Life on Mars - A podcast from MarsBased

085 - Beyond TextExpander: Greg Scown’s journey after stepping down as co-founder

MarsBased - Àlex Rodríguez Bacardit (CEO) Episode 85

Greg Scown, co-founder of TextExpander, shares an inspiring journey through the partial sale of his company to Summit Partners and the path that led him there. Discover how casual coffee chats carried invaluable advice, such as re-registering as a Delaware C corporation, which significantly boosted the company's valuation. Greg discusses the pivotal role of an enthusiastic fan at Summit Partners, which propelled TextExpander into the spotlight and paved the way for successful negotiations. As Greg and his partner Philip Goward step back from operational duties, they embark on a transformative journey of semi-retirement and advisory roles, exploring new ventures and collaborations.

The episode takes a deep dive into the strategic decision-making process behind selling to private equity versus traditional venture capital. With JD Mullen taking the reins as CEO, we examine the balance of maintaining continuity while embracing change. Greg highlights the strengths of bootstrap companies like TextExpander, emphasizing the significance of subtle improvements to enhance user experience while preserving product reliability. This discussion offers insights into the private equity landscape, exploring de-risking strategies and the challenges of transitioning from a high-pressure leadership role to a more relaxed lifestyle.

We explore Greg's insights on the evolving tech landscape, the burgeoning potential for indie app developers, and the value of partnerships with organizations like Founder Partners. Through personal stories and reflections, Greg sheds light on the emotional transition post-exit, tackling mental health challenges, and societal pressures. There's also an intriguing look at the future of indie app development and the entrepreneurial spirit driving innovation in Europe, exemplified by entrepreneurs like Michael Simmons of Fantastical. If you're an engineering founder in Barcelona or Europe, this conversation invites you to connect and collaborate, opening doors to new opportunities and shared growth.

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🎬 You can watch the video of this episode on the Life on Mars podcast website: https://podcast.marsbased.com/

Speaker 1:

Hello everybody and welcome to Life on Mars. I'm Alex, ceo and founder of Marsbase, and in today's episode we have Greg Scown, co-founder of TextExpander. Textexpander is a productivity tool that I have been using for over 10 years now, and I was pleasantly surprised when Greg appeared out of the blue as an attendee of one of our startup brand events in Barcelona and, lo and behold, obviously he became the next speaker at the event, right, somebody who has built a tool that has been 20 years in the making and has sold partially to a growth equity fund like Summit Partners two years ago. We talk and discuss what happens after a partial or a total sale. In the case of Tax Expander, it was a partial sale to Summit Partners, after which Craig and his partner decided to step aside and leave the operational part of the company to somebody else.

Speaker 1:

So we discussed the day after how many proposals do you receive? Are you actually engaged with the company or not? How is this handover period? What do you do with incoming requests of angel investing or other proposals to join companies as a co-founder, as a board member, as an advisor, or do you become a serial entrepreneur? And right now, the question of the day, which is what do you do between projects? Do you take time off? Do you concatenate them? Do you take sabbaticals? Do you use the money you made from one project to spend it or invest it in the other? I'll gladly read the answers in the comments down below and, without further ado, let's jump right into the episode. How exciting, we got a countdown. How are you doing? I'm doing well, thank you, we got a countdown?

Speaker 2:

How are you doing? I'm doing well, thank you.

Speaker 1:

No singing on this one. No singing on this one. Welcome to Live on Mars podcast Mars-based. You are familiar with it because I know you're a regular listener and you were a speaker, a guest, at Startup Prime in Barcelona, where you surprised us with your singing abilities.

Speaker 2:

I was super nervous about the whole useless superpower thing, and so that worked out well for me in the end.

Speaker 1:

It was great. We had fun. It was one of the very last Startup Grind events. Actually, I just announced a couple of weeks ago that we stopped doing them, and so I will hold that event in high esteem. It was probably the best performance we've ever had, or the best answer we've ever had to the question of the use of superpower. So thank you for that. Thank you Good. I wanted to discuss life after your company in this episode, right? So one of the things that well, I mean, you're known for your time at TextExpander, but you've done several other things. We covered that already that in Startup Brand so let's focus more on what happened afterwards, right? If you want to give a brief summary of how did your personal exit go? Right, so your tax expander had been there for many, many years. There come Summit Partners and they let you, they give you this opportunity of you know they invest in the company, you move to another role in the company, and how did that whole thing go? If you want to start with, how did they approach you?

Speaker 2:

Sure, sure. So my business partner, philip Goward, had made a habit of taking coffee with folks who asked essentially I mean obviously he would vet them and see if they were folks who were likely to be serious. But probably as much as two and a half years before we did the deal, philip started having coffee with an associate at Summit Partners and there were probably about five or six folks that he would regularly have coffee with per quarter, per quarter. And this was great because, to be fair to the folks, the associates at these growth, equity and other types of firms they were very free with their advice. So he would talk and they would say okay, for example, you're not a Delaware C corporation yet, you're an Oregon corporation, you should move, and you should move now, and that that will actually improve your valuation. That was very, very good advice and super helpful, and for the price of a cup of coffee, essentially. In fact it's entirely possible Scott bought full of the cup of coffee.

