Welcome back! This is Part II in a series of blog posts discussing the origins of Loopio. If you missed the first one, I encourage you to give it a read! As I mentioned in Part I, I recently became a Looper in March 2015. It’s been quite the adventure and getting to learn more about how Loopio got started has been a wonderful experience. Our hope is that our Loopio Journey posts provide insight into the milestones and challenges we face as a growing company in an ever-growing world.
Where We Left Off
Last we met, we were discussing how Jafar, Zak and Matt’s work experiences have influenced and inspired them now that they are running their own company. One of the themes we took away was the importance of continual learning. It’s one thing to instill a culture of learning, but it’s important to also identify how you can apply what you’ve learned. Whether this leads to adopting a new company best practice or simply promoting a spirited discussion, the key is application. The questions that I throw out in Part II revolve a lot around new learning moments that confronted our founders during Loopio’s infancy. Ready? Let’s go!
Being Thrown For a Loop(io)
Virginia: Let’s talk about surprises. More specifically, tell me about something that caught you off guard and perhaps caused some grief when Loopio was starting out.
Zak: There’s a lot to consider here, but one of the surprises was definitely how difficult it was to sustain for the first year, financially speaking. I don’t think we fully thought through what it meant to bootstrap a company. Should I get into this now?
Virginia: We are going to talk more about bootstrapping a bit later, however, please go on. I know many people can relate to what you’re talking about.
Zak: For sure, and I will discuss it for now in the context of initial startup surprises. We had confidence in our ability not to take financing while we kept getting customer validation. What we never really thought through was what this would mean in terms of our day to day lifestyles. There were definitely some struggles associated with not having a salary! I mean, this is more personal than anything, but not fully thinking through the implications of living this new type of lifestyle resulted in a pretty big shock. On the one hand, there’s a lot of value in starting a company ten years into your career. You’ve developed quite a bit of experience and a solid network. However, if you’re bootstrapping it, it provides a good reality check since you’ve likely gotten comfortable with a certain lifestyle.
Virginia: I bet it gave you some perspective on exactly how many things you were spending money on!
Zak: For sure. I think a big surprise was looking at money in a different way and thinking “Oh @*!&! This is how much money I was spending?”. It was a very humbling having to think about how you’re going to put food on the table.
Matt: Back to eating ramen!
Jafar: Come on, it never got that bad.
Virginia: (glancing over to a shelf and seeing several packages of ramen) I think I see some right there.
Zak: That’s because it’s delicious. But back to the question, I had to restructure my lifestyle more than I expected. It’s funny because I feel that many people go the opposite route and think too much about the lifestyle implications and it stops them from entering into a venture like this. We were so set on making this happen that we put the blinders on. We may have gotten slapped in the face a bit later, but we went for it and made it work.
Matt: There was an element of good timing for us as well. We all had experience working for a while, but none of us had a mortgage or kids yet, so we were in sort of a sweet spot.
Virginia: Speaking of entering into new ventures, let’s talk about jumping all in! Jafar, you were the first to officially take the plunge. Care to share?
Jafar: It was definitely very scary being the first to jump ship and not knowing when all of us would be working full time together. The reality for most startups, however, is that you can’t just say “let’s all quit tomorrow!”.
Virginia: What triggered the move for you?
Jafar: In late 2013, I was back in Toronto from Chicago for the weekend. We booked a workspace for some whiteboarding sessions and to discuss some feedback we’d received from the customer interviews we’d been conducting. The intent at this time was for us all to work part time on Loopio and see if we could make it happen. I was already considering moving back here to be closer to the guys and Zak threw out the idea of me taking that opportunity to jump in full time. I paused for a second and thought “that might actually work”. I remember going back to my parents place and seeking my dad’s advice. I told him I was seriously considering quitting my job to pursue Loopio and he told me to go for it – something that I wasn’t expecting! I quit my job and that was that! Then a few months later, I got a text from Matt saying he was ready to leave his job. It was a pleasant surprise, to say the least.
