Finding the Funding/Profitability Balance | Bill Boebel from Pingboard

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Bill Boebel 0:00
Things always take longer than you think. And if you’re if you get yourself in a tight spot and have to raise money on bad terms, because you’re out of money, you’re you end up giving up a lot of your company.

Alexander Ferguson 0:17
Bill, I’m excited to continue our conversation now hearing your journey. Tell me where to begin. How did you get to where you are?

Bill Boebel 0:26
If I go way back to the beginning, I grew up watching my dad run his company, he had a printing business, and I started working there when I was actually seven years old. Not sure if it was legal or not, but I’m stuffing envelopes for three cents apiece. And the faster I went, the more money I’d make. sense. So all throughout high school can have the idea in, in throughout college that I would eventually start my own company. And just timing worked out such that in late 90s, as as I was in college, the.com bubble was happening, convinced two friends to three or three friends to drop out of school and started business. You know, we call it Gary pro early, you know, pro athlete doesn’t work can’t Yeah, software engineer, I like it. So we started a company, it was all about organizing parties and events online and creating a place where he served locally and find it so we’re college students. That’s kind of what we’re into at the time. But literally, we lost our business. On the day, the NASDAQ started crashing March 10 of 2000. Friday, the first day of spring break, we had this big plan to drive around and do a lot of marketing on different college campuses. And things started falling apart right then. So over the next few months, we pivoted to hosting content for newspapers or events to publish. And through the over the next year, we went through a few other pivots and eventually fell off story but became an email hosting company

Alexander Ferguson 2:01
that has changed from parties to email hosting.

Bill Boebel 2:04
Yep, so it’s about a two year journey from start to becoming an email company and then about a five year journey, scaling that to $8 million revenue business and selling it to Rackspace out here in Texas. So lots of mistakes along the way. We learned a lot. That’s how I ended up out here. And yet since since Rackspace, so I worked there about four years did corporate partnerships, m&a, which was fun. And then kind of overlapping with that started getting into angel investing helped friend open Capital Factory here in Austin, which is a co working space and Investment Fund, as well as like center of gravity for like startup events and things like that. But then around 2013, sort of getting the itch again to accompany being an investor has come a long way. Like you have no customers in a team, and you’re finding other entrepreneurs and you can’t really go in and get your hands dirty. So want to take go and get my hands dirty answer started paying working late 2013

Alexander Ferguson 3:03
data so that now it’s been about seven years, Coming up on eight years. What lessons learned you have on on funding wise, both from the first venture and the now throughout this time? Now the second venture on that maybe you can share of what would you have done differently? Or maybe a common mistake that you see others are doing?

Bill Boebel 3:25
Yeah, I definitely have a different approach to funding I typically, if you go out to Silicon Valley and single room and talk to the VCs out there, I know a bunch of them are pretty well that, like what they’re looking for is a company that they can invest obviously millions of dollars into, but operate in such a way that in about 18 to 24 months, you’re you’re going to have invested that capital fully and be ready for your next round of funding. And hopefully along the way you hit some milestones that makes you fundable. It’s pretty often that companies go through that time period burn through their cash and are not fundable. So I decided with this business, I didn’t want to run it that way I wanted to raise just enough to execute on the plan we had, whether it’s scaling for product or investment in my Google ads, team, whatever, but operate in such a way that on that amount of money we raised we get to profitability before having to raise any more money. Not that we necessarily need to commit to getting profitable, we just need to know we can so we’re not forced to go raise money because things always take longer than you think and if you’re if you get yourself in a tight spot and have to raise money on bad terms, because you’re out of money, you’re you end up giving up a lot of your company and, and control. So we didn’t want to do that we kind of I call it the touch zero operating model. You want to invest every dollar and nothing more you want to touch zero the bank account, the moment you start getting profitable and your money starts climbing. Touch zero.

Alexander Ferguson 4:59
I haven’t that it felt like it touched. So then one is funding and the next isn’t getting those customers getting to where you’re generating that profit. What does it take? What tactics have you learned that has worked well? Or didn’t to get that first couple customers and be able to grow?