Speaker 2:

I don't know, but at any rate that's the gist of how this got started. And it turns out that the associate was a text expander user and maybe even a bit of a fanatical text expander user, which certainly didn't hurt, and so he was building awareness of the product internally to Summit, unbeknownst to us. We didn't really know that this was going on until later and he built internal awareness and then he got to the point where he said, okay, it's time for you to meet the partner. And so he introduced us to Colin Mestel. And that's when we started talking seriously about, okay, what would make sense for Texas Spinner.

Speaker 2:

They had an internal executive in residence and so they had somebody that they were training up to run a company and they were looking for a company for that person to run, and so this was sort of a good confluence of interests, uh, and then, uh, it was really a question of talking for a bit, and then everything goes slow until it goes fast, and then, when it goes fast, it goes very, very fast. So, you know, from April 2022 to the end of June 2022, that was it Like. That was the, the, the deal timeframe, due diligence was done in that timeframe, everything got done in that timeframe. Uh, and so two and a half year, or two years, and three months build up and three months of execution, essentially.

Speaker 1:

So, from the first cup of coffee to the deal, that was the two years, right, two and a half years, I believe Two and a half years yeah.

Speaker 2:

I mean, the first cup of coffee wasn't entirely about doing a deal. The first cup of coffee was about learning about who we were, what were our goals, that type of thing.

Speaker 1:

And so from the time that things got serious until the deal, how long was that then?

Speaker 2:

It was less than three months.

Speaker 1:

Oh wow, that was pretty impressive. That was right before the heavy decline or the plummeting of the technological companies or the tech stock in general, because that must have been around July, August 2022. So you guys got it done in June.

Speaker 2:

We got in just under the radar, it is true.

Speaker 1:

That was good timing actually, but for me this kind of feel it is pretty interesting. I mean, after the event with you, I started reading a little bit more on private equity and I know Summit Partners is some kind of a weird animal because sometimes they're labeled as a growth investment firm but sometimes it's a private equity. So I don't really know if they make an internal distinction or just they don't know about anything, about marketing or something like that, because depending on who you ask, they're one thing or the other. But things turned out to be very interesting for private equity um in the last 24 months right, so between summer 2022 and summer 2024 because high um, I mean there were the super high sky high valuations, they dropped. There was no investment, no m&a activity. Therefore it was a very ripe market for private equity to go out and chase and hunt, because they buy technically very low to sell very high.

Speaker 1:

But in your case it was not an acquisition, it was just, you know, it was an investment or a partial sale right, sale right. So it's very interesting to see how this started because after that, you know, bending Spoons and other big players started acquiring a lot of productivity tools, b2c or consumer market tools, similar, sometimes bigger, sometimes smaller than TextExpander, but in the same vein. So yours was kind of like the precedent right, the origin of all of that. Did you feel the same way? I don't know about that.

Speaker 2:

And then, in terms of how Summit presented themselves, they presented themselves to us as a growth equity firm, so as folks who buy profitable companies. They're not interested in folks who are getting started. They're interested in folks who are already running and they're looking for folks who have some runway for growth. But it doesn't seem like they're looking for ridiculous growth, right. They're not looking for 300%, 400% annual growth. Nice, solid double digits will do well, as far as I can tell, and so that was the approach. They're looking for companies that are established, profitable and growing, and so we were all of the above at the time.

Speaker 1:

But the thing with the private equity usually they're.

Speaker 1:

I mean maybe Summit Partners is one of a kind and they really do some growth investing as part of their strategy or diversification strategy. But most PE firms what they do is either roll-ups or build-ups. Right, and I don't think or it doesn't look to me from the outside that this operation was part of neither of them, right? No, yeah, that's not what they're doing in this case. Okay, that was, that was a, that was a pure investment. No, that's that. That's good, you know, but usually in there do you think about? You know? I have been compiling a, a list of things where you should sell or take investment from a PE firm and why you shouldn't. On the overall, you look very happy about it. What would you say to people that are not acquainted with PE investment or operations? What are the reasons to go for it?

Speaker 2:

Okay, good question. I mean I think that I would go back again to say look for a growth equity firm. Don't look for a private equity firm that's strictly trying to do private equity and that's strictly trying to do debt loading or other forms of playing around right. Look for someone who genuinely wants to invest in the growth of your company. Playing around right. Look for someone who genuinely wants to invest in the growth of your company. In our case, it was a combination of an investment in the company and an enablement for an exit for Phil and myself, and so that was a good combination for all the parties involved, and I guess that would be the other bit. If it doesn't feel like it's good for everyone involved, then it's probably not something you should be doing.

Speaker 1:

it's good for everyone involved then it's probably not something you should be doing. But the thing is like, some of the advantages of selling to private equity is they are, you know they're looking for an exit. They're very financially driven, they're very good at operations and at making the most out of every penny they invest. Right. So it looks like a safe investment from the founder's perspective and also to the rest of your shareholders, right. So it looks like a safe investment from the founder's perspective and also to the rest of your shareholders, right. Maybe it's not so good in the short term, because usually they buy cheap and they sell better because that's the entire basis of their business model. But you know there's an exit strategy. That's pretty clear, right?

