Practical Founders Podcast

Jeff Corn is the co-founder and former CEO of Virtuance, one of the US's leading real estate photography and marketing providers. In 2010, Jeff was in the real estate investment business and wondered why it took $10,000 and nearly a month to get professional photos for new listings. He and a cofounder started taking photos to serve busy real estate agents to learn what was needed and improve the quality and speed of delivery with technology.

Virtuance started with the vision of a software-only solution, but the business started growing with a high-quality, done-for-you service with a fast turnaround, powered by its technology, partners, and systems. The company grew steadily every year without any outside funding to eventually serve more than 20,000 real estate agents with 100 employees and more than 300 local photography partners.

This tech-enabled services company has SaaS-like gross margins. re-occurring revenue, and some profits In 2022, Jeff successfully sold Virtuance to Diakrit, a global real estate marketing technology company backed by private equity investors. Jeff stayed on for two years after the sale, until last month.

Quote from Jeff Corn, co-founder of Virtuance "The biggest reason that founders fail is that they actually fail to launch. The hardest thing to do is to fricking push your product and get it out in the world– because it's messy. It's certainly far from perfect, and it may not even work very well. But getting that feedback is so important to figure out what to do next.

"I see too many founders try to perfect it before they get it into the market. And then when it gets into the market, they might think it's perfect, but the market may not. And at that point, they already invested too much in it. It's not that we're shipping something that we don't think works; we are shipping something that we know checks just one of the boxes that our customers need.

"It's just human nature that we want to put out good work, we have pride in our work. It's one of the one of the real paradoxes of entrepreneurship is that we are all perfectionists and Type A personalities. We want to control it and we want it to be right, but also to be successful. The only way to succeed is to let go of some of that, to allow our teams to do the work, and be able to ship an imperfect product to get real feedback."

Links

• Jeff Corn on LinkedIn
• Virtuance on LinkedIn
• Virtuance website
• DIAKRIT website

The Practical Founders Podcast

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

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

Adam Haynes is a managing director at GLC Advisors, an M&A advisory firm that helps bootstrapped founders to successfully sell their companies. The software advisor team at GLC has been working with practical software founders for over 15 years and has completed over 100 software transactions.

In this expert interview, Adam shares:

• What has changed in software acquisitions in the last 20 years and recently through 2024
• What are the valuation ranges and factors for practical SaaS companies under $10M revenue
• The 7 key areas that founders should be working on several years before an acquisition
• When should a SaaS founder consider using an M&A advisor

Quote from Adam Haynes, M&A Advisor at GLC Advisors "When you are selling your company and the buyer is looking at all your challenges and problems, founders should know that deal breakers are very rare. Buyer and seller want to get a deal done, and there are ways to navigate around them.

"You can't have a software company without tech debt. That's okay. Nothing's perfect, but you need to have a remediation plan for it. If you were going to close a couple of big deals during diligence and you don't, or they get delayed, the valuation may take a hit. Or they might inject some structure like an earn-out if you can get these two deals signed.

"But if you don't own your IP and don't own or clearly license all your code, that's tough to navigate around. Or if you've infringed on somebody. That can be a dealbreaker, but it isn't that common."

Links

• Adam Haynes on LinkedIn
• GLC Advisors on LinkedIn
• GLC Advisors website
• GLC Software Capital Markets Report – Q1 2024

The Practical Founders Podcast

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

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

Matt Wolach spent 15 years as a successful SaaS account rep, sales leader, and software founder before becoming a SaaS sales coach for early-stage B2B SaaS companies. He has worked with over 250 SaaS founders and sales leaders worldwide to improve their close rates and create repeatable sales systems quickly.

