How We Hit $30m in ARR Bootstrapped

founders what's going on you guys know i love in-person events and they are back the recording you're about to hear is from our most recent event where we had hundreds of founders come together share intimate details templates kpis okrs about their business and it was something special something special we'd love to meet you in person if you want to see the next live events we have coming up via our schedule the link will be down below in the description if you're listening on itunes check this out on youtube you'll see the links in the description or you can just google

founder path or latka next event we'd love to see you in person in the meantime though enjoy this recording it's a good one all right so uh i did lose a lot of money uh to nathan over here he got me into a poker game i actually don't like um i just play poker for social reasons not not the way these guys play there they i think i lost like a grand maybe that night or maybe even another game tomorrow night if you want to come i don't know well i know i'll try to keep my grind to myself uh

i don't have the sexy pants on so it's all right um so very quickly since he brought it up we've not talked about this so i i came to the states as a poor student at byu and i was a in the computer science room a market research professor comes into the lab and says hey i want somebody to build me a survey tool i looked at him and said how much you're going to pay me obviously right it's like 17 bucks an hour and i do a lot more for 17 bucks an hour right now so

um and that guy was scott smith his son is ryan uh he was a sales guy i was the tech guy scott obviously was the professor uh they don't tell the story that way but you know that's what happened uh and then we divorced in 2003 2005 is when we divorced they kept survey pro i kept question pro obviously they've done uh 27 times better than what i've done so you know clearly right so uh so that's the back story um so but i want to talk about m a today uh and so

most people think that you know i kind of stumbled into this kind of path not necessarily you know thinking through this this kind of like gives you kind of an idea of how we've been doing as you can see we've been doing this for a long time um and we're and what what i want to talk about today is just opportunistically doing deals as they come along and most people you know i was even talking outside like you know how how do how do how do you kind of suss it out and then um and how to actually execute really

fast a little bit about ourselves like i said uh we've been at it for a while we started up in seattle um and then currently we're in austin so we were part of the cohort of companies that got the [ __ ] out of bay area i guess and into austin and uh and let's talk a little bit about my journey i'll obviously in the next 15 minutes i'll just talk very very briefly through my journey for a couple of years now or many years now the first zero to one is obviously a hustle everybody knows this every one of

you guys are in some way shape or form have done it we'll do it and for us also that's me that's actually my garage and the story here is that i used to build my own computers because i was too cheap to buy a regular computer and the most important part was that cd-rom that you see um in my hand so yeah you have to install linux on the on the computers uh i was so cheap that i used to install the cd-rom install linux and then take the cd-rom out and put it

on the next computer so you don't have to buy multiple cd-roms so uh so that gives you an idea of being cheap but also in fact uh the other gentleman was and you were talking about revenue based kind of like acceleration like uh you know i did that quite a bit in the first part which i said like i never said no to any feature right anybody said that they wanted something i said i'll get it done really right will you buy it and i was just like on the spot um i've done deals where like you know like pay me 10 grand i'll build

this feature overnight uh and i was you know obviously i was the developer slash janitor slash customer success and everything else in between so that the zero to one angle was um that that one thing worked for us really well obviously and the second thing that i want to talk about in terms of seo is something that we anchored on even back in the day because we we jumped onto seo uh because you know before seo was kind of frankly

seo but in this particular case uh uh we also kind of like did a latam expansion and this gives you an idea of how we did the latin america one so that gives you kind of how much we grew in the last couple of years um we almost 9xed our traffic um and the game plan for the latime stuff was pretty straightforward we had a bunch of content we translated everything auto translated all our content into spanish obviously and then we waited for traffic to come

okay and as soon as traffic came to any particular piece of content we started manually optimizing that content right because the auto translation obviously does not work long term but it's a great strategy for say like if you have a bunch of english content and you want to get into a particular market but obviously you've created tons of english you know we had almost like 2000 blog entries on our blog in english so we're like oh we want to optimize this in spanish so the normal way would have been like oh look you know we're going to you know hand translate 2000 and it's

