November 18, 2024 • 53 mins
Greg Scown, co-founder of TextExpander, shares an inspiring journey through the partial sale of his company to Summit Partners and the path that led him there. Discover how casual coffee chats carried invaluable advice, such as re-registering as a Delaware C corporation, which significantly boosted the company's valuation. Greg discusses the pivotal role of an enthusiastic fan at Summit Partners, which propelled TextExpander into the spotlight and paved the way for successful negotiations. As Greg and his partner Philip Goward step back from operational duties, they embark on a transformative journey of semi-retirement and advisory roles, exploring new ventures and collaborations.
The episode takes a deep dive into the strategic decision-making process behind selling to private equity versus traditional venture capital. With JD Mullen taking the reins as CEO, we examine the balance of maintaining continuity while embracing change. Greg highlights the strengths of bootstrap companies like TextExpander, emphasizing the significance of subtle improvements to enhance user experience while preserving product reliability. This discussion offers insights into the private equity landscape, exploring de-risking strategies and the challenges of transitioning from a high-pressure leadership role to a more relaxed lifestyle.
We explore Greg's insights on the evolving tech landscape, the burgeoning potential for indie app developers, and the value of partnerships with organizations like Founder Partners. Through personal stories and reflections, Greg sheds light on the emotional transition post-exit, tackling mental health challenges, and societal pressures. There's also an intriguing look at the future of indie app development and the entrepreneurial spirit driving innovation in Europe, exemplified by entrepreneurs like Michael Simmons of Fantastical. If you're an engineering founder in Barcelona or Europe, this conversation invites you to connect and collaborate, opening doors to new opportunities and shared growth.
🎬 You can watch the video of this episode on the Life on Mars podcast website: https://podcast.marsbased.com/
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Hello everybody and welcome to Life on Mars.
I'm Alex, ceo and founder ofMarsbase, and in today's episode
we have Greg Scown, co-founderof TextExpander.
Textexpander is a productivitytool that I have been using for
over 10 years now, and I waspleasantly surprised when Greg
appeared out of the blue as anattendee of one of our startup
brand events in Barcelona and,lo and behold, obviously he
(00:25):
became the next speaker at theevent, right, somebody who has
built a tool that has been 20years in the making and has sold
partially to a growth equityfund like Summit Partners two
years ago.
We talk and discuss whathappens after a partial or a
total sale.
In the case of Tax Expander, itwas a partial sale to Summit
(00:48):
Partners, after which Craig andhis partner decided to step
aside and leave the operationalpart of the company to somebody
else.
So we discussed the day afterhow many proposals do you
receive?
Are you actually engaged withthe company or not?
How is this handover period?
What do you do with incomingrequests of angel investing or
(01:12):
other proposals to joincompanies as a co-founder, as a
board member, as an advisor, ordo you become a serial
entrepreneur?
And right now, the question ofthe day, which is what do you do
between projects?
Do you take time off?
Do you concatenate them?
Do you take sabbaticals?
Do you use the money you madefrom one project to spend it or
(01:34):
invest it in the other?
I'll gladly read the answers inthe comments down below and,
without further ado, let's jumpright into the episode.
How exciting, we got acountdown.
How are you doing?
I'm doing well, thank you, wegot a countdown?
Speaker 2 (01:45):
How are you doing?
I'm doing well, thank you.
Speaker 1 (01:48):
No singing on this one.
No singing on this one.
Welcome to Live on Mars podcastMars-based.
You are familiar with itbecause I know you're a regular
listener and you were a speaker,a guest, at Startup Prime in
Barcelona, where you surprisedus with your singing abilities.
Speaker 2 (02:07):
I was super nervous about the whole useless
superpower thing, and so thatworked out well for me in the
end.
Speaker 1 (02:13):
It was great.
We had fun.
It was one of the very lastStartup Grind events.
Actually, I just announced acouple of weeks ago that we
stopped doing them, and so Iwill hold that event in high
esteem.
It was probably the bestperformance we've ever had, or
the best answer we've ever hadto the question of the use of
superpower.
So thank you for that.
(02:34):
Thank you Good.
I wanted to discuss life afteryour company in this episode,
right?
So one of the things that well,I mean, you're known for your
time at TextExpander, but you'vedone several other things.
We covered that already that inStartup Brand so let's focus
(02:54):
more on what happened afterwards, right?
If you want to give a briefsummary of how did your personal
exit go?
Right, so your tax expander hadbeen there for many, many years
.
There come Summit Partners andthey let you, they give you this
(03:16):
opportunity of you know theyinvest in the company, you move
to another role in the company,and how did that whole thing go?
If you want to start with, howdid they approach you?
Speaker 2 (03:30):
Sure, sure.
So my business partner, philipGoward, had made a habit of
taking coffee with folks whoasked essentially I mean
obviously he would vet them andsee if they were folks who were
likely to be serious.
But probably as much as two anda half years before we did the
deal, philip started havingcoffee with an associate at
(03:53):
Summit Partners and there wereprobably about five or six folks
that he would regularly havecoffee with per quarter, per
quarter.
And this was great because, tobe fair to the folks, the
associates at these growth,equity and other types of firms
they were very free with theiradvice.
So he would talk and they wouldsay okay, for example, you're
(04:15):
not a Delaware C corporation yet, you're an Oregon corporation,
you should move, and you shouldmove now, and that that will
actually improve your valuation.
That was very, very good adviceand super helpful, and for the
price of a cup of coffee,essentially.
In fact it's entirely possibleScott bought full of the cup of
coffee.
I don't know, but at any ratethat's the gist of how this got
(04:36):
started.
And it turns out that theassociate was a text expander
user and maybe even a bit of afanatical text expander user,
which certainly didn't hurt, andso he was building awareness of
the product internally toSummit, unbeknownst to us.
We didn't really know that thiswas going on until later and he
(04:59):
built internal awareness andthen he got to the point where
he said, okay, it's time for youto meet the partner.
And so he introduced us toColin Mestel.
And that's when we startedtalking seriously about, okay,
what would make sense for TexasSpinner.
They had an internal executivein residence and so they had
(05:22):
somebody that they were trainingup to run a company and they
were looking for a company forthat person to run, and so this
was sort of a good confluence ofinterests, uh, and then, uh, it
was really a question oftalking for a bit, and then
everything goes slow until itgoes fast, and then, when it
goes fast, it goes very, veryfast.
So, you know, from April 2022to the end of June 2022, that
(05:46):
was it Like.
That was the, the, the dealtimeframe, due diligence was
done in that timeframe,everything got done in that
timeframe.
Uh, and so two and a half year,or two years, and three months
build up and three months ofexecution, essentially.
Speaker 1 (06:00):
So, from the first cup of coffee to the deal, that
was the two years, right, twoand a half years, I believe Two
and a half years yeah.
Speaker 2 (06:08):
I mean, the first cup of coffee wasn't entirely about
doing a deal.
The first cup of coffee wasabout learning about who we were
, what were our goals, that typeof thing.
Speaker 1 (06:17):
And so from the time that things got serious until
the deal, how long was that then?
Speaker 2 (06:23):
It was less than three months.
Speaker 1 (06:26):
Oh wow, that was pretty impressive.
That was right before the heavydecline or the plummeting of
the technological companies orthe tech stock in general,
because that must have beenaround July, August 2022.
So you guys got it done in June.
Speaker 2 (06:43):
We got in just under the radar, it is true.
Speaker 1 (06:46):
That was good timing actually, but for me this kind
of feel it is pretty interesting.
I mean, after the event withyou, I started reading a little
bit more on private equity and Iknow Summit Partners is some
kind of a weird animal becausesometimes they're labeled as a
(07:06):
growth investment firm butsometimes it's a private equity.
So I don't really know if theymake an internal distinction or
just they don't know aboutanything, about marketing or
something like that, becausedepending on who you ask,
they're one thing or the other.
But things turned out to bevery interesting for private
equity um in the last 24 monthsright, so between summer 2022
(07:32):
and summer 2024 because high um,I mean there were the super
high sky high valuations, theydropped.
There was no investment, no m&aactivity.
Therefore it was a very ripemarket for private equity to go
out and chase and hunt, becausethey buy technically very low to
(07:52):
sell very high.
But in your case it was not anacquisition, it was just, you
know, it was an investment or apartial sale right, sale right.
So it's very interesting to seehow this started because after
that, you know, bending Spoonsand other big players started
(08:13):
acquiring a lot of productivitytools, b2c or consumer market
tools, similar, sometimes bigger, sometimes smaller than
TextExpander, but in the samevein.
So yours was kind of like theprecedent right, the origin of
all of that.
Did you feel the same way?
I don't know about that.
Speaker 2 (08:25):
And then, in terms of how Summit presented themselves
, they presented themselves tous as a growth equity firm, so
as folks who buy profitablecompanies.
They're not interested in folkswho are getting started.
They're interested in folks whoare already running and they're
looking for folks who have somerunway for growth.
But it doesn't seem likethey're looking for ridiculous
(08:47):
growth, right.
They're not looking for 300%,400% annual growth.
Nice, solid double digits willdo well, as far as I can tell,
and so that was the approach.
They're looking for companiesthat are established, profitable
and growing, and so we were allof the above at the time.
Speaker 1 (09:07):
But the thing with the private equity usually
they're.
I mean maybe Summit Partners isone of a kind and they really do
some growth investing as partof their strategy or
diversification strategy.
But most PE firms what they dois either roll-ups or build-ups.
Right, and I don't think or itdoesn't look to me from the
(09:27):
outside that this operation waspart of neither of them, right?
No, yeah, that's not whatthey're doing in this case.
Okay, that was, that was a,that was a pure investment.
No, that's that.
That's good, you know, butusually in there do you think
about?
You know?
I have been compiling a, a listof things where you should sell
or take investment from a PEfirm and why you shouldn't.
(09:49):
On the overall, you look veryhappy about it.
What would you say to peoplethat are not acquainted with PE
investment or operations?
What are the reasons to go forit?
Speaker 2 (10:03):
Okay, good question.
I mean I think that I would goback again to say look for a
growth equity firm.
Don't look for a private equityfirm that's strictly trying to
do private equity and that'sstrictly trying to do debt
loading or other forms ofplaying around right.
Look for someone who genuinelywants to invest in the growth of
(10:24):
your company.
Playing around right.
Look for someone who genuinelywants to invest in the growth of
your company.
In our case, it was acombination of an investment in
the company and an enablementfor an exit for Phil and myself,
and so that was a goodcombination for all the parties
involved, and I guess that wouldbe the other bit.
If it doesn't feel like it'sgood for everyone involved, then
it's probably not something youshould be doing.
Speaker 1 (10:43):
it's good for everyone involved then it's
probably not something youshould be doing.
But the thing is like, some ofthe advantages of selling to
private equity is they are, youknow they're looking for an exit
.
They're very financially driven, they're very good at
operations and at making themost out of every penny they
invest.
Right.
So it looks like a safeinvestment from the founder's
(11:04):
perspective and also to the restof your shareholders, right.
So it looks like a safeinvestment from the founder's
perspective and also to the restof your shareholders, right.
Maybe it's not so good in theshort term, because usually they
buy cheap and they sell betterbecause that's the entire basis
of their business model.
But you know there's an exitstrategy.
That's pretty clear, right?
