075 - Bootstrapping a Partner Led Business, with Andrew Gazdecki

What is up PartnerUp!?

Wow. Andrew is an understated powerhouse. The dude built his first company with one $100k angel check to $11M ARR…by leveraging a network of over 5,000 agency partners!

You’ll want to stick around for this one, it keeps getting better as we go!

He’s the founder of Microacquire, and an evangelist for the bootstrapping approach. We talk about the changing startup funding landscape, and how ecosystems are lowering the cost of Go-To-Market for founders.

Oh, and he’ll be speaking at the PL[X] Summit in November. The moment partner ecosystems go mainstream is live at plxsummit.com.

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Full Transcript:

Isaac Morehouse  00:00
Hey what is up partner up? Unfortunately, Jared is not with us today last minute switch which is why I got to say what is up partner up. Really excited about this episode we're gonna get into it in a second. I gotta I'd be remiss if I didn't mention a few things first though, if you've been sleeping under a rock and you haven't seen it yet, the pls summit partner led x. In other words, partner led everything five days partner led startup partner LED product, partner led marketing sales, customer success, we're bringing in the best people from all over the world, including today's guest, to talk about what it means to be partner first. So pls summit.com, go check it out. We even got a pretty cool synth wave playlist there custom song we made for the event. We also have a couple other events coming up really soon. This week, September 22. We've got what do agencies want a fun little hangout with a partner page. So grab a drink, come learn how to be a good partner to your agency partners. And then September 28, partner school half a day free learnings with fonio, September 28. You can find all that stuff on partner hacker.com. So that's enough enough promo stuff. Let's get into it. I've got Andrew gaz Deki, founder of micro acquire. He's founded a couple different companies that got acquired, and has has gone on to help founders get their companies acquired. So Andrew, great to have you with us. Yeah,

Andrew Gazdecki  01:32
what's up, man? Nice, man.

Isaac Morehouse  01:34
Likewise, I was saying we were recording this. And then we got completely cut off and had to start over. And I was saying that, Andrew, I met you a couple years ago, the first time I think 2019. And one of the most laid back guys I've ever met. And you have to be pretty laid back because I saw you had a you hosted a big house party at Sastre this year, which sounds like as a homeowner. I don't think I would want to host a house party at my house. That's after so did you survive?

Andrew Gazdecki  02:08
Yeah, so I did. And if I seem a little low energy the party was last night. I personally don't drink but it just there's like 150 people, they're all founders. And it's the second time we've done it. So the thought process behind this was I live five minutes from sastra. I live in San Mateo. And I have a big backyard. And last year, I just send something out on Twitter saying like, Hey, does anybody want to really hang out and eat tacos in my house? I've literally and I showed a map like how close I was like you ride your bike here if you want. And then 100 people ended up showing up and then and then people started asking me if I was going to do it again this year. And I guess it's I'm kind of committed to it for the next day until I until I die probably. But yeah, so last night. Yeah, we just kind of hung out. We had about 150 people over. You know, the key things is like keep everybody in the backyard. You know, we have taco truck, drinks water. Even just candy, just a casual hanging out. Letting other founders just chat with founders. It was a good time. And by the way, and one thing that I think is the most impressive part about it is we had it all cleaned up before I went to bed. Because everyone why? Everyone was so cool. Everyone picked up all their stuff. Everyone was helping with the trash like it was. My backyard is completely spotless.

Isaac Morehouse  03:56
That's amazing. That's amazing. I must be inviting the wrong crowds over to my house. families with small kids. It's a little different. They don't not as good. The kids aren't as good at cleaning up. No, it's funny you. You said right when you said I don't drink I had just finished taking a sip of whiskey. So for our YouTube watchers, they got that it's it's afternoon here on the East Coast man. Almost the weekend.

Andrew Gazdecki  04:20
It's it's 2pm PST, PST. So it sounds five o'clock there. Yeah,

Isaac Morehouse  04:25
yeah, we're good. That's a that's actually a great that's a great example of like, we talk a lot about living in market and building a community and with micro acquire you know, you're obviously your customers are founders and CEOs. And just, hey, everybody come over to my house like that's very, you're very real about it too. Right. It's not put on that's kind of a I don't know there's something there. There's a reason that I think you've cultivated trust with that audience which again, is a big part of what we talked about it at partner hacker that you know, you're not going to get out gonna acquire your customers by spamming them with cold emails, you're gonna acquire them by living where they live being a part of that community. So I'd love to just talk about micro acquire a little bit like, not just kind of the founding story, that's part of it, but sort of the broader. What do you see in the world going on? That's changing with startups, the the shifts, that has made it, you know, easier for more people to bootstrap or to do, you know, micro acquisitions, like, what is a micro acquisition to you? So give me give me just like, give me your pitch on that. Give me the story, the background and why you think it, it fits in the world? Yeah.