just too much work so we auto translate 2000 articles wait for traffic and look and every week we usually look at the traffic and the traffic that bumped up which means obviously you know google was picking it up and so and then we go back and fix those uh uh fix those ones um so this gives you an idea like and obviously we compete against surveymonkey type form a lot of people um in we have better traction than most of those guys and and if you think about it seo is a game of not how good you are but how everybody else is

playing that game really right if they have you know sorry monkey has 15 guys working on english seo we have four guys working on spanish seo let's put it that way so we can win the spanish market and we did the same thing for german and uh so we even obviously english is really hard because the whole planet is fighting for it really right so that's that was one of the kind of hacks that worked uh for us at least and these are some examples of kind of you know pretty fairly fairly generic keywords they're pretty

difficult to get uh to number in the top three on uh now let's talk about going from one to one to ten uh we have to really pivot at this point and i i struggled quite a bit uh because the hustle was on it was fun uh you did everything uh and you really have to put process in play really right i mean as founders we're all doing everything janitor slash customer success slash developer but then you know from the one to ten you really have to kind of step back and say like look everybody needs

to have a function and each function needs to be optimized and more and most importantly you need to have people on all those kind of you know you know all those functions and it took me honestly it took me quite a while to understand that uh since we were bootstrapped and i probably don't like listening to other people also so i never figured out what to do and then eventually we figured it out you know we struggled for for two or three years we struggled quite a bit or four years we struggled so we got up to like uh three or four million dollars really

fast right so from 2005 to 2009 we got to 4 million bucks then we got stuck over there right for for almost four years i got stuck i'd be now even four to four point two to four point three um and then eventually kind of six point five and so it's when then we get from six 6.5 to 10 that's when that happened because we put all because all the process systems started working kind of together at that point that's pretty important so but we have talked a little bit about m

a so another way to get and i was talking about this another way to get people into the company into those systems is to hire you know smart people right and one way to hire founders i mean obviously we're all founders here we don't want to you know we don't want to work for anybody uh but you can hire founders by just acquiring their companies simply put right smaller companies that they they're kind of either exhausted or they're looking they just need more they're not able to get beyond the one million dollar er

function uh this is an example of like i just said like look i needed you to be the president of kind of one of the divisions i'll just pay you some cash i'll buy your company and i'll and you can keep all the money that you have through that process and and in fact all the invoices that are going to come through and i'll give you all the kind of support around you uh that you're kind of like obviously those functions are in there as a smaller company then then this is where things got really interesting um and i'll tell you the story around uh you know as you can see

over here uh let me just go back a little bit yeah so this is that so this is in the middle of the pandemic in may of 2020 a private equity company calls me and says like hey vivek i've been talking to a bunch of pe guys one way or the other like heavyweight we really want you to buy this company one of our portfolio companies i'm like dude are you kidding me right you're the billion dollar pe firm why are you calling me up and i'm the bootstrap guy and it isn't supposed to be the other way around right no no not

me they're like no no you you really have to take a look at this like and i knew the company too it was called in prison and they're like okay cool send it you know they kind of we have a call and i said okay i'll spend and first of all it's may of 2020 who's doing anything right like we don't want to do anything nobody knows the world's going to end day after tomorrow what's going to happen really right and so they said like all right let's talk about it and then i talked to them the one important thing the managing director of the pay firm said like tell me what's it worth to you

that's a good point i can get behind that i don't know how much you think it's worth but i'll tell you what's worth to me right so it was making three and a half million bucks i said well i'm not going to pay anything for this so i typed in that email i just put an offer letter on my on my iphone and i offered them 800 grand and they came back and said would you do 1 million like oh [ __ ] we have a deal now right i'm at 800 you're a millionaire somebody's gonna close at this point and i'm getting three million bucks in