Whereas with traditional VCmoney, you're investing in
(11:27):
speculation, I would argue right, it's yeah, maybe we're able to
sell this for 300x, but wedon't know.
It really depends on you.
There's a lot of pressure,Whereas with this PE money or
growth equity, you de-riskyourself, which, on the one hand
, I think it's really good, andalso you give them the
(11:49):
opportunity to help you do that.
Or sometimes it's delegation100% on them, and now it's on
them.
Somebody else takes over as aCEO and the entire founding team
is replaced or moved to othernon-executive positions, like
yourself, if I'm not mistaken.
So this de-risking is thatsomething that you also took
(12:10):
into account when the operationcame to the?
Speaker 2 (12:12):
table.
Sure, I mean, we'd been doingthis for 20 years and it was
clear that we weren't going tobe doing it for 20 more, and so
the question was OK, then whatwould the next thing be?
Would we either try and buildthe company out internally so
that we could step back andessentially run the company as a
(12:35):
dividend generator, or would wefind a way in which we could
step back and de-risk, as youjust said?
Speaker 1 (12:45):
The person that was going to take over the company
or be appointed as a CEO or onthe forefront of the company?
Did you know him before or her,and what sort of process did
you undergo Like?
Was it some sort of like youwould vet him?
Or just how do you get to knoweach other and how do you know
(13:11):
that's the right person to runyour company from this point
onwards?
Speaker 2 (13:15):
The person is JD Mullen, and so I mean, that's no
secret, that's publicinformation and he is still the
CEO and he's doing a very goodjob.
He was the executive inresidence at Summit and he was
introduced to us I think he wasat one of the coffees along the
way that Philip met, and so methim earlier, but didn't engage
(13:41):
in detail until they started tochoose to do the deal, and at
that point he was involved withthe deal team, which makes sense
.
Speaker 1 (13:50):
I know he's doing a great job because the product
hasn't changed and so you knowI've been a power user since
like I don't remember like 2007,something like that.
And one of the things I reallylike about TextExpander and
other companies likeTextExpander, like mostly
bootstrap businesses, like inthe time I was using Buffer, for
(14:12):
instance.
Now they're not entirelybootstrap, but they follow the
same strategy.
Or Harvest, for instance, weuse at the company is I pay them
so that they don't change.
Right, Because when they sellout to VCs or they take
investment, usually companiesstart like going crazy, trying
experiments, redesigning the UXUI every six months, trying new
(14:34):
product lines and experimenting.
And one thing I love aboutTextExpander and other software
like Magnet, MailTrack, stufflike that that they are mostly
bootstrap or entirely bootstrap.
They don't change, they justfucking work and I it.
I love that.
So I think like, if, first off,it's still around, that's good.
Second, hasn't changed, that'sgood.
(14:54):
And third one is no bugs ever.
I don't remember ever a singlebug with text expander the same.
You know, I use Ghost right nowas a publishing platform for my
new website and stuff like thatdoesn't break, Everything works
, it's flawless and I thinkthere's got to be something in
bootstrap companies that maybewe take a little bit more time
(15:18):
and attention to detail andironing out the last details
right In, not cutting corners,and the product doesn't resent
that right.
The product actually thrivesunder this guidance.
I don't know what's your takeon this.
Are you of the same opinion, or?
Yeah, I mean.
Speaker 2 (15:40):
I feel like bootstrap companies have massive
reputational risk and so cannotafford to goof around with their
customers.
Honestly, that said, it's kindof cool.
I'm glad that you say thatthings haven't changed, that you
see visibly.
But there has been a fairamount of change and
experimentation behind thescenes and the idea is to do
(16:02):
that without disrupting the userexperience.
Right, don't get in your way,don't make it not work the way
you've known before, but like,for example, the snippet editor.
Well, the snippet editor, thething that you edit your
snippets in, has changedentirely over the last two or
three years.
I mean, it's completely,completely different from the
ground up and better, but slowlyand quietly and and bit by bit,
(16:27):
and I think that they, the team, has done an excellent job on
that.
So, uh, you know, these are thekinds of things where make the
improvements, but don't messwith the user base, don't get in
their way yeah, that's spot onactually.
Speaker 1 (16:40):
well, you and I have got a friend in common, joanne,
from Everyday and I know thatbecause I'm also a power user of
Everyday, and people perceivelike, oh, it's like the same
product, like it was like fouryears ago.
But he's got seven code bases,right.
He's got the desktop app, theweb app, the watch app, the
(17:03):
iPhone app, the Android app andsomething else.
I don't remember where else hegot, but he's got a couple other
code bases lying around and sosometimes it's an entire
refactor of the React views ofthe web app, for instance, right
.
Or he changed the entire DevOpsstructure over the last year
and it's funny that he's got thesame message is we're changing
(17:23):
a lot of the stuff behind thescenes but we don't want people
to notice because otherwise youknow people.
Just in his case, it's a freeapp mostly, so people just jump
over to another similar app andthere's a lot of volatility here
.
In TextExpander, the maincompetitor must be in iOS.
(17:44):
It's an OS system because itprovides that build right out of
the box, even though it's 10times more basic.
But I know probably in Androidthere's a lot of apps for that.
Speaker 2 (18:02):
Yeah, I mean, the world of Android extension apps
and keyboards is pretty broad,but on to everyday, I think that
, yes, okay, it looks like againnothing has changed in four
years.
But think about it.
He's added widgets, he's addedthe ability to check off a task
on a widget, and he's done allof that without disrupting the
product, without disrupting theflow.
(18:23):
It's kind of amazing and so,yeah, I totally appreciate that
kind of craft and that level ofattention to detail and respect
for the customer.
Speaker 1 (18:32):
Yeah, circling back to the, I mean we have covered
more or less the advantages ofselling or taking investment by
a PE firm or a growth equityfirm like Summit Partners.
How about the cons?
Like, what are some things thatyou considered back then that
were like we should be aware ofthis?
Like, for instance, you knowthe loss of control because,
(18:53):
basically, they take over, startoperating the company
differently, culture shock ormaybe potential layoffs, stuff
like that?
What did you fear the mostabout this kind of operation?
Speaker 2 (19:05):
That's a good question.
I mean stuff like that what didyou fear the most about this
kind of operation?
That's a good question.
I mean.
I think that we were veryfortunate that we've been
talking for a relatively longterm and had some sense of the
folks that were involved andtheir philosophy and what they
wanted to do, and it was prettyclear that they were not looking
to radically change the companyculture.
(19:43):
In fact, if anything, theyspent a lot of time with us
saying, okay, what is thecompany culture?
What are we walking into tostay?
What's the plan for doing that?
In the course of thistransaction, and they were
incredibly receptive to thatadvice side.
Again, if you're not talkingabout these things directly with
(20:05):
the person that's going toinvest in you, that's a problem,
because then your expectationsabsolutely won't get met Right.
Anything that you didn't talkabout, anything that you didn't
run through, is open for trouble.
But if you're relativelydeliberate about it and you talk
through okay, this is theculture, these are the people,
this is the organization youknow.
Okay, this is the culture,these are the people, this is
the organization, you know this,this is what you're getting,
(20:28):
this is what you're about to getinto.
I think that folks are smartand receptive to that and can,
can, can potentially do a goodjob, and in this case, I think
they really did.
Speaker 1 (20:39):
And before we move on to what happened next, I'm
really curious about one veryspecific thing about what
happened before, which is howaligned were you and your
partner?
Oh, 100%, 100%.
How did you prepare?
Did you have specific meetings,coaching or was there any
(21:00):
friction in the process ofdiscussing how and when and if
to do it?
Speaker 2 (21:07):
Sure, I mean, I'm incredibly fortunate to have had
the best business partner inthe world.
Honestly, I mean, in no word ofa lie.
Philip is just amazing, andwe've just built a relationship
of immense respect over a very,very long period of time and we
remained friends, which isanother good quality after such
(21:27):
a thing.
But I think that how do weprepare?
We started buildingspreadsheets for where we wanted
to go as a company in terms ofrevenue, in terms of growth, in
terms of marketing spend, interms of employee count, et
cetera, and we started buildingthose, I mean probably as early
(21:48):
as 2018 or so and so this isfour years before the
acquisition and so that we wouldhave some idea of, okay, what
are we trying to do, where arewe trying to get, what are our
odds of being able to achievethat?
And that was super helpful,because we had some idea of what
(22:09):
we thought we could do on ourown.
And then we were comparing thatagainst what was on offer and
it looked favorable, and it waspretty easy for us to make a
decision because we had, youknow, sort of the path that we
were looking at compared againstthe path that they were
offering.
So I think that.
I mean, I suppose the advice inthis space is you know, start
(22:34):
planning for where you want tobe, because that's super helpful
in evaluating somebody whocomes along and says, okay, you
know, I can take you therefaster, or okay, I can, I can
take you there faster, or okay,I can, I can help you achieve
this now, instead of three yearsfrom now.
Five years from now, what haveyou?
Speaker 1 (22:50):
Good, let's move on to the what happened afterwards,
because I assume that the veryfirst day after you moving on
from an execution execution roleat your company, you have to
suffer some kind of vertigo.
I don't know.
How did you feel the first daythat you're hands-off?
(23:10):
I assume there was a transitionperiod in which you were
hands-on handover, and how didthat go?
Speaker 2 (23:17):
So for me, my role at the time of the transaction was
as the COO doing operations,and so I ran day-to-day finance,
I did and I managed theengineering team, so that was
sort of my side of the house,and this also included our
(23:38):
software stack of tools that wewere using internally security
things of that nature.
And so you know, for me Iagreed to stay on through the
end of the year and it was clearthat we were going to hire an
engineering manager.
And in fact they hired a VP ofengineering about two months in
(24:03):
and you know it was supercollegial to hand off because I
had a great team with two solidteam leads and I was able to say
, all right, here you go, andy,these are yours now.
And he did a really nice jobwith the transition.
I think he's extremely patientand he's a good communicator.
So I think that that helped alot.
And so that happened and Ithought, okay, now I just wind
(24:28):
down the operations things andhere we go.
But it turns out that we raninto an unexpected road bump,
which was that CFO left and Iwound up doing finance
operations for the last two anda half months.
We hired a VP of finance.
She's absolutely fantastic.
And then was able to transitionthat.
(24:50):
But so much for the whole.
You know, slow, easy transition.
It turned out to be a littlemore more hectic than expected,
but I think that's, that'severything right.
You know everything is going tobe different than what you
expect, so expect the unexpectedyeah.
Speaker 1 (25:05):
And how did you start going from you know this
full-time role to part-time,then advisory, and uh, when did
you start feeling like, oh I, Idon't have a job anymore and
what's next for me do?
Do I really need to work again?
(25:25):
So how is that mental process?
I'm very curious about that.
Speaker 2 (25:30):
Yeah, so in theory I ended in the end of December,
but we'd hired the VP of Financeabout three weeks before, so
there was a period of helpingwith that transition, but that
was not a ton of time.
She was super, super quick atwrapping up and very experienced
.
So by mid-January really, myonly responsibility to the
(25:52):
company was serving on the boardand so preparing for and
attending quarterly boardmeetings.
So the vertigo set in aroundthe end of January.
Uh, and then, uh, we're inprocess of, uh, reforming a flat
here in Barcelona, and thattook through June.
(26:13):
So that actually turned out tobe how would you say, a useful
project.
Uh, yeah, that too Right.
So so that happened.
Yeah, that too right, so thathappened.