Andrew Gazdecki  05:36
So, you know, what I always look for when I start businesses, is really a trend that is unknown to most people, but is known to me, I call it you know, another way of putting it is, you know, make a bet that is obvious to you today, that will become obvious to others over time. And before my group where I bootstrapped a business, I had a great outcome and now known and celebrated it, it wasn't reported in any magazines. But, you know, I'm really grateful and fortunate for that opportunity. And so, you know, after that, I started another company, which was acquired. And so going through both of those processes, really, two things happened. Number one, people were just kind of confused at bootstrapping, like, Oh, that's cute. Like, that's a lifestyle business. And I'm like, No, actually, like, it was pretty good out calm, like, I'm proud of it in a way. And then I got a lot of messages from friends, like, what's due diligence? What's, what are the legal steps? How do you find the buyers and then this light bulb goes off, you know, we're trained as entrepreneurs to, you know, fundraise, is just like 1000 books on sales, marketing, but there's not a lot about the, arguably the most important part of the founders journey, which is the exit. And so I felt there's just this huge gap in the marketplace, specifically the startup ecosystem, for an easy way for entrepreneurs to find buyers for their businesses. So I so I built that and, and the thesis was pretty simple. I just, you know, we do all these no code tools popping up. All these other individuals building these amazing businesses doing, you know, one 2 million year, you know, loving life, no investors, you know, those businesses will sell for like four or five $6 million, maybe more. And that's life, changing money, but you're not going to be on the cover of Forbes for doing that. But like that, I believe that's what 99% of founders want. But they're swinging at something way bigger, with way lower odds of success. And so I thought it'd be just, you know, really, I guess, what's the word, just rewarding to kind of shine light on a more, more practical and realistic path of entrepreneurship, in my opinion. So to kind of shorten that, you know, I believe building a startup has been democratized. So you can build an MVP quicker than ever. So that means more startups are going to be created. Out of the startups that are created really only, I believe the stat now is half a percent of startups raise venture money. And then out of those startups, only less than 1% will actually reach, you know, a unicorn billion dollar valuation or whatever, which I think is the corniest name for a highly valued company. But so I just, you know, I'm just thinking, Okay, so another analogy would be, you know, you can go to Barnes and Noble, and you can see all the best selling books, and those are the top companies. Or you can go on Amazon, and there's just this long tail of books at every single book. And so, when you think of the world of startups and entrepreneurship, there are so many, there's hundreds, if not millions of startups that you've never heard about. And that's the market that we serve. So I like to say my group Bar serves, you know, basically 99.9% of other startups taking a different route to building their business.

Isaac Morehouse  09:30
Oh, I love it. I love it. Yeah. And I want to get into a little bit to where I think this really connects with some of the partnership and ecosystem angle. But I it's funny, my previous, you know, most of the last decade I was working in and around the early career space and one of the things I always tell people early in their career is that, you know, don't don't be afraid to do something concrete, but if you can do it in such a way where you can you can have various out columns, right, you can pivot to various outcomes easily, that's great, like, don't get over obsessed with having too much optionality. But like, make sure you're not unnecessarily removing options. And when it comes to founders, you know, I've been in this position myself where you want to take that when you decide I want to try, I want to try to build a billion dollar company, I want to try to do something massive, and that's going to take, you know, the, the amount of fuel or whatever, then you're going to need some VC for that. But what you don't realize is that when you do that, you remove options. So if you're starting a company, and you're like, I want to go for the billion, if I hit if I'm only worth 5 million, 10 million, 20 million, if I haven't raised or if I haven't raised sort of traditional VC, maybe I've done some other things some other ways. I can always say, well, we didn't hit a billion, but we made a company that was worth 5 million bucks. And that's actually still pretty cool. If you go the VC route, that's kind of off the table, right? If you get if you raise at a, you know, especially if it's at a high valuation, and then you sell for anything less than that valuation, you feel like a loser, you don't get any money personally, right? Because of the preferences and stuff. So just the fact that you can say, hey, if I build something from zero to 10 million in value, but I raised in a really frothy market, a 20 million valuation, and I'm gonna sell it 10 million, I'm gonna walk away with nothing. Now, maybe you needed that money, but but just knowing like, knowing that you're taking away the option of having a anything less than an exponential outcome, which is like when you ask somebody, Hey, would it be cool to build a business worth $10 million and sell it? I mean, that's insane. Like you said, that's life changing. So just that's one of those things that I think it's gotten, it's thanks to people like you is impart. I mean, in the last couple years, it's gotten brought to the forefront that conversation, like, what do you really want, and the options available to founders are just so much greater now? Not only in terms of, you know, different ways to fund things, but even just to build things on the cheap. And I think that's just I think it's important, I think it puts pressure on the venture capital industry to change and adapt, you know, yeah,

