Episode 669 | 10 Years to Overnight Success: Bootstrapping to a Multi-Million Dollar Exit

Rob Walling:
It’s The Startups For the Rest of Us. I’m Rob Walling. This week, I talk with Rick Hymanson, the founder of detamoov, in an episode I like to call 10 years to overnight success. As you listen to this conversation, you’ll hear that Rick bootstrapped his prior company, Shugo, starting in 2008 and grew that company to over a million in ARR and exited in 2018, so a decade working on the same company, and then moved on to start detamoov, which is in the same space. It’s in payroll and HR, and it’s building software for folks who need assistance in those areas.
Rick became a listener of this very podcast in 2021, and his first thought when he was listening was, “Where was this years ago?” He realized this podcast could have saved him a lot of time and a lot of headache. Here he is in this episode to give back to you as someone who has had an exit and is on his second bootstrap startup and who is gaining traction with detamoov. We not only tell his story, but we especially focus on several learnings that he took from his experience building, growing and exiting Shugo.
Before we dive into that, my book, The SaaS Playbook, it’s almost out. I ran a Kickstarter. I have hardcover books here in my office, and I have several thousand sitting at a fulfillment center getting ready to be shipped out to Kickstarter backers. In addition, I have a final proof of the paperback copy that you can still get at saasplaybook.com. If you haven’t given it a look yet, head over there to learn more about what’s in the book and all the stuff that I’ve learned over the years, and I’ve tried to put it into a single tome. With that, let’s dive into my conversation with Rick Hymanson, founder of detamoov.
Rick Hymanson, welcome to Startups for the Rest of Us.

Rick Hymanson:
Cool. Excited to be here.

Rob Walling:
I like to think of your story as 10 years to overnight success because you started a company in, what, ’08, and you create an MVP in ’08, ’09, and then eventually you build it up to a million, more than a million in ARR as a SaaS founder and you sell it in 2018. Shugo was the name of your company, and it’s secure file transfer for payroll providers.
I want to jump to the end of the story and start there. January 2018, your deal finalizes, and you and your co-founders sell Shugo for, I’m just going to say, millions and millions of dollars. We’re not going to get into the purchase price here. I know there’s NDAs and such, but I want to find out where you were when the money hit that bank account, how you discovered looking on your phone or whatever it was and how that felt.

Rick Hymanson:
Yeah. I live in the northeast of the country. I just remember it was early January, and I think anticipation was my feeling of that day. Of course, a huge snowstorm came in, and I kept on going outside to shovel snow, and I kept on coming back in my front door and looking at my cell phone to see when the bank account was hit. I probably went inside and outside about three or four times before it hit. I literally came inside. I looked at my phone. I saw it. I texted my co-founder, and then I literally went back outside and shovel snow again.

Rob Walling:
Life continues it feels like, exactly. I had a same moment. I’ve talked about it. My kid was at cello camp, and I would step outside to sign a doc and then, hours later or whatever it was, you see this number in your bank account that you’re like, “Is that real?” That’s a lot of zeros, right? When that hit you, did you think, oh, my gosh, what am I going to do next? Some founders feel that feeling of loss like, “I’ve worked on something for a decade, and now it’s gone,” or was it more that feeling of, “The future is so bright. I got to wear shades. I can do whatever I want now?”

Rick Hymanson:
I don’t know if it was either. I had always planned that I was going to retire by the time I was 40, and this was after I was 40 years old. I think it was at first it was like, okay, I missed my timeline, as awful as that sounds, but I think it was also relief, too. I knew that I set myself up for my future for what I wanted to do moving forward. I hate to say this. I felt like I could then prioritize projects that I wanted to work on now and not have to focus on making sure that dollars are coming in for my family and their future and what we had to live on. I think that was just where my head was.

Rob Walling:
I call it freedom, purpose and relationships. These are these things I seek. Whether you make a million dollars in an exit or five, 10 million, you have some modicum of freedom at that point to work on what you want for different periods of time. I would say at 10 million, you’re probably for the rest of your life and, at 500,000, maybe you can take a year or whatever depending on where you live, five years if you’re a digital nomad, of course. That’s what you found, right? It’s life-changing because you can now work on whatever you want and you don’t need immediate revenue. Sometimes, I found the paradox of choice creeps in where you can do anything, “What do I decide to work on? How do I decide what to do next?”
Before we go back to the beginning of your story and recount the tale, how did you decide to start your next startup, which is detamoov? It’s spelled D-E-T-A-M-O-O-V. It’s detamoov.com, and the H1 is reinventing the way data moves. detamoov eliminates manual tasks with its no-code data exchange, connectivity and movement platform and, realistically, it’s around moving payroll data. It’s focused on something that your Shugo was also around payroll and HR stuff, so back to the question, it’s like you can work on anything next, you could have taken years off, we’re going to presume, what made you decide to start detamoov specifically?

