Practical Founders Podcast

Wes Bush is CEO of ProductLed, a coaching and education company that has helped almost 500 serious SaaS founders to succeed with product-led growth strategies, tactics, and execution. These include freemium products and free trials, where the product itself creates the awareness, engagement, and enthusiasm to buy before any human intervention (aka “the required sales demo”). Wes has written two successful books, Product-Led Growth and The Product-Led Playbook, describing key ideas, frameworks, approaches, and examples for SaaS founders. In this expert episode, Wes shares his expertise for SaaS founders, including these topics: Defining product-led growthTransitioning from sales-led to product-ledCommon mistakes in product-led growthIdentifying challenges and solutions for user experiencePricing strategies in product-led growthThe future of product-led growth in SaaS Quote from Wes Bush, CEO of ProductLed “The PLG model you choose doesn’t matter. Not a bit. Freemium, free trial, credit card up front, whatever. You can make any of those work. That’s not the question. What matters in PLG is the actual outcome that we hope somebody will get from our product-led experience? “Does your free motion actually have a transformation in it where they can feel they will grow bigger, save time, and do cool stuff? Because if you don’t have that, it’s literally just, “Hey, look around, see for yourself, see what you can do in this product. That’s not real value.” “What is your PLG outcome that creates that transformation for the user? There has to be tangible value for the user before they ever consider buying. That’s what customers want when they buy software now–Show me value first before I think about buying from you.” Links Wes Bush on LinkedIn ProductLed on LinkedInProductLed websiteFree Product-Led Growth bookFree Product-Led Growth audio bookThe Product-Led Playbook book 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.

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 LinkedInThe CE Shop on LinkedInThe CE Shop websiteWaud 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.

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 LinkedInFull Scale on LinkedInFull Scale websiteStartup Hustle podcastProduct 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. Get the weekly Practical Founders newsletter and podcast updates at practicalfounders.com.

Eric Dill was a successful mortgage broker in Sydney, Australia, who struggled with the same painful problem as every other broker: manually checking with multiple banks to validate and price mortgages for homeowners. Eric and his good friend Angus Keatinge resolved to create a software product to solve this complicated and chronic problem. Quickli was launched in late 2021 and it immediately gained happy customers and fans without any proactive marketing or sales. Three years later, more than 10,000 mortgage brokers use Quickli every week—that's over 50% market share. Quickli has AUD $5 million in ARR with 40 employees. This is an amazing story of two product-focused entrepreneurs who solved a difficult problem and grew a successful software company without any outside funding. Quickli still has almost no marketing staff and no salespeople. Most of their employees are engineers working on the product and customer service. Quote from Eric Dill, cofounder and co-CEO of Quickli “We just cracked the $5 million ARR figure in just three years, which is a big milestone for us. We have 10,000 brokers on the platform, which is over 50% of the total market in Australia. We also have 40 employees, mostly in engineering. “It’s been very, very much a story of product-led growth. Our product completely solves the biggest problem that every broker has every day. No other product has solved it. Brokers have been telling each other about Quickli, and we have some really big fans. It’s a very tight community of brokers who help each other. ‘How lucky did we get? Because we didn’t do anything. Almost marketing and no sales. We have a website. To say we have half a marketing person feels like an overstatement because we have a customer service person who also does some marketing on the side for us.” Links Angus Keatinge on LinkedInEric Dill on LinkedInQuickli on LinkedinQuickli 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.

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 LinkedInebsta on LinkedInebsta website2024 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. Get the weekly Practical Founders newsletter and podcast updates 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 LinkedInStukent on LinkedInStukent websiteTritium 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. Get the weekly Practical Founders newsletter and podcast updates at practicalfounders.com.