Andrew Gazdecki  12:15
I would agree. And I think one mistake founders make a lot is, you know, there's kind of this narrative of, like, what building a startup is, and a big part of that, unfortunately, is raising money. Like, one of the first questions, you know, you're typically asked by other founders, when you meet them, is how much capital raise how many people are on your team? Which are total vanity metrics, like, you know, like, it should be, you know, what do you what problem are you solving? You know, where are you in terms of like revenue to give you a real sense of like, where the business is in terms of value. But yeah, like when I think about the different scene, and I'm not like, anti venture capitalists, you know, for full disclosure, micro choir is venture backed. So I understand I got a 1% chance and all that stuff. So I've accepted that I wanted to ask

Isaac Morehouse  13:09
you about that. Why, from your previous companies being, you know, bootstrapped. Why did you choose to raise for micro acquirer?

Andrew Gazdecki  13:17
That's a good question. Number one, I felt the opportunity supported it. And, you know, I just love the business so much. This was one where, so for the first two years, I bootstrap the business to about I'd say, 800,000 and in recurring revenue, and it was just me, it was like customer support, product, marketing,

Isaac Morehouse  13:40
your 800k AR just like basically solo.

Andrew Gazdecki  13:44
Yeah, it was like 4am to midnight. Shit, it was, but it was fun. Like it was like my video game. So and then I got the right partners involved. And but here's my point. I always say you know, bootstrap a company. You know, get yourself to a place of financial security, and then swing for the fences, do whatever you want, because you know, if microcar fails, like my my personal worst fear for a lot of founders is you spend five years building something and you walk away with nothing. I can afford to do that like because of my prior exits. And I'm also not really financially motivated anymore. So let's just say Mike requires a huge excess and it exits out. I'm probably just going to start another company after that I there's an I have no wants, like I'm wearing a shirt like that my I don't even know where I got it. It's like some crappy target shirt. So my point being is, you know, when you get that first win, not only do you get the experience, experience, especially in the mistakes that you're gonna make, but when you know you really want us swinging big and you really want to go down the venture path, you're going to be more confident you're going to be more experienced, and you're gonna be way less stressed out, because you don't have all your eggs in one basket, so to speak, like, you don't have your entire life's net worth, in this company, you have to make it work, you know, because over the period of let's call, like 10 years, you know, life happens, like you get married, like, maybe you have a kid responsibility, you pick up a mortgage. And so, and founders are not paid a lot. So also, you know, you got to deal with that level of stress. And it's just, in my opinion, it's such a more practical way of if, if this is what you want to do, you know, just get a win in first, because you'll be more prepared for the next venture. And then, you know, I always say, you know, definitely try to, you know, at least bootstrap the business to, you know, a point where you can hire like, maybe one or two people, just so you can kind of, like, have options in terms of, like, Okay, I've found product market fit, things are working, if I do raise capital, I know exactly what I'm going to spend it on. Rather than, hey, I have a startup idea, the first thing I'm going to do is make a deck, and then I'm going to chase around a bunch of investors to help me go build the product like that, that is, in my opinion, the worst way to build a company. And then the other thing I just want to note is, you know, I think a lot of startup founders just don't understand, or really put too much thought into probably the most critical part of a startup, which is, what do you want out of it? Like would What do you? Do you want to change the world? Like, do you want to disrupt a market that will completely change your decisions, like with micro choir, we want to streamline acquisitions, we want to really, we want to have potentially millions of entrepreneurs exited their businesses, all around the world. And that's very capital intensive, so that, you know, kind of puts us in the bucket of, you know, maybe it makes some sense to raise some capital, but, you know, if you just want, you know, a business that pays your bills, allows you to go surfing whenever you want, you know, it's like you're just you're kind of live in the dream, you know, if that's what you want, then you should like ruthlessly guard decisions that will take that away. Or it could be you just, you know, want a better financial situation for yourself and your family. And you know, those decisions. Once you know what outcome you want, the decisions that you make, will be become much more clear. And I think, too many entrepreneurs just basically start a company and they're like, well gotta raise money. And they haven't really defined what, what do I want out of that. And if you ask them, like, hey, what do you want, and they say, I'd be totally fine with like, walking away with one to $2 million, they should not be raising venture capital, they should be doing that. And I think that's something that a lot of founders miss, because of just, you know, the typical path that we hear about and which is kind of the only path we unfortunately are about with startups. And so that's another part of my group wire that we kind of champion is just, you know, it's, it's kind of cool to bootstrap a company, you own the whole thing even so whenever you want, you don't have any, you know, people that need to approve the sale of the business. And in my opinion, for first time entrepreneurs, I think it's, it's the best way to go.