Rick Hymanson:
Yeah. I mean I didn’t start it right away. We were acquired in 2018, and I spent the next two and a half years working at the acquiring company. I spent a bunch of time still in the industry, still working a little bit on the product that we had built for a while and I really didn’t move forward with detamoov until former customers called me. They felt like there was a big void in the industry still, and they thought that I was someone that could maybe take that on and take it head on. Originally, when they called me, Rob, they were talking about integrating payroll data to retirement vendors, and I thought it was so boring and I just dismissed it. I was like, “This sounds so awful,” but the more I kept thinking about it, I kept on thinking about Zapier and how a Zapier-like solution could be a huge hit in this payroll HR industry and how it could really reinvent the way that these guys work.
Again, it really wasn’t my original thought. It was prior customers coming to me and presenting problems that they had and how they felt that I could solve it. Again, it took me a few months to convince myself that now was the time. I always knew after Shugo was acquired that I would do another venture. I just didn’t know when or what. Honestly, I thought I was going to get out of the payroll industry because I’ve been in it for 20 years, but, again, opportunity knocked and I just felt like it was time.

Rob Walling:
If we flash back now to February of 2008, you started Shugo focused on providing secure data exchange for accountants and you equate it to like share file, that you thought, if it’s something that would help them during tax season, then you brought on a CTO with some equity. I call him your co-founder. Is that the relationship?

Rick Hymanson:
I always treated him like that. I mean, he wasn’t there when we originally started it, but he was so instrumental in what we did and our success that I think it’s a good term to describe him as.

Rob Walling:
You created an MVP over the next couple of years. That’s a long time, man. It’s like, what, it’s 2010, two years later, you finally get it in the hands of accountants and you quickly realize maybe this isn’t going to work. Walk us through that.

Rick Hymanson:
Yes. We had a couple of local accountants that we knew that would be our MVP users. We gave it to them. We put it in their hands, and we noticed a few things right away. Number one, they didn’t use the product whatsoever even though we thought that there was this great need that they had. It just didn’t happen. We saw no data movement whatsoever, and then in these conversations and interviews with them, we just found out that their accounting platforms they were using were including this type of functionality already. Again, we probably started in 2008, like you said. We didn’t have an MVP for a couple of years. We were probably too late, and we just realized we had to pivot.
I had an old mentor that used to tell me all the time, “Just, look, as an entrepreneur, test, test, test. Test different things. Try different things. That’s your job. See what sticks. Obviously, come up with ideas of what you think will work. Test them and see if they work.” Luckily, I was in the payroll industry and folks were like, “Rick, I think what you have we need.” We kind of stumbled upon it because they were struggling with securely exchanging data, and that ventured our foray into the industry that way.

Rob Walling:
This is super interesting. See, when we use the word pivot, there are 12 categories of pivoting. There’s a zoom in and a zoom out, and I know three of them. This feels to me, I may be making one up, but this is almost a positioning pivot where the product doesn’t sound like it had to change. The tech was there. It was just we’re not going to be for accountants, we’re going to be for payroll. Is that pretty accurate?

Rick Hymanson:
It’s almost a hundred percent accurate. That’s a great way to describe it, because the product did not change. I mean, we enhanced it as we grew based upon features and needs that the payroll industry had, but the original product didn’t change at all. The core structure of the system, the core features didn’t change one bit. It was more just a marketing positioning now because we were really trying to target payroll providers. I think, just to describe this, most people think, in the payroll world, ADP pay, checks. These big companies, you have Gusto, new providers out there, but there’s thousands of independent payroll providers across the country, from accountants to just small professional payroll companies, and that’s who we really targeted and worked with.

Rob Walling:
Was it pretty obvious from the start? You got that input, and it’s easy to get a payroll company to say, “Oh, we would use that.” What was it like getting your first, let’s say, five or 10 paying customers? Maybe it’s a long time ago, so I don’t need exact numbers, but do you remember how long it took to get those customers, and was it pretty obvious from the start like, “This has legs?”

