Plasso Founder On Scaling And Selling A Startup
Drew Wilson shares the lessons he’s learned from scaling, raising capital, and going through an acquisition.
In this episode of AngelList Radio, host Tyler Willis speaks with Drew to hear, frankly, about what he’s learned from starting Plasso, scaling the company, and going through its acquision.
An Accidental Entrepreneur: Plasso’s Humble Origins
Even though Drew is now a prolific software creator, he practiced, initially, as a designer. As he mentions in the episode, he “didn’t want to code, didn’t want to touch it.” He learned how to, though, and got to work on a number of projects. Reminiscing on his lack of business chops in the early days, he says, “I had nobody in my inner circle that was wealthy or knew how to build businesses. I advertised in the Yellow Pages. This is the kind of person we’re talking about here.”
He later spent two years building a front-end CMS that he expected to be a hit, but it wasn’t:
I was under the impression that, hey, if I just build the best version of X, all the best money will come to me. It’s completely false, however — it took me years to learn that lesson.
After the failure of the CMS, he had to sell all the furniture in his house and short-sell the house to make ends meet.
In 2010, Drew created an icon set called Pictos, “just for fun.” He remembers his brothers weren’t familiar with the concept of icons at the time and dubbed him “the king of clip art.” He created a digital goods delivery service to sell the icon set online, which is the project that turned into Plasso.
Raising Money And Scaling Plasso
After working on the digital payments project for a couple of years, Drew decided to raise money for Plasso. This was his first time fundraising for any project, and he made some early mistakes along the way, but he believed he could raise money for Plasso.
There’s no good reason I should have thought I was capable of going for it. I had no skillsets around raising money or pitch decks. I had to research what an angel investor really did and the difference between an angel investor and a VC. I was coming at this brand new, but I absolutely love trial by fire—that gut feeling where you’re just super-nervous and you know you’re way outside your comfort zone. I love learning that way.
Drew reflected on the advantages and drawbacks of raising from angels vs. VCs. If he were to do it again, he says he would only raise from angels, particularly those who have been entrepreneurs themselves. Those are the people who were most helpful to him.
Raising money wasn’t the only challenge Drew faced while building Plasso to a success. He’d worked completely alone before raising money, and the transition to building a team—especially learning to let go of some control—was a difficult one:
If you want to have 100% control of everything, there is no way that you can ever scale beyond a one-woman or one-man show. Before you raise money, I hope you take a moment to reflect on what that means…Plasso, at that time, when I first raised a team was me. It was an extension of me. That’s what it feels like. It doesn’t feel like a team effort. It feels like this is what I built, and now I’m bringing a team to it. After about a year, it started to feel like a team effort.
If he were to start over again, Drew says he would have two pieces of advice for himself:
- Hire slow
- Start with sales
One thing I learned (working with sales) is you get a lot of candid feedback. If you’re calling the right people, you’ll find out how your product is not easy for them to use or is not tailored for them to use. The truth is not that many people cold call.
Getting Acquired By GoDaddy
Of course, as a first-time money-raiser and team-builder, this was also Drew’s first time dealing with an acquisition offer. He shared a blow-by-blow account, from GoDaddy’s business development team reaching out about a potential acquisition to the deal closing. During this time, Drew was spending 80% of his time managing the acquisition process.
He also provided a checklist for any founder considering an acquisition offer:
- Figure out if the person or team reaching out has decision-making power
- Look into the terms and people involved with past acquisitions that the company has done
- Map out the competitive landscape to get a sense of how valuable your company would be for the acquirer
The job of the CorpDev is to get the acquired company at the lowest price. That’s the entire reason for their industry and so you have to not take anything personally and you have to understand that that’s their job.
He suggested talking to more than one prospective acquirer to discover what opportunities exist and to gain negotiating leverage. Drew reached out to his network and investors to get introductions to corporate development teams at similar companies but ultimately chose GoDaddy.
Listen to Drew’s full story here.
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