Isaac Morehouse  18:45
So so I'm gonna make a prediction here. And this is where the partnerships the partner up angle comes in. And I'm gonna predict that we're going to have a, a wave of founders that have disproportionate representation from people who work in partnerships. And I've seen little little bits of this already, you know, right now because I think one of the one of the elements and maybe disproportionate bootstrap companies, one of the elements that allows you to bootstrap where maybe in the past you would have needed to raise or raise earlier is the way go to market is changing that you know, okay, one of the reasons you raise capital is because you gotta buy a whole sales team and you got to you know, you got to be able to pay for all the salespeople, you got to do you know, heavy duty marketing lift on your go to market, but those things are working less and less, which on the one hand, you could say, Okay, well now you need to raise even more money, right? Because there's so much noise out there, it's so much harder to get the ROI on you know, on on direct sales, direct marketing, but the other the other approach is kind of what what we're seeing, you know, when early signs of is no, you look for your go to market, you look for your distribution through an ecosystem for Adeje you look for partners, and people who understand that and know that already, if you get distribution nailed, right, like, it's, it's easier, it's easier to make a quality product. And we're gonna say it's easy than it is to have great distribution. So if you have the best distribution in the world, you can go out and find who's doing the best, who's making the best products, right, and feed that product into your channel. So if you if you understand this, you're working in partnerships, and you see, hey, here's, here's a series of companies. Here's an ecosystem that if I build in this ecosystem, I've got distribution, I don't need a sales team, right, one of the one of the companies that we partner with partner stack, you know, they kind of started with this question, what if you had no sales team? Could you build a SaaS company, a b2b SaaS product with no sales team? How would you do it? How would you get it out there, and it was a 100%, a partnership strategy. And of course, you, you know, whether it's through tech integrations or working with service partners, all the above. And I've even seen companies that have launched 100%, they launched on, actually Jared was telling me about one recently, it's like an app that launched on Zoom's integrations marketplace. Like that's it, they don't have any other go to market. And they, they're, they're doing, they're worth at least a couple million dollars, like within, you know, six months or something. So the ability to kind of build and market and build with your distribution. That's one thing that I've sort of learned the hard way, with my previous companies that if you can line up some of those partners that already have, you know, whether it's people that have trust in the audience, through communities, you can if you can integrate with those communities and roll out of products to an existing community in an existing community. Or through, you know, again, launching on a platform, I mean, how many companies are basically, Salesforce AppExchange is where they get there is where their customers come from. So I think that's an interesting, I think that's an interesting angle on the ability to bootstrap the ability to avoid all that cost of early go to market. If you start from day one, with a partner centric, go to market strategy, how much more how much leaner you can be, and you can get to legitimate size without without a sales team. Have you seen? Do you see that trend in your world?

Andrew Gazdecki  22:22
Yeah, that's, that's exactly what I did for my first how many business apps you want, you want to know the story.

Isaac Morehouse  22:31
Give me the story, baby. That's what we're here for.

Andrew Gazdecki  22:34
So I started this company called for those of you listening, I wrote a book about it's called getting acquired. I started a company in college when I was 21. And it was a drag and drop mobile app builder, Ed totally Right place, right time business. People say like, you know, obviously, you got lucky, I got I got lucky on this one like. But point being is our initial go to market strategy was selling mobile apps, you know, directly to small businesses, mainly restaurants to start. And this is back in like 2010. So we would cold call restaurant B, say something like, what's your mobile app strategy? And they're like, What? Like, like, appetizers like, What are you talking about?

