4 years ago, we almost went bankrupt

September 2018, we had $7,000 left in the bank with an $80,000 monthly outflow. The box of tissues on the table was for tears, which were coming often. Nacho, my old dog that I gave to my friends Brendan Callum and Karen Leung in San Francisco, kept me company. They very much thankfully let me work from their place, keeping me from feeling entirely alone. The founder and CEO path is lonely.

The business was failing. We had seven people left after letting two go, $300K ARR, and we were largely paying the bills from implementation services, not product sales. As the CEO, I had to figure out something to keep the company from going bankrupt. I had been pitching angel investors and VCs for months to no avail. My friend Colin Lau invested $50K to help us survive (thanks Colin!).

Scott Hemmeter emailed me an article on Jason Calacanis 's LAUNCH accelerator, where they give you $100,000 and let you pitch 100 investors in-person over the course of 12 weeks in San Francisco, in return for an effectively 6% convertible note. We were in Jason's 'Goldilocks' range of investments then ($5K-$50K MRR), which got me a pitch interview in their office. The terms of the note weren't great, but I had no other choice if I wanted to keep the business alive. I flew out from NYC, pitched Jason and Jason Demant , and got us into LAUNCH.

This led to me flying back and forth to SF for 12 weeks. I rented an apartment with some of the $100K for two months and split it with Denis Casaubon , who was also in LAUNCH. I spent the bulk of my time alone in the apartment though as Denis was returning home to family while not pitching.

During this alone time, it was mentally brutal. There's only so much peanut butter one can eat in a depression. Week after week, in-person investors all said no. I knew we had no focus and too many products. But now I was hearing it in front of a panel of investors and my peers.

I heard

• The Salesforce space is too small - how big is your TAM really (total addressable market)
• Mobile payments will never work
• Events won't work because your competitors have bad businesses
• I don't understand your business
• Wait so someone requires Salesforce for this to work?

I started having lucid suicidal thoughts while waiting my turn in the LAUNCH room to pitch. Why would I stand up again to pitch while our company had no money, no main product, our team was struggling to keep up with feature demand while warding off bugs, I was living alone in SF, my peers were getting funded, and I could see no hope in sight.

I was on the phone with my psychiatrist often, changing prescription sleeping pills, because nothing was working, I couldn't get to bed. No amount of melatonin would work.

Talking to my therapist twice a week, individually and separately to our therapy men's group, wasn't helping. I was being told to 'wait and see' by my therapist instead of quitting as I couldn't tell the future. I dreaded going to bed nightly as it just wasn't happening. I went on 3+ hour bike rides to exhaust myself, which didn't work to help me get to sleep. It also didn't help that on one of them I started crying.

I started shopping the company. I called Naushad Parpia , Jerry C. Huskins , and Tim Hale , as well as others by email who never replied, to buy us. I received one offer I really didn't like (3x ARR), the others just didn't materialize.

I told our employees we were low on cash and asked them to voluntarily take pay cuts for the foreseeable future. Many of them did (and I eventually paid them back). I gave them more stock options, it's all I could do.

When I pitched Roelof Botha and David O. Sacks in-person, they both voted us as the number two company of the seven company LAUNCH cohort, but neither invested. (Though it was pretty awesome to pitch such successful people).

It was time to make moves

1. I killed our web-based forms app and merged it into Blackthorn Payments, now a featured called DocumentLink.
2. I killed our multi-tenant data-normalizing portal that we called Connect360, which now serves as our AWS-hosted Salesforce-querying middleware to render Blackthorn Events UIs from Salesforce.
3. I killed our billing app that we had been building for over a year. Weekend after weekend I was in the office for an app that no longer existed. We either had to be a billing company or something else as the apps needs were too big, and with SteelBrick , Accounting Seed , and Stripe Billing, it just didn't make sense to keep on.
4. I killed our Commerce app. Cloud Craze (now Salesforce B2B Commerce) was too far ahead and we hadn't yet established our go-to-market of Nonprofits and Higher Ed. Also, our Events technology was too early, so I couldn't see the technical similarities between the two. Fast forward four years and our course-focused Commerce app is now ready for launch, with zero functionality from the 2018 one.

4. I pitched a bigger monthly customer on pre-paying six months with a 10% discount. They agreed, $49K.

5. Blackthorn Payments at the time was free. The thought was we could build a business on our Payments gateway-based revenue share alone, but this was wrong, we needed additional revenue from somewhere. We converted the Payments app to paid, telling all customers they could stay on the current version of the app, but they could never again upgrade or get support without paying. This brought in $80K ARR and no one complained. Looking back, I undercharged our biggest customers, charging them $4.5K capped for multi-hundred user orgs. I was too scared to lose them or get bad press.

6. I called John Cui and said "Make the Events app a stand-alone app. We are going to run with this as our main business." This entailed changing our middleware architecture to be singularly focused. What an undertaking.

7. We got another services project from IAB to continue building out their custom Events implementation. Thank you Conor Healy .

Somehow, all of these combined were keeping the company afloat. In December 2018, Cesar Devoto messaged me on LinkedIn about joining the company. A seasoned events-software sales professional, he joined in March 2019. Sales started to take off from that point on.

Today

Skip ahead four years to the day from the picture in the header, we now have almost $11M ARR, 100+ people, and 600+ customers. We have two core products, Payment and Events, with a few ancillary products and a few more on the way. The lack of focus was whittled down, and we're only now able to expand the product line up.

It feels like an eternity looking at that picture, thinking back to how bad things were. Brendan sent me it this morning and it brought this flood of thoughts.

One day I'll write about April 2019 to September 2022, but for now, I wanted to reminisce on the period when things were brutal. I never expected the business to succeed, I only wanted it to stabilize. If we could only reach $1M ARR, we could pay for our expenses and I could be happy.

I didn't realize that $1M didn't pay all of our expenses and had no correlation to happiness ???but I soon had no more suicidal thoughts and I shifted to a positive outlook.

I also wanted to write this for other entrepreneurs to have hope that although other businesses may look good at a point in time, not all journeys are filled with smiles and overnight success. It took three very stressful years to get to $300K ARR, then another to hit $1M. Four years to hit $1M ARR. Many organizations are able to do this in under a year, many never hit the mark.

I feel fortunate to be where we are now and I'm happy to speak with earlier-in-the-journey product entrepreneurs. Feel free to email me at [email protected]. Stick with it if you're not out of business yet and can afford to do so. It doesn't mean that the business will work, but it's the best shot it'll have at getting there. It'll also fend off regret. It takes one minute to quit, and apparently many years to keep going.