And in the course of that, Ithink that I realized and also
in talking to Philip, herealized as well that we were
kind of lobsters boiling in apot.
(26:34):
I don't think that we hadrealized how much we had put
into the company, how muchstress we had taken on, and so
when it was not there, it waspretty evident and it's like ooh
, okay, I need to take care ofmyself a little bit.
So I'm one of the typicalfounders where we did a Midland
(26:59):
job of taking care of ourselvesin exchange for trying to do a
pretty good job of taking careof the company, and I reckon you
have firsthand familiarity withthat.
Speaker 1 (27:08):
It ebbs and flows.
I'd like to say that we are alifestyle company and therefore
we take care of ourselves.
We take a lot of pride intothings small little things like
not working more than 40 hoursper week not even the founders,
right.
But that's not 100% true.
Sometimes you have to do it andyou know it as a founder.
(27:29):
Sometimes you have to work onthe weekend, but luckily I can
take time off during the week,right.
So, because you know familyissues all the time.
Then sometimes you got to takecare of children.
I was like, okay, I'll justtake half a day off here, I
might work of the time.
Then sometimes you got to takecare of children.
I was like, okay, I'll justtake half a day off here, I
might work on the weekend, right.
Today I have to take care offamily pretty much the entire
(27:52):
day, say for this podcast and acouple of other calls, and then
day off, but maybe I will workin the night.
And also, we got we are in themidst of a procurement process
with a big corporation in the US.
So for me it's good to stayalert between, like you know, 8
pm and midnight, because usuallythat's when the emails come in.
Maybe you got to take one callor two.
(28:14):
So having this sort offlexibility, that has got to be
the exception, not the norm.
It's good for a while, right,but I know where you're coming
from when you're mentioning this.
So, having said that, in termsof you mentioned a lot of
pressure, a lot of you didn'texplicitly say burnout, but I
inferred from that Any othersort of mental issue you'd like
(28:39):
to speak openly about, like, forinstance, I talk publicly a lot
about imposter syndrome and youknow about it Sometimes anxiety
, right, and stuff like that, orhow to cope with the pressure
of I've done something big.
Now, if I don't do somethingbigger, I will be letting down a
(29:01):
lot of people, including myself.
That's something I've gottenfrom serial entrepreneurs.
They usually feel thisauto-imposed pressure.
Right, what happened in yourprocess?
If you want to talk about it,no, no, it's fine.
Speaker 2 (29:15):
I relaxed.
That's what happened, honestly,and it's not something that I'd
been particularly good at.
Speaker 1 (29:23):
The operations.
People are not good at relaxing.
Speaker 2 (29:25):
No, no Now the barometer for this is my mother.
So you know, I talked to mymother pretty regularly and one
of the sort of benefits from thepandemic is that mom and dad
will do Zoom calls now andthat's actually a super handy
way to keep up with them.
And so, you know, as we getinto March, april, may, mom's
(29:48):
like wow, you look much morerelaxed, it's like you look way
better.
I'm like, okay, I mean, I feelbad in a way because that means
that I must have looked wayworse previously.
But on the flip side, you know,it's a good barometer.
And so I learned to relax, um,and I can't say that that's, you
know, uh, an easy thing,necessarily, because you get,
(30:11):
you know, very focused or veryintense in what you're doing.
And then, uh, you know it'sit's time to not do that.
I'd be a terrible serialentrepreneur.
Honestly, I think it's not.
I don't think it's entirely inmy DNAna.
I, how is it?
I, I would.
Until I managed to make acompany, I was completely
dedicated, right, I failed thefirst jot out the gate and went
(30:33):
back to work for a couple years,that kind of thing.
So that part, yes, but like nowthat I, you know that I've done
this and built this companyover 20 years and and had the
acquisition.
I don't feel the need toimmediately get back on or to
immediately do anything.
If something amazing crossed mypath, great.
Speaker 1 (30:52):
But otherwise I'm okay.
Yeah, that's why you moved toBarcelona, otherwise you would
have stayed in Silicon Valley,because yeah.
Speaker 2 (30:58):
I have a place in my A lot of people say you're not
ambitious.
Speaker 1 (31:00):
Right, you're not ambitious because you moved out
of Silicon Valley.
That's fine, no.
But A lot of people say you'renot ambitious, right, you're not
ambitious because you moved outof Silicon Valley.
That's fine, no.
But taking care of oneself isreally important.
But did you really disconnect100% from it Because you're
still attached to tech?
Speaker 2 (31:17):
Oh yeah, I mean I keep up.
I mean I keep up with the Slacka bit, but at the same time I
don't interact, so it is not myplace to be-.
You're lurking, I lurk, that'sall that I do.
It is not my place to write topeople about what's going on
right now.
That's for the board meetings.
That's the level of feedbackthat I allow myself, but beyond
(31:37):
that, the company is in goodhands and have great people and
I trust that in good hands andhave great people, and you know,
I, I, I trust that.
Speaker 1 (31:53):
Okay, you said that you wouldn't be a good or a
great serial founder.
I've heard you say that youwouldn't be a good investor
either.
Why are you so harsh onyourself and what would you be
good at, after you know, sellingyour part of the company?
Speaker 2 (32:02):
So I mean well, so I I've.
So I've landed in aninteresting spot related to that
, which is that I've run into agroup of serial founders by
renting a catamaran here inBarcelona.
It's a separate story, but-.
Speaker 1 (32:16):
You can tell it.
You can tell it Go ahead,because Frank has been on the
pod, founder partners have beenon the pod, so all of them, all
of them have have been here.
Speaker 2 (32:25):
Yeah, so rented a catamaran in October of 2023,
and uh, philip and I were on theboat and the cap, we were
talking to the captain and welearned that he is an adjunct
professor at ASADA, so abusiness school.
And so we tell our abbreviatedstory and he says, oh well,
(32:45):
there's this guy in SanFrancisco that you ought to meet
, brian Flynn of FounderPartners.
And so it turns out that Frankis the boat captain for Brian
and his family's annual vacationand a good friend of his, of
yours, of other people inBarcelona as well, and a heck of
a nice guy, well, and a goodcataract pilot, by the way, but
(33:08):
with a very nice cataract and abetter one now.
Even so, that was neat.
And so I met Brian in SanFrancisco.
I learned about FounderPartners.
They're a group of, they are agroup of serial entrepreneurs,
and I mean, I do consider myselfa serial founder.
It's just, you know, only twoinstead of 10, or, and also
bootstrapped instead of funded,and so I think that's part part
(33:32):
of my, I guess, bias in terms ofwhat I was saying.
You know, I'm, I don't thinkthat I'm the guy to take someone
else's money and run with it,you know, and try and achieve,
you know, triple digit growth.
That's not entirely my DNA, Iguess I'm just a little more
deliberate a little more.
You know cash flow, make surethat you can cover things, don't
(33:55):
spend more than you have, thatkind of thing.
So just wired a littledifferently, I guess.
And so there's a neat group.
So what Founder Partners doesis they look for fledgling
companies.
They look primarily for folkswho have technical founders and
who have achieved some degree ofbasic product market fit and in
(34:16):
a trade for equity we work withthe company for a period of two
to three years as essentiallyminority co-founders.
So the gig for me that I'msuper excited about is being
able to do founder type stuffpart-time and to be able to
leverage what I learned over thecourse of 20 years for someone
(34:38):
who's getting started.
And so right now I'm in thephase of evaluating companies
and I look forward to being ableto take one on or take two on
and see what I can do with them.
Speaker 1 (34:49):
So that's how you feel your time, your agenda
right now?
I think so, yeah.
Speaker 2 (34:53):
Yeah, and so it's weird, I'm doing sales now which
I have never done before, so Imean really, in a way, I mean I
don't.
Speaker 1 (35:01):
You're reinventing yourself.
Yeah, I mean you do what yougot to do.
That's what a partner, what afounder does, also true.
Speaker 2 (35:07):
Yeah.
So I mean, you know, I'messentially pitching founder
partners to people who are notfamiliar with it and who are not
familiar with the model, andwe're not familiar with what
we're trying to do, and so thereis a process of helping someone
understand that, ofdemonstrating that we can be of
value, and then of building adeal.
Speaker 1 (35:29):
I can throw some similarities between a growth
equity firm like Summit Partnersand Founder Partners, because I
think you take a stake in thecompany.
You're looking for companiesthat are profitable and growing
maybe not massive growth,because also they look maybe for
VC-backed companies.
Founder Partners definitelydoesn't want that.
(35:51):
On the overall I could be wrongabout the specifics and then
you assign somebody with theoperational expertise and growth
expertise to help them giveguidance, as opposed to summit
partners.
That appoints somebody elsearound the company, right?
What other similarities couldthere be in this model?
Speaker 2 (36:13):
Well, I think the other similarities are cash
efficiency right.
Really trying to find abusiness that is capable of sort
of living within its means andspending smartly on their growth
.
That's you know, and that'sstraight out of the bootstrap
playbook, essentially.
Speaker 1 (36:32):
What kind of company would be interesting for you?
Because I think I failed to askthis question when Brian and
Dimitri were on the show.
We delved so deep into M&A thatwe never got out of it, and
when we realized we were 95minutes into the conversation,
I'm like fuck, we got to, Brianhad to jump into another call
(36:54):
and there was no time to talkabout founder partners itself,
which in and of itself it was avery interesting podcast episode
, but we didn't talk about fundpartners that much.
So what kind of companies areyou looking at?
Rss sync or what could bepotential fits?
Speaker 2 (37:10):
Sure I mean I think that we have a fair chunk of
internal expertise in B2B SaaScompanies, right that's?
I mean certainly that's mybackground, or what B2C and B2B
SaaS companies my background orwhat b2c and b2b SaaS companies
um, and an interest in folks whohave technical founders, who
have really good productexperience but may or may not
(37:31):
have operations experience,sales experience, marketing
experience, etc.
That we can help bring to bear,um on a practical level, folks
with a fairly simple cap table.
I mean we're not looking forfolks who've taken a lot of
other people's money againlooking for the whole cash
efficiency and trying to buildthe business in the same manner.
So if somebody's already takena ton of money and burned
(37:54):
through it, then that's probablynot something that we'd be as
interested in and how aboutother opportunities for you?
Speaker 1 (38:19):
I assume that after a sale of a company or you know
this kind of exit that you hadwhere you step down or even a
partner at the firm or becomeangel investor or tons of other
things like external consultant,advisory boards and whatnot
what kind of opportunities didyou receive and how did you
(38:41):
separate the grain from thechaff?
Speaker 2 (38:43):
If I said not a ton, would you be disappointed?
Because, honestly, I mean, Ithink I think partly if you, in
order for that to happen, youhave to express publicly that
you're open to it.
And that's not something that Idid, in part because I don't
think that I really wanted to gothrough that process.
Speaker 1 (39:02):
I'll be honest.
And you don't like exposure?
No, I'm not a fan, I mean.
Speaker 2 (39:08):
I sang at Startup Grind and that was a big deal,
but nonetheless, you know public.
Speaker 1 (39:13):
And neither did DexExpander, because DexExpander
is kind of like the underdogBootstrap companies.
We either or both.
We don't get to be on thespotlight because media doesn't
like us, because we don't raisefunds.
But we also don't want exposure, in a sense because otherwise
we're approached by the vulturesof the ecosystem.
