Five Years A Founder

Five years ago today, on January 10, 2017, I wrote the very first post on this blog announcing to the world what we’re building at Outseta. While our product strategy and team has remained quite consistent over the last five years, nearly everything else has changed—my personal life, my professional life, and my entrepreneurial experience look dramatically different than they did at the outset. 

This post is a candid look back at the last five years—I hope it’s helpful to a younger version of myself that’s just starting out on their own founder journey.

My reasons for starting Outseta were sound… but incomplete

I have always been entrepreneurial, but the reason I ultimately decided to devote 10+ years of my life to building Outseta can be summed up in two words: Dimitris and Dave. 

I had worked with Dimitris for five years previously at Buildium, where we had a very successful start-up run. I knew him to be an excellent developer, but also someone I'm hugely philosophically aligned with. And I knew that Dimitris and several of my other colleagues had the utmost respect for Dave as a software engineer—they all talked about him glowingly.

In short, I saw a ridiculously talented development team—one that I was lucky to work with. I knew that whatever we built, it would be a world class product. A start-up always comes with lots of unknowns, but working with this team eliminated the challenges that permeate less experienced development teams. I think betting on the quality of the team was a sound decision...albeit an incomplete one. 

If I could go back and do it again, I’d apply a different level of rigor to the decision—some of that is hard won experience that I only have now as a result of being in the trenches with so many start-ups over the last five years. But a lot of it also comes with age. I was in my twenties when we started with plenty of ambition and not a lot of responsibility. It’s hard to wrap your head around committing 10+ years of your life to anything in that circumstance, and certainly it’s tough to fully appreciate the ramifications of that decision. 

I’d evaluate any start-up idea more rigorously than I did against criteria beyond the quality of the team. Top of mind for me would be:

• The relative size of the product. How long will it take to deliver a truly competitive product? 
• How fast the market is growing. This is probably the single biggest factor in terms of how fast you’ll grow.
• The price sensitivity of the target market. Selling to buyers with deep pockets is an advantage.
• The level of support required by the customer base. Some products require far less ongoing support than others.
  

This is an incomplete list, but it’s a start.

Also, one of the reasons we chose to work on Outseta I now kind of look back and scoff at—we wanted something large enough to hold our attention for 10-15 years. The sentiment sounds reasonable, but it’s a little preposterous—there are definitely ideas we could have gotten traction with far sooner, that could have similarly blossomed into something large enough to hold our interest.

We sort of fudged our idea validation interviews

Idea validations interviews are a funny thing. On one hand, we talked openly about not really needing to do idea validation interviews for Outseta—we were planning to build categories of software that represented mature markets; CRM, subscription billing, email marketing, etc. We knew there would always be buyers that needed these tools.

One the other hand, we did the interviews anyway—15 or 20 of them in fact! We listened earnestly as founders of early stage SaaS start-ups told us that their tech stacks felt a bit duct taped together. But reflecting on those sessions, it’s clear to me that we were already excited and at least a bit guilty of hearing what we wanted to hear. Yes, there was pain in integrating dozens of tools—but we didn’t push hard enough on whether that pain was acute enough to change the predominant behavior of developers. 

I think we all recognized that a fully integrated stack was a better solution, but the interviews we conducted were a bit ceremonial. We set out to build something that is a better solution, but not something that the market was demanding. 

I think it's entirely OK to build a product that represents a better solution, even if the market isn't demanding it. Tons of great businesses start this way, but it is a tougher path than if you're tapping into a market that's already demanding what you're building. Particularly when bootstrapping, I think it's important to stack the cards in your favor as much as possible early on.

We nailed our co-founding team

One thing we absolutely got right was our co-founding team. We all have very complimentary skills and we’re all remarkably aligned in terms of what we want out of the business and how we intend to operate it. We’ve hashed out plenty of important decisions together, but I can’t recall a single instance in five years where things got heated or tempers flared out of line.

We’re all fairly calm people, but even our dispositions have been complimentary—Dimitris is ever the optimist, I drag us back to earth by being a bit more of the realist, and Dave carefully contemplates things providing some balance. This is all the more remarkable because our life circumstances are all different and we now all live thousands of miles away from each other. 

Beyond that, we’ve been through some tough times—the scope of what we’re building meant it took us a full two years to get a minimum viable product to market. We struggled as a business in year three, and a pandemic hit in year four. It’s easy to be aligned with your co-founders when your business is a runaway success—Outseta was never that. We had to grind to get to where we are today, a point where our efforts from the last five years are finally compounding.

I don’t have much wisdom to impart here other than it really helps to have worked with your co-founders previously. And it’s probably more important that you’re aligned in terms of what you want out of life even more so than being aligned in terms of what you want out of your business.

I consider myself fortunate to work with this team every day.

