product management leader at Silicon Valley startups before he became an acclaimed author and speaker in the enterprise software development world. He used funding from his consulting business—plus revenue from his first big customers—to build a new software product called Conteneo.

Conteneo was enterprise collaboration software that enabled the biggest companies to engage their leaders in new ways to make much better decisions about product portfolio investments. Started in 2010, this idea came out of several of the gamified collaboration exercises Luke used in his consulting business. Conteneo software customers include Adobe Systems, Cisco, Emerson, HP, Rackspace, and Reed Elsevier.

As the Conteneo software business grew, their consulting business shrank. Eventually, Conteneo was acquired by a strategic partner who was also a leader in enterprise software development and innovation, Scaled Agile. Conteneo was rebranded as SAFe Collaborate.

"One of the important lessons for any practical founder is this: Instead of thinking of investors as your first source of funding, look to your first customers," Luke says.

In this episode, Luke explains:

• How his biggest consulting client asked him to build their proven collaboration process into a SaaS software product.
• How he funded the initial development and subsequent features with creative customer contract commitments.
• Why his little, bootstrapped company was successful in selling to the largest software companies in the world in the heart of Silicon Valley.
• The bet he won with a funded founder friend about who would end up with the biggest prize when they sold their companies.
• The crazy story of how a well-known business author offered to invest in his company over a handshake at a conference.
• Why he thinks founders should have a structured advisory board and pay them instead of just having informal advisors.

Check out all our episodes and articles at https://practicalfounders.com.

Vince Hsieh is a two-time entrepreneur who has started, grown, and sold two industrial tech companies that included software and either an RFID or GPS device in the solutions. His second venture, Geoforce, raised a non-dilutive funding round to accelerate global growth before being successfully acquired by private equity investors LLR Partners in 2019.

Their royalty-based funding round allowed Geoforce to skip a VC funding round, preserving founder equity and fueling their growth. After their acquisition, Vince shares that the founders saved tens of millions of dollars in founder equity value with their non-dilutive funding from Cypress Growth Capital.

Vince eventually joined Cypress as a general partner, working with capital-efficient SaaS founders to help them build more enterprise value. Vince shares how royalty-based funding can be a very useful funding approach in specific situations.

Quote from Vince Hsieh, partner at Cypress Growth Capital

"Skipping a VC found by using non-dilutive funding made a huge difference to us at Geoforce, especially compared to my first startup where we did not have royalty-based funding in the middle from Cypress. We had just venture capital and then eventually sold to private equity.

"So the math of royalty-based funding is amazing because from the time of our funding from Cypress to the time we sold to private equity, our equity, our value more than 10x'd. But we didn't pay back Cyprus anything close to 10X.

"Had we raised several million dollars in VC funding with equity, there would have been easily tens of millions of dollars of difference between having done royalty-based funding and equity funding. And that tens of millions of dollars of difference went into our shareholders' pockets, including the founders and our friends and families who invested earlier."

Links

• Vince Hsieh on LinkedIn
• Cypress Growth Capital on LinkedIn
• Cypress Growth Capital website
• Geoforce website

Podcast Sponsor – Cypress Growth Capital

This week’s podcast is sponsored by my friends at Cypress Growth Capital. For 15 years, Cypress has provided non-dilutive growth funding to bootstrapped SaaS founders, including many successful founders I’ve interviewed here on this podcast.

The Practical Founders Podcast

Tune into the Practical Founders Podcast for weekly in-depth interviews with founders who have built valuable software companies without big funding. Subscribe to the Practical Founders Podcast using your favorite podcast app.

Get the weekly Practical Founders newsletter and podcast updates at practicalfounders.com/newsletter.

Josh Haynam grew up in the Central Valley of California just 100 miles from the tech center of Silicon Valley--without any awareness of tech jobs or tech businesses when he lived there. He was a successful high school entrepreneur, then supported himself through his college years with his digital SEO agency. Their experiments with custom website quizzes showed promising results, so Josh and his cofounder friends started a company to build the first lead-generation online quizzes as a standalone plugin for websites.

Interact quizzes showed promise with great customer value, but they struggled to sell their new solution to small business owners or marketers who had never seen quiz software before. They experimented, pivoted, and kept going for seven years before they finally reached $1 million ARR with some profits. The ups and downs continued with well-funded competitors, COVID booms and busts, target market pivots, and more.

Interact now is profitable and growing with nearly $3 million in annual recurring revenues, 11 remote employees, and thousands of customers—still without any outside equity funding. Every day, users complete millions of Interact quizzes on their customers’ websites.

Learn more at practicalfounders.com.

Joshua Strebel started a small SEO and website agency in the early 2000s after graduating from university. Joshua and his wife Sally experimented with website hosting using WordPress with low monthly fees while they ran their services business in Scottsdale, Arizona. WordPress became popular and eventually Pagely was formally launched as the first managed WordPress hosting platform in 2009 and they closed their services. business.

Pagely grew steadily until 2013, when dozens of inexpensive managed WordPress hosting competitors entered the market, all backed by big VC funding. Pagely was bootstrapped with no outside funding, so they slowly changed their focus to serve only the biggest companies the largest WordPress sites with the most complex needs. Pagely revenues grew 1000% in just 3 years after focusing on the top 1% of WordPress customers.

Pagely was profitable and sustainable with many big-brand large customers when they sold the company in 2021 to GoDaddy, the huge website hosting company also based in Arizona. With nearly $10 million in ARR, Pagely’s strategic exit created generational wealth for Joshua and Sally and life-changing wealth for multiple key employees.

Learn more at practicalfounders.com.,