Speaker 1:

Whereas with traditional VC money, you're investing in speculation, I would argue right, it's yeah, maybe we're able to sell this for 300x, but we don't know. It really depends on you. There's a lot of pressure, Whereas with this PE money or growth equity, you de-risk yourself, which, on the one hand, I think it's really good, and also you give them the opportunity to help you do that. Or sometimes it's delegation 100% on them, and now it's on them. Somebody else takes over as a CEO and the entire founding team is replaced or moved to other non-executive positions, like yourself, if I'm not mistaken. So this de-risking is that something that you also took into account when the operation came to the?

Speaker 2:

table. Sure, I mean, we'd been doing this for 20 years and it was clear that we weren't going to be doing it for 20 more, and so the question was OK, then what would the next thing be? Would we either try and build the company out internally so that we could step back and essentially run the company as a dividend generator, or would we find a way in which we could step back and de-risk, as you just said?

Speaker 1:

The person that was going to take over the company or be appointed as a CEO or on the forefront of the company? Did you know him before or her, and what sort of process did you undergo Like? Was it some sort of like you would vet him? Or just how do you get to know each other and how do you know that's the right person to run your company from this point onwards?

Speaker 2:

The person is JD Mullen, and so I mean, that's no secret, that's public information and he is still the CEO and he's doing a very good job. He was the executive in residence at Summit and he was introduced to us I think he was at one of the coffees along the way that Philip met, and so met him earlier, but didn't engage in detail until they started to choose to do the deal, and at that point he was involved with the deal team, which makes sense.

Speaker 1:

I know he's doing a great job because the product hasn't changed and so you know I've been a power user since like I don't remember like 2007, something like that. And one of the things I really like about TextExpander and other companies like TextExpander, like mostly bootstrap businesses, like in the time I was using Buffer, for instance. Now they're not entirely bootstrap, but they follow the same strategy. Or Harvest, for instance, we use at the company is I pay them so that they don't change. Right, Because when they sell out to VCs or they take investment, usually companies start like going crazy, trying experiments, redesigning the UX UI every six months, trying new product lines and experimenting. And one thing I love about TextExpander and other software like Magnet, MailTrack, stuff like that that they are mostly bootstrap or entirely bootstrap. They don't change, they just fucking work and I it. I love that.

Speaker 1:

So I think like, if, first off, it's still around, that's good. Second, hasn't changed, that's good. And third one is no bugs ever. I don't remember ever a single bug with text expander the same. You know, I use Ghost right now as a publishing platform for my new website and stuff like that doesn't break, Everything works, it's flawless and I think there's got to be something in bootstrap companies that maybe we take a little bit more time and attention to detail and ironing out the last details right In, not cutting corners, and the product doesn't resent that right. The product actually thrives under this guidance. I don't know what's your take on this. Are you of the same opinion, or? Yeah, I mean.

Speaker 2:

I feel like bootstrap companies have massive reputational risk and so cannot afford to goof around with their customers. Honestly, that said, it's kind of cool. I'm glad that you say that things haven't changed, that you see visibly. But there has been a fair amount of change and experimentation behind the scenes and the idea is to do that without disrupting the user experience. Right, don't get in your way, don't make it not work the way you've known before, but like, for example, the snippet editor. Well, the snippet editor, the thing that you edit your snippets in, has changed entirely over the last two or three years. I mean, it's completely, completely different from the ground up and better, but slowly and quietly and and bit by bit, and I think that they, the team, has done an excellent job on that. So, uh, you know, these are the kinds of things where make the improvements, but don't mess with the user base, don't get in their way yeah, that's spot on actually.

Speaker 1:

well, you and I have got a friend in common, joanne, from Everyday and I know that because I'm also a power user of Everyday, and people perceive like, oh, it's like the same product, like it was like four years ago. But he's got seven code bases, right. He's got the desktop app, the web app, the watch app, the iPhone app, the Android app and something else. I don't remember where else he got, but he's got a couple other code bases lying around and so sometimes it's an entire refactor of the React views of the web app, for instance, right. Or he changed the entire DevOps structure over the last year and it's funny that he's got the same message is we're changing a lot of the stuff behind the scenes but we don't want people to notice because otherwise you know people. Just in his case, it's a free app mostly, so people just jump over to another similar app and there's a lot of volatility here.

Speaker 1:

In TextExpander, the main competitor must be in iOS. It's an OS system because it provides that build right out of the box, even though it's 10 times more basic. But I know probably in Android there's a lot of apps for that.

Speaker 2:

Yeah, I mean, the world of Android extension apps and keyboards is pretty broad, but on to everyday, I think that, yes, okay, it looks like again nothing has changed in four years. But think about it. He's added widgets, he's added the ability to check off a task on a widget, and he's done all of that without disrupting the product, without disrupting the flow. It's kind of amazing and so, yeah, I totally appreciate that kind of craft and that level of attention to detail and respect for the customer.