Bill Boebel 5:16
The first couple is always come through your network, typically. Yeah. So in Austin, I had a bunch of companies that were scaling. And we started testing team work with them and giving them free accounts and getting a lot of feedback sitting with their employees, as they use ping worked for the first time, or if they had a bug at drive right over and like sit down with them and see in person rather than trying to understand what’s on screen remotely. But then once you get past that, I think is really what you’re asking is like, how do you start getting that really growth? For, for me, my entire career has been building inbound businesses where you’re typically search some some other strategies too. But typically, we’re I’m trying to get in front of some sort of search term, or 1000 search terms relevant to what we’re doing, have a really strong website that converts have really strong onboarding experience that gets people to experience value kind of that that flow. I have friends that build companies, kind of the complete opposite. They’re doing it they build a sales team, and there have SDRs reaching out to generate leads, and they flip them to the sales team. And we we don’t do that we will have sales people talk to people, but it’s much later in the journey after they’ve already experienced the product.

Alexander Ferguson 6:29
Do you have a most favorite or impactful inbound campaign that you’ve really enjoyed our site? While Yeah, this worked? Well.

Bill Boebel 6:40
Certainly the thing that has worked the most, it’s kind of boring, but just Google AdWords, you can just buy your traffic as much as you’re willing to spend, you can you can buy it and it as long as you understand economics down funnel, and it can look scary at first go in and spend $10,000 a month in AdWords early with it with a company. But that’s about what you need to spend to really start testing it and get enough data to to know if you’re getting the right traffic and to optimize your site to convert and kind of things downfall from there. So AdWords is what kind of what I know the most the kind of second to that is like SEO hacks. So trying to like one of the things we’ve done a lot of over the past few years is find highly ranking content that is already out there, and then get links or purchase the content, get it through and redirected to our site. We now host that blog post or whatever it was. And you know, we’re kind of getting that that page rank well from from Google.

Alexander Ferguson 7:39
Interesting approach. Never that purchasing the content that hosting it

Bill Boebel 7:44
takes a while for SEO to kind of grow organically. So if you find something existing that you can just get today, like you get immediate benefit in a matter of days, not months,

Alexander Ferguson 7:54
just and you just have to just like reach out to that person say, Hey, can I buy your piece of content?

Bill Boebel 7:58
Correct? Yeah, it works. Sometimes now I don’t. And a lot of them more and more often, a lot of the highly rated content actually belongs to competitors. So they’re not going to sell it to us. And they’re like, No, but you can also but you can go out and look at that article and what it says and write a better version of it and kind of over a few months climb ahead of them.

Alexander Ferguson 8:18
So it is a long term strategy for sure. For that first one, obviously, you just turn it, turn it on and money starts coming in. You said you mentioned a $10,000 spend? Is that with a company that’s going to manage that for you? Or is that just like strictly ad spend on in Google and then you’re managing it.

Bill Boebel 8:36
So at that level, you probably want to do it yourself. Once you get beyond that we I would recommend working with an agency or hiring somebody that’s just a pro at that stuff. But I think anyone that’s got an engineering minded mentality towards growth can can manage it themselves at first and start proving it out. But you really do have to quickly understand that the payback period is the number we look at. It’s if you spent $10,000, how many months does it take to recoup that from the customers you got off that 10,000. So a really simple example is if you got $1,000 in monthly recurring revenue, as long as your churn rate is significantly low, and they’re keeping them for more than 12 months, you have a 10 month payback period on that 10,000 1000 A month payback pays back in 10 months. So you have to really understand that and some of the other nuances, nuances to retention before you can scale up. But if you can get that right. Yeah, in my mind, you pump an unlimited amount of money into it as much as you have access to because it pays back predictably.

Alexander Ferguson 9:42
What have you seen is different from your first venture to now of difference between b2c versus b2b Because that with webmail, I think was called it that was that was a consumer product, correct?

Bill Boebel 9:54
Oh, well, actually, it was a b2b at the time. Yeah, so we hosted it was basically like If today if you were starting a company, you go to Gmail or my office 365 and sign up for an account and you have a web based version as well as desktop clients. That’s that was our product back in 2002. So if Gmail wasn’t even out yet, or if they did, it was like, it certainly wasn’t for companies. So we were hosting mailboxes for companies. And it was our we’ve spent a lot of time getting the anti spam anti virus and large mailboxes. Right. Those are, those are like things you take for granted today. But back then it was very hard engineering challenges, that we’ve always kind of approached growth with the b2c mindset. Because search is it’s your it’s an individual typing something into Google to meet a need that they have. And you do the same things in your personal life. And you’re, you have an initial impression of the company when you land on their site. And it like for example, if you land on a site, and it says Book a demo versus try it for free, you have a completely different perception of the company. So you know, we always skewed toward that, try it for free path, which is similar to every other consumer product you use. And also on that point, a lot of the growth techniques that we try, are things that consumer companies tend to do first. So we kind of look at what the best consumer companies do with user onboarding, or you know, the way their, their way their paywalls work and things like that, or the email nudges you get the weeks after you sign up. And we kind of take cues from that to think about how to apply that to a b2b product.