Matt: Yup! I joined him around four months later. We worked out of a Starbucks and then a place called Artscape for a while.
Zak: From there I booked a hard stop for myself at my job and several months later, I had joined them both.
Dolla Dolla Billz Yall
Virginia: I think this is a good time to get back to the bootstrapping topic. Did you guys know from the get go that you did not want to take outside funding?
Zak: We did not know. Startup literature is heavily focused on “so and so company closing $X millions of dollars in funding”. This is the type of news that is celebrated and that you get inundated with on a daily basis. It wasn’t that we decided we wouldn’t pursue a funding round, it was more that we wanted to start building a product and then eventually get financing because we’d need it to drive growth. This all changed when we shifted from our beta period to our first paid customer.
Matt: That was a random day. We pretty much looked at each other and said “I think we are ready. Next demo let’s ask someone to pay us”.
Zak: Gaining traction and making revenue was a huge eye opener for us. Even though we weren’t making a lot of money, it led to the decision to actively say we no longer wanted to seek financing. While we continue to talk to VCs and investors to this day, our message of not needing financing is clear. It’s funny how much more attractive this makes you to them!
Virginia: Would you say that this forced more discipline in terms of forecasting?
Matt: We definitely started looking at metrics more closely. We developed a solid understanding of what was going out, what was coming in and where we were at.
Jafar: When you get a round of financing, you have the money and ability to hire more people and really drive growth. By bootstrapping, you have to be nimble. It felt weird charging customers money at first because you never feel like your product is fully ready or complete. To your point around discipline, it forced us to focus on the real pain points our customers were feeling and to not spend forever obsessing over every detail. Another reason we were considering funding was to get office space. Working out of the same office was really important to us. Thankfully, some good friends at another software company were kind enough to open their doors and give us space for a few months. We were treated like employees, felt like we were part of a team and had the opportunity to ask questions. This speaks to the value of building a solid network before taking the startup plunge.
Less Management, More Doing
Virginia: Let’s focus on the shift from working with and/or managing a team of people to it being just the three of you. What was this like for you?
Matt: Zak’s harder to manage than a team of 15 other people.
Jafar: He’s a primadonna.
Virginia: He does seem to get his hair done a lot.
Jafar: Please don’t edit this out!
You’re welcome Jafar :)
Matt: Back to the question, it involves being really hands on. Instead of mentoring and teaching, you are doing. It’s a completely different job, and I would say that most people who manage technology love building technology as well. It doesn’t necessarily mean you’re good at both though.
Zak: There are so many failure stories of either great technical or sales people being promoted to management that fail. It’s a completely different skillset. You don’t just take your best developer and and make them a team lead because they are good at developing. There needs to be ways to promote horizontally as well as vertically to ensure people can become better experts at what they are doing and be compensated fairly for that. Matt and I have experience building teams and we will consider this more and more as Loopio grows. It’s definitely been interesting going back to not having a team!
Virginia: What was the adjustment like for you?
Zak: For me, managing a team trains you to become a professional juggler. Your entire day consists of context switching. You go from meeting to meeting and jumping around becomes the norm for you. Going from that to having to sit down, focus and do something for 5-10 hours in a row was a big adjustment! My attention span was not there. It took me a few months to really adapt and change my mindset back to what’s truly involved in going deep and building something as opposed to managing.
Matt: Also, let’s be honest, computers are easier to manage than people.
Zak: Well, they definitely listen better.
Summary of Part II
- Keep your doors open – Even if you decide to bootstrap, always be willing to meet with and listen to investors. These relationships are valuable.
- Don’t wait for perfection – At some point you’ll have to take a leap of faith. You should be uncomfortable the first time you ask someone to pay for your product.
- Bias for action – As a founder, no task is beneath you. It is up to you to execute. The most important person you need to manage is yourself.
We’ve reached the end of our second installment in our From Zero to Loopio series. Fear not, there is still more to come. If you have not done so already, make sure to subscribe below and get notified when Part III is released!