Isaac Morehouse  23:21
I remember when apps meant appetizers, that's a throwback,

Andrew Gazdecki  23:24
right there. Yeah. And so then I saw an individual, his name was Rob wall, he created a few hotel apps in Switzerland. And I'm like, 22, I assumed he owned hotels. So I reached out to him just a number one thing from as a customer. And I don't know, he owns hotels, he's very rich. And maybe I was saying good advice. I'm fine. You own hotels, like that's so cool. And he explains to me that he doesn't own the hotels, he owns a marketing agency that does the web design, you know, all the social stuff. And now he's looking to offer mobile apps as a service to his business. So I remember googling the term what he said, because my next question was, how many clients you have like, and how can I help you sell apps, all of them. And he explained to me if we white labeled our software, meaning we remove all the branding from our software and created kind of a duplicate version for him to use and his clients log into, he could then set his own pricing and kind of have like a semi custom app solution. And so we went from like zero to like 7 million in the first three, four years. And before that, it was like kind of like this, then just hockey stick it up. Because we went from selling one app at a time to hundreds and we targeted web design agencies. Some of the duties of website builders, you could probably name public companies as we got more mature with our partner strategy, and what was so powerful about it, and what helped us bootstrap the business was, and this was a metric that I always tracked, and it was customer payback period time. So basically, how fast how much does it cost to acquire a company, a customer? And then how fast can you reinvest that into the business. And so our customer payback period was 28 days. And so basically a day 28 We were profitable with that customer. And we would just reinvest that aggressively into the business for growth, acquiring more partners and more agencies. At our peak, we had over 5000 agencies. So that's roughly I don't know, 5000 sales reps, and then that equated to us. At one point, I believe we were the number one mobile app developer in the world.

Isaac Morehouse  25:57
People worked in your company, how many employees did you have?

Andrew Gazdecki  26:01
So there are some other like, let's just call them. warts are just things that we had to do like to upload an iPhone app, it takes 45 minutes. And so we're creating 1000s of these, and we're uploading them on behalf of our clients. And so we at one point, we had a team of like 12, it was the worst job ever, like because you just are like dragging an app icon uploading screenshots, like, and you can only really upload, like 12 apps in a day on a good day. And that's if you're caffeinated and grinding. We obviously automated all this stuff over time. But yeah, the team was was was pretty lean. We instead of investing in like a big sales teams where my sales team was, let's call it like 1520. And that was exclusively for agencies. And then you know, just to give you

Isaac Morehouse  27:01
20 People who were selling to an army of 5000 people who were going on selling apps to the end user, and customer and buyer Yeah.

Andrew Gazdecki  27:09
And then we got like a customer success team that would train the resellers figure out what market they were going after we had white labeled marketing materials, we borrowed a lot of we had a lot of inspiration from, you know, the HubSpot partner program, we had a partner conference where we had all of our customers come and you know, learn new parts of our product, how to sell a product, how to approach businesses, because when you sell to small businesses, it's really in person sale. So that's why you see, like you just said, companies like five star belly, you know, some of those low tea companies, they're raising very large amounts of money, because they're building basically, you know, Field Sales teams. So we were able to bypass that and have a global footprint by just partnering with, you know, a lot of agencies in the United States, but also, like, Brazil, we were big Germany, Australia, Japan, we had an exclusive partnership in Japan. So we I would always tell my team, we are a distribution company where we're not a software company. We're a distribution company. So we basically just had a pretty lean and mean team to answer your question. Total team size at exit was around 100. And that's including contractors and everybody. But kind of lose my train of thought, but

Isaac Morehouse  28:38
what were you doing? If you don't mind me asking, What were you doing in revenue at that point at accident?

Andrew Gazdecki  28:43
We were like 11 and a half and growing. So it was it was a good visit good business considering we only raised 100k. And that was in college. That was like after I won like the business plan competition, a local angel investor, or two local angel investors invested in the business, but we probably do well. Is there yeah, they're happy. And it was it was just a fun ride. I mean, being able to start and run a company and just have product market fit. There was a point where we were only answering the phones when people were ready to buy our product because we couldn't keep up with the demand. And we had no idea what we were doing. We had no prior experience. Like I found my CTO off like Upwork like it was it was like a company. I don't know how it worked out. But we basically were if there's a company scrappier than what we went to, like I would I would be surprised.