And also, what benefit could weget from the exposure?
(39:37):
Maybe attracting talent, but wedon't need to hire 10 people a
week, right, so we're good withour own growth.
So that's why tech expansionmaybe was like never on the
spotlight of anything and so nota lot of people knew tech
expander, not a lot of peopleknew you.
Probably that's why, also, youdidn't get a lot of proposals.
That's my take.
Speaker 2 (39:56):
Oh yeah, no, I mean I think again, if you aren't
tremendously public and youdon't signal an interest, then
that stuff doesn't justmagically happen.
I mean, what I've done since isjust keep up with the people
that I know.
I mean 20 years in the Maccommunity I know a bunch of
people and they're great peopleand you know it's really fun to
(40:17):
keep up with them.
So that's sort of my strategy.
Speaker 1 (40:20):
But now through founder partners and maybe and
I'm also sure that just becauseyou have probably updated your
LinkedIn and a lot of peoplehave automated their messaging
saying like, oh, he's exitedthis, now he will be an angel
investor, let's target this guy.
How many of these do you get?
(40:40):
I got vastly vastly more.
Speaker 2 (40:44):
Uh oh, so you got an exit, now you can afford our
tool mails than anything else.
Right, like because I inoperations and because I was
deciding, uh, you know what wewere spending on for software,
along with the rest of the team,of course.
Those were the bulk of themales, was you?
Now you can spend on, oh God,what's the NetSuite, for example
(41:05):
?
I think they were prettyrelentless and I mean, I suppose
, credit to them.
If that's their sales strategy,then they execute it quite well
.
And you know, those were thetypes of things that I
encountered more than anythingelse.
Speaker 1 (41:19):
And how about what's next for you?
I mean, Founder Partner istaking a lot of your time right
now, but I'm assuming that'ssomething that you could juggle
with something else on the side,or maybe you can take on
projects as an external advisorto a company or as a consultant
and stuff like that.
Do you see yourself creating anew venture, or it's mostly
(41:40):
helping others from now on?
Speaker 2 (41:42):
I think it's mostly helping others from now on.
I think it's mostly helpingothers from now on.
I like that and I'm enjoying itso far.
I'm really looking forward tohaving a committed company
within Founder Partners that I'mworking to build and I'm making
progress toward that In termsof other stuff.
So sailing would be fun.
I took a course here inBarcelona, good city, to do that
(42:05):
, and now I'm a littleintimidated because in order to
get the license to sail twomiles offshore, you have to take
a 16-hour radio class, and the16-hour radio class is in
Spanish.
I can function, I can getthrough the post office, I can
do stuff like that, but I don'tknow about 16 hours of nautical
radio, so I'm nervous.
(42:29):
But I may get there.
So that would be an interestinggoal.
So if I make a New Year'sresolution for next year, maybe
it'll be do the radio class.
I'm not sure it may be like thebar.
It may be something that youcan fail the first time without
a great deal of shame.
So we'll.
Speaker 1 (42:46):
A Duolingo could help you with that.
I am totally working Duolingo.
Yeah, no, Duolingo is fantastic.
I know, I know, I know.
So it's one hell of a drug,Duolingo, you know.
By the way, this podcast is notsponsored by Duolingo, but
might as well be because we'rementioning it every now and then
.
Speaker 2 (43:03):
They earned it.
In fact, the New Yorker had agreat article on the founder,
and so if your listeners haven'tread the New Yorker ad article
on the founder of Duolingo, youshould totally do it.
Really, really fascinating.
Speaker 1 (43:17):
I'll go dig it up.
One of the things I wanted alsoto get your opinion on is
there's been a lot of, as Imentioned earlier in the
conversation.
I want to go back to one thingthe consolidation of these
consumer tools, especially onthe Mac right, because a lot of
them end up being bundled intothe OS right, and so I think
(43:44):
right now, with the managementof the desktops, maybe Mac in it
is not entirely useful anymore.
I mean, you can pay for itbecause it's got some extra
features, but essentiallyeverything they do it's there.
Or eververnote back in the daywas such a great tool, but they
fell from grace for whateverreason.
But now Apple Notes I thinkit's way better than Evernote
was in the prime.
But how do you see the futurefor these kind of applications
(44:09):
right now, right Now that theOSs are evolving faster?
I think they're taking a lookin the market always and saying
like this we want to integratethis, we want to integrate.
And so companies likeTechExpander or Everyday or Dois
or whatever, they could be indanger, or have they always been
(44:30):
in danger danger or have theyalways been in danger?
Speaker 2 (44:31):
I think they've always been in danger.
Um, I mean, you know, I I gotmy start writing fax software,
which was eventually integratedin the operating system, but
even then that integrationdidn't sink us overnight.
Right, we saw it coming, we hadother products and there was a
smooth and orderly transition.
So I think that the goal ifyou're an indie developer or
(44:55):
even a small development shop,is build an excellent
application.
Just build the best app thatyou can, and life is likely to
do okay, because let's say thatyou build well.
Would you imagine that acalendar app alternative to
Apple's calendar is a hugeseller within the Mac?
(45:17):
So Fantastical, who justreleased a Windows version last
week.
They do an incredible product.
I use their product, I lovetheir product and I use their
scheduling stuff now too, andthat's a case of they just built
something excellent and it'sgot a nicer feature set than the
(45:38):
built-in calendar.
So Apple is great at buildingthat which is enough, but
probably not which addresseseveryone's needs incredibly
broadly.
And so if you're in an areawhere Apple has done something
but you are able to addresssomeone else's needs more
(45:59):
broadly, then go for it really.
Speaker 1 (46:03):
I mean, apple has never been great at software,
except for the operating system.
The applications are pretty.
Most of them are very rubbishto me, like Mail who uses that
Calendar it's very bad and basicMaps.
Until very recently it wasdownright unusable, right.
The podcast application, youcould argue, is pretty good.
(46:26):
Itunes has always been a messbecause now you can do this with
iTunes, now it's not.
Now it's the App Store.
It's in iTunes.
Now it's not.
Now it's the App Store.
It's in iTunes, now it's not.
Now the music is in iTunes, nowmusic is a separate app.
I don't even know if iTunesexists anymore, to be honest,
right.
So the applications have beenpretty bad, usually in the Apple
ecosystem, not to mention thehardware is usually pretty good
(46:51):
and so.
But you can cover all grounds,right?
Maybe in Google it's theopposite in a way, but I'm not
going to get into this.
But you could say there's a lotof opportunity of building this
, maybe more for indie hackersand bootstrap companies perhaps,
but I wouldn't build a VCbacked app on the Apple
ecosystem just because there's ahuge threat there.
Speaker 2 (47:09):
But that's great because that means that there's
ample opportunity for the folkswho are crazy enough to go in
and build something amazing.
Right, that ground is wide openand you're not likely to be
competing against someone withridiculous amounts of funding.
So I think it's exciting.
And then, to be slightly fair,I worked at Apple back many,
(47:31):
many moons ago and, uh, you know, in terms of their friends who
work there now, uh, you know, Ithink that they have an awful
lot on their plate and they donot try to do everything for
everyone and they improve whatthey've got incrementally.
Uh, and so externally, thatseems like, oh, you know, their
(47:52):
stuff isn't as good as it couldbe, or et cetera, et cetera.
But you know, I think that whatthey're building meets their
goals and what they're buildingis, I mean, as you said, some of
it's quite good.
Notes is very good.
Notes was terrible at first.
Notes was useless, and so, andon top of that, like dot mac
back in the day, but you know,they said, okay, we want this to
(48:15):
work long haul and we will chipaway at it and chip away at it
and chip away at it, and, andthey got there.
Uh, so a little bit of creditfor that.
That's all exactly great.
Speaker 1 (48:26):
Um, just to wrap it up, um and that's something I
never ask on the spot becauseI'm always like fuck, I should
have done that who would youlike to listen on this podcast?
That you know, somebody fromyour previous years or from your
network, especially fromSilicon Valley?
The English podcast couldbenefit from that.
Speaker 2 (48:46):
Who would I like to listen to on this podcast?
Speaker 1 (48:48):
Tomorrow we have the founder of Ghost, so it's a big
one.
Today's a big one too.
So we're doubling down on thepodcast and ramping up on
listens, so I'm pretty happyabout that.
As a byproduct of not doingStartBrand anymore, I could just
dedicate more resources andmental bandwidth to running this
podcast, and so you know,slowly chipping at it.
(49:09):
But who would you like to?
Speaker 2 (49:11):
Sure, I mean.
So, I think, a profile asopposed to a specific person.
I'm really interested inbootstrap companies and in their
stories In particular.
I'd love to hear more bootstrapcompanies in Barcelona or in
Europe, and so those thingswould interest me tremendously.
(49:31):
In terms of giving you someoneyou might want to interview,
michael Simmons of Fantasticalwould probably be a pretty good
guest, and so, having justreleased, he's going to be a
little busy, having justreleased the Windows version,
but when he comes up for air hemight be a fun guest.
Speaker 1 (49:50):
Okay, yeah, but like when, when he comes up for air,
uh, that he might be a fun guest, okay, yeah, uh, um, I would
reach out because a lot ofpeople like to be on podcast.
I think it's a pretty lowcommitment as opposed to an
in-person event.
Right, podcast is iTunes, maybeit just they.
They have like some hoursdedicated per month or something
like that, to doing interviews,and so maybe you can book them
four months out.
(50:11):
But, um, yeah, why not?
Speaker 2 (50:13):
and then other one, other folks that might be
interesting is, uh, the folks atsass group.
Uh, so they're a german companywho okay, buy sass, companies.
Yeah, they're yeah and so,relative to what we were talking
about earlier, they might beinteresting folks to hear about
what is their model, how do theygo about it, and or talk to
(50:35):
founders of companies who'vebeen through that process with
them.
Speaker 1 (50:37):
Yeah, or somebody from Summit Partners.
I mean, I worked for SummitPartners as a freelancer 10
years ago, but I think myconnections are not there
anymore.
But yeah, that's how I saidlike, wow, this goes full circle
, right, it was probably one ofmy very first clients as a
freelancer and when I met you,it was fun because it was
(51:02):
exactly on the day that Istarted working for them.
More or less it was that weekright, a couple of days in, a
couple of days out.
But yeah, it was a greatcoincidence, maybe because I
think we haven't had any PE firmor growth equity firm on the
podcast Bootstrap we hadEveryday.
We had Tanya from theMultiverse AI.
We had what else?
(51:23):
The guys from Metricool inMadrid, a Combo Mail from Madrid
as well.
Both of them sold in the last12 months something like that as
bootstrap companies.
Speaker 2 (51:32):
He has a newest founder at Startup Grind.
I don't know if you've had himon the podcast or not.
Speaker 1 (51:36):
Yeah, yeah, also a couple of times already, like,
amir is a great, great friend ofthe show and also because we
have this, we have thismentality whereby we've got to
support each other.
We're bootstrap companies.
We know that.
You know, if we have toprioritize one thing over the
others, I always go to abootstrap event or indie hackers
or stuff like that than ratherto another you know VC event or
(51:59):
podcast or publication, justbecause they can get whoever
they want.
He likes being on this show,because we can focus on stuff
that matters like workingremotely, async, leadership
under tough times, mental health, and whereas in other podcasts
and other events it would belike, yeah, but what's your LTV,
(52:20):
what's your CAC, what's yourrunway right now?