Speaker 1:

Yeah, circling back to the, I mean we have covered more or less the advantages of selling or taking investment by a PE firm or a growth equity firm like Summit Partners. How about the cons? Like, what are some things that you considered back then that were like we should be aware of this? Like, for instance, you know the loss of control because, basically, they take over, start operating the company differently, culture shock or maybe potential layoffs, stuff like that? What did you fear the most about this kind of operation?

Speaker 2:

That's a good question. I mean stuff like that what did you fear the most about this kind of operation? That's a good question. I mean. I think that we were very fortunate that we've been talking for a relatively long term and had some sense of the folks that were involved and their philosophy and what they wanted to do, and it was pretty clear that they were not looking to radically change the company culture. In fact, if anything, they spent a lot of time with us saying, okay, what is the company culture? What are we walking into to stay? What's the plan for doing that? In the course of this transaction, and they were incredibly receptive to that advice side.

Speaker 2:

Again, if you're not talking about these things directly with the person that's going to invest in you, that's a problem, because then your expectations absolutely won't get met Right. Anything that you didn't talk about, anything that you didn't run through, is open for trouble. But if you're relatively deliberate about it and you talk through okay, this is the culture, these are the people, this is the organization you know. Okay, this is the culture, these are the people, this is the organization, you know this, this is what you're getting, this is what you're about to get into. I think that folks are smart and receptive to that and can, can, can potentially do a good job, and in this case, I think they really did.

Speaker 1:

And before we move on to what happened next, I'm really curious about one very specific thing about what happened before, which is how aligned were you and your partner? Oh, 100%, 100%. How did you prepare? Did you have specific meetings, coaching or was there any friction in the process of discussing how and when and if to do it?

Speaker 2:

Sure, I mean, I'm incredibly fortunate to have had the best business partner in the world. Honestly, I mean, in no word of a lie. Philip is just amazing, and we've just built a relationship of immense respect over a very, very long period of time and we remained friends, which is another good quality after such a thing. But I think that how do we prepare? We started building spreadsheets for where we wanted to go as a company in terms of revenue, in terms of growth, in terms of marketing spend, in terms of employee count, et cetera, and we started building those, I mean probably as early as 2018 or so and so this is four years before the acquisition and so that we would have some idea of, okay, what are we trying to do, where are we trying to get, what are our odds of being able to achieve that?

Speaker 2:

And that was super helpful, because we had some idea of what we thought we could do on our own. And then we were comparing that against what was on offer and it looked favorable, and it was pretty easy for us to make a decision because we had, you know, sort of the path that we were looking at compared against the path that they were offering. So I think that. I mean, I suppose the advice in this space is you know, start planning for where you want to be, because that's super helpful in evaluating somebody who comes along and says, okay, you know, I can take you there faster, or okay, I can, I can take you there faster, or okay, I can, I can help you achieve this now, instead of three years from now. Five years from now, what have you?

Speaker 1:

Good, let's move on to the what happened afterwards, because I assume that the very first day after you moving on from an execution execution role at your company, you have to suffer some kind of vertigo. I don't know. How did you feel the first day that you're hands-off? I assume there was a transition period in which you were hands-on handover, and how did that go?

Speaker 2:

So for me, my role at the time of the transaction was as the COO doing operations, and so I ran day-to-day finance, I did and I managed the engineering team, so that was sort of my side of the house, and this also included our software stack of tools that we were using internally security things of that nature. And so you know, for me I agreed to stay on through the end of the year and it was clear that we were going to hire an engineering manager. And in fact they hired a VP of engineering about two months in and you know it was super collegial to hand off because I had a great team with two solid team leads and I was able to say, all right, here you go, andy, these are yours now. And he did a really nice job with the transition. I think he's extremely patient and he's a good communicator. So I think that that helped a lot. And so that happened and I thought, okay, now I just wind down the operations things and here we go.

Speaker 2:

But it turns out that we ran into an unexpected road bump, which was that CFO left and I wound up doing finance operations for the last two and a half months. We hired a VP of finance. She's absolutely fantastic. And then was able to transition that. But so much for the whole. You know, slow, easy transition. It turned out to be a little more more hectic than expected, but I think that's, that's everything right. You know everything is going to be different than what you expect, so expect the unexpected yeah.

Speaker 1:

And how did you start going from you know this full-time role to part-time, then advisory, and uh, when did you start feeling like, oh I, I don't have a job anymore and what's next for me do? Do I really need to work again? So how is that mental process? I'm very curious about that.

Speaker 2:

Yeah, so in theory I ended in the end of December, but we'd hired the VP of Finance about three weeks before, so there was a period of helping with that transition, but that was not a ton of time. She was super, super quick at wrapping up and very experienced. So by mid-January really, my only responsibility to the company was serving on the board and so preparing for and attending quarterly board meetings. So the vertigo set in around the end of January. Uh, and then, uh, we're in process of, uh, reforming a flat here in Barcelona, and that took through June.

Speaker 2:

So that actually turned out to be how would you say, a useful project. Uh, yeah, that too Right. So so that happened. Yeah, that too right, so that happened. And in the course of that, I think that I realized and also in talking to Philip, he realized as well that we were kind of lobsters boiling in a pot. I don't think that we had realized how much we had put into the company, how much stress we had taken on, and so when it was not there, it was pretty evident and it's like ooh, okay, I need to take care of myself a little bit. So I'm one of the typical founders where we did a Midland job of taking care of ourselves in exchange for trying to do a pretty good job of taking care of the company, and I reckon you have firsthand familiarity with that.