Isaac Morehouse  29:45
No, this is this is an amazing story. I mean, it's incredible. It's right like whether you knew it at the time or not. What you did is the two things that stuck out to me right away. The first is you you stumbled onto the You know, sort of partner strategy by being super in touch with your customers by listening and like, so hey, this is interesting customer, this guy owns hotels, I want to talk to him taking that issue like paying attention, who are my customers? What are they up to? Oh, this is interesting. Let me reach out. Let me talk to them. And then learning through that conversation listening oh, wait a minute, you're an agency. Interesting. Connecting that DOD, if I can sell the more agencies that a reminds me of, I think it was Optimizely. There's a great story here. I don't know the full story. But I know, partially will have to have these guys on to tell it but they had essentially like classic, you know, product lead growth strategy, they had this free tool you could go on and and you know, see how your website, how well optimized it was, or do like a free A B test or something like that. I can't remember exactly what it was. And they just noticed, they kept noticing the email addresses of the people that were coming and using this free tool. They were from agencies, they were not from customers, because they did not expect. And so there's like paying close attention to what their customers behavior was, who is our customer? Wait a minute, our customer is not the SAS companies, we thought we were selling to its agencies who are doing the marketing work on behalf of SaaS companies. And so they shifted their strategy based on that they started going to them and packaging it for them and selling it for them. So I think just that act of like, paying attention and listening who's using our product? How are they using? Oh, they want it white labeled? Okay, like, that's really, really powerful. That's just, it sounds so simple, but it's such a phenomenal first first step, was that something like? Was that deliberate on your part, like, Okay, I gotta pay close attention to our customers, I gotta learn everything I can from them, or did you just kind of like happen to happen to do that? Yeah,

Andrew Gazdecki  31:49
ah, you know, I, I was pretty determined to make that business work. So I was always talking to customers. I was I was on live chat, like until like, midnight. And this is when I was like, 2023 24. So I had like, the energy and I didn't have any responsibilities. So I had the luxury to do that. And I don't recommend it, because it, you know, it's some pretty intense working hours, but

Isaac Morehouse  32:17
it's, it's got a shelf life, you can do that for forever.

Andrew Gazdecki  32:21
No, definitely not. But I just enjoyed it. I wanted to learn from customers, just like how do I make, you know, the customer experience because I've always been a big believer in your brand, customer experience, you know, everything, but your product, is what I focus on the most, because that kind of builds your moat. David can sell kind of says it the best in terms of like what we've seen in SAS, and like, he describes it as three ways where the first wave was, you know, you kind of won when you were just the first to build it. And then around like 2014 the company to kind of when the market was whoever could figure out the best go to market model like, you know, CAC, LTV ratio, eight ser ratio, whatever. And then now we're moving into, you know, this phase of, you know, brand, like, why can Procter and Gamble sell a bar soap for, you know, 20 cents more than this other company? And so I was always thinking of, you know, you know, how can we, you know, differentiate our business beyond just our product because your products gonna get copied 100% So, that's where distribution and again, the brand and, you know, customer success was our biggest department in the business. So we focused a lot on on those things. So I guess to answer your question, yes, it was deliberate. But back then there's like 2010 There was no books on like how to build a startup there was no Twitter threads on like, how to do XYZ you like you're just kind of winging it, it felt like like startup founders have it. This is all even throw in we had like physical servers and stuff like it was there was no AWS there was no stripe. It was

Isaac Morehouse  34:12
like What made you decide to cook because you said you know, we Hey, we through a conference for all of these, you know, agencies who are out there, you know, reselling our services or white labeling it that when you shifted to them as your primary customer. Like it seems like you kind of really went the extra mile and showed a lot of love built up but like what what was that watching what HubSpot was doing? What kind of inspired you to how you chose to run that partner program?

Andrew Gazdecki  34:41
Yeah, good question. I would put it as we treated our partners as employees of the business like we wanted, you know, when you bring an employee on into your business, you know, I always say you want to make sure you know, number one, they're happy and they have everything they need to succeed. So We went kind of overboard in terms of training and providing resources and just making their lives easier. Because also, the tricky part about partners, depending on who the partner is, if it's a larger organization, you know, they probably have multiple different products. And so they're gonna sell the easiest one to sell. And so the easier you can make it for your resellers or your partners, however you describe them to sell your product, the more success you're going to have, because they're gonna go oh, well, I have all this much marketing materials, I have a full presentation on this company. This is the product that seems to fit well with this business. So we just use it as, hey, this is our sales team. So let's empower a sales team, a trainer sales team, let's invest in our sales team. Because to really have a successful partner program, in my mind, it's much more than just, hey, here's an affiliate link. Good luck. It's, you know, it's like, we would have like a one hour coaching call on like, Okay, this is how, like, we had multiple services where we would build the apps for you, if you just wanted to handle the sales. So basically, in order would come in, we deliver everything we would have, we had an online course that you could take, like how to sell to small businesses, or how to position mobile apps, to your clients, but just that investment into your partner network, like, you're just gonna get a massive ROI out of it.