In this episode, Matt shares:

• How B2B SaaS founders need to learn to sell and understand their own sales processes before hiring salespeople
• Why technical founders can their sales using a helpful mindset of customer problem-solving
• Why he starts by analyzing the sales demo to understand what's working and what needs to be improved in the sales process
• How successful founders and salespeople show their product less and follow up more than their peers
• Why software buyers are tired of buying software and don't want to engage with commission-focused salespeople

Quote from Matt Wolach, B2B SaaS Sales Coach

"The only way a buyer can be excited about your solution is if they are really emotional about their own problem. How can we get them to realize their problem is important and worse than they thought?

"If they're gonna take action, they've gotta be emotional about their problems. They come in thinking, I just got this thing I want to take care of. And they leave saying, Whoa, I had no idea we were in so much trouble. We have to move now.

"We have to make sure that they prioritize the problem we solve instead of not doing anything and moving on to a different problem. When they realize how bad their problem is and feel the emotion, it helps them see they need to prioritize it and take action instead of putting it on the back burner and waiting till later."

Links

• Matt Wolach on LinkedIn
• Matt Wolach SaaS sales coach website
• Matt Wolach YouTube channel
• Scale Your SaaS podcast

The Practical Founders Podcast

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

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

Charlie Alsmiller is the founder and CEO of APIWORX, a powerful integration platform for mid-sized ecommerce companies. He is an experienced practical founder who has created and grown several software companies. His first venture was VC-funded and shut down quickly in 2001. His next software ventures were bootstrapped with funding from services revenue and his own savings.

APIWORKS is a powerful integration platform that connects Shopify data to accounting software and other applications. Charlie started the company in 2020, with well over $1M in annual recurring revenues and 30 employees. They are growing faster by focusing on key vendor ecosystems and specific customer problems where they have a unique advantage.

In this episode, Charlie shares:

• What happened when challenges arose in his first company, which was VC-funded
• Why he started a services business to find and fund his next software business
• What happened after his first successful exit that made him start another company
• How he ideated and validated to discover the best startup idea to invest in
• Why they are growing faster every time they niche down on specific vendor ecosystems
• Why startup CEOs should eventually focus on their superpowers and delegate everything else

Quote from Charlie Alsmiller, founder and CEO of APIWORX "As a startup founder, you need to really know yourself. Know your personality type, know your skills, and know your superpower. Focus on what you do best and where you add the most value.

"I have the superpower of whacking the machete to start new things, clearing the brush away in new markets, and figuring it out. And I'm pretty good at recruiting people who can do the things I don't do well. Now my team tells me, Charlie, don't do that, we'll do it and you go do that thing over there.

As an early-stage founder, you start by taking out the trash, doing software development, doing marketing, and everything else. As soon as you can scrape together the pennies to outsource or hire those other things you're not good at, you should do it because it allows you to double down and grow faster. That's the game changer for your growth."

Links

• Charlie Alsmiller on LinkedIn
• APIWORX on LinkedIn
• APIWORX website

The Practical Founders Podcast

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

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

David Evans, the managing partner of Sentiero Ventures, a seed fund focused on AI-focused software startups. David discusses the role of AI in software development and the opportunities it presents for practical SaaS startups. He shares his journey with AI and predictive modeling in his previous companies and the key factors he looks for when investing in AI-powered companies.

In this expert podcast interview, David discusses:

• The new questions about revenue models for AI-powered companies
• The challenge of cost in AI and the potential for innovation
• The importance of clean and relevant data to train models and machine learning
• Balancing AI in the go-to-market strategy
• The impact of AI on various industries

Quote from David Evans, Managing Partner of Sentiero Ventures "The biggest challenges and opportunities we see right now are in the revenue model. The traditional per-user, per-month model in SaaS is becoming increasingly difficult to justify in AI-powered companies because every time I interact with ChatGPT, there is an associated nontrivial cost. When I ask it a question with AI, there is a compute resource of OpenAI or whatever that is being directly accessed.

"This also leads to some opportunities to scale revenue more quickly because you can now charge based on utilization. With the right sort of unit economics, you have the opportunity to scale your revenue more directly with usage and value. Companies will scale their utilization very quickly when they see results. It gets really interesting fast.