Speaker 1:

It ebbs and flows. I'd like to say that we are a lifestyle company and therefore we take care of ourselves. We take a lot of pride into things small little things like not working more than 40 hours per week not even the founders, right. But that's not 100% true. Sometimes you have to do it and you know it as a founder. Sometimes you have to work on the weekend, but luckily I can take time off during the week, right. So, because you know family issues all the time. Then sometimes you got to take care of children. I was like, okay, I'll just take half a day off here, I might work of the time. Then sometimes you got to take care of children. I was like, okay, I'll just take half a day off here, I might work on the weekend, right. Today I have to take care of family pretty much the entire day, say for this podcast and a couple of other calls, and then day off, but maybe I will work in the night. And also, we got we are in the midst of a procurement process with a big corporation in the US. So for me it's good to stay alert between, like you know, 8 pm and midnight, because usually that's when the emails come in. Maybe you got to take one call or two. So having this sort of flexibility, that has got to be the exception, not the norm. It's good for a while, right, but I know where you're coming from when you're mentioning this.

Speaker 1:

So, having said that, in terms of you mentioned a lot of pressure, a lot of you didn't explicitly say burnout, but I inferred from that Any other sort of mental issue you'd like to speak openly about, like, for instance, I talk publicly a lot about imposter syndrome and you know about it Sometimes anxiety, right, and stuff like that, or how to cope with the pressure of I've done something big. Now, if I don't do something bigger, I will be letting down a lot of people, including myself. That's something I've gotten from serial entrepreneurs. They usually feel this auto-imposed pressure. Right, what happened in your process? If you want to talk about it, no, no, it's fine.

Speaker 2:

I relaxed. That's what happened, honestly, and it's not something that I'd been particularly good at.

Speaker 1:

The operations. People are not good at relaxing.

Speaker 2:

No, no Now the barometer for this is my mother. So you know, I talked to my mother pretty regularly and one of the sort of benefits from the pandemic is that mom and dad will do Zoom calls now and that's actually a super handy way to keep up with them. And so, you know, as we get into March, april, may, mom's like wow, you look much more relaxed, it's like you look way better. I'm like, okay, I mean, I feel bad in a way because that means that I must have looked way worse previously. But on the flip side, you know, it's a good barometer. And so I learned to relax, um, and I can't say that that's, you know, uh, an easy thing, necessarily, because you get, you know, very focused or very intense in what you're doing. And then, uh, you know it's it's time to not do that.

Speaker 2:

I'd be a terrible serial entrepreneur. Honestly, I think it's not. I don't think it's entirely in my DNAna. I, how is it? I, I would. Until I managed to make a company, I was completely dedicated, right, I failed the first jot out the gate and went back to work for a couple years, that kind of thing. So that part, yes, but like now that I, you know that I've done this and built this company over 20 years and and had the acquisition. I don't feel the need to immediately get back on or to immediately do anything. If something amazing crossed my path, great.

Speaker 1:

But otherwise I'm okay. Yeah, that's why you moved to Barcelona, otherwise you would have stayed in Silicon Valley, because yeah.

Speaker 2:

I have a place in my A lot of people say you're not ambitious.

Speaker 1:

Right, you're not ambitious because you moved out of Silicon Valley. That's fine, no. But A lot of people say you're not ambitious, right, you're not ambitious because you moved out of Silicon Valley. That's fine, no. But taking care of oneself is really important. But did you really disconnect 100% from it Because you're still attached to tech?

Speaker 2:

Oh yeah, I mean I keep up. I mean I keep up with the Slack a bit, but at the same time I don't interact, so it is not my place to be-. You're lurking, I lurk, that's all that I do. It is not my place to write to people about what's going on right now. That's for the board meetings. That's the level of feedback that I allow myself, but beyond that, the company is in good hands and have great people and I trust that in good hands and have great people, and you know, I, I, I trust that.

Speaker 1:

Okay, you said that you wouldn't be a good or a great serial founder. I've heard you say that you wouldn't be a good investor either. Why are you so harsh on yourself and what would you be good at, after you know, selling your part of the company?

Speaker 2:

So I mean well, so I I've. So I've landed in an interesting spot related to that, which is that I've run into a group of serial founders by renting a catamaran here in Barcelona. It's a separate story, but-.

Speaker 1:

You can tell it. You can tell it Go ahead, because Frank has been on the pod, founder partners have been on the pod, so all of them, all of them have have been here.

Speaker 2:

Yeah, so rented a catamaran in October of 2023, and uh, philip and I were on the boat and the cap, we were talking to the captain and we learned that he is an adjunct professor at ASADA, so a business school. And so we tell our abbreviated story and he says, oh well, there's this guy in San Francisco that you ought to meet, brian Flynn of Founder Partners. And so it turns out that Frank is the boat captain for Brian and his family's annual vacation and a good friend of his, of yours, of other people in Barcelona as well, and a heck of a nice guy, well, and a good cataract pilot, by the way, but with a very nice cataract and a better one now. Even so, that was neat. And so I met Brian in San Francisco. I learned about Founder Partners.