Isaac Morehouse  36:33
It's the same thing you said about, you know, brand on the like, there's, there's going to be other tools that these that these resellers can use to solve this thing. So how are they going to make that decision? Of which one they want to go with? which one they want to sell to their customer? Right? Obviously, it has to work, table stakes, they have trust on the line, but how easy is it to work with that company? How much do they like that company? Right? So did you create? Did you create, like a formal program with like different, you know, different tiers? Did you have revenue share? What What was your kind of incentive structure for those? resellers?

Andrew Gazdecki  37:18
Yeah, you would, you would join and then every app that you created, you would pay $30 a month, and then our resellers would go and sell them for $100 a month with like a $2,000 setup fee. So there is a healthy margin to really incentivize them, we probably could have, you know, maybe push that like 50 a month per app, and then you charge 100. But we wanted resellers to choose us because you know, number one, we had the best support, we had the most training. We also, I'd like to think had the best product. But we really signaled to resellers like this is all we do, like we will invest not just in the product, but we'll invest in you in terms of, you know, training and everything they need to be successful. So, you know, you kind of gotta get all that right. But yeah, the pricing was basically. And there's multiple different ways like price partner program, but we would just do it by each app that they publish. And once they got over certain tiers, like once you published over 100 apps, you'd lower down to like 20, we had like a sliding scale down. And our largest partner published like 5000 naps was like that, which was kind of ridiculous and a period of like 12 months. So yeah, and again, we don't do anything, like we basically just focus on the software. And they're building the apps, talking to the clients making the sale, handling any sort of customer support requests, and we're just supporting that one person that was just supporting, you know, 1000, or 100, or 10. We resellers of all scales, someone to have five, find someone of 10s or hundreds. So we did have different tiers. And when we have like a user conference, we did two of them. And we got some pretty interesting people to speak there. But we will give out a awards and we'd have like, like we'd really celebrate like you know, you're part of our like, we really appreciate you like we can't run this business without you. And so again, I think it's really important if you're going to have a partner program to really treat your your partners as true partners like you invest in them, you show that you care about them, give them everything they need to succeed.

Isaac Morehouse  39:47
So I want to ask you, you know, there are people listening to this I guarantee you who they they get the the part that you figured out with that business, the distribution the power of leverage. Imagine the distribution through a network of partners. They get that. And they're probably working in partnerships for a company, trying to help them do just that. But they're thinking about, they're sitting on a product idea or a startup idea, or they're tinkering on it on the weekends. Do you have some you have some words for that person who's maybe thinking like, hey, maybe maybe I start this thing? Do I need to quit my job and go raise VC? Should I keep doing it as a weekend side project? What's the because often there's that transition point where you're like, I've got this thing, I'm tinkering with it. I think it's kind of real, I like it. I want to go do it. But I can't, I can't maybe quit my job. I can't we're not in a position where I can afford to not have that salary. Yeah, the only way I could go full time on it would be if I raised a chunk of money, or like, I gotta slowly build up cuz what's just what's your thought to that person? Who's kind of right on that edge? They can? Yeah, see the opportunity?

Andrew Gazdecki  40:57
Yeah, keep your job. And let your employer be your main investor who takes zero equity, that's amazing, you know, obviously, you know, be ethical about it, work nights, weekends, if you build something meaningful, you're gonna want to get a no claim letter. So you know, know that there is legality in your employee contracts, depending on where you work, some will straight up, say whatever, that you can only work at this company and only work, whatever you, you know, that steam from, like Silicon Valley at Hooli, where they're like, whoa, you worked on it for like a second. You know, that I don't, I can't think of a company being that hardcore. But I would say yeah, like, that's, in my opinion, like, one of the best paths in entrepreneurship is, you know, if you want it, it just comes down to how bad you want it where, you know, if you can, you know, just basically think of some some stuff that you're doing, where you could probably allocate that time towards working on your startup, yeah, your employer could be your best investor. And again, they take no equity, they never asked you about it. And then you get to a certain point where, you know, maybe you really get that spark going. And I think the worst thing you could do is just quit cold turkey. And you're like, I'm gonna build this product, and then you're just sitting around for like, six months, depending on if you're technical, or you're building the product. And then no sales come in, you're like, oh, shoot, and then you give up super early, you know, so the longer you can come in, and then your stress levels are so high, because, again, you're in that bucket of like, you have to make it work. And depending on your life situation, you got a wife or some kids, you know, you could start dipping into savings. And you could avoid all that by keeping your job, there's nothing wrong, there's so many entrepreneurs that have done that, where, you know, they start working on the side, they figured out a way to get their first few customers. And then when they go full time, you're so much more confident because you have that little spark. And now you're like, Okay, I got to, I don't know, let's just call it like 100,000 in revenue, you're gonna be or even less like 2030 like enough to just give you an indication that this is a risk worth taking. Like, I'm a big, I think a lot about, you know, statistics in terms of how to optimize, you know, your startup for success. And that comes down to everything from how much capital you raise to how you go about diving into the business full time, how you spend your time, like, there's so many little things that you can do to optimize your chances of success. And to build anything meaningful, you need to go a long time. And if you quit cold turkey, and your first release sucks, you're just gonna quit most likely. But if you have a job and you're firstly sucks, you'll get feedback. And I go, Well, this is just a side project. Next thing you know, you're working on it two years, and it starts to pick up. And you're like, wow, like, Okay, I actually have something here. So kind of a long winded answer, but I, I always say, you know, your, your employer can be your best investor and they take zero equity.

