I met with Troy briefly for coffee about 8 to 12 months ago and we chatted a bit about this. I sensed his aversion to growing the biz back then. Seemed like he'd made up his mind. This post from him reinforces that. Even so I feel compelled to post a few thoughts.
Troy is an implementer. I was too. I was a dev guy who started as an ops guy. I really really wanted to build a business and for over a decade I tried to do it myself by writing my own code, doing my own ops, doing my own marketing and so on. It was very very hard, and after many failures and almost financially ruining me, I got to a place where I have an amazing biz and amazing team and I've turned myself into an exec who is no longer doing the day to day implementation, but is leading and coordinating.
This transition is very hard to make for folks like most of the people here - including myself. You have the sense that it's all on you. I need to repeat that in caps because that's how it feels. IT'S ALL ON YOU. I think this deep sense of accountability is what makes great devs and great ops people very good at what they do. But it also is perhaps what leads to burnout.
For an entrepreneur, it really is all on you. That work isn't going to do itself. And so that sense is even more visceral when you're a one man show. Now imagine you're running at the scale of HIBP. Pretty hardcore.
When I made the transition to being a leader and once I had a team behind me, the feeling was a bit like I'd imagine one might feel getting over a traumatic experience. It took a while. I felt like I could breathe again. I never wanted to go back to that place, if I have to be perfectly honest. It's a rough gig.
I think the trouble here is that Troy thinks that scaling HIBP is going to be more of the same. More of everything being on him, more work, more implementation, more accountability, more more more!!!
It doesn't work that way and I'm going to use my own path to growing a team (and regaining my sanity) to describe how it actually does (and can) work.
If one were to not sell HIBP and not raise money but instead grow it yourself into a business, it might work thusly:
1. Immediately work on developing strong cashflow for HIBP. Unfortunately this step is going to take some implementing from Troy. However, with good planning, you can probably hire some help and perhaps even do so in exchange for equity/options if you hire a good lawyer and can structure a cost effective deal. This stage is critical and I'd encourage Troy to get as much advice from other seasoned entrepreneurs as possible. Not folks who have raised VC, but who have actually created cashflow out of thin air. It's a dark art, but many of us know how to do exactly that.
2. Once you launch, it will take a while for the full revenue potential of the business to reveal itself. Cashflow takes a while to kick in and you will take a while to optimize it. e.g. many simply won't know that HIBP now has a paid option. That will take months, perhaps longer. So keep working and wait it out. I've seen this in every single successful cash generating biz I've created. At first it's a trickle, then a stream, then a river, then a wonderful fun and exciting deluge.
3. Once you can demonstrate that the biz is clearly going to grow into something with strong cashflow, you can start making your first hires. I would suggest hiring dev first. At this point you are going to have to do something very difficult. Step back from the coal face and trust your first employee. This was huge for me but thanks to Harvard Biz Review etc writing about this founder dilemma over and over, I was primed and I wasn't going to be the baker that can't get out of the kitchen. So I 100% delegated the job to an amazing person who remains with our team to this day. Once I could hire for ops, did the same. Rinse, repeat. Grow the team.
4. As your expenditures increase, you will need to be very good at managing cashflow. That is because at some point growth will pause. When that happens, if you don't realize that you will run out of money in X months, it will sneak up on you and you will lose the business. It happens every week around the world. Execs take their eye off the cashflow for a few months and byeeeee. Not everyone has the appetite for finance. Some are mildly or even severely allergic. I'm on that spectrum and thankfully my co-founder has a passion for it and happens to be very good at it. This has literally saved our asses and we too went through that growth pause. So if you are allergic, find someone who isn't. This is critical.
Once you do the above, if you build a team you can trust and you are very good at stepping back, finding and motivating talented people and carefully guiding the direction of the biz, things can get weird. You'll see a lot of executives talking about burnout, about how they work 20 hour days and the pressures of being a leader etc. But in your case you'll find that you have more free time and more mental bandwidth to shape the direction of the biz. You'll wake up one morning not sure what to do because you won't have a job anymore. You will have fired yourself from dev, ops, customer service, finance, HR, marketing, blogging and everything else. You'll go "oh shit, what am I supposed to do?"
The answer to this question is really fun: Whatever you and the business want to do. And guess what? You have a CEO who is the company founder and has a ton of energy and bandwidth to continue innovating.
That's pretty much the end of this post. I want to add a few more notes:
Delegating is hard for several reasons: If you're a dev and you have to delegate dev, you need to realize there are developers out there that are better than you and you will need to learn to trust them. You also need to understand that you're firing yourself from a job you are passionate about - a job you have loved and gotten very good at for many years. This is tough.
To scale a biz, you need to continue to delegate, even the things you love doing. Troy loves blogging and he writes epic tomes. But this too will need to be delegated if he wants to run at maximum effectiveness. I know. I did this. It was very hard. But I now have about 5+ writers in our organization and it's freed me up to launch a video podcast which I am already beginning to delegate to a certain extent.
VC is certainly an option, but know that each round you raise will also raise the bar on what success means. Right now you own the biz and success means a team that frees you up and cashflow that pays everyone better than market rate salaries. After the first round, a $20MM exit will be the definition of success. After a B and then C round north of $100MM will become success. And so it goes.
I'd also like to note that HIBP has built an incredible brand and growth. This is very hard to do. As Naval put it in a conversation I had with him not too long ago, it's lightning in a bottle, and I truly think that HIBP is a great example of lightning in a bottle. This won't happen again in Troy's lifetime. And what he has right now makes it very easy to: recruit, hire, retain, get help from other entrepreneurs, find customers, convince them to sign up, convince them to pay, get them to continue to pay, etc. The list of benefits is long. This kind of biz and brand is very hard to create. Troy's personal reputation is sterling and he's one hell of a nice guy. He is young, smart, healthy, well spoken. Seriously, you don't see this very often and it won't happen again, so choose your path wisely if you're reading this Troy.
And finally - and this is really why I'm writing this as a reply to onli's post - because I agree with their sentiment. Have no illusions that once you sell, you 'exit' in a very real sense. You are no longer the owner of the business. You are an employee. I'll also add that M&A folks are VERY good at selling the dream. I was recently at a certain multi-billion dollar company's offices who were trying to buy us. Their offices are based on Lake Washington up here in the Pacific Northwest. The M&A guy actually suggested that once we join their team we can ride to work in our boat. But in his defense, that's his job. Sell the dream. However, in this case I know the reality because I've been here before. Monday morning after you sell your company you will commute to work in a car, sit in a cubicle or office if you're lucky and you will do what you're told to do by the new owners of your business.
You will stare through those bars longing to roam the great plains once again as a free and wild creature in control of your own destiny. Or as Bodhizafa said in the final scene of the original Point Break: You know I can't handle a cage man!