What was the valuation in yourlast round?
And a lot of times he doesn'thave an answer for that because
it doesn't apply to his business.
So I think he's a little bitfrustrated with with this kind
of podcast.
But anyways, rick, um I don'tknow if you have any parting
words, I'm rolling out thecarpet for you, like 60 seconds
(52:42):
to say how we can help you.
What's, what's, uh, next foryou and, um, how, what you, what
do you want to get out thislike if people, if people can
help you.
Anyhow, let us know Sure.
Speaker 2 (52:53):
I mean, the main thing would be if there are
folks who meet the profile forfounder partners, then I'd love
to hear about them.
So if you're an engineeringfounder of a company in
Barcelona or Europe and you'relooking to talk to some folks,
then shoot me an email.
Speaker 1 (53:11):
Awesome.
Well, thank you very much, greg.
Have a nice week, all right,thank you.
Hello everybody and welcome to Life on Mars.
I'm Alex, ceo and founder ofMarsbase, and in today's episode
we have Greg Scown, co-founderof TextExpander.
Textexpander is a productivitytool that I have been using for
over 10 years now, and I waspleasantly surprised when Greg
appeared out of the blue as anattendee of one of our startup
brand events in Barcelona and,lo and behold, obviously he
(00:25):
became the next speaker at theevent, right, somebody who has
built a tool that has been 20years in the making and has sold
partially to a growth equityfund like Summit Partners two
years ago.
We talk and discuss whathappens after a partial or a
total sale.
In the case of Tax Expander, itwas a partial sale to Summit
(00:48):
Partners, after which Craig andhis partner decided to step
aside and leave the operationalpart of the company to somebody
else.
So we discussed the day afterhow many proposals do you
receive?
Are you actually engaged withthe company or not?
How is this handover period?
What do you do with incomingrequests of angel investing or
(01:12):
other proposals to joincompanies as a co-founder, as a
board member, as an advisor, ordo you become a serial
entrepreneur?
And right now, the question ofthe day, which is what do you do
between projects?
Do you take time off?
Do you concatenate them?
Do you take sabbaticals?
Do you use the money you madefrom one project to spend it or
(01:34):
invest it in the other?
I'll gladly read the answers inthe comments down below and,
without further ado, let's jumpright into the episode.
How exciting, we got acountdown.
How are you doing?
I'm doing well, thank you, wegot a countdown?
Speaker 2 (01:45):
How are you doing?
I'm doing well, thank you.
Speaker 1 (01:48):
No singing on this one.
No singing on this one.
Welcome to Live on Mars podcastMars-based.
You are familiar with itbecause I know you're a regular
listener and you were a speaker,a guest, at Startup Prime in
Barcelona, where you surprisedus with your singing abilities.
Speaker 2 (02:07):
I was super nervous about the whole useless
superpower thing, and so thatworked out well for me in the
end.
Speaker 1 (02:13):
It was great.
We had fun.
It was one of the very lastStartup Grind events.
Actually, I just announced acouple of weeks ago that we
stopped doing them, and so Iwill hold that event in high
esteem.
It was probably the bestperformance we've ever had, or
the best answer we've ever hadto the question of the use of
superpower.
So thank you for that.
(02:34):
Thank you Good.
I wanted to discuss life afteryour company in this episode,
right?
So one of the things that well,I mean, you're known for your
time at TextExpander, but you'vedone several other things.
We covered that already that inStartup Brand so let's focus
(02:54):
more on what happened afterwards, right?
If you want to give a briefsummary of how did your personal
exit go?
Right, so your tax expander hadbeen there for many, many years
.
There come Summit Partners andthey let you, they give you this
(03:16):
opportunity of you know theyinvest in the company, you move
to another role in the company,and how did that whole thing go?
If you want to start with, howdid they approach you?
Speaker 2 (03:30):
Sure, sure.
So my business partner, philipGoward, had made a habit of
taking coffee with folks whoasked essentially I mean
obviously he would vet them andsee if they were folks who were
likely to be serious.
But probably as much as two anda half years before we did the
deal, philip started havingcoffee with an associate at
(03:53):
Summit Partners and there wereprobably about five or six folks
that he would regularly havecoffee with per quarter, per
quarter.
And this was great because, tobe fair to the folks, the
associates at these growth,equity and other types of firms
they were very free with theiradvice.
So he would talk and they wouldsay okay, for example, you're
(04:15):
not a Delaware C corporation yet, you're an Oregon corporation,
you should move, and you shouldmove now, and that that will
actually improve your valuation.
That was very, very good adviceand super helpful, and for the
price of a cup of coffee,essentially.
In fact it's entirely possibleScott bought full of the cup of
coffee.
I don't know, but at any ratethat's the gist of how this got
(04:36):
started.
And it turns out that theassociate was a text expander
user and maybe even a bit of afanatical text expander user,
which certainly didn't hurt, andso he was building awareness of
the product internally toSummit, unbeknownst to us.
We didn't really know that thiswas going on until later and he
(04:59):
built internal awareness andthen he got to the point where
he said, okay, it's time for youto meet the partner.
And so he introduced us toColin Mestel.
And that's when we startedtalking seriously about, okay,
what would make sense for TexasSpinner.
They had an internal executivein residence and so they had
(05:22):
somebody that they were trainingup to run a company and they
were looking for a company forthat person to run, and so this
was sort of a good confluence ofinterests, uh, and then, uh, it
was really a question oftalking for a bit, and then
everything goes slow until itgoes fast, and then, when it
goes fast, it goes very, veryfast.
So, you know, from April 2022to the end of June 2022, that
(05:46):
was it Like.
That was the, the, the dealtimeframe, due diligence was
done in that timeframe,everything got done in that
timeframe.
Uh, and so two and a half year,or two years, and three months
build up and three months ofexecution, essentially.
Speaker 1 (06:00):
So, from the first cup of coffee to the deal, that
was the two years, right, twoand a half years, I believe Two
and a half years yeah.
Speaker 2 (06:08):
I mean, the first cup of coffee wasn't entirely about
doing a deal.
The first cup of coffee wasabout learning about who we were
, what were our goals, that typeof thing.
Speaker 1 (06:17):
And so from the time that things got serious until
the deal, how long was that then?
Speaker 2 (06:23):
It was less than three months.
Speaker 1 (06:26):
Oh wow, that was pretty impressive.
That was right before the heavydecline or the plummeting of
the technological companies orthe tech stock in general,
because that must have beenaround July, August 2022.
So you guys got it done in June.
Speaker 2 (06:43):
We got in just under the radar, it is true.
Speaker 1 (06:46):
That was good timing actually, but for me this kind
of feel it is pretty interesting.
I mean, after the event withyou, I started reading a little
bit more on private equity and Iknow Summit Partners is some
kind of a weird animal becausesometimes they're labeled as a
(07:06):
growth investment firm butsometimes it's a private equity.
So I don't really know if theymake an internal distinction or
just they don't know aboutanything, about marketing or
something like that, becausedepending on who you ask,
they're one thing or the other.
But things turned out to bevery interesting for private
equity um in the last 24 monthsright, so between summer 2022
(07:32):
and summer 2024 because high um,I mean there were the super
high sky high valuations, theydropped.
There was no investment, no m&aactivity.
Therefore it was a very ripemarket for private equity to go
out and chase and hunt, becausethey buy technically very low to
(07:52):
sell very high.
But in your case it was not anacquisition, it was just, you
know, it was an investment or apartial sale right, sale right.
So it's very interesting to seehow this started because after
that, you know, bending Spoonsand other big players started
(08:13):
acquiring a lot of productivitytools, b2c or consumer market
tools, similar, sometimes bigger, sometimes smaller than
TextExpander, but in the samevein.
So yours was kind of like theprecedent right, the origin of
all of that.
Did you feel the same way?
I don't know about that.
Speaker 2 (08:25):
And then, in terms of how Summit presented themselves
, they presented themselves tous as a growth equity firm, so
as folks who buy profitablecompanies.
They're not interested in folkswho are getting started.
They're interested in folks whoare already running and they're
looking for folks who have somerunway for growth.
But it doesn't seem likethey're looking for ridiculous
(08:47):
growth, right.
They're not looking for 300%,400% annual growth.
Nice, solid double digits willdo well, as far as I can tell,
and so that was the approach.
They're looking for companiesthat are established, profitable
and growing, and so we were allof the above at the time.
Speaker 1 (09:07):
But the thing with the private equity usually
they're.
I mean maybe Summit Partners isone of a kind and they really do
some growth investing as partof their strategy or
diversification strategy.
But most PE firms what they dois either roll-ups or build-ups.
Right, and I don't think or itdoesn't look to me from the
(09:27):
outside that this operation waspart of neither of them, right?
No, yeah, that's not whatthey're doing in this case.
Okay, that was, that was a,that was a pure investment.
No, that's that.
That's good, you know, butusually in there do you think
about?
You know?
I have been compiling a, a listof things where you should sell
or take investment from a PEfirm and why you shouldn't.
(09:49):
On the overall, you look veryhappy about it.
What would you say to peoplethat are not acquainted with PE
investment or operations?
What are the reasons to go forit?
Speaker 2 (10:03):
Okay, good question.
I mean I think that I would goback again to say look for a
growth equity firm.
Don't look for a private equityfirm that's strictly trying to
do private equity and that'sstrictly trying to do debt
loading or other forms ofplaying around right.
Look for someone who genuinelywants to invest in the growth of
(10:24):
your company.
Playing around right.
Look for someone who genuinelywants to invest in the growth of
your company.
In our case, it was acombination of an investment in
the company and an enablementfor an exit for Phil and myself,
and so that was a goodcombination for all the parties
involved, and I guess that wouldbe the other bit.
If it doesn't feel like it'sgood for everyone involved, then
it's probably not something youshould be doing.
Speaker 1 (10:43):
it's good for everyone involved then it's
probably not something youshould be doing.
But the thing is like, some ofthe advantages of selling to
private equity is they are, youknow they're looking for an exit
.
They're very financially driven, they're very good at
operations and at making themost out of every penny they
invest.
Right.
So it looks like a safeinvestment from the founder's
(11:04):
perspective and also to the restof your shareholders, right.
So it looks like a safeinvestment from the founder's
perspective and also to the restof your shareholders, right.
Maybe it's not so good in theshort term, because usually they
buy cheap and they sell betterbecause that's the entire basis
of their business model.
But you know there's an exitstrategy.
That's pretty clear, right?
Whereas with traditional VCmoney, you're investing in
(11:27):
speculation, I would argue right, it's yeah, maybe we're able to
sell this for 300x, but wedon't know.
It really depends on you.
There's a lot of pressure,Whereas with this PE money or
growth equity, you de-riskyourself, which, on the one hand
, I think it's really good, andalso you give them the
(11:49):
opportunity to help you do that.
Or sometimes it's delegation100% on them, and now it's on
them.
Somebody else takes over as aCEO and the entire founding team
is replaced or moved to othernon-executive positions, like
yourself, if I'm not mistaken.
So this de-risking is thatsomething that you also took
(12:10):
into account when the operationcame to the?
Speaker 2 (12:12):
table.
Sure, I mean, we'd been doingthis for 20 years and it was
clear that we weren't going tobe doing it for 20 more, and so
the question was OK, then whatwould the next thing be?