Alexander Ferguson 11:39
Well, another side of growing a company, aside from the clients, which you need for the money is then the team to make it happen. Any insights or texts that you found a lot of work when whether it’s hiring or really building that right culture? So that you can grow?

Bill Boebel 11:56
Yes, that’s a great question. Certainly, for me, as a repeat founder, one of the biggest assets I had was an existing network of great talent that I could convince to come work for me. So we’re able to pull people that I’ve worked with previously into paying work, which was super helpful, and a good way to get started. It, I definitely am a fan of hiring kind of junior raw talent that just has a really open mind and somebody smart willing to work hard. So you know, we’ve, we’ve hired my first company, we hired a ton of people out of Virginia Tech. And with this company, we’ve, we’ve, we’ve hired some people who may not have gone to college for computer science background, but they’ve kind of learned it. And we’ve, we’ve had a few interns, one final one just came on full time. So definitely, I definitely like having that junior talent with the open mind that you get within somebody who hasn’t been out in the workforce is really, it’s a hidden gem, hidden asset. And a lot of companies that once you’re out there and work for someone for 1015 years, you kind of get a preconceived notion of how things should be. But when you get somebody fresh out of college, you’re still in college or hiring people in high school. Like, they don’t have any of those preconceived notions, yet. They saw things differently.

Alexander Ferguson 13:22
When you’re hiring someone fresh, obviously, they may not have a lot on the resume. So beyond the resume, what methods do you use to assess the potential of a candidate

Bill Boebel 13:33
depending on the role, so like, right now, we’re hiring a data analyst and we have a project that they work on it can take a couple hours at home, where we we use a hypothetical scenario with some since the data set that we give them and they have to do some visualizations. Other C we have we hired a writer, we have the the writing sample, we hired a deaf person, and we had them pitch us on how to approach a certain kind of partnership model that we’re looking at doing. So that we definitely have 1/3 interview will have the kind of talking through their background and what they want to do and all that sort of thing, but then we’ll have to do some sort of real work out pretty often.

Alexander Ferguson 14:21
Has anyone said that to you like they’ve done something interesting in the interview, they like wow, I didn’t expect that and you’re like, I like that

Bill Boebel 14:31
nothing comes to mind there but you can you can just tell based on some of the projects that you tell somebody thinks based on what questions they ask, how deep they go with certain answers. How they communicate their answers. So you can tell a lot from the nuances of that.

Alexander Ferguson 14:50
I mentioned it changes the the team itself and the culture as you grow. How many people do you have now on the team?

Bill Boebel 14:55
We have 20 employees right now.

Alexander Ferguson 14:59
Have you seen A change as it grows, and how do you manage that grows?

Bill Boebel 15:03
Yeah, it certainly does change as you grow, and actually around this size, probably around 2025, you start getting to where not everyone knows each other really, really well, when you’re both 20. Everyone, you don’t have to make an effort for people to know, who are all these people. And what do they do? You know, once you get beyond that, you have to really make a conscious effort to keep people in the loop on who does what, who are these people? What? What are their goals, right now? What, what do they do outside of work? So that’s really where ping work comes in.

Alexander Ferguson 15:40
You’re gonna eat your own dog food, right? Yeah, that was the problem

Bill Boebel 15:42
that we had as we scaled webmail. And then we saw as we worked at Rackspace for a few years as they grew to, like 4000 employees. And in that, it, obviously that scale, not everybody knows each other, but really a webmail, probably around 2025 employees have started seeing that make it it’s just a feeling different. So I think it’s, I think it is a problem software console, we see that with all the social network tools that we use in our personal life. And yeah, with with work, I think can be a lot more focused on kind of the work life aspects of somebody.

Alexander Ferguson 16:17
What challenges do you see or hurdles you see your need to overcome in the, in the next coming year, both internally with the team as well as externally and clients and communicating and marketing.