I didn’t realize how much I’d miss marketing

While I do a bit of everything at Outseta, I’m undeniably the “marketing founder.” Going into building Outseta I had a bit of an idyllic view that I’d sit around all day and do the focused, brilliant marketing work I’d always wanted to do on my own terms. Nothing has been farther from the truth—marketing has largely been something of an afterthought and the time I do spend on it is often focused on making sure what we’re doing is “good enough” rather than the best that it could be.

I wrote this tweet kind of tongue-in-cheek, but it’s dripping with truth:

The vast majority of my time over the past five years has been working directly with customers, teaching them our product, importing their data, prioritizing product improvements, and conducting product demos. We’ve never been hurting for sign ups; the work has been in maturing the product and making it as easy as possible for new customers to adopt successfully. There are lots of days where I lose my voice, having been on demos and support calls with customers almost all day. I’m a bit of an introvert and that much customer facing time is draining for me—it’s all made me miss marketing that much more. 

The takeaway here is that as a founder of a bootstrapped business you’re going to be tasked with whatever the business needs to get done. There will likely be long stretches where you can't delegate tasks to others—the buck stops with you. I’m definitely looking forward to spending more time on marketing as our team continues to grow. 

Building a customer acquisition engine from the ground up is a massive advantage

While I haven’t been able to focus as much time on marketing as I initially expected, there is one huge benefit to being the “marketing founder” that is dramatically underrated—the ability to build a customer acquisition engine from the ground up. This is such a massive advantage I’m surprised nobody talks about it—I want to scream it from the rooftops!

When you work with established companies, you inherit a lot—they have existing sources of website traffic, pre-defined means of capturing leads, marketing programs already in place. That’s fine, but that always comes with some baggage. There’s always a CEO or another marketing leader who is pushing for more traffic, more leads, more channels—and while well intentioned, that often actually dilutes how effective you can be.

At Outseta, I said from day one that I didn’t care about anything except our brand and the number of people that come to our website that truly have buying intent. If you look at our traffic today, it’s still quite modest and we have just a handful of significant lead sources. But while that’s the case, our lead sources are:

• People coming directly from Stripe’s website that are building SaaS products
• People coming directly from Webflow’s website that need login and membership payments tools
• Students that are building no-code products as part of Makerpad courses
  

You get the idea. The quality of the leads coming into our funnel is better than at any other company I’ve seen, and having fewer of them allows us to spend more time with each. That’s a massive advantage when it comes to what we’re really after—revenue growth!

The benefits of building your customer acquisition process from the ground up are enormous and very hard to replicate in any company that you didn’t start yourself.

I’ve struggled a lot more with burnout than I expected

You see a lot of stories in the media about founder burnout—I never questioned their validity, but I always felt that most sort of glorified the issue. Beyond that, I’ve always been a person that’s put work in its place. I’m pretty calm, and I’ve never really struggled with work / life balance.   

Without question, I’ve struggled with burnout a lot more than I ever expected. 

I’ve thought a lot about this, and there has certainly been something of a perfect storm of circumstances that have contributed. Among them:

• I bought a house that was a financial stretch immediately prior to starting Outseta.
• It took us about 3 years to develop meaningful revenue.
• I was juggling Outseta with consulting work to make ends meet—juggling multiple jobs gets exhausting quickly.
• I unexpectedly had twin boys (well, a bonus child appeared!)
• A pandemic hit.
• We hit a point where sign ups for Outseta scaled up dramatically—suddenly we were supporting a large number of customers within a very small team.
• While we share the responsibility for customer support, the rest of our team is primarily focused on product. I'm the only true customer facing team member at Outseta.

There was a day this past August where this all came to a head. My kids (now two) had learned to escape their cribs in the middle of the night and wreak havoc. As a result, I'd be up routinely in the middle of the night and had woken up before 5:00am every day for over a month. 

Groggy eyed I’d plow through coffee until I started work at 7:00am, then I’d immediately take over watching the kids when I finished work at 4:00pm—my wife was thoroughly fried by then from watching the kids by herself all day. The kids would bounce off the walls until 8:00pm at which point, exhausted, I had the first few minutes of the day to myself. This went on for over a month.

One particular Friday, I was initially excited because I’d landed our biggest customer ever—one I’d been working on for months—the previous day. But when I started my day at 7:00am my inbox was flooded with messages from angry customers— one of our backend processes had a hiccup which meant some important notifications and emails for our customers were being sent on a delayed schedule. We resolved the issue quickly, but I spent the entirety of the day apologizing to angry customers. Some understood, others took their frustrations out on me. 

It was a tough day, and just before I was about to sign off for the day that new customer called. Because of the size of their account they’d hit some scalability issues that we hadn’t encountered before. They were angry and ready to walk. The kids proceeded to spiral out of control that night, and my wife was angry because I was trying to resolve the customer’s issue rather than helping her with the kids. In the midst of it all, news of a large unforeseen expense landed in my lap.