Would we either try and buildthe company out internally so
that we could step back andessentially run the company as a
(12:35):
dividend generator, or would wefind a way in which we could
step back and de-risk, as youjust said?
Speaker 1 (12:45):
The person that was going to take over the company
or be appointed as a CEO or onthe forefront of the company?
Did you know him before or her,and what sort of process did
you undergo Like?
Was it some sort of like youwould vet him?
Or just how do you get to knoweach other and how do you know
(13:11):
that's the right person to runyour company from this point
onwards?
Speaker 2 (13:15):
The person is JD Mullen, and so I mean, that's no
secret, that's publicinformation and he is still the
CEO and he's doing a very goodjob.
He was the executive inresidence at Summit and he was
introduced to us I think he wasat one of the coffees along the
way that Philip met, and so methim earlier, but didn't engage
(13:41):
in detail until they started tochoose to do the deal, and at
that point he was involved withthe deal team, which makes sense
.
Speaker 1 (13:50):
I know he's doing a great job because the product
hasn't changed and so you knowI've been a power user since
like I don't remember like 2007,something like that.
And one of the things I reallylike about TextExpander and
other companies likeTextExpander, like mostly
bootstrap businesses, like inthe time I was using Buffer, for
(14:12):
instance.
Now they're not entirelybootstrap, but they follow the
same strategy.
Or Harvest, for instance, weuse at the company is I pay them
so that they don't change.
Right, Because when they sellout to VCs or they take
investment, usually companiesstart like going crazy, trying
experiments, redesigning the UXUI every six months, trying new
(14:34):
product lines and experimenting.
And one thing I love aboutTextExpander and other software
like Magnet, MailTrack, stufflike that that they are mostly
bootstrap or entirely bootstrap.
They don't change, they justfucking work and I it.
I love that.
So I think like, if, first off,it's still around, that's good.
Second, hasn't changed, that'sgood.
(14:54):
And third one is no bugs ever.
I don't remember ever a singlebug with text expander the same.
You know, I use Ghost right nowas a publishing platform for my
new website and stuff like thatdoesn't break, Everything works
, it's flawless and I thinkthere's got to be something in
bootstrap companies that maybewe take a little bit more time
(15:18):
and attention to detail andironing out the last details
right In, not cutting corners,and the product doesn't resent
that right.
The product actually thrivesunder this guidance.
I don't know what's your takeon this.
Are you of the same opinion, or?
Yeah, I mean.
Speaker 2 (15:40):
I feel like bootstrap companies have massive
reputational risk and so cannotafford to goof around with their
customers.
Honestly, that said, it's kindof cool.
I'm glad that you say thatthings haven't changed, that you
see visibly.
But there has been a fairamount of change and
experimentation behind thescenes and the idea is to do
(16:02):
that without disrupting the userexperience.
Right, don't get in your way,don't make it not work the way
you've known before, but like,for example, the snippet editor.
Well, the snippet editor, thething that you edit your
snippets in, has changedentirely over the last two or
three years.
I mean, it's completely,completely different from the
ground up and better, but slowlyand quietly and and bit by bit,
(16:27):
and I think that they, the team, has done an excellent job on
that.
So, uh, you know, these are thekinds of things where make the
improvements, but don't messwith the user base, don't get in
their way yeah, that's spot onactually.
Speaker 1 (16:40):
well, you and I have got a friend in common, joanne,
from Everyday and I know thatbecause I'm also a power user of
Everyday, and people perceivelike, oh, it's like the same
product, like it was like fouryears ago.
But he's got seven code bases,right.
He's got the desktop app, theweb app, the watch app, the
(17:03):
iPhone app, the Android app andsomething else.
I don't remember where else hegot, but he's got a couple other
code bases lying around and sosometimes it's an entire
refactor of the React views ofthe web app, for instance, right
.
Or he changed the entire DevOpsstructure over the last year
and it's funny that he's got thesame message is we're changing
(17:23):
a lot of the stuff behind thescenes but we don't want people
to notice because otherwise youknow people.
Just in his case, it's a freeapp mostly, so people just jump
over to another similar app andthere's a lot of volatility here
.
In TextExpander, the maincompetitor must be in iOS.
(17:44):
It's an OS system because itprovides that build right out of
the box, even though it's 10times more basic.
But I know probably in Androidthere's a lot of apps for that.
Speaker 2 (18:02):
Yeah, I mean, the world of Android extension apps
and keyboards is pretty broad,but on to everyday, I think that
, yes, okay, it looks like againnothing has changed in four
years.
But think about it.
He's added widgets, he's addedthe ability to check off a task
on a widget, and he's done allof that without disrupting the
product, without disrupting theflow.
(18:23):
It's kind of amazing and so,yeah, I totally appreciate that
kind of craft and that level ofattention to detail and respect
for the customer.
Speaker 1 (18:32):
Yeah, circling back to the, I mean we have covered
more or less the advantages ofselling or taking investment by
a PE firm or a growth equityfirm like Summit Partners.
How about the cons?
Like, what are some things thatyou considered back then that
were like we should be aware ofthis?
Like, for instance, you knowthe loss of control because,
(18:53):
basically, they take over, startoperating the company
differently, culture shock ormaybe potential layoffs, stuff
like that?
What did you fear the mostabout this kind of operation?
Speaker 2 (19:05):
That's a good question.
I mean stuff like that what didyou fear the most about this
kind of operation?
That's a good question.
I mean.
I think that we were veryfortunate that we've been
talking for a relatively longterm and had some sense of the
folks that were involved andtheir philosophy and what they
wanted to do, and it was prettyclear that they were not looking
to radically change the companyculture.
(19:43):
In fact, if anything, theyspent a lot of time with us
saying, okay, what is thecompany culture?
What are we walking into tostay?
What's the plan for doing that?
In the course of thistransaction, and they were
incredibly receptive to thatadvice side.
Again, if you're not talkingabout these things directly with
(20:05):
the person that's going toinvest in you, that's a problem,
because then your expectationsabsolutely won't get met Right.
Anything that you didn't talkabout, anything that you didn't
run through, is open for trouble.
But if you're relativelydeliberate about it and you talk
through okay, this is theculture, these are the people,
this is the organization youknow.
Okay, this is the culture,these are the people, this is
the organization, you know this,this is what you're getting,
(20:28):
this is what you're about to getinto.
I think that folks are smartand receptive to that and can,
can, can potentially do a goodjob, and in this case, I think
they really did.
Speaker 1 (20:39):
And before we move on to what happened next, I'm
really curious about one veryspecific thing about what
happened before, which is howaligned were you and your
partner?
Oh, 100%, 100%.
How did you prepare?
Did you have specific meetings,coaching or was there any
(21:00):
friction in the process ofdiscussing how and when and if
to do it?
Speaker 2 (21:07):
Sure, I mean, I'm incredibly fortunate to have had
the best business partner inthe world.
Honestly, I mean, in no word ofa lie.
Philip is just amazing, andwe've just built a relationship
of immense respect over a very,very long period of time and we
remained friends, which isanother good quality after such
(21:27):
a thing.
But I think that how do weprepare?
We started buildingspreadsheets for where we wanted
to go as a company in terms ofrevenue, in terms of growth, in
terms of marketing spend, interms of employee count, et
cetera, and we started buildingthose, I mean probably as early
(21:48):
as 2018 or so and so this isfour years before the
acquisition and so that we wouldhave some idea of, okay, what
are we trying to do, where arewe trying to get, what are our
odds of being able to achievethat?
And that was super helpful,because we had some idea of what
(22:09):
we thought we could do on ourown.
And then we were comparing thatagainst what was on offer and
it looked favorable, and it waspretty easy for us to make a
decision because we had, youknow, sort of the path that we
were looking at compared againstthe path that they were
offering.
So I think that.
I mean, I suppose the advice inthis space is you know, start
(22:34):
planning for where you want tobe, because that's super helpful
in evaluating somebody whocomes along and says, okay, you
know, I can take you therefaster, or okay, I can, I can
take you there faster, or okay,I can, I can help you achieve
this now, instead of three yearsfrom now.
Five years from now, what haveyou?
Speaker 1 (22:50):
Good, let's move on to the what happened afterwards,
because I assume that the veryfirst day after you moving on
from an execution execution roleat your company, you have to
suffer some kind of vertigo.
I don't know.
How did you feel the first daythat you're hands-off?
(23:10):
I assume there was a transitionperiod in which you were
hands-on handover, and how didthat go?
Speaker 2 (23:17):
So for me, my role at the time of the transaction was
as the COO doing operations,and so I ran day-to-day finance,
I did and I managed theengineering team, so that was
sort of my side of the house,and this also included our
(23:38):
software stack of tools that wewere using internally security
things of that nature.
And so you know, for me Iagreed to stay on through the
end of the year and it was clearthat we were going to hire an
engineering manager.
And in fact they hired a VP ofengineering about two months in
(24:03):
and you know it was supercollegial to hand off because I
had a great team with two solidteam leads and I was able to say
, all right, here you go, andy,these are yours now.
And he did a really nice jobwith the transition.
I think he's extremely patientand he's a good communicator.
So I think that that helped alot.
And so that happened and Ithought, okay, now I just wind
(24:28):
down the operations things andhere we go.
But it turns out that we raninto an unexpected road bump,
which was that CFO left and Iwound up doing finance
operations for the last two anda half months.
We hired a VP of finance.
She's absolutely fantastic.
And then was able to transitionthat.
(24:50):
But so much for the whole.
You know, slow, easy transition.
It turned out to be a littlemore more hectic than expected,
but I think that's, that'severything right.
You know everything is going tobe different than what you
expect, so expect the unexpectedyeah.
Speaker 1 (25:05):
And how did you start going from you know this
full-time role to part-time,then advisory, and uh, when did
you start feeling like, oh I, Idon't have a job anymore and
what's next for me do?
Do I really need to work again?
(25:25):
So how is that mental process?
I'm very curious about that.
Speaker 2 (25:30):
Yeah, so in theory I ended in the end of December,
but we'd hired the VP of Financeabout three weeks before, so
there was a period of helpingwith that transition, but that
was not a ton of time.
She was super, super quick atwrapping up and very experienced
.
So by mid-January really, myonly responsibility to the
(25:52):
company was serving on the boardand so preparing for and
attending quarterly boardmeetings.
So the vertigo set in aroundthe end of January.
Uh, and then, uh, we're inprocess of, uh, reforming a flat
here in Barcelona, and thattook through June.
(26:13):
So that actually turned out tobe how would you say, a useful
project.
Uh, yeah, that too Right.
So so that happened.
Yeah, that too right, so thathappened.
And in the course of that, Ithink that I realized and also
in talking to Philip, herealized as well that we were
kind of lobsters boiling in apot.
(26:34):
I don't think that we hadrealized how much we had put
into the company, how muchstress we had taken on, and so
when it was not there, it waspretty evident and it's like ooh
, okay, I need to take care ofmyself a little bit.
So I'm one of the typicalfounders where we did a Midland
(26:59):
job of taking care of ourselvesin exchange for trying to do a
pretty good job of taking careof the company, and I reckon you
have firsthand familiarity withthat.
Speaker 1 (27:08):
It ebbs and flows.
I'd like to say that we are alifestyle company and therefore
we take care of ourselves.
We take a lot of pride intothings small little things like
not working more than 40 hoursper week not even the founders,
right.
But that's not 100% true.
Sometimes you have to do it andyou know it as a founder.