"It's obvious when you start viewing it through the lens of whether I need to run one more campaign. If they are making money, then yes, I'll pay for the next campaign and the next one. We're seeing a better scale with utilization-based billing. You have to figure out the unit economics to ensure you're doing it profitably."

Links

• David Evans on LinkedIn
• Sentiero Ventures on LinkedIn
• Sentiero Ventures website

The Practical Founders Podcast

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

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

Phil Dur is cofounder and managing partner of PeakSpan Capital, a growth equity investment firm that works with bootstrapped SaaS founders who are scaling up to become sizable market leaders. Phil has been funding capital-efficient software founders for over 20 year and has served on 45 boards with those companies.

In this expert podcast interview, Phil explains:

• Why the practical growth equity approach is fundamentally different from the venture investment approach
• How PeakSpan and other growth equity investors support bootstrapped and capital-efficient SaaS founders
• Why founders should be taking money off the table with every funding or transaction event
• When can growth equity investment be a good fit for practical SaaS founders
• Why founders should be thinking about the risk-adjusted odds of successful exits at multiple milestones

Quote from Phil Dur, Managing Partner of PeakSpan Capital "It's a big deal to bring an investment partner into your business because now you're now collaborating with someone on your big decisions. Some founders only need to look themselves in the morning mirror to decide what will happen in their business this year. When you have investor partners, you will have more dialogue to align around important decisions.

"Unfortunately, I frequently see entrepreneurs picking their first investor partner without much time getting to know them and experience working with them. That's why we start actively helping our founders 6 to 12 months before they make a final decision on a transaction.

"We want our founders to get a free trial of what the full experience is going to feel like before we work with them. Founders should be doing that with every other investor they are interested in.

"Don't bring someone into your business with eight figures of capital at risk when you just met the partner two weeks before term sheets are due. That's not a smart strategy for founders."

Links

• Phil Dur on LinkedIn
• PeakSpan Capital on LinkedIn
• PeakSpan Capital website

The Practical Founders Podcast

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

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

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

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

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

Quote from Joe McMenemon, CEO of ChapterSpot

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

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

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

Links

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

The Practical Founders Podcast

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

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

Jeromy Wilson spent over ten years in the software business as a product management leader working for PE-owned and VC-funded software companies. When he decided to start his own software company, he focused on serving public libraries, like his father, who had created a successful library automation software company called Dynix.

Jeromy is the founder and CEO of Niche Academy, the leading learning and development platform for libraries in the US. With his savings and a little angel funding, Niche Academy struggled at first but eventually grew into a profitable and growing software company with 20 employees that is almost ten years old.

Jeromy and his co-founder have no intention of selling the company or raising big VC funding. They are focused on serving their customers, developing their employees, and living great lives with their families right now.

Quote from Jeromy Wilson, CEO of Niche Academy

"Early on, I idolized VC-funded founders. Why aren't I growing as fast as that funded company? But now, I say thank goodness. I'm not dictated to like they are, have the problems that they have, or have these massive crashes that some of them end up having. I don't idolize them as much anymore.

"I love the freedom that I have now as the CEO of a profitable software company that didn't take big VC funding. When you don't have tons of outside funding, you make different decisions and choices. You do things in a way that is going to make a difference for the customer rather than how we can make more money today.

"I'm a real believer in being in charge of your own destiny, having this control, and being able to grow with your profits because you know it's valid. Your solution is something that your customers see as valuable rather than something that some VCs see as valuable.

Links

• Jeromy Wilson on LinkedIn
• Niche Academy on LinkedIn
• Niche Academy website

Learn more at practicalfounders.com.

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

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

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

Links

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

The Practical Founders Podcast

Tune into the Practical Founders Podcast for weekly in-depth interviews with founders who have built valuable software companies—without big funding.

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

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

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

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

Learn more at practicalfounders.com.