Bill Boebel 16:32
Challenge I feel are different every six months or so. And obviously, we’ve covered its challenges are different today than it was in February. And one of the challenges we’ve focused on really the past six months, and we’re not out of the woods yet is we’re growing really well until COVID hit and then our growth stalled. And we track a little bit not by much. But one of the things I’ve always believed in really, our whole team felt is like, growth solves a lot of problems or can hide a lot of problems. If you have growth, you can give people promotions, because there’s just more to do and you’re hiring, you need to move people from individual contributors to managers. And then it also obviously, it’s exciting and fun to be winning. When you’re when growth goes sideways for a little bit like it has for us for a little while, and we’re just now starting to get the growth back. It can it, you know, people start getting really antsy. And it’s you have to make even more of an effort to keep people engaged and kind of see the light at the end of the tunnel. And I think we’ve done a pretty good job at it. But I’m sure there’s more we could be doing. And you know, as we’re now getting back to growth, I think the world has started realizing we’re going to be in this for a while. So they’re, they’re buying software and and just trying to cut every cost. And they see the need for tools like pingboard, actually, because everyone’s at home. People still need to know who all these people are and new hires are joining. So we’re more relevant now. And I think companies are starting to realize it. So I’d say that the path ahead for us some of the challenges are going to be really thinking through where to expand our products. And we’ve got about 2200 customers right now paying plus another 120,000 for eight, which is a lot. And we there’s certainly way more of the market to go grab. But I think a big opportunity for us is to broaden the problem set that we solves and but there’s a lot of directions we can go and getting that right is going to be one of the big challenges for us over the next year or two. I’ve seen so many companies try to expand a product and it just dilutes it they don’t they start doing a lot of things good. Nothing great. You know, we don’t want to be that company we want to the things we do want to be great at.

Alexander Ferguson 18:50
And that is the joy of you as the leader to have to make those decisions. The right decision, hopefully.

Bill Boebel 18:57
Yeah, luckily, we’re pretty good at talking to customers. So we take a lot of input from them. They’re there helping guide us through that.

Alexander Ferguson 19:06
Where do you go and where have you enjoy getting good information, whether it’s books, podcasts, audio books, journals, online blogs, where do you view found good information?

Bill Boebel 19:18
Probably most relevant comes through the people I follow on Twitter and things they share. I I don’t follow any publications directly anymore because I find that if I follow smart people there like a filter for the good content, and I

Alexander Ferguson 19:34
will get people to follow them.

Bill Boebel 19:36
Follow a few VCs like Fred Wilson, Mark Schuster. That’s that. And then there’s a few random random entrepreneurs that just share good content out there. So follow a handful of them and then as few as follow for for fun because they kisana funny, sarcastic things about things going on in the tech world? But yeah, so you kind of have started, I actually went through a couple phases where I cut out news completely, including Twitter and realized that man, all the important information still gets to me somehow, like somebody will tell me about it, or it’s, it shows up in something that somewhere else. So I realized I don’t have to proactively, like follow a whole lot of publications. So I’ve kind of taken that and expanded it to following just smart people that, basically tell me what I should read.

Alexander Ferguson 20:34
Like that about last question for you. What kind of technology innovations do you predict we’ll see in the next year in short term, and long term, 510 years.

Bill Boebel 20:44
Certainly the next year, a lot of it is going to be entrepreneurs, continuing to try to figure out how the world has permanently changed and what new problems exist. So certainly in our space, there’s a lot of innovation around work technologies. So collaboration tools, and obviously video, video tools, project management tools, and then HR outside of that.

Yeah. I don’t know, I actually, I see heads two heads down on software, and have given a lot of time thought. I’ve got a couple friends doing interesting things with facemask businesses, but that’s temporary. So there was a there’s a buddy of mine in Austin, I invested in that delta factory. It’s crazy did a starting in January, he kind of saw it coming. And he’s now producing hundreds of 1000s of face masks per day.

Alexander Ferguson 21:45
AC good timing for him. For the near term, it’s it’s a need? Well, I

Bill Boebel 21:52
think there is a trend there, by the way, where I think you will see some manufacturing come back to the states and leverage a lot of automation and technology and software to do it smart. Instead of kind of outsourcing it to cheap labor overseas. I think you’ll see innovations in like the physical world where things were just done smarter. Like if, if I were to start a manufacturing company, I would certainly do it differently than somebody that’s probably been doing it for the past 30 years. So I think we’ll see more of that, like what my friend here is doing with the mass business.

Alexander Ferguson 22:23
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