Speaker 2:

They're a group of, they are a group of serial entrepreneurs, and I mean, I do consider myself a serial founder. It's just, you know, only two instead of 10, or, and also bootstrapped instead of funded, and so I think that's part part of my, I guess, bias in terms of what I was saying. You know, I'm, I don't think that I'm the guy to take someone else's money and run with it, you know, and try and achieve, you know, triple digit growth. That's not entirely my DNA, I guess I'm just a little more deliberate a little more. You know cash flow, make sure that you can cover things, don't spend more than you have, that kind of thing. So just wired a little differently, I guess.

Speaker 2:

And so there's a neat group. So what Founder Partners does is they look for fledgling companies. They look primarily for folks who have technical founders and who have achieved some degree of basic product market fit and in a trade for equity we work with the company for a period of two to three years as essentially minority co-founders. So the gig for me that I'm super excited about is being able to do founder type stuff part-time and to be able to leverage what I learned over the course of 20 years for someone who's getting started. And so right now I'm in the phase of evaluating companies and I look forward to being able to take one on or take two on and see what I can do with them.

Speaker 1:

So that's how you feel your time, your agenda right now? I think so, yeah.

Speaker 2:

Yeah, and so it's weird, I'm doing sales now which I have never done before, so I mean really, in a way, I mean I don't.

Speaker 1:

You're reinventing yourself. Yeah, I mean you do what you got to do. That's what a partner, what a founder does, also true.

Speaker 2:

Yeah. So I mean, you know, I'm essentially pitching founder partners to people who are not familiar with it and who are not familiar with the model, and we're not familiar with what we're trying to do, and so there is a process of helping someone understand that, of demonstrating that we can be of value, and then of building a deal.

Speaker 1:

I can throw some similarities between a growth equity firm like Summit Partners and Founder Partners, because I think you take a stake in the company. You're looking for companies that are profitable and growing maybe not massive growth, because also they look maybe for VC-backed companies. Founder Partners definitely doesn't want that. On the overall I could be wrong about the specifics and then you assign somebody with the operational expertise and growth expertise to help them give guidance, as opposed to summit partners. That appoints somebody else around the company, right? What other similarities could there be in this model?

Speaker 2:

Well, I think the other similarities are cash efficiency right. Really trying to find a business that is capable of sort of living within its means and spending smartly on their growth. That's you know, and that's straight out of the bootstrap playbook, essentially.

Speaker 1:

What kind of company would be interesting for you? Because I think I failed to ask this question when Brian and Dimitri were on the show. We delved so deep into M&A that we never got out of it, and when we realized we were 95 minutes into the conversation, I'm like fuck, we got to, Brian had to jump into another call and there was no time to talk about founder partners itself, which in and of itself it was a very interesting podcast episode, but we didn't talk about fund partners that much. So what kind of companies are you looking at? Rss sync or what could be potential fits?

Speaker 2:

Sure I mean I think that we have a fair chunk of internal expertise in B2B SaaS companies, right that's? I mean certainly that's my background, or what B2C and B2B SaaS companies my background or what b2c and b2b SaaS companies um, and an interest in folks who have technical founders, who have really good product experience but may or may not have operations experience, sales experience, marketing experience, etc. That we can help bring to bear, um on a practical level, folks with a fairly simple cap table. I mean we're not looking for folks who've taken a lot of other people's money again looking for the whole cash efficiency and trying to build the business in the same manner. So if somebody's already taken a ton of money and burned through it, then that's probably not something that we'd be as interested in and how about other opportunities for you?

Speaker 1:

I assume that after a sale of a company or you know this kind of exit that you had where you step down or even a partner at the firm or become angel investor or tons of other things like external consultant, advisory boards and whatnot what kind of opportunities did you receive and how did you separate the grain from the chaff?

Speaker 2:

If I said not a ton, would you be disappointed? Because, honestly, I mean, I think I think partly if you, in order for that to happen, you have to express publicly that you're open to it. And that's not something that I did, in part because I don't think that I really wanted to go through that process.

Speaker 1:

I'll be honest. And you don't like exposure? No, I'm not a fan, I mean.

Speaker 2:

I sang at Startup Grind and that was a big deal, but nonetheless, you know public.

Speaker 1:

And neither did DexExpander, because DexExpander is kind of like the underdog Bootstrap companies. We either or both. We don't get to be on the spotlight because media doesn't like us, because we don't raise funds. But we also don't want exposure, in a sense because otherwise we're approached by the vultures of the ecosystem. And also, what benefit could we get from the exposure? Maybe attracting talent, but we don't need to hire 10 people a week, right, so we're good with our own growth. So that's why tech expansion maybe was like never on the spotlight of anything and so not a lot of people knew tech expander, not a lot of people knew you. Probably that's why, also, you didn't get a lot of proposals. That's my take.

