How Mailinator CEO Paul Tyma grew Mailinator to $126K revenue and 300 customers in 2017.

this is the top where I interview entrepreneurs who are number one or number two in their industry in terms of Revenue or customer base you'll learn how much revenue they're making what their marketing funnel looks like and how many customers they have I'm now at $220,000 per talk 5 and6 million he is hellbent on global domination we just broke our 100,000 unit sold Mark and I'm your host Nathan lka hello everybody this is episode 703 I love do these you know I love this right guys it's unbelievably fun tomorrow morning episode 704 we talk to Eric Dolan and I he breaks down a son saving his mom that's really what's happening he is a son he is saving his mom with a health tech product that recognizes seizures and it's big big financially tune in to find out especially if you're interested in the health Tech space good morning guys my guest this morning is Paul tea he's the founder and creator of a tool called mailinator it's an email system he's also the startup veteran a startup veteran has focused on four Silicon Valley startups including preemptive Solutions many Brin Inc which owns mailinator home account.com which was later acquired by bills.com you guys might remember we had the bills.com CEO on about a week and a half ago and refresh Inc which was acquired by LinkedIn he's a frequent speaker and writer and is author of one of the original books on Java called Java PR primer plus Dr Teo received his PhD in computer engineering from Syracuse University focus on Java and.net performance Paul are you ready to take us to the top I sure am W is a bio man congratulations yeah thanks tell tell us first so you obviously studied Computer Engineering at Syracuse right out of that did you go right into one of these startups or did you work for somebody else no I actually started my first company during my PhD and actually incubated it at Syracuse it it eventually moved back to Cleveland where I was from uh right out of PhD I ended up working for Google got and I was just a happen stance that I happened to move out to Silicon Valley and talked to Google and there I was and so which one of these companies was your first kind of big win preemptive solution home account.com or refresh in I think they've all been interesting in their own way preemptive is actually still a going concern I'm still on the board of the company it's about 30 employees um refresh was was a little bit more of a sort of um I'd say advertised or very visible uh exit because LinkedIn purchased them you can now see the refresh technology in what LinkedIn calls its ice breakers uh in application their mobile app right now I'm not sure if it's on on their web or not what year was that refresh acquisition the acquisition was one year ago okay got it that right no two years ago I'm sorry two years ago and I left LinkedIn a year ago okay and what was the uh what was the acquisition price on that uh well obviously it was confidential but I think everybody was pretty happy what was the business model of refresh was it a SAS business or that was Absolut no that was absolutely a consumer application that had it was you know it fascinated me to pitch investors who didn't ask how you're going to make money and never at any point had a anybody asked us and nobody cared the goal was to absolutely get users and build technology and we raised enough money to do that how much we raised 10 million total okay and was that I assume you got into a series that price Dr that wasn't all note right no we started our first round was was uh two two on four pre which was a priced round we started priced and then the second round was priced also so just to everyone understands again Paul started out doing a equity round in other words he didn't do a kiss or a safe or one of these I notes that you're you're hearing about he got you know he raised $2 million and his valuation was $4 million pre-money uh $6 million post money so he sold what about a 30-year company Paul yeah yeah that's about right got it and were you the sole founder of a fresh or do you have Partners no I I had another founder Bob and Shaw okay and then what did you grow that to in terms of number of users where it be suddenly became so interesting to LinkedIn um you it was only a couple 100,000 users at the end of the day it was the first startup I've ever had though and you know you could think of it sort of this people search on steroids it basically found everything about you from GitHub LinkedIn Facebook P Pinterest Ford Square YouTube we hit all these networks and it was the first startup I never had to explain anybody I simply showed them their dossier and their jaw would usually drop open were you paying for access to the data pipelines of companies like return path and consumer insights product or clearbit or full contact or discover org or was it were were just scraping the web front structured data none of the above clearbit didn't even exist we tried full content honestly we didn't like the data and we built our own identity engine from scratch and and what was the technology what was it built on was it again just scraping unstructured data online um you know I would I'd be a little more careful to say it was sort of semi-structured you know to be fair um but it was a heck of a lot of work and yeah it was M it was real time so you walked in a coffee shop typed in someone names we looked it all up in real time and provided the results that's amazing so was refresh your you know get me inside of your quote money brain right was refresh your first big win or was the bills exit uh enough to like basically have you set free for life you know there's the exits that are the the car the house and the plane and I don't think I've had the plane yet so I'm still I'm still working you know there's no question about it now everybody got though on the refresh you raised 10 million bucks everyone made money on that right I believe so yeah yeah okay well I mean you would know because you would have been one of one's making money all right good so that one well and then we're working backwards so refresh was your most recent exit what was the bills.com exit right before that no it was a good five years before four years before okay but in terms of your company prior to refresh you were building home account.com correct that's correct okay so you built that for uh for uh how many years before you sold that to bills um I was there for the first year of the company and left the company went on for another two years or so so home account wasn't your company I was a I was a minor founder what's a minor founder mean well I didn't get 50% of the company I got you know more than the opt something out of the option pool and less than uh you know 50% yeah and for those folks that don't understand or theyve never heard the term option pool before describe to everyone what that is uh when you take investment you you do the calculation of how much Equity you just gave up and then the venture capitalist say oh no by the way you need to give up 10% more or 15% more that you're going to put aside for future employees and typically when you hire you know uh first employees you know all depending on on their their skill set what they're bringing to the table but it's typically um in the early days one to one to two to three four five% of the company and in the later days 0. 25.5 you know that sort of thing and those of you listening right now that are thinking about raising you want to watch out for that conversation because many of these Venture VCS or just investors will ask for you to set that up before they invest so it doesn't dilute their share that they're buying into was that your experience I I don't know if any would do it any other way they absolutely are not going to get deluded by the option pool that I've ever experienced and and you know 100% watch out for that but it's also pretty standard you know you expect it yeah okay let's fast forward to where we are today so these companies are going well you're doing well you you sell to LinkedIn you stay there for a while why' you leave the company you just get bored um you know I think it's almost the Silicon Valley cliche to say you sell your startup to a large company and you stay precisely one year and you go um and you know I'm not sure I ever never understood that but you know keep in mind when you come in through an acquisition nobody hired you nobody championed you to for this role and and that sort of thing so it is and you come in as part of a big group of people so it's it's a very different um you know situation there's nothing wrong with the situation that sort of thing but you know um I'm always looking for bigger and better opportunity and it was I was that was fine there but it was time to go did you have a one-year earnout as part of the deal yeah sure okay got so part of the part of the exit deal was an earnout that's really what kept you even a year that's why you didn't leave immediately yeah well I I don't know if I would have met left immediately anyway I remember my mind you know my thought process back then but yes definitely earnout was a factor in the in the decision okay so take us through today what is mailinator and how do you support yourself how does it make money so...