How Timedoctor CEO Robert Rawson grew Timedoctor to $35M revenue and 140K customers in 2024.

quick context this was recorded March 28th and 29th so a couple weeks ago at my live event SAS open.com we had a thousand software CEOs there if you missed it we hope to see at the next one September 5th and 6th in New York City SAS open.com but for now let's jump into the recording SEO has a 202% return on ad spend paid ads has 155% return on ad spend and email has 127 bootstrap companies grow faster than their Venture back counter s past 10 million [Music] AR hey folks if we haven't met yet my name is Nathan lka I launched and sold my first software company back in 2015 and went on to write a book about it which you guys made a Wall Street Journal bestseller purchasing over 30,000 copies thank you so much for that after the book I launched this show and went went on to create founder path.com I raised a large fund to do non-dilutive deals with B2B software Founders so far we've invested in over 400 software Founders totaling $150 million here in 2024 we're doing three to four New Deals per week so if you're looking for Capital and don't want to give up Equity go sign up at founder path.com for free to get your offer all right let's jump into the interview I want to start out my talk with a question because I always like to start out my talks with questions and usually these questions are something that I talk about around a couple other founders and this question the more that I thought about it the more that I realized it was actually a lot more complicated to answer than initially when I asked it and that question is how do we build billion dooll bootstrapped SAS companies how many of you guys are bootstrapped right now just to raise of hands perfect and how many are venture-backed okay cool you guys are going to be pissed off but don't worry about it it you're going to learn something from this as well so here's some interesting statistics bootstrap SAS medium growth rate is 28.5% from 3 to 20 million ARR that's pretty good another statistic that I saw was SAS median growth rate over 10 million ARR is 24% so growth goes down obviously a little bit as you're scaling the organization however if you split out venture-backed companies bootstrapped actually grows 6.7% faster than venture-backed companies Now isn't that very counterintuitive don't you usually have a bunch of people that are at conferences like this and say no no you need to raise money because that's going to allow you to grow faster but no bootstrap companies grow faster than their venture-backed counterparts past 10 million ARR they actually grow faster than their venture-backed counterparts there is a lot more failure rate on the smaller ones but once you get past that 10 million AR Mark bootstrap actually grows faster so this was really weird for me cuz I thought to myself okay so if we want to build more billion dooll bootstrap SAS companies we have to start to think differently because to be completely honest with you the information is different the conflicts are different the economics are are different the culture is different the business is different but in my opinion it is better and that's not just my opinion that's a fact so how do we build billion dooll bootstrapped SAS companies well my answer is that bootstrapped SAS needs a different Playbook than venture-backed companies we need a different methodology in order to be able to build those types of companies and I would also add on that bootstrapped companies learning from venture-backed companies is counterproductive to their overall growth so we've seen a lot of bootstrap companies we've seen lot of venture back companies that have talked over the last two days at SAS open but what I really wanted to do was Focus specifically on the 13 counterintuitive insights that I had bootstrapping an 8 figure sess now this is the slide to say please don't leave the room I know what I'm talking about my name is leam Martin I'm the co-founder and chief Innovation officer at time doctor which is just a really great way of saying I basically just get to play around with the research and development team all day long which I've been loving by the way over the last year I'm also the co-organizer of running remote which is the largest conference on remote work I also co-wrote the same titled book Running remote which became a Wall Street Journal bestseller last year teaching you everything you need to know on building and scaling remote teams and I'm really passionate on focusing on understanding how work works and my second passion is actually working with SAS businesses we have team members in 46 different countries all over the world and they all work seamlessly because we've understood remote work at scale and when I was working on this talk about a month ago I was actually in this little coffee shop in the Fifi islands does everyone know where the Fifi islands are one person okay it's in Thailand and I just realized in this moment as I was writing out this talk if I had raised Venture money I would have never been able to do the cool and fun stuff that I currently do now me and my co-founder because we can't just go off to you know thiefy Islands for 2 months um so it's also a lot more fun so first Insight that I have is if you can't measure it you can't manage it and probably a lot of people know this quote it comes from Peter Ducker but probably a lot of you don't know that Peter Ducker actually stole this from this guy Lord Kelvin and I actually like this one more if you can't measure it you can't improve it and I stole it from this guy David SC who actually did a really great talk at websummit last year about SAS metrics if you're interested in checking that one out it is amazing but in our organization everyone has a number and if you don't have a number you can't work here that's very simple so when you start working inside of time doctor you need to be able to have some type of quantifiable trackable goal to work towards and this is our version and again I'm going to give everyone access to this at the end if you're interested in downloading all of these reports so this is our top level executive dashboard we have leading indicators and we have lagging indicators we have three different colors which is red yellow and green green means everything's doing great don't worry about it maybe we should have actually set a more aggressive goal previous quarter yellow means maybe this person is not going to actually hit their target we should probably pay attention and red means there's a 50-50 shot of this person not hitting or this department not hitting their goals or not just from looking at this dashboard where were our problems for this quarter any ideas it is pqls mqls deals pipeline uh we totally miffed uh we totally whiffed this particular quarter on our improved targets so we work on that obviously and we spend 90% of our time on the Reds we spend 10% of our time on the yellows and we spend none of the time on the greens we basically just set a more aggressive Target for next year next one camels not unicorns reduced resources eliminates optionality when you have a ton of cash it's really easy to be able to work on crazy new things and go in directions that you wouldn't necessarily be interested in pursuing in the first place you kind of solve problems with money and we see a lot of this with a lot of venture-backed companies but I actually almost wanted to make this one of my counterintuitive insights which is make eida for everyone that's here right now who has some net profit some I in their books how many have like 5% keep your hands up 10% 20% 30% whoa you're buying the drinks okay thank you very much uh so in my opinion one of the things that my my financial adviser actually sat me down about six years ago and he said Liam you have 94.5% of your net worth in a private company that you can't sell you need to start taking some risk off the table and so we did and and that's very counter to grow at all costs reinvest everything you possibly can inside of this business and in my opinion that was the that was the right move to make which was start to make some profit and it completely protected us against a lot of problems that we had uh down the line I would say 10% is good is a rule of thumb minimum 20% is where I would really put the target at and 30% is if you think that there are going to be some rough Economic Times in the next couple quarters boost yourself up to 30% Eid to protect yourself in terms of that downside next one large Tams equals bad for bootstrapped companies again this is probably something that people are not going to like very much when I say this but these three books how many of you have read crossing the chasm Blitz scaling or scaling up almost everybody right and what they teach is that and I'm just using crossing the chasm as an example you should be focusing on your early Market segment not the big mainstream market so when we started time doctor we had a probably a billion doll total addressable market now postco with everyone using remote work our industry became a lot bigger it's probably worth 20 to 30 billion at this point and so we recognized that if we wanted to start the same business today we would never do it because we just don't have the resources to be able to do it and there are lots of competitors right now that are raising 50100 $200 million to be able to compete against us but they've got to overcome the entrenched brand that we've built which is very very difficult for them and we actually were terrified around 20121 because we had like seven companies that raised over $100 million to come directly after our market and so far none of them have really penetrated the market...