Isaac Morehouse  44:24
Yeah, man, I love that. I love that. It's funny. A couple of years ago, I was talking to Mike Maples from floodgate who's an incredible seed investor. And he was saying something to the effect of, you know, founders who are like raising money because they basically need to close around so that they can keep working on this thing. There's almost something that someone's like less of a less of a proof point than founders who are there. They don't need to raise money for their fingers working out on the side for fun. He's like the thing you're working on for fun is the thing I'm interested in and you If you're if you just can't stop working on it, and you're not like, oh, well, I'll work on it if someone pays me to work on it, right? But you're like, No, I'm gonna work on it no matter what, I'm gonna find a way to work on this thing, because I'm so interested in it. Like, there's something in that that's even more attractive if you do need to raise. So I think it's a great mindset that I ran into same thing myself, when I started my first company in 2013. My initial thought was like, I gotta go raise a million dollars to get this thing going. There's so much that needs to be built. This is gonna be you know, I talked to my brother who's an entrepreneur who bootstrapped his first company. He was like, you don't need to raise anything he's like, until you're, he's like, is there anything you can do today? That, that you don't need money for? You can do right now. I was like, Well, yeah, I got a list of like, 20 things. So if Okay, well, when that list is done, see what else you can do and see what else you if you get to a point where you literally can't do another thing without money, well, then you go raise money. But don't talk to me until you get to that point about how you need money. And not that you have to be that extreme. But that was just like a really helpful framing. I was like, Oh, I guess I didn't realize there's a lot of stuff I can just keep doing right now. Let's see how far we can go with this thing. So yeah, Andrew, this is why I'm really excited about you're gonna be at the pls Summit, you're speaking on startup day, day one. And it's gonna be really awesome. Because, you know, the whole theme of the summit is, you know, partner LED. So your story, obviously, with business apps is is right up that alley, but we're gonna cover the whole spectrum, because we've got Andrew Chen speaking on that day, as well, from you know, the biggest VC firm, you know, that there is, and being able to kind of talk about a partner led startup, what's happening in the world with these strategies, some approaches, from both ends of that, like, whether you're talking from a a16z point of view, or from a bootstrapper, who wants to go and sell on micro acquire for a couple million bucks. I think he's gonna be really interesting. And maybe we'll have some interesting tensions and disagreements, you know, throughout the throughout those conversations.

Andrew Gazdecki  46:59
Yeah. And again, I think, you know, put both tasks. There. They have their, their their places. But, you know, I always say if, if you want to create wealth, Bootstrap, you want to change your market, raise venture capital. So looking forward to a man sent me a fun talk.

Isaac Morehouse  47:20
Hey, this is awesome. I really appreciate you taking the time. I know it's very last minute, I literally hit you up today and was like, Hey, we had somebody cancel, and then Jared couldn't make it so and then our audio didn't work. You were super patient, even after your house party. So I

Andrew Gazdecki  47:34
cancelled my whole calendar. And then I was like, What am I going to do today? Because I thought I was going to be just like, super wiped out. But again, I just maybe lost like two hours of sleep. So I was totally fine. So when your email came in, I was like, oh, yeah, let's go.

Isaac Morehouse  47:49
Oh, I caught you at the right time. Well, that's why I never heard that because like, I don't know if I want to bug this guy about last minute, you know, like podcasting. So there you go. Andrew, awesome to chat with you. I look forward to hearing from Louisiana feel like Southern man. Take it easy.

Andrew Gazdecki  48:03
Yeah, my wife. Cheers, man.

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