#23 - Bootstrapped to VC Funding

Thomas Johnson LinkedIn Profile

Multiplayer Website

Thomas has founded many companies before and he has a different approach related to bootstrapped companies.

Currently, he has been building a solution including his wife as a CEO and 10+ teammates.

They started multiplayer.app by bootstrapping and received VC funding to move quickly.

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When I first saw your profile on LinkedIn, I saw that you have an entrepreneurial spirit. And right now you have another company and working with your wife, and you start as a bootstrapped and get funded later on. And this is a different story that I want to share with my subscribers.

One of them is working with your wife. I think this is one of the things that you have something to share. And the other one is,mainly I interviewed most of the bootstrapped funders. But, your case is also fine. I meant, you started as a bootstraped and get VC funding later on. So for most of the bootstrapped companies, VC funding is a nice question because I think for VC funding, you should be a great fit.

So we can start from the first topic, what are the challenges and good sides of working with your wife?

So there's so much I want to share.  So let me start with  the part about my partner, my wife. So my career has been entrepreneurial. I love going from zero to one. I love making the early decisions tech-wise and trying to figure things out (problem and solution, product, market fit, all that sort of stuff). 

It's just so exciting. So I'm attracted to that kind of thing. 

We've been married for 24 years. She has a communications background, and worked for PR firms for several years, got into sort of technology and was brought in-house at DigitalOcean, where she was head of communications, and at MongoDB she was doing all of the communications of the CEO.

Her next step would be to lead a company. And I have a lot of ideas and we decided to start a company - Multiplayer.

I know a couple of things when you're starting a company, which maybe many of your subscribers know, which is like, it's tough to do it on your own, it is not possible to do everything.

I know, it's just much better if you have a partner that can share some of the responsibilities because it's not all about building tech. It's not all about building a go-to-market. It's all of these things. There's just a lot to do. You've got the highs and lows. It's nice to have somebody to help balance things out.

I would recommend somebody with complementary skills, somebody who's looking at the opportunity you're doing, especially if you're starting from zero and is in it as much as you are, somebody who you have some history with, you can have some trust.

It's nice if you've known somebody for a while and you've worked out some of these things. So, my wife and me, we've already worked out our communication issues. 

We also have complementary skills. So she's not telling me about technology. I'm not telling her about go-to-market. We have ideas, but I have my spot in the area that I'm in charge of.

She has hers and we work together and it's been working out nicely that way.  

It's hard to find that with a random person. 

So I feel very lucky that she has a communication background and I was able to sort of convince her to say, okay, take this on as your first CEO job.

And you have been focusing on this project for almost two years. Can you give us more details about how the project started? How was the idea born?

So in terms of bootstrapping, I first got this idea 10 years ago. So one of the things that I would say to people who are considering starting something is “you’ve got to take the long view”. 

It's never immediate success, overnight success, like they say it takes years and years and years.

I've always had lots of ideas. What I've done to them is like, let them sit for a while. And the ones that like are still with me months later, a year later, I might say:

Hey, this is a great idea, but the market's not right because this would be a nice to have not an essential thing, but I see where the trends are going, which is what happened with this idea.”

Sometimes you have to let it sit. So that's part of the bootstrapping effort, like knowing when to start, not when to go and sometimes saying, I've got to wait a little while because it's not quite right.

Is it something related to market, the people that you are going to work with, the timing, the money you have? 

So Multiplayer is a tool for teams that work on distributed software. So, which is every software, it's hard to communicate about system architecture, know what you have.

It's hard to make changes. It's hard to communicate about API changes, all this other stuff, without breaking things. It's hard to do this kind of software development, modern software development. With lots of cloud dependencies and things like that without using a bunch of tools that don't talk to each other.

So we have a tool that brings together your system architecture, your components, and your API, that helps to document it, and soon it will help you to create platforms easily by taking a template, dragging, dropping components, and deploying. So that stuff is really hard.  And it's essential, especially the communication part.

If you want a simple way of describing it:

I started thinking about this as working on large distributed systems, 10 years ago, working on teams with lots of platforms, lots of APIs, poor communication, poor versioning, like just all this stuff.