revenue i'll take that deal any day of the week the key part was just making that making the call now the back story is really like they needed to sell obviously they needed to sell the company because they were shutting down the fund so it didn't matter whether they got whatever they got they just needed it and most importantly i offered them all cash 30 days that's it right no [ __ ] around no screwing around with the you know you know you know burnouts and this and that and all that stuff like dude it's a

foreclosure sale you know 30 30 days you know you get your money you can shut down your fund and you're happy i'm definitely happy so so let's do this so that's the way we closed that deal and that's kind of a quick example of you know a lot of people kind of think through like hey how do i set up an loi and this and that and loi and term sheets are nothing but just whatever you think just write it down it's not that complicated just write down like okay this is how much i'm gonna pay right now is how much pay in the future and so on so forth i just wrote that down in like

24 minutes send it over and they said well okay it seems like seems seems going to work let's do this and then we kind of like then went through 30 30 eventually it took more than 30 days um to go through diligence it took more than but that doesn't nobody cares once you're in loi like you know if it takes 30 days 60 days who cares really it just goes through um this was this was regal right yes it was yeah i'm probably going to get sued for saying all this [ __ ] but i as you can see i don't care

[Laughter] so they're pretty uptight about it but whatever we're building the slides and vivek goes i'm definitely getting sued for this and i said wonderful great content yes um the other thing that worked for us is global expansion so uh so we we can obviously as you know we are competing against you know folks who have 24 times the money that i have in terms of marketing spend execution and everything else uh and so one of the one of the one of the goals was like let's just open up

offices and sell in those markets right and we have a pretty good playbook now and and the whole story started off because um we are at one point this was like five years ago we said like you know what we should sell in spanish right i mean like you know half the world speaks spanish and we should start selling in spanish so we hired the sales guy who walks into the door in seattle and he's a mexican-american guy i'm like of course you speak spanish dude here's the phone from now on you're gonna you're gonna handle all the spanish conversations right and so so we do that and then at some

point he comes whacked after after us he's a regular ae really right he walks into my room and says hey i got a question for you he's like yeah hey look i'm in seattle does it make sense to you that we are selling to a bunch of mexicans from seattle i'm like no it makes no [ __ ] sense right i'm going to go down to mexico i'm going to build the team there i'm going to build a team there i'm like oh here's the ticket i don't know just go do it uh so we started off at 100 grand and now it's four and a half million bucks just

out of latin america not just mexico but all of latin america mexico that includes brazil and everything else really right and that thing is going to hit 10 million bucks i'm guaranteeing you that and and and that has been and so we replicated that same model in other markets so same thing i had somebody in dubai sahara you know in dubai we can beat out qualtrics and medalia very very easily because we walk into the door and say hey look we're right here in our enterprise sales is largely about hey you work on sundays we work on sundays all right do you drive on that side of the road i also drive on that side of the road you know whatever

right so so so my sales team can walk in and say hey this is what you know i'm here you know and then they're like yeah screw caller extreme medallion there because some irish guy is gonna show up from you know london at some point we don't like that [ __ ] right so um so we can win that deals i mean we can't do that in the states obviously right you know so so but we win in those markets so our global revenue is going up uh fairly well and in conjunction with that what we did that was interesting and i think was actually

needed we just built out other data centers so our platform so so that was our kind of conversation said hey look we are here and we have a data center here in you know in your region and all the data issues are kind of like you know it's all [ __ ] but you know everybody wants to talk about it and so gdpr and all that crap so so that that saw that solved that problem together and that you know obviously you know accelerated revenue uh what do we do to go from 20 plus actually i don't know i'm i'm writing it

as as we go along um but you know one thing that we've started doing is kind of you know build out more products more offerings right round out the offering one of the ways that we do it now is like we look at a persona and then they say like okay all the products that a particular person i need so typically we are selling on the enterprise we're selling to three different personas one is the director of insights market research and insights so they need native audience services they need you know qualitative quantitative research services so we kind of provide tools for

