Bootstrapped to Exit and Bootstrapped Again (and Again)

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Retention.com CEO Adam Robinson has bootstrapped his first company to exit, and before the acquisition, incubated his second one within it. He’s repeating the same incubation model by incubating a third company within his second one. Really cool strategy and a great interview.

Sramana Mitra:?So tell me what’s been going on since we last talked . You sold your company.

Adam Robinson:?I sold the first one, which was called Robly email marketing in 2021.

Sramana Mitra:?Were you a part of the deal? Did you have to go work for the acquirer?

Adam Robinson:?No. When I started GetEmails, it was very obvious that it was going to be a much bigger company than Robly was. So, I moved the team that I wanted on GetEmails from Robly and replaced them. It was very clear that it was operating without me for nine months or so. I find buyers to always be skeptical, but it was pretty clear that I wasn’t spending any time on it. We had 5,000 paying customers. So there were no key relationships. I actually had credibility in making that statement.

Sramana Mitra:?Yes, with metrics. So, you incubated something else within Robly? Is that what you’re saying?

Adam Robinson:?Yes. GetEmails was a feature in Robly that we called Robly ID. Robly was an email service provider (ESP) in a really hard space of email marketing or marketing automation. I think it’s the second oldest SaaS space.

Sramana Mitra:?It’s very crowded.

Adam Robinson: It’s very mature with very little differentiation. People like SendGrid came along, so it was super easy to spin up a UI, just put it on top of SendGrid, and do the hard work that Constant Contact and MailChimp had to do back in the day.

So it was just very difficult to compete in. I finally figured out something that I was always thinking the whole time – what can I do that MailChimp is not doing? Because I can’t be more free than them. I can’t build a cooler brand than them with the kind of resources they have. I can’t spend $500 million on ads for a free product like they do.

So, what can I do that they just can’t or won’t? So, I had heard that there was a way to figure out the email address of a website visitor, even if they didn’t fill out a form. I heard it was legal to do in the US, but not Europe, but nobody was willing to do it because it’s such a gray area.

So, I thought that’s going to be the way that I grow this email marketing company. I felt confident that none of the large vendors would do it because if you sell data, you can’t be a part of this self-regulatory organization called MOG that they ought to be in. Because if Gmail turns off MailChimp, MailChimp’s got to be able to pick up the phone and talk to somebody over there, or it’s going to be a major problem.

So it’s like, great, this is going to be how we grow our company again. I will get unstuck. We’ll be off to the races. We put it as a feature in Robly and called it Robly ID. Over the next four or five months, people heard about the feature, and they would sign up for Robly, and use the ID feature. They’d download it and put it into Klaviyo. They’d tell us the feature was amazing and not use Robly.

They wouldn’t use our ESP because it wasn’t as good as Klaviyo for e-commerce. Meanwhile, I do NPS surveys and it would be 10. They would say, “At 25 cents per lead, this is the greatest product I’ve ever seen in my life. All I need are more email addresses. This is incredible.”

So, all of the three years that I was stuck, I had been doing research on?what product-market fit was; I had deduced that I didn’t have it, and I needed it. I was always trying to do things and look for signs of product-market fit.

And I found one.

Enduring a horrible user experience of downloading a file and putting it in a different system, yet giving an NPS score of 10 is a very strong indicator of product-market fit. So, it became pretty clear that instead of trying to use this feature to grow my email app, if I just spun the feature out and connected it to all the email apps, it was probably a much better company.

That was almost five years ago. It was November 2019. Now it’s called Retention.com , and it’s like $23 million ARR.

Sramana Mitra:?I want two clarifications. One is, who bought Robly under those conditions? Clearly it’s a saturated market, very mature market, lots of large competitors. Who wanted to buy that business and why?

Adam Robinson:?So it had positive cash flow, and the EBITDA multiple that they paid was not unreasonable. At the time, there were a lot of people doing these roll-ups of these smaller cash-flowing businesses. It was somebody who was in another part of the email space, and they wanted to buy something for cheap to experience absorbing an email marketing app into their company and running it to see how it worked.

I think they wanted to see if they could acquire customers that way. They didn’t buy any more ESPs. They bought many other companies since then. They didn’t buy any more like that, but they still like it. It was 2021. The three-year mark just hit in April 2024. It was a nine-person team. All nine of them stayed the entire three years. Isn’t that incredible?

Sramana Mitra:?For Robly?

Adam Robinson:?Yes. The whole team.

Sramana Mitra:?So you bootstrapped Robly, if I remember correctly. How much did you sell it for?

Adam Robinson: I’m not supposed to disclose the price.

Sramana Mitra:?You were the sole owner of Robly, right?

Adam Robinson:?No, I had three co-founders. It’s not even equity, but I ended up getting 45%.

Sramana Mitra:?Okay, so that’s great. That was your first venture. Robly was your first venture. You had a great bootstrapping to exit story. Especially for first-time entrepreneurs, a bootstrapping to exit sets you up really well for a second company.

Adam Robinson:?You use the cash flow of the first one to start the second one. When we sold Robly, it was at $3 million ARR and $1.5 million EBITDA, and so was GetEmails. That was my goal the whole time. I wanted to get GetEmails to where it’s making the same amount of money as Robly, so I don’t have to take an income hit. Then punt that one, and then grow this other one.

Our conversation continues here .

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