John Stewart created and sold an engineering services business, then grew a Salesforce integration services company before building some early software products. One of their software experiments allowed Salesforce customers to see and interact with their customer data on a map. When customers paid for it and revenue grew, he and his co-founder wound down services and focused on their mapping product.  MapAnything grew quickly to over $2M ARR as a bootstrapped software company, with some revenue-based financing from Lighter Capital to help test their growth plans. When they focused on field service route optimization and grew quickly, MapAnything raised several rounds of venture capital to grow even faster by focusing its sales and marketing efforts within the Salesforce ecosystem.  MapAnything reached $22 million in ARR before Salesforce acquired the company for $250 million. John stayed on with Salesforce for six months before moving on. John and a co-founder launched Fastbreak.ai three years later, a sports schedule optimization platform for professional and amateur sports leagues.  Quote from John Stewart, former CEO of MapAnything “I tell founders most often that you really need to focus on sales and distribution. As a CEO of a startup in the tech space or SaaS, the only thing that really matters is revenue growth. Technology is technology. Even if you have unique IP right now, it won’t be unique soon enough. “So you need to figure out your go-to-market motion. That’s the single most important thing. Revenue cures all ills. It doesn’t matter what’s going on in the company as long as revenue is growing. It’s all about revenue growth more than anything.” Links John Stewart on LinkedInMapAnything on LinkedInSalesforce websiteFastbreak.ai 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.

Landon Taylor created two successful digital marketing services businesses before starting a product-powered business with recurring revenues. His first agency drove traffic to its customers, which led to his second business, Best Company, which produced qualified leads for large home services businesses through its bestcompany.com consumer review site.  Their work in consumer reviews led them to his latest business, Snoball, a word-of-mouth marketing platform they use to predictably and efficiently drive customer referrals. With their systematic approach and some human-in-the-loop help, Snoball creates a scalable customer acquisition channel for large home services businesses in the US.  Landon speaks openly about his approach to “parlay” one business into another to create new businesses that are larger and more valuable than the last. Rather than raising big VC funding, Landon invests his own resources to find and create new businesses.  Quote from Landon Taylor, CEO of Snoball “Fear can be debilitating for an entrepreneur. If you fear failure, if you take a leap and you’re gonna fail, you’ll be paralyzed. You won’t be able to move forward, see opportunities, and take risks that will open up doors. “You’ve gotta get to the mindset that failure is not fatal. Everybody who’s been successful has failed multiple times, right? So just take the leap. It can be a small leap. Or it could be a mental leap of believing that I can build, I can create, I’ve got something unique. “It might be as simple as wanting to do a LinkedIn post, but you hit this wall of ‘I can’t.’ So get beyond that to believe I can, I’ve got something unique, I can build, I can create.” Links Landon Taylor on LinkedInSnoball on LinkedInSnoball websiteBestCompany.com website Sponsor 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. Connect with Cliff Sentell at cypressgrowthcapital.com/practical to find out how they can help with your practical growth plans.  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.

Kyle York was the Chief Revenue Officer of Dyn, a bootstrapped cloud infrastructure that he helped grow and sell to Oracle for over $600 million. He then led product strategy and acquisitions in Oracle’s cloud infrastructure group before going out on his own to invest in SaaS startups and help them grow.  York IE is both an advisory firm with tech-enabled services to help early-stage B2B SaaS companies grow  and an investment firm that has invested in over 60 practical SaaS companies.   In this expert session, Kyle discusses why his efficient funding approach appeals to practical SaaS founders and why it is different than traditional VC funding. We discuss the current environment for funding, growth, and exits for practical founders. We also dive into what’s working and not working in 2024 to drive growth in capital-efficient SaaS businesses.  Quote from Kyle York, Founder of York IE “It’s gonna sound so simple, but founders need to set the long-term vision of what they want to be and what they want to build. Then make sure that every decision you make backward to today is working towards fulfilling that vision. “What I see too often is companies pigeonholing themselves down a certain trajectory or path that isn’t even aligned exactly with what they wanted. This can create problems when you’re raising money from outside investors if what investors want is not the same as your vision and timeline Links Kyle York on LinkedInYork IE on LinkedInYork IE website Sponsor 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. Connect with Cliff Sentell at cypressgrowthcapital.com/practical to find out how they can help with your practical growth plans.  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.

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 LinkedInAttribytes on LinkedInSyndigo websiteShopController 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.