Lying in bed that night, I couldn't sleep. I was exasperated—seemingly everybody was mad at me and I felt tightness in my chest. Sure, this wasn't a life or death thing; I recognized that much. But our customers' businesses do rely on Outseta, and as the founder, all of our customers had put their faith in me. That's a real responsibility; I feel the weight of that responsibility every day. It's incredibly hard to stomach when you feel like you're letting people down that took a chance on you.

“Get a grip,” I thought to myself that night. But the truth was it wasn’t just a bad day—it was the culmination of five years of entrepreneurial stress all compounding at once. I knew enough to see that I needed to find more margin in both my life and the business itself.

A couple of other contributing factors are worth mention—Outseta is a big product in a fiercely competitive market. What that means practically is it took years to get the product to “good enough.” 

A hard reality of bootstrapping that’s not discussed enough is if you’re building a truly large product, it's going to be dissected and criticized by users for years. When you’re pouring your heart and soul into something, years is a long time to be told your product isn’t good enough—it weighs on you! 

And only recently did I recognize an even more interesting source of stress—I’m not just on my own entrepreneurial roller coaster, but I’m in the passenger seat with hundreds of other founders as well. I routinely bounce between calls where one founder is elated, while another is in a dark place, despondent after years grinding. Oftentimes I’ll talk to the same founder a few days apart, and their own outlook and mood will have shifted between these states. My own entrepreneurial journey aside, I play the role of both cheerleader and confidant for an awful lot of founders. That’s both exhausting and a privilege.

I’d reconsider whether Outseta creates subscription products in Stripe

As I reflect on our product strategy as whole, there’s not too much that could be considered controversial or that I would change. Little of what Outseta offers is novel—what’s unique is the benefits that come from delivering the tools that we do in a single platform.

Of the major product decisions that we’ve made, the only one that I’ve really wrestled with is that we chose to build our own subscription management logic and use Stripe solely as a payment gateway (rather than creating subscription products in Stripe).

This decision came from a good place—Stripe’s own subscription management tools didn’t even exist until well after we started working on Outseta. Even after Stripe started offering their own billing products, we still saw a lot of benefits in owning our own logic—we can build and offer any sort of product type that we want rather than being confined to what Stripe offers. Even today there are lots of product types and scenarios that Outseta supports that Stripe does not.

While that’s great, Stripe’s own products have matured significantly and there are undeniably some benefits to creating subscription products in Stripe. Namely, a lot of other products in the Stripe ecosystem work out-of-the-box with other tools that create subscriptions in Stripe. That aside, there’s also the effort that our team has to spend maintaining our own subscription management logic rather than relying on Stripe’s. 

If we could start again today, I think we would probably elect to create subscription products in Stripe—both because it would help with speed to market, but also because of the other benefits I mentioned. Ultimately this is another downside of bootstrapping that I think isn't discussed enough—by electing to move more slowly, you're more vulnerable to changes in the market in which you operate.

This is still very much a decision we are wrestling with heading into 2022—if you're an Outseta customer with an opinion on this, we'd love to hear your feedback.

Flexibility? Yes. Financial freedom? No.

I’m now five years into my founder journey. We’re well beyond product market fit and we’ve found cost effective means of acquiring customers—our growth trajectory is up and to the right on a compelling slope. I’m set for life, right?

Nope.

While I now have significant equity in a valuable asset and my investment in Outseta looks like it will end up being a very good one, I’m still making a very modest salary.

At this point being a founder means I’ve forgone about $500,000 in salary and benefits that I would have made in a “regular” job.

Some of that is self-inflicted—we’ve prioritized hiring team members and putting money back into the business. But the truth is five years in my financial situation has not changed significantly for the better—that’s a hard truth most aspiring founders would benefit from hearing.

While that’s the case, there’s no question that Outseta has given me enormous flexibility—something that I value very much. I’ve built Outseta in 15+ countries. I’ve been around every day since my kids were born. And that’s worth a lot.  

It’s important that you consider why you want to be an entrepreneur in the first place. If my goal was solely to maximize my income I would have taken a job at a large, well established tech company long ago. 

Do it your own way

One of the pieces of advice that I would advocate for most strongly is encouraging founders to “do it their own way.”  The tech industry at large has a weird obsession with successful entrepreneurs, and everybody seems to be hyperventilating for more information on how they have architected their success. That’s natural, but the more people that replicate a particular strategy the less of an advantage it becomes.

At Outseta, we blazed a very abnormal trail since day one. This included things like:

• Having no hierarchy in the business
• Giving everybody equity on the same terms as the founders
• Not setting budgets, forecasts, or performance targets
• Purposely not having a sales team
  

Plenty of people have called all of this nuts—fair. I’m the first to tell you this is why many of our customers have elected to do business with us. 