Speaker 2:

Oh yeah, no, I mean I think again, if you aren't tremendously public and you don't signal an interest, then that stuff doesn't just magically happen. I mean, what I've done since is just keep up with the people that I know. I mean 20 years in the Mac community I know a bunch of people and they're great people and you know it's really fun to keep up with them. So that's sort of my strategy.

Speaker 1:

But now through founder partners and maybe and I'm also sure that just because you have probably updated your LinkedIn and a lot of people have automated their messaging saying like, oh, he's exited this, now he will be an angel investor, let's target this guy. How many of these do you get? I got vastly vastly more.

Speaker 2:

Uh oh, so you got an exit, now you can afford our tool mails than anything else. Right, like because I in operations and because I was deciding, uh, you know what we were spending on for software, along with the rest of the team, of course. Those were the bulk of the males, was you? Now you can spend on, oh God, what's the NetSuite, for example? I think they were pretty relentless and I mean, I suppose, credit to them. If that's their sales strategy, then they execute it quite well. And you know, those were the types of things that I encountered more than anything else.

Speaker 1:

And how about what's next for you? I mean, Founder Partner is taking a lot of your time right now, but I'm assuming that's something that you could juggle with something else on the side, or maybe you can take on projects as an external advisor to a company or as a consultant and stuff like that. Do you see yourself creating a new venture, or it's mostly helping others from now on?

Speaker 2:

I think it's mostly helping others from now on. I think it's mostly helping others from now on. I like that and I'm enjoying it so far. I'm really looking forward to having a committed company within Founder Partners that I'm working to build and I'm making progress toward that In terms of other stuff. So sailing would be fun. I took a course here in Barcelona, good city, to do that, and now I'm a little intimidated because in order to get the license to sail two miles offshore, you have to take a 16-hour radio class, and the 16-hour radio class is in Spanish. I can function, I can get through the post office, I can do stuff like that, but I don't know about 16 hours of nautical radio, so I'm nervous. But I may get there. So that would be an interesting goal. So if I make a New Year's resolution for next year, maybe it'll be do the radio class. I'm not sure it may be like the bar. It may be something that you can fail the first time without a great deal of shame. So we'll.

Speaker 1:

A Duolingo could help you with that. I am totally working Duolingo. Yeah, no, Duolingo is fantastic. I know, I know, I know. So it's one hell of a drug, Duolingo, you know. By the way, this podcast is not sponsored by Duolingo, but might as well be because we're mentioning it every now and then.

Speaker 2:

They earned it. In fact, the New Yorker had a great article on the founder, and so if your listeners haven't read the New Yorker ad article on the founder of Duolingo, you should totally do it. Really, really fascinating.

Speaker 1:

I'll go dig it up. One of the things I wanted also to get your opinion on is there's been a lot of, as I mentioned earlier in the conversation. I want to go back to one thing the consolidation of these consumer tools, especially on the Mac right, because a lot of them end up being bundled into the OS right, and so I think right now, with the management of the desktops, maybe Mac in it is not entirely useful anymore. I mean, you can pay for it because it's got some extra features, but essentially everything they do it's there.

Speaker 1:

Or eververnote back in the day was such a great tool, but they fell from grace for whatever reason. But now Apple Notes I think it's way better than Evernote was in the prime. But how do you see the future for these kind of applications right now, right Now that the OSs are evolving faster? I think they're taking a look in the market always and saying like this we want to integrate this, we want to integrate. And so companies like TechExpander or Everyday or Dois or whatever, they could be in danger, or have they always been in danger danger or have they always been in danger?

Speaker 2:

I think they've always been in danger. Um, I mean, you know, I I got my start writing fax software, which was eventually integrated in the operating system, but even then that integration didn't sink us overnight. Right, we saw it coming, we had other products and there was a smooth and orderly transition. So I think that the goal if you're an indie developer or even a small development shop, is build an excellent application. Just build the best app that you can, and life is likely to do okay, because let's say that you build well.

Speaker 2:

Would you imagine that a calendar app alternative to Apple's calendar is a huge seller within the Mac? So Fantastical, who just released a Windows version last week. They do an incredible product. I use their product, I love their product and I use their scheduling stuff now too, and that's a case of they just built something excellent and it's got a nicer feature set than the built-in calendar. So Apple is great at building that which is enough, but probably not which addresses everyone's needs incredibly broadly. And so if you're in an area where Apple has done something but you are able to address someone else's needs more broadly, then go for it really.

Speaker 1:

I mean, apple has never been great at software, except for the operating system. The applications are pretty. Most of them are very rubbish to me, like Mail who uses that Calendar it's very bad and basic Maps. Until very recently it was downright unusable, right. The podcast application, you could argue, is pretty good.

Speaker 1:

Itunes has always been a mess because now you can do this with iTunes, now it's not. Now it's the App Store. It's in iTunes. Now it's not. Now it's the App Store. It's in iTunes, now it's not. Now the music is in iTunes, now music is a separate app. I don't even know if iTunes exists anymore, to be honest, right. So the applications have been pretty bad, usually in the Apple ecosystem, not to mention the hardware is usually pretty good and so. But you can cover all grounds, right? Maybe in Google it's the opposite in a way, but I'm not going to get into this. But you could say there's a lot of opportunity of building this, maybe more for indie hackers and bootstrap companies perhaps, but I wouldn't build a VC backed app on the Apple ecosystem just because there's a huge threat there.

