Why I’m switching from being a bootstrapper to a funded startup

I’ve decided to stop being a bootstrapper and seek angel funding. This entry talks about why.

To set the context: Last year, I quit my day job and decided to experiment with a number of different product ideas. In the beginning of 2011, I reflected on the year of experimentation and shared my game plan for the year in a blog entry titled: I quit my job. Shipped 2 products. Launched a Services business with clients. Now what!?

As I said in my gameplan, there were a number of hard decisions I made in the beginning of the year. The most important decision being the one to focus on Tout and double down on it; even though my other products showed promise as well.

The Known Problems in my 2011 Plan

As I set the goal to build Tout to a revenue generating product, I saw two key impediments to actually achieving my goal:

  • I was still relying on my Consulting business to pay my bills
  • I am a one-man team spending 50% of my time (sometimes less) on building Tout

I flagged these as impediments but I was still willing to work through these without any drastic changes since Tout 2.0 had just launched and it was still more of a hunch that it would make a significant impact in increasing user retention, user growth and revenues. Additionally, I still had consulting contracts that would go on for at-least another two  months that I wanted to see through to the end anyway. I got these customers through my relationships, so the last thing I wanted to do was screw someone over.

Here’s whats happened in 2011 so far

  • Tout passed 1,000 users
  • We’re close to processing our 10,000th email (note that Tout doesn’t let you mass-email — so that makes 10,000 times that an actual person pressed the Send button on Tout)
  • I’m starting to see regular upgrades to Premium — which means some real revenues for Tout
  • I’m staring to see the marketing strategies (which were mere theories before) actually working
  • I’m starting to see beyond the current version and well into the future where Tout can actually EVOLVE how we use email
  • I’m working 80+ hours a week juggling my time between Consulting and Tout

Here’s what I’ve learned so far

  • I’ve come to the realization that Consulting is a treadmill. There is very rarely a natural stopping point or transition — especially when it comes to 1-man teams. 37Signals and Harvest may have transitioned but thats about 2 companies out of the ~20 consulting companies and independent consultants that I’ve talked to or read up on.
  • I had a ton of reluctance to even think about funding when I was working with theoretical ideas. But as soon as I started to see a product “click” — as soon as I started to deal with support requests with happy customers wanting more, and as soon as I started to see settlement reports in my Inbox…. my entire perspective changed. As soon as I saw traction, all of a sudden, I had ZERO issues looking an investor in the eye and asking for money — because all of a sudden, I was able to map out in my head how I’d not only get him 3x his money in a few years, that I’d also achieve my dream of building my own company and changing how the world communicates.

Ever since I was in 3rd grade, I knew that I wanted my own company. I never wanted to run a huge conglomerate or anything. I wanted a small outfit of about 10 extremely talented people that worked on a few products that truly changed the world. Most importantly, I wanted to be working on my vision and my ideas. Thats the vision I had since the 3rd grade, and part of that was the idea that I’d build up my business naturally with no one else’s help.

Now, I don’t know where I got the whole idea of doing it all myself — but as I grew older, as I worked in actual teams, as I managed people, and as I saw how relationships were just as important as ideas, and how a small braintrust of people can actually accomplish a hell of a lot more than one person or a large team, I slowly and begrudgingly started to morph my views of how I’d build my empire.

In Conclusion

Call it growing up. Call it turning 28. Call it getting wiser. I don’t care what you call it but what it comes down to is the fact that today, I’m ready. I’m ready to focus 100% of my time on Tout. I’m ready to build and evolve email through Tout. I’m ready to look an angel investor in eye and tell him or her: put your trust in me and my company, here is why we think we can deliver.

If you are an angel investor and would like to talk, just shoot me an email: tk@braintrust.co. I will immediately respond with a 2-pager PDF with an overview of myself and Tout, and then I will work with you to set up a time to talk/meet.

My goal is to close out this funding round before SXSW starts, so that I can focus my time there on evangelizing Tout and meeting awesome people to help build by team.