(27:29):
Sometimes you have to work onthe weekend, but luckily I can
take time off during the week,right.
So, because you know familyissues all the time.
Then sometimes you got to takecare of children.
I was like, okay, I'll justtake half a day off here, I
might work of the time.
Then sometimes you got to takecare of children.
I was like, okay, I'll justtake half a day off here, I
might work on the weekend, right.
Today I have to take care offamily pretty much the entire
(27:52):
day, say for this podcast and acouple of other calls, and then
day off, but maybe I will workin the night.
And also, we got we are in themidst of a procurement process
with a big corporation in the US.
So for me it's good to stayalert between, like you know, 8
pm and midnight, because usuallythat's when the emails come in.
Maybe you got to take one callor two.
(28:14):
So having this sort offlexibility, that has got to be
the exception, not the norm.
It's good for a while, right,but I know where you're coming
from when you're mentioning this.
So, having said that, in termsof you mentioned a lot of
pressure, a lot of you didn'texplicitly say burnout, but I
inferred from that Any othersort of mental issue you'd like
(28:39):
to speak openly about, like, forinstance, I talk publicly a lot
about imposter syndrome and youknow about it Sometimes anxiety
, right, and stuff like that, orhow to cope with the pressure
of I've done something big.
Now, if I don't do somethingbigger, I will be letting down a
(29:01):
lot of people, including myself.
That's something I've gottenfrom serial entrepreneurs.
They usually feel thisauto-imposed pressure.
Right, what happened in yourprocess?
If you want to talk about it,no, no, it's fine.
Speaker 2 (29:15):
I relaxed.
That's what happened, honestly,and it's not something that I'd
been particularly good at.
Speaker 1 (29:23):
The operations.
People are not good at relaxing.
Speaker 2 (29:25):
No, no Now the barometer for this is my mother.
So you know, I talked to mymother pretty regularly and one
of the sort of benefits from thepandemic is that mom and dad
will do Zoom calls now andthat's actually a super handy
way to keep up with them.
And so, you know, as we getinto March, april, may, mom's
(29:48):
like wow, you look much morerelaxed, it's like you look way
better.
I'm like, okay, I mean, I feelbad in a way because that means
that I must have looked wayworse previously.
But on the flip side, you know,it's a good barometer.
And so I learned to relax, um,and I can't say that that's, you
know, uh, an easy thing,necessarily, because you get,
(30:11):
you know, very focused or veryintense in what you're doing.
And then, uh, you know it'sit's time to not do that.
I'd be a terrible serialentrepreneur.
Honestly, I think it's not.
I don't think it's entirely inmy DNAna.
I, how is it?
I, I would.
Until I managed to make acompany, I was completely
dedicated, right, I failed thefirst jot out the gate and went
(30:33):
back to work for a couple years,that kind of thing.
So that part, yes, but like nowthat I, you know that I've done
this and built this companyover 20 years and and had the
acquisition.
I don't feel the need toimmediately get back on or to
immediately do anything.
If something amazing crossed mypath, great.
Speaker 1 (30:52):
But otherwise I'm okay.
Yeah, that's why you moved toBarcelona, otherwise you would
have stayed in Silicon Valley,because yeah.
Speaker 2 (30:58):
I have a place in my A lot of people say you're not
ambitious.
Speaker 1 (31:00):
Right, you're not ambitious because you moved out
of Silicon Valley.
That's fine, no.
But A lot of people say you'renot ambitious, right, you're not
ambitious because you moved outof Silicon Valley.
That's fine, no.
But taking care of oneself isreally important.
But did you really disconnect100% from it Because you're
still attached to tech?
Speaker 2 (31:17):
Oh yeah, I mean I keep up.
I mean I keep up with the Slacka bit, but at the same time I
don't interact, so it is not myplace to be-.
You're lurking, I lurk, that'sall that I do.
It is not my place to write topeople about what's going on
right now.
That's for the board meetings.
That's the level of feedbackthat I allow myself, but beyond
(31:37):
that, the company is in goodhands and have great people and
I trust that in good hands andhave great people, and you know,
I, I, I trust that.
Speaker 1 (31:53):
Okay, you said that you wouldn't be a good or a
great serial founder.
I've heard you say that youwouldn't be a good investor
either.
Why are you so harsh onyourself and what would you be
good at, after you know, sellingyour part of the company?
Speaker 2 (32:02):
So I mean well, so I I've.
So I've landed in aninteresting spot related to that
, which is that I've run into agroup of serial founders by
renting a catamaran here inBarcelona.
It's a separate story, but-.
Speaker 1 (32:16):
You can tell it.
You can tell it Go ahead,because Frank has been on the
pod, founder partners have beenon the pod, so all of them, all
of them have have been here.
Speaker 2 (32:25):
Yeah, so rented a catamaran in October of 2023,
and uh, philip and I were on theboat and the cap, we were
talking to the captain and welearned that he is an adjunct
professor at ASADA, so abusiness school.
And so we tell our abbreviatedstory and he says, oh well,
(32:45):
there's this guy in SanFrancisco that you ought to meet
, brian Flynn of FounderPartners.
And so it turns out that Frankis the boat captain for Brian
and his family's annual vacationand a good friend of his, of
yours, of other people inBarcelona as well, and a heck of
a nice guy, well, and a goodcataract pilot, by the way, but
(33:08):
with a very nice cataract and abetter one now.
Even so, that was neat.
And so I met Brian in SanFrancisco.
I learned about FounderPartners.
They're a group of, they are agroup of serial entrepreneurs,
and I mean, I do consider myselfa serial founder.
It's just, you know, only twoinstead of 10, or, and also
bootstrapped instead of funded,and so I think that's part part
(33:32):
of my, I guess, bias in terms ofwhat I was saying.
You know, I'm, I don't thinkthat I'm the guy to take someone
else's money and run with it,you know, and try and achieve,
you know, triple digit growth.
That's not entirely my DNA, Iguess I'm just a little more
deliberate a little more.
You know cash flow, make surethat you can cover things, don't
(33:55):
spend more than you have, thatkind of thing.
So just wired a littledifferently, I guess.
And so there's a neat group.
So what Founder Partners doesis they look for fledgling
companies.
They look primarily for folkswho have technical founders and
who have achieved some degree ofbasic product market fit and in
(34:16):
a trade for equity we work withthe company for a period of two
to three years as essentiallyminority co-founders.
So the gig for me that I'msuper excited about is being
able to do founder type stuffpart-time and to be able to
leverage what I learned over thecourse of 20 years for someone
(34:38):
who's getting started.
And so right now I'm in thephase of evaluating companies
and I look forward to being ableto take one on or take two on
and see what I can do with them.
Speaker 1 (34:49):
So that's how you feel your time, your agenda
right now?
I think so, yeah.
Speaker 2 (34:53):
Yeah, and so it's weird, I'm doing sales now which
I have never done before, so Imean really, in a way, I mean I
don't.
Speaker 1 (35:01):
You're reinventing yourself.
Yeah, I mean you do what yougot to do.
That's what a partner, what afounder does, also true.
Speaker 2 (35:07):
Yeah.
So I mean, you know, I'messentially pitching founder
partners to people who are notfamiliar with it and who are not
familiar with the model, andwe're not familiar with what
we're trying to do, and so thereis a process of helping someone
understand that, ofdemonstrating that we can be of
value, and then of building adeal.
Speaker 1 (35:29):
I can throw some similarities between a growth
equity firm like Summit Partnersand Founder Partners, because I
think you take a stake in thecompany.
You're looking for companiesthat are profitable and growing
maybe not massive growth,because also they look maybe for
VC-backed companies.
Founder Partners definitelydoesn't want that.
(35:51):
On the overall I could be wrongabout the specifics and then
you assign somebody with theoperational expertise and growth
expertise to help them giveguidance, as opposed to summit
partners.
That appoints somebody elsearound the company, right?
What other similarities couldthere be in this model?
Speaker 2 (36:13):
Well, I think the other similarities are cash
efficiency right.
Really trying to find abusiness that is capable of sort
of living within its means andspending smartly on their growth
.
That's you know, and that'sstraight out of the bootstrap
playbook, essentially.
Speaker 1 (36:32):
What kind of company would be interesting for you?
Because I think I failed to askthis question when Brian and
Dimitri were on the show.
We delved so deep into M&A thatwe never got out of it, and
when we realized we were 95minutes into the conversation,
I'm like fuck, we got to, Brianhad to jump into another call
(36:54):
and there was no time to talkabout founder partners itself,
which in and of itself it was avery interesting podcast episode
, but we didn't talk about fundpartners that much.
So what kind of companies areyou looking at?
Rss sync or what could bepotential fits?
Speaker 2 (37:10):
Sure I mean I think that we have a fair chunk of
internal expertise in B2B SaaScompanies, right that's?
I mean certainly that's mybackground, or what B2C and B2B
SaaS companies my background orwhat b2c and b2b SaaS companies
um, and an interest in folks whohave technical founders, who
have really good productexperience but may or may not
(37:31):
have operations experience,sales experience, marketing
experience, etc.
That we can help bring to bear,um on a practical level, folks
with a fairly simple cap table.
I mean we're not looking forfolks who've taken a lot of
other people's money againlooking for the whole cash
efficiency and trying to buildthe business in the same manner.
So if somebody's already takena ton of money and burned
(37:54):
through it, then that's probablynot something that we'd be as
interested in and how aboutother opportunities for you?
Speaker 1 (38:19):
I assume that after a sale of a company or you know
this kind of exit that you hadwhere you step down or even a
partner at the firm or becomeangel investor or tons of other
things like external consultant,advisory boards and whatnot
what kind of opportunities didyou receive and how did you
(38:41):
separate the grain from thechaff?
Speaker 2 (38:43):
If I said not a ton, would you be disappointed?
Because, honestly, I mean, Ithink I think partly if you, in
order for that to happen, youhave to express publicly that
you're open to it.
And that's not something that Idid, in part because I don't
think that I really wanted to gothrough that process.
Speaker 1 (39:02):
I'll be honest.
And you don't like exposure?
No, I'm not a fan, I mean.
Speaker 2 (39:08):
I sang at Startup Grind and that was a big deal,
but nonetheless, you know public.
Speaker 1 (39:13):
And neither did DexExpander, because DexExpander
is kind of like the underdogBootstrap companies.
We either or both.
We don't get to be on thespotlight because media doesn't
like us, because we don't raisefunds.
But we also don't want exposure, in a sense because otherwise
we're approached by the vulturesof the ecosystem.
And also, what benefit could weget from the exposure?
(39:37):
Maybe attracting talent, but wedon't need to hire 10 people a
week, right, so we're good withour own growth.
So that's why tech expansionmaybe was like never on the
spotlight of anything and so nota lot of people knew tech
expander, not a lot of peopleknew you.
Probably that's why, also, youdidn't get a lot of proposals.
That's my take.
Speaker 2 (39:56):
Oh yeah, no, I mean I think again, if you aren't
tremendously public and youdon't signal an interest, then
that stuff doesn't justmagically happen.
I mean, what I've done since isjust keep up with the people
that I know.
I mean 20 years in the Maccommunity I know a bunch of
people and they're great peopleand you know it's really fun to
(40:17):
keep up with them.
So that's sort of my strategy.