Brothers David and Chris Sinkinson attended Queen’s University in Ontario, Canada, when David learned of the problems maintaining the blue emergency phones on campus. He proposed a location-aware mobile safety app, so Chris built it himself, and it worked great.  AppArmor grew steadily to become the most popular university mobile safety platform in Canada and the US, and over 250 universities use it. With no outside investors, they bootstrapped the company to $6 million ARR with serious profits before selling the company to Rave Mobile Security for $40 million. They stayed on for another year in transition before writing a book and running a podcast called Startup Different. Quote from Dave Sinkinson, CEO and co-founder of AppArmor ”The biggest advice I give new founders is to ‘ignore that startup noise.’ Throughout our experience, we had lots of people who I loosely referred to as haters. People who said we’re "just a lifestyle business” or our idea is never going to work. One person literally told my cofounder brother Chris that we weren’t even a startup. “Just ignore those people. Don’t pursue validation from your peers. Instead, pursue validation in the market. A couple of years into the business, that realization was a big change that helped me stay on track. So, my advice for SaaS founders is to ignore the haters and enjoy the journey.” Links David Sinkinson on LinkedInChris Sinkinson on LinkedInAppArmor on LinkedInAppArmor websiteRave Mobile Security websiteStartup Different podcast and book Sponsor 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. 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.

Dan Balcauski is the founder and principal consultant of Product Tranquility, a SaaS pricing consultancy. Dan shares the core building blocks of SaaS pricing, including customer segments, value, competition, and positioning strategy. Dan also describes the common mistakes in pricing and the importance of having structured pricing conversations with customers. In this expert interview, Dan shares his perspectives on key SaaS pricing challenges: Why CEOs need to be involved in pricing decisions as pricing and packaging affect everyone in the organization.How understanding customer segments, value drivers, competitive alternatives, and differentiation are key building blocks of SaaS pricing.Why choosing the right pricing metric and offer configurations can help target multiple customer segments.Why having pricing conversations with customers can provide valuable insights into their perception of value and willingness to pay.How pricing plays a role in positioning and branding.How AI is impacting pricing strategies in the SaaS industry. Quote from Dan Balcauski, Principal at Product Tranquility “One of the healthiest ways to think about pricing is that price is a thing, but pricing is a process. Like any other process in your company, it probably will have a process owner and some sort of document to describe it. “Your first pricing iteration is probably not going to be your best iteration. You’ll keep improving it. You don’t prevent your team from answering customer support tickets until you have the perfect customer support process. It’s the same with your pricing. “You’re going to make mistakes. Those mistakes will be way less fatal than you imagine they will be in your head. But as long as you’re committed to improving that process over time, you’re going to start moving in the right direction.” Links Dan Balcauski on LinkedInProduct Tranquility websiteSaaS Scaling Secrets podcast Sponsor This week’s podcast is sponsored by 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. Learn more and connect with Cliff Sentell at cypressgrowthcapital.com/practical to have a conversation about your growth plans.  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.

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

Krista Morgan started her first tech company by raising funding and trying to grow very fast. When the company faced a big issue and failed, she learned that big funding was more of a problem than a help in the growth and wind-down processes. Krista is now CEO and General Partner of Stage Fund, an early-stage private equity fund that makes control acquisitions of venture-funded SaaS companies that are stuck and need an alternative option to continue in a practical and profitable way. In this expert episode, Krista explains: Why “growth at all costs” rarely works for software companiesWhy VCs and funded founders don’t plan for the likely scenario that the company won’t have a successful exitWhat’s happening in M&A for practical SaaS companiesWhy acquiring software companies to grow is often less risky than growing organicallyHow to approach potential future acquirers to have a conversation about someday joining forces Quote from Krista Morgan, General Partner of Stage Fund “The game for practical startup founders is to find a way to make good decisions in the reality of today while still holding this big vision of the future. We can’t just grow at all costs, and we can’t just make all these big investments. “There’s this misconception that practical founders don’t have a big vision of the future. Of course, they do. They’re just thinking about it and getting there in a different way. And that’s where we want to be. “When I was founder of my first tech company, I thought money was always the answer. But money is usually NOT the answer. There is usually an answer, and maybe it takes money to get there, but it’s not the magical thinking of, If I just had five more people, I’d be here. Maybe, or maybe you wouldn’t. There’s no guarantee on that.” Links Krista Morgan on LinkedInStage Fund on LinkedInStage Fund 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.