The same can be said for how I’ve built our customer acquisition engine—it simply wouldn’t fly in the context of a normal SaaS company, where I’d be tasked with hitting some arbitrarily set goal for “marketing qualified leads.”

There are countless examples of this across our business, but the common denominator is the same. In the instances where we’ve said “we’re doing this differently” we now have a real competitive advantage—and importantly, what we’re doing simply feels more like us.  

Beat to your own drum—I think the benefits of doing so will surprise you.

I’d start selling later

Conventional start-up wisdom tells us to build a minimum viable product, unleash it on the market, capture feedback, and iterate often. Nothing is more indicative of product market fit than making sales, right?

If I could do it all over again I would actually start selling Outseta far later than we did. 

Again, this largely comes down to our product idea specifically. If you’re building something that’s truly new, truly novel, then trying to sell your MVP as early as possible makes a lot of sense. But if you’re entering a well established and hyper competitive market, I think this advice can actually backfire.

For example, the first feature that we built was our email marketing functionality—I started trying to sell it almost immediately. I’d show it to prospects whose reaction was largely the same:

“Cool man—this looks like a really bare bones email marketing platform. Why would I use this when there are countless alternatives?”

That feedback is totally fair, and in reality I introduced a lot of people to an underwhelming product. Many would come back years later:

“Woah! This is not the Outseta you showed me a few years back.”

That sentiment always feels good, but the reality is there were plenty of people who had a lackluster first impression of Outseta and simply moved on. If I could do it again, I’d wait to really start selling until we’d delivered simple and stable features across all of the software categories we set out to build. 

Trying to sell a minimum viable product in a crowded market resulted in a lot of wasted effort. I could have invested my time and energy elsewhere.

When to niche down and focus vs. experiment

A final bit of hard won experience that’s hard not to reflect on is knowing when to niche down and focus versus experiment. The first three years of building Outseta were tough—we invested a lot of time and energy into a product and didn’t have much to show for it. My natural reaction was to double down, to maintain our focus—we needed all of our energy and effort focused on building the best possible platform to help founders launch a SaaS business as quickly as possible. 

I had plenty of conversations in those early years with myself and others about other markets we could potentially serve—subscription box services and membership sites were mentioned to me early on, and I started to hear grumblings about “no-code” as well. But I kept our focus solely on SaaS. 

While well intentioned, in retrospect I was probably 6-12 months slower than I should have been at seriously looking at other markets. We’d gotten plenty of feedback from developers that they simply wanted to assemble the perfect tech stack, even if it wasn’t the best use of their time. And it only takes some common sense to realize that the all-in-one nature of Outseta is particularly appealing to less technical users, who don’t have the skill set to integrate a whole bunch of tools like their developer counterparts do.

Luckily, the no-code community would eventually find us and become loud enough that they demanded our attention. But not experimenting with other markets earlier came with an opportunity cost—competitors with lesser products had become well known in the no-code community before Outseta even arrived on the scene.

In my defense, I know it’s more common that founders become distracted by shiny new objects than it is that they remain focused on a particular market segment for too long. There’s also a lot of “why don’t you just go test that new market” advice out there that just isn’t practical. Sure, you can throw together a landing page and drop it in front of a new audience, but I seriously question the validity of doing so.

Entering any market is a serious undertaking, not something that can be achieved with some half baked marketing campaign.

The lesson here is simply to be honest with yourself in terms of what the market is telling you, but also to be self-aware in terms of your own personal runway and the level of effort you’ve put into your product so far. There’s a real cost to remaining focused on something that’s not working for too long, just as there’s a cost to switching your attention away from something prematurely.

My hopes for the next five years

We’re now five years into a 15+ year journey—and we’re far enough along that I know the hardest parts of our start-up journey are behind us. I feel relieved, but not yet relief. 

My primary hope is that by year 10 the business is calm, stable, and has enabled a small team of people to live the best possible lives that they can. I hope we remain small—I don’t want to see the team scale much beyond 20 or so people.

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I’d also like to see Outseta progressing towards being the platform that founders of early stage SaaS and membership businesses look to when starting new projects. While I get “this is amazing—how did I not know this existed?” reactions to Outseta on a daily basis now, I want to see us smooth out the rough edges of the product. I want Outseta to become beloved for its simplicity and user experience. 

On a personal level, I’m excited to further build out the team—recruiting and the people component of building start-ups has always excited me. I hope we take chances on up and coming talent, give them opportunities that they never imagined they’d receive, and let them pleasantly surprise us.

I want to see us continue to forge our own path and I want to prove Dimitris, Dave, James, Bernard, myself, and all of the customers that took a chance on us in those early years right—that will feel really good. 

We’re well on our way—I’ll let you know how it turns out when you read our 10 year update.