Speaker 1 (40:20):
But now through founder partners and maybe and
I'm also sure that just becauseyou have probably updated your
LinkedIn and a lot of peoplehave automated their messaging
saying like, oh, he's exitedthis, now he will be an angel
investor, let's target this guy.
How many of these do you get?
(40:40):
I got vastly vastly more.
Speaker 2 (40:44):
Uh oh, so you got an exit, now you can afford our
tool mails than anything else.
Right, like because I inoperations and because I was
deciding, uh, you know what wewere spending on for software,
along with the rest of the team,of course.
Those were the bulk of themales, was you?
Now you can spend on, oh God,what's the NetSuite, for example
(41:05):
?
I think they were prettyrelentless and I mean, I suppose
, credit to them.
If that's their sales strategy,then they execute it quite well
.
And you know, those were thetypes of things that I
encountered more than anythingelse.
Speaker 1 (41:19):
And how about what's next for you?
I mean, Founder Partner istaking a lot of your time right
now, but I'm assuming that'ssomething that you could juggle
with something else on the side,or maybe you can take on
projects as an external advisorto a company or as a consultant
and stuff like that.
Do you see yourself creating anew venture, or it's mostly
(41:40):
helping others from now on?
Speaker 2 (41:42):
I think it's mostly helping others from now on.
I think it's mostly helpingothers from now on.
I like that and I'm enjoying itso far.
I'm really looking forward tohaving a committed company
within Founder Partners that I'mworking to build and I'm making
progress toward that In termsof other stuff.
So sailing would be fun.
I took a course here inBarcelona, good city, to do that
(42:05):
, and now I'm a littleintimidated because in order to
get the license to sail twomiles offshore, you have to take
a 16-hour radio class, and the16-hour radio class is in
Spanish.
I can function, I can getthrough the post office, I can
do stuff like that, but I don'tknow about 16 hours of nautical
radio, so I'm nervous.
(42:29):
But I may get there.
So that would be an interestinggoal.
So if I make a New Year'sresolution for next year, maybe
it'll be do the radio class.
I'm not sure it may be like thebar.
It may be something that youcan fail the first time without
a great deal of shame.
So we'll.
Speaker 1 (42:46):
A Duolingo could help you with that.
I am totally working Duolingo.
Yeah, no, Duolingo is fantastic.
I know, I know, I know.
So it's one hell of a drug,Duolingo, you know.
By the way, this podcast is notsponsored by Duolingo, but
might as well be because we'rementioning it every now and then
.
Speaker 2 (43:03):
They earned it.
In fact, the New Yorker had agreat article on the founder,
and so if your listeners haven'tread the New Yorker ad article
on the founder of Duolingo, youshould totally do it.
Really, really fascinating.
Speaker 1 (43:17):
I'll go dig it up.
One of the things I wanted alsoto get your opinion on is
there's been a lot of, as Imentioned earlier in the
conversation.
I want to go back to one thingthe consolidation of these
consumer tools, especially onthe Mac right, because a lot of
them end up being bundled intothe OS right, and so I think
(43:44):
right now, with the managementof the desktops, maybe Mac in it
is not entirely useful anymore.
I mean, you can pay for itbecause it's got some extra
features, but essentiallyeverything they do it's there.
Or eververnote back in the daywas such a great tool, but they
fell from grace for whateverreason.
But now Apple Notes I thinkit's way better than Evernote
was in the prime.
But how do you see the futurefor these kind of applications
(44:09):
right now, right Now that theOSs are evolving faster?
I think they're taking a lookin the market always and saying
like this we want to integratethis, we want to integrate.
And so companies likeTechExpander or Everyday or Dois
or whatever, they could be indanger, or have they always been
(44:30):
in danger danger or have theyalways been in danger?
Speaker 2 (44:31):
I think they've always been in danger.
Um, I mean, you know, I I gotmy start writing fax software,
which was eventually integratedin the operating system, but
even then that integrationdidn't sink us overnight.
Right, we saw it coming, we hadother products and there was a
smooth and orderly transition.
So I think that the goal ifyou're an indie developer or
(44:55):
even a small development shop,is build an excellent
application.
Just build the best app thatyou can, and life is likely to
do okay, because let's say thatyou build well.
Would you imagine that acalendar app alternative to
Apple's calendar is a hugeseller within the Mac?
(45:17):
So Fantastical, who justreleased a Windows version last
week.
They do an incredible product.
I use their product, I lovetheir product and I use their
scheduling stuff now too, andthat's a case of they just built
something excellent and it'sgot a nicer feature set than the
(45:38):
built-in calendar.
So Apple is great at buildingthat which is enough, but
probably not which addresseseveryone's needs incredibly
broadly.
And so if you're in an areawhere Apple has done something
but you are able to addresssomeone else's needs more
(45:59):
broadly, then go for it really.
Speaker 1 (46:03):
I mean, apple has never been great at software,
except for the operating system.
The applications are pretty.
Most of them are very rubbishto me, like Mail who uses that
Calendar it's very bad and basicMaps.
Until very recently it wasdownright unusable, right.
The podcast application, youcould argue, is pretty good.
(46:26):
Itunes has always been a messbecause now you can do this with
iTunes, now it's not.
Now it's the App Store.
It's in iTunes.
Now it's not.
Now it's the App Store.
It's in iTunes, now it's not.
Now the music is in iTunes, nowmusic is a separate app.
I don't even know if iTunesexists anymore, to be honest,
right.
So the applications have beenpretty bad, usually in the Apple
ecosystem, not to mention thehardware is usually pretty good
(46:51):
and so.
But you can cover all grounds,right?
Maybe in Google it's theopposite in a way, but I'm not
going to get into this.
But you could say there's a lotof opportunity of building this
, maybe more for indie hackersand bootstrap companies perhaps,
but I wouldn't build a VCbacked app on the Apple
ecosystem just because there's ahuge threat there.
Speaker 2 (47:09):
But that's great because that means that there's
ample opportunity for the folkswho are crazy enough to go in
and build something amazing.
Right, that ground is wide openand you're not likely to be
competing against someone withridiculous amounts of funding.
So I think it's exciting.
And then, to be slightly fair,I worked at Apple back many,
(47:31):
many moons ago and, uh, you know, in terms of their friends who
work there now, uh, you know, Ithink that they have an awful
lot on their plate and they donot try to do everything for
everyone and they improve whatthey've got incrementally.
Uh, and so externally, thatseems like, oh, you know, their
(47:52):
stuff isn't as good as it couldbe, or et cetera, et cetera.
But you know, I think that whatthey're building meets their
goals and what they're buildingis, I mean, as you said, some of
it's quite good.
Notes is very good.
Notes was terrible at first.
Notes was useless, and so, andon top of that, like dot mac
back in the day, but you know,they said, okay, we want this to
(48:15):
work long haul and we will chipaway at it and chip away at it
and chip away at it, and, andthey got there.
Uh, so a little bit of creditfor that.
That's all exactly great.
Speaker 1 (48:26):
Um, just to wrap it up, um and that's something I
never ask on the spot becauseI'm always like fuck, I should
have done that who would youlike to listen on this podcast?
That you know, somebody fromyour previous years or from your
network, especially fromSilicon Valley?
The English podcast couldbenefit from that.
Speaker 2 (48:46):
Who would I like to listen to on this podcast?
Speaker 1 (48:48):
Tomorrow we have the founder of Ghost, so it's a big
one.
Today's a big one too.
So we're doubling down on thepodcast and ramping up on
listens, so I'm pretty happyabout that.
As a byproduct of not doingStartBrand anymore, I could just
dedicate more resources andmental bandwidth to running this
podcast, and so you know,slowly chipping at it.
(49:09):
But who would you like to?
Speaker 2 (49:11):
Sure, I mean.
So, I think, a profile asopposed to a specific person.
I'm really interested inbootstrap companies and in their
stories In particular.
I'd love to hear more bootstrapcompanies in Barcelona or in
Europe, and so those thingswould interest me tremendously.
(49:31):
In terms of giving you someoneyou might want to interview,
michael Simmons of Fantasticalwould probably be a pretty good
guest, and so, having justreleased, he's going to be a
little busy, having justreleased the Windows version,
but when he comes up for air hemight be a fun guest.
Speaker 1 (49:50):
Okay, yeah, but like when, when he comes up for air,
uh, that he might be a fun guest, okay, yeah, uh, um, I would
reach out because a lot ofpeople like to be on podcast.
I think it's a pretty lowcommitment as opposed to an
in-person event.
Right, podcast is iTunes, maybeit just they.
They have like some hoursdedicated per month or something
like that, to doing interviews,and so maybe you can book them
four months out.
(50:11):
But, um, yeah, why not?
Speaker 2 (50:13):
and then other one, other folks that might be
interesting is, uh, the folks atsass group.
Uh, so they're a german companywho okay, buy sass, companies.
Yeah, they're yeah and so,relative to what we were talking
about earlier, they might beinteresting folks to hear about
what is their model, how do theygo about it, and or talk to
(50:35):
founders of companies who'vebeen through that process with
them.
Speaker 1 (50:37):
Yeah, or somebody from Summit Partners.
I mean, I worked for SummitPartners as a freelancer 10
years ago, but I think myconnections are not there
anymore.
But yeah, that's how I saidlike, wow, this goes full circle
, right, it was probably one ofmy very first clients as a
freelancer and when I met you,it was fun because it was
(51:02):
exactly on the day that Istarted working for them.
More or less it was that weekright, a couple of days in, a
couple of days out.
But yeah, it was a greatcoincidence, maybe because I
think we haven't had any PE firmor growth equity firm on the
podcast Bootstrap we hadEveryday.
We had Tanya from theMultiverse AI.
We had what else?
(51:23):
The guys from Metricool inMadrid, a Combo Mail from Madrid
as well.
Both of them sold in the last12 months something like that as
bootstrap companies.
Speaker 2 (51:32):
He has a newest founder at Startup Grind.
I don't know if you've had himon the podcast or not.
Speaker 1 (51:36):
Yeah, yeah, also a couple of times already, like,
amir is a great, great friend ofthe show and also because we
have this, we have thismentality whereby we've got to
support each other.
We're bootstrap companies.
We know that.
You know, if we have toprioritize one thing over the
others, I always go to abootstrap event or indie hackers
or stuff like that than ratherto another you know VC event or
(51:59):
podcast or publication, justbecause they can get whoever
they want.
He likes being on this show,because we can focus on stuff
that matters like workingremotely, async, leadership
under tough times, mental health, and whereas in other podcasts
and other events it would belike, yeah, but what's your LTV,
(52:20):
what's your CAC, what's yourrunway right now?
What was the valuation in yourlast round?
And a lot of times he doesn'thave an answer for that because
it doesn't apply to his business.
So I think he's a little bitfrustrated with with this kind
of podcast.
But anyways, rick, um I don'tknow if you have any parting
words, I'm rolling out thecarpet for you, like 60 seconds
(52:42):
to say how we can help you.
What's, what's, uh, next foryou and, um, how, what you, what
do you want to get out thislike if people, if people can
help you.
Anyhow, let us know Sure.
Speaker 2 (52:53):
I mean, the main thing would be if there are
folks who meet the profile forfounder partners, then I'd love
to hear about them.
So if you're an engineeringfounder of a company in
Barcelona or Europe and you'relooking to talk to some folks,
then shoot me an email.
Speaker 1 (53:11):
Awesome.
Well, thank you very much, greg.
Have a nice week, all right,thank you.
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