Speaker 2:

But that's great because that means that there's ample opportunity for the folks who are crazy enough to go in and build something amazing. Right, that ground is wide open and you're not likely to be competing against someone with ridiculous amounts of funding. So I think it's exciting. And then, to be slightly fair, I worked at Apple back many, many moons ago and, uh, you know, in terms of their friends who work there now, uh, you know, I think that they have an awful lot on their plate and they do not try to do everything for everyone and they improve what they've got incrementally. Uh, and so externally, that seems like, oh, you know, their stuff isn't as good as it could be, or et cetera, et cetera. But you know, I think that what they're building meets their goals and what they're building is, I mean, as you said, some of it's quite good.

Speaker 2:

Notes is very good. Notes was terrible at first. Notes was useless, and so, and on top of that, like dot mac back in the day, but you know, they said, okay, we want this to work long haul and we will chip away at it and chip away at it and chip away at it, and, and they got there. Uh, so a little bit of credit for that. That's all exactly great.

Speaker 1:

Um, just to wrap it up, um and that's something I never ask on the spot because I'm always like fuck, I should have done that who would you like to listen on this podcast? That you know, somebody from your previous years or from your network, especially from Silicon Valley? The English podcast could benefit from that.

Speaker 2:

Who would I like to listen to on this podcast?

Speaker 1:

Tomorrow we have the founder of Ghost, so it's a big one. Today's a big one too. So we're doubling down on the podcast and ramping up on listens, so I'm pretty happy about that. As a byproduct of not doing StartBrand anymore, I could just dedicate more resources and mental bandwidth to running this podcast, and so you know, slowly chipping at it. But who would you like to?

Speaker 2:

Sure, I mean. So, I think, a profile as opposed to a specific person. I'm really interested in bootstrap companies and in their stories In particular. I'd love to hear more bootstrap companies in Barcelona or in Europe, and so those things would interest me tremendously. In terms of giving you someone you might want to interview, michael Simmons of Fantastical would probably be a pretty good guest, and so, having just released, he's going to be a little busy, having just released the Windows version, but when he comes up for air he might be a fun guest.

Speaker 1:

Okay, yeah, but like when, when he comes up for air, uh, that he might be a fun guest, okay, yeah, uh, um, I would reach out because a lot of people like to be on podcast. I think it's a pretty low commitment as opposed to an in-person event. Right, podcast is iTunes, maybe it just they. They have like some hours dedicated per month or something like that, to doing interviews, and so maybe you can book them four months out. But, um, yeah, why not?

Speaker 2:

and then other one, other folks that might be interesting is, uh, the folks at sass group. Uh, so they're a german company who okay, buy sass, companies. Yeah, they're yeah and so, relative to what we were talking about earlier, they might be interesting folks to hear about what is their model, how do they go about it, and or talk to founders of companies who've been through that process with them.

Speaker 1:

Yeah, or somebody from Summit Partners. I mean, I worked for Summit Partners as a freelancer 10 years ago, but I think my connections are not there anymore. But yeah, that's how I said like, wow, this goes full circle, right, it was probably one of my very first clients as a freelancer and when I met you, it was fun because it was exactly on the day that I started working for them. More or less it was that week right, a couple of days in, a couple of days out. But yeah, it was a great coincidence, maybe because I think we haven't had any PE firm or growth equity firm on the podcast Bootstrap we had Everyday. We had Tanya from the Multiverse AI. We had what else? The guys from Metricool in Madrid, a Combo Mail from Madrid as well. Both of them sold in the last 12 months something like that as bootstrap companies.

Speaker 2:

He has a newest founder at Startup Grind. I don't know if you've had him on the podcast or not.

Speaker 1:

Yeah, yeah, also a couple of times already, like, amir is a great, great friend of the show and also because we have this, we have this mentality whereby we've got to support each other. We're bootstrap companies. We know that. You know, if we have to prioritize one thing over the others, I always go to a bootstrap event or indie hackers or stuff like that than rather to another you know VC event or podcast or publication, just because they can get whoever they want.

Speaker 1:

He likes being on this show, because we can focus on stuff that matters like working remotely, async, leadership under tough times, mental health, and whereas in other podcasts and other events it would be like, yeah, but what's your LTV, what's your CAC, what's your runway right now? What was the valuation in your last round? And a lot of times he doesn't have an answer for that because it doesn't apply to his business. So I think he's a little bit frustrated with with this kind of podcast. But anyways, rick, um I don't know if you have any parting words, I'm rolling out the carpet for you, like 60 seconds to say how we can help you. What's, what's, uh, next for you and, um, how, what you, what do you want to get out this like if people, if people can help you. Anyhow, let us know Sure.

Speaker 2:

I mean, the main thing would be if there are folks who meet the profile for founder partners, then I'd love to hear about them. So if you're an engineering founder of a company in Barcelona or Europe and you're looking to talk to some folks, then shoot me an email.

Speaker 1:

Awesome. Well, thank you very much, greg. Have a nice week, all right, thank you.