all of them the other persona that we sell to is cx you know so then a whole bunch of kind of tools around cx we are building and obviously the hr buyer for employee experience so we are building a bunch of tools around that so so when you start getting to this kind of scale we just have to have more product to sell to the same buyer and we round it out and we i call it the share of wallet model so you know that's how we do it uh and yeah i mean this is how most m a conversations start like somebody sends me a text and i just make an offer on

the spot uh and uh the thing hold on you have to break this down what i mean someone just sends you a text how did this thing start so this this is an interesting one so this guy calls me up and says like uh hey he had a dev shop um and we needed more developers obviously who doesn't need more developers i mean come on right so and so we were i mean obviously our go-to-market functions have scaled up but we need to get we were having a tough time just recruiting developers and he had 10 of these guys and he was telling me on the fact that hey you know give me some work let me do let me do

work for you right typical you know dev shop hustle and i said like no i'm not going to do like individual dev job stuff but you know why are you kind of like you know bugging around he's like yeah i mean i have some spare capacity i'm having a tough time finding new buyers i'm like why don't i just buy your company and just all your developers can work on all the stuff that we need to do that's it so i turned that around immediately and said like look i'll give you this much and you know and in the anatomy you know you know on every deal is you know most people think that you cannot afford it it's actually not true

like you know if you think about it like whatever price tag you give you can divide it between what you pay today and what you pay tomorrow and you what you pay the day after and whatever you pay tomorrow and the day after usually has some contingencies right if you think about it like yeah i mean you're in the shared board at that point so your risk on that money is nearly zero in fact it is zero um so the real risk you're taking is how much are you going to pay cash up front today that's it that's the only number that you really care about that's at risk to the

conversation so if you're going to keep that thing as low as possible that you can absorb and that's like you know in the bragal deal like we all looked at each other and said like dude we don't know anything about this company okay great it makes three and a half million bucks with from seven clients so high concentration so two of those clients are paying a million bucks each which means if those two clients cancelled we're done right i mean the whole company is done so it's not really a great kind of asset from a sas kind of evaluation perspective so then you have to make a decision how much are you

willing to throw money into it and not worry about it that's it right i mean if that goes away that goes away but you know you do that risk reward analysis and that's the upfront payment so so that's why we just offered i was like okay how much can i throw at this problem with without stressing myself out it'll be 800 grand for 3 million okay that that's a good kind of like ratio if i had paid 3 million for 3 million then everybody would be stressed and then we have to do all this drama and all that stuff really so the smaller companies what you can do is just you know negotiate the price first i've seen

a lot of people and even i've done to make the mistake of oh we're doing we want to talk about tech diligence we want to do this we want to do that we want to do kind of all this other conversation all those conversations are irrelevant the only only thing that really matters is like dude how much are you going to pay that's it right so get that conversation at least that's what i do get that conversation out of the way first and then start worrying about the diligence and everything else because now now the deal's on your side right so you've you've made you've at least anchored the price and once you've anchored the price then you can figure

out whether you want to do this this deal or not otherwise you spend three months talking about all kinds of stuff and in the end then you're like oh look you know what the founder wants two million okay you can't pay two million that's it now now you're back to now now that's a that's a problem so so you might as well and it's a pretty easy way from my perspective at least i know how much i can afford that's it it doesn't matter how much you're worth really right because we are not chasing after kind of competitive deals if it's a chase of a company deal we are not in it really we are trying to

do you know we we try to do m a opportunistically not structurally if you will right and if you're opportunistic just like sales you will win a few it's not that you're going to win all of them you're going to win a few of them and the last thing i'll say is like and i'm done it's just the formality really i mean i think everybody thinks that oh we got to go through a process the process is whatever you do that's it right and you could send that term [ __ ] on an email send out a term sheet or text message who cares really right they just need to know the numbers and you don't have to even think about

it too hard like okay you know this is how much i can afford this is what i want to do and uh and then you and then the negotiations begin and then then you definitely will close at something or the other i think that's about it guys with question pro give a round of applause thank you guys