Ian Manners was a successful consultant for pharmaceutical companies in the US when he discovered a major problem that needed a software solution. Big pharma companies provide financial assistance funding for patients who require their drugs but struggle with high costs, but these funds are difficult to access and manage for patients and healthcare providers.  Ian and his cofounder created Vivor in 2014 to connect this financial assistance funding to patients through healthcare providers like hospitals, medical offices, and healthcare networks. The bootstrapped software startup grew slowly at first but eventually became profitable as it scaled up. Since inception, Vivor has helped over 100,000 patients receive over $2 billion in financial assistance to offset the high costs of prescriptions.  During the COVID crisis that hit the US healthcare industry, Ian decided to merge Vivor with TailorMed, a VC-funded competitor, in a cash and stock deal. He stayed on for two years during the transition and is now looking for his next entrepreneurial adventure in healthcare software.  Quote from Ian Manners, cofounder and former CEO of Vivor “The overall idea of merging our companies and having stock and some cash in our acquisition structure made sense for both parties. If the company that’s acquiring your company is huge and they’ve got big cash reserves, they buy someone out. But if you’re combining with another startup, that cash is precious. They don’t want to spend all of it.  “So it really makes sense to do a combination of the two and to include equity in the deal. I think that part was absolutely a win-win, even when, as you’re going through that process, you negotiate all the details. “It’s a huge bet for us to take equity as part of our deal, We became an investor in the company that bought us.. I think for anyone facing something similar, my advice would be to just slow down that part of it and really think about and digest the fact that you’re becoming an investor in the combined company. “ Links Ian Manners on LinkedInVivor websiteTailorMed on LinkedInTailorMed 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.

Dave Lambert and the team at Right Side Capital Management are the most active venture capital investors, having invested in over 2,000 startups since 2009. Right Side Capital is a “pre-VC” institutional investor that operates very differently from traditional VCs: investing when SaaS companies have just a little revenue using a submission form on their website, then responding quickly and making investment decisions in a week. They also invest in practical SaaS founders with capital-efficient approaches who expect to sell their companies someday for less than $100M. In this expert episode, Dave shares practical insights for SaaS founders who don’t expect to play the big VC funding game: Why raising Series A or B funding rounds from VCs reduces your odds of a successful exitWhat founders should be focused on when they get their first customers and revenueWhy most VCs don’t invest when you have just a few customers and a little revenueHow the founders they invested in are using AI technology to grow more efficientlyWhat’s happening right now with acquisitions of SaaS companies for $25-$100M enterprise value Quote from Dave Lambert, Right Side Capital “More often than not, at the stages that we’re investing and someone has $4K, $8K, $20K MRR, the founders are still supremely confident and think they figured out their exact ICP and how it’s going to grow in scale. They think, We’re just going to take your money, and it’s going to be straight up from here. And it never does, or almost never does. “We’re having conversations with founders where we’re sharing, Hey, just so you know, 90% of our companies miss their revenue targets massively in their first year. So you should assume that you are going to as well. “But guess what? They all spend exactly what they thought they were gonna spend or more, usually. Just know that that’s gonna be the case and have a plan for where you’re still alive if things don’t go as expected.” Links Dave Lambert on LinkedInRight Side Capital Management on LinkedInRight Side Capital Management 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.

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 LinkedInShowit websiteShowit website design marketplace:Showit on LinkedIn 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.