I said, there really needs to be a tool here. But 10 years ago there were a few companies that had this problem. It wasn't an every-company problem yet.

So I decided to wait. So part of the bootstrapping process was having the idea, knowing that it needed to wait for a little while until the right time. Until the right time when there's a critical mass of potential customers, then what we did with this was we put some of our own money in it. 

You know, I've worked with developers around the world. We've got a distributed team and brought some of them into this project. 

We paid for all of the initial work and got sort of first designs, very rough initial MVP, got out there, started getting feedback from a lot of potential customers.

And you know for us, we decided that we wanted to move quicker than just what bootstrapping fully allowed us to do.

You think you find the market and you think you should be fast instead of going bootstrapping. And you need some money for marketing and other stuff.

I felt as far as I understand. Or finishing the full product. Cause this is a particularly complex products.

It's like the ultimate idea is simple, but the foundation for the product and real-time collaboration and having this different kind of document type system, architecture, diagrams, and APIs, and shows diffs and changes, all the stuff we wanted to do would take time and we made the choice, in this case, to say listen we do want to move quickly.

We don't want to use our own money to get to this like the first version. 

And that's why we decided to make that change. 

How long did you bootstrap?

It was probably about six months. After six months we started reaching out to VCs and then they invested in our company.

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I'm just curious about this case. I guess there are three types of companies. One of them is like bootstrapping as mainly maybe more than 90 percent of companies, 95 percent of companies in the US, there are some VC funding companies like they want to be unicorns.

And there are some companies like “one and done” which are raising one time and they don’t want to raise later on. 

What do you think regarding to those models?  

Yeah, I guess it depends on where you want to take it and how big the market opportunity is. So for us, I have another product that's a project.

That is completely bootstrapped and still in the beginning stages. So it's a robotics project. 

So there are things that sort of fit that model where you can do it yourself. You can get early users, you can get money and you don't need to hire a bunch of developers.

To help out, you can do a lot yourself and reach a point where you've brought in some positive cash flow and you've got some growth and work it out. 

That's kind of rare to have, sometimes you need more time, you need more resources, and you might not have the money yourself, which is why you go for external funding.

From my side, I went through the dot com boom and I started a company at that time.

Okay. Luckily sold it. But I experienced the downsides of competitors, like raising 50 million with a business plan, a hundred billion dollars and all this crazy stuff that was happening.

They just disappeared and there's no fun in that. Everybody loses money, but what I learned is that;

You never get that time back. Not only is it a bad experience for everybody involved, but you lose the time.

There are drawbacks to taking funding, which is you're going to have, you have this clock that starts ticking. It really depends on what you're trying to do. For us, we wanted to bring this team together.

We want it to be able to move quicker than we would have. Otherwise, the product features we're trying to build are a little bit broader than just hiring one or two people and doing stuff myself. 

We've raised 3 million, just not a lot of money. It's plenty for what we're doing in the phase that we're in. 

I'm not thinking like, let's just be a unicorn and raise a bunch of money and have a valuation. I've had this idea. And dream of having this product out for such a long time.

And I think, it will resonate with a lot of people and help a lot of teams and I want that to happen as quickly as possible.

Thanks for sharing all of those, Thomas. I think this is going to be a different issue compared to others because of your journey and other stuff and the things that you shared. Just my last question is going to be about anything you would like to share as an advice.

I'm gonna recommend a very strange book. But first: my advice to people is, it's never just one person.

It's always the team. And if you want the team to work well together, you have to make an effort on the culture that you're building, like from day one and take it seriously. Culture and communication.

And the book is Making Comics, I think it's by Scott McCloud. It’s a book on communication that I think everybody should read.

I think everybody should read it because even though it's about making comics, it's about storytelling. It's about communication. It's about taking ideas and getting them across to other people. And if you're a large distributed team, communication is a very important thing.

Previous Issues:

• How to Leverage the Shopify App. Marketplace and Building 2 Apps - Erman Küplü

• The Importance of Localized SEO - Calendesk

• Everything you need to know about bootstrapping

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