Erin Fletter had a long career in the restaurant business before starting an after-school enrichment program to teach kids how to cook at her daughters’ school in 2011. Her cooking program became popular, and she improved and expanded it to become a paid program called Sticky Fingers Cooking. Soon, she had a sizable business with over 100 chef-instructor employees who conducted engaging classes daily in Denver. Her team created custom software to help manage their complicated operations, from enrolling students, coordinating instructors, and building relationships with schools to handling payments and payroll. The software grew slowly initially but eventually became a powerful system that helped them scale their business and run efficiently.  Erin considered turning her business into a software company, as many tech-powered businesses do. Instead, they kept improving the software and expanding operations, serving over 100,000 students and thousands of schools and venues. Now Sticky Fingers Cooling is a fast-growing and successful franchise business with a software superpower.  Quote from Erin Fletter, CEO of Sticky Fingers Cooking “Our business has a lot of logistics, coordination, and operations. Our own custom software, we call it the Dash, it takes about 85% of all operations off the table for humans. This enables our chef-instructors to connect with their students and our franchise owners and regional directors to focus on building relationships with schools and parents. “Over the years, we have been contacted by very large organizations like YMCAs, Boys and Girls Clubs, and other after-school enrichments about our software. They would see our automatic rosters getting texted and emailed at the venues that we were teaching in, and they asked, What are you using? What is this? And we told them, Well, it’s our own software, sorry.  “We had talked for years about selling our software as a white-label solution because the demand is there. We’ve had inquiries for the last 10 years. That was a direction we could have taken.  “But I’m just laser-focused on Sticky Fingers Cooking. It’s a very simple business, and our technology helps us do it incredibly well. We want to be the best at what we do. I didn’t really want a diversion from the path of taking our business national through franchising.” Links Erin Fletter on LinkedInSticky Fingers Cooking on LinkedInSticky Fingers Cooking 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.

In this second of two episodes, Practical Founders Podcast host Greg Head discusses the next five important things venture capital investors don’t tell new SaaS startup founders. Greg emphasizes that VCs invest in very few businesses and seek big wins. He highlights the importance of understanding the game of venture capital funding and the alternatives available to SaaS founders. Check out last week’s episode, in which Greg discusses the first five things that VCs don’t tell SaaS startup founders about raising VC capital. Quote from Greg Head, Host of the Practical Founders Podcast “Professional VC investors are expecting very big results when they invest. If you sell a piece of your company to get a $5 million Series A investment, that typically ends up being about 20 percent of your equity. So you’ve just valued your company after funding at about $25 million. “$25 million is the point where the venture capital investor comes in, so you can’t sell your business for $30 million or $50 million anymore. That wasn’t why the VC invested. They probably don’t even want you to sell your business for $75 million. That’s just a 3X exit. “That’s not what they invested their precious cash. They’re going for a 10x or 20x exit. So even when you just take $5 million from VCs, you can’t sell your company for less than $100 million and have everyone win. You have to sell for $500 million or more for everyone to be happy, including the founders.” Links Greg Head on LinkedInPractical Founders websitePractical Founders PodcastGreg Head’s blog Part 1 – The 10 Things that VCs Don’t Tell Startup SaaS Founders – Greg Head

In this episode, Practical Founders Podcast host Greg Head discusses the most important things venture capital investors don’t tell new SaaS startup founders. He emphasizes that VCs invest in very few businesses and are looking for big wins. Greg highlights the importance of understanding the game of venture capital funding and the alternatives available to SaaS founders. Quote from Greg Head, Host of the Practical Founders Podcast “If you’re thinking about raising VC investment, do your homework so you know what you are signing up for before. VCs are not evil people, and it’s not a bad business model—for them.  “The world has changed for SaaS founders in the last 5-10 years, and it’s still changing. You no longer need VC funding to start most B2B SaaS software companies. It’s 10 times cheaper to create a sellable SaaS product and go to market now. And founders can get higher multiples earlier when they sell their companies. VC funds are also much bigger, so it’s riskier for founders to play that game. “You just don’t need to make a crazy all-or-nothing bet that your company will create a billion-dollar exit in seven years, which VC investors require to win. The best case scenario for 80 to 90 % of software companies is NOT to raise big institutional venture funding.” Links Greg Head on LinkedInPractical Founders websitePractical Founders PodcastGreg Head’s blog   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.