Rick Hymanson:
I would say, once we got the first one or two, it’s such a tight-knit industry that the word just started spreading virally, so probably to go from one to two to 10, I’m going to guess it probably only took us about maybe two months at that point in time because people were just talking and a lot of folks had that same need. These payroll companies, a lot of these guys really do talk and value the opinions of each other especially because, back in that time, they were all geographically focused. Someone who was focused let’s just say in New York would trade stories with somebody in Minnesota because they didn’t fear they were competing against each other. That’s how I think it quickly grew. It grew like wildfire to the point where people just talked and word of mouth spread, and we grew pretty quickly from one to two customers to 10.

Rob Walling:
That’s amazing. I want to call out here you started this in essence in 2008. It’s 2013 when you stop consulting, when you go full-time on Shugo. That’s a five-year timeframe. That’s something I think that a lot of listeners and even today’s kind of expectation when I go on Indie Hackers or Hacker News or something, it’s like, oh, I’m full-time from the start or I’m full-time from six months in. I don’t know if it’s a this-is-how-we-did-it-in-the-old-days thing or if this is how I would do it again today, but I did the same thing. I was part-time nights and weekends for years on things that I was building, some of which worked and some of which didn’t. That’s a long time, and I think sometimes that’s just what you have to do, right? You just have to grind it to make this work.
During that five year time, were there moments where you were like, “This isn’t sustainable for me,” because I’m assuming you were working maybe 40 hours a week of consulting and then 20 hours a week on Shugo?

Rick Hymanson:
Yeah, and I think when I look at my lifetime, and it’s kind of weird to say that, but I had just started a family in 2008 as well. At the same time I got married in 2007, first child in 2008, second child in 2009, started the business in 2008. I think there was a lot of moments of doubt because I had two young kids in the first early years, revenue just starting to grow slightly. Obviously, it’s great when you’re making a couple of hundred thousand dollars consulting. Why would you give that up? I think part of our delay was probably, A, what was going on in my life. B, we were making such great money consulting, but I knew in the end I wouldn’t be happy even if I had a million dollars of consulting, working for every hour that I needed to get paid, it just wasn’t what I wanted.

Rob Walling:
Yep, I did the same thing. When I stopped consulting, I was making between 200 and $250,000 a year. We lived in an apartment in New Haven, Connecticut, and then Boston, so our expense wasn’t that much. We were moving around because my wife Sherry was just wrapping up her PhD. When I quit consulting for product income, my product income was just about a hundred grand a year, 105 grand. I took more than a 50% haircut, but I certainly wasn’t doing it for the money. I was doing it for the freedom and the purpose and owning my own thing. I knew that I was building equity. I knew that I was building for long-term something of my own, so that really resonates with me as well.
Before we talk, we’re going to talk, bounce to 2013, when you go full-time. At the end of 2013, you got up to almost a quarter million in ARR, but before that, I want to hear a little anecdote, something you told me offline about having to run out to your car to answer phone calls from… I’m assuming these are support requests or stuff. This is about scrappy. This is about doing what it takes to get it done. Talk me through the things you were doing.

Rick Hymanson:
Yeah. I was consulting and, like we said, the product was out there, we were growing the client base a little bit, and I would always have the support phone number direct to my cell phone. I’m fanatical. I was completely fanatical about getting back to folks. Even now, today, people email me and they’ll probably get a response within five minutes just because I want them to know that I’m looking at things. I just remember support calls would come in, and I’d be in the middle of my consulting work and I would literally, like you said, I would run either to the back of the building or back into my car and take those calls.
What made it even worse was, and I think I mentioned this to you, we made up this fake support rep, a guy named Dan, who was my best friend’s name, because we wanted to make the company look a little bit bigger than what we really were. I would even sometimes answer the phone as Dan or respond to emails as Dan. My co-founder, coincidentally, his name is Rob, he would do the same thing, but that was just the way it was. I mean, I would schedule demos at my lunch hour so that I could easily get demos done and not disrupt my day-to-day work of being a consultant.
Again, to your point, it was what did we need to do to grow this business so that we could stop consulting? Then I stopped consulting, but my partner Rob continued consulting because we knew we needed the income for both of us. My job was to build the business, the sales, the business development side while he continued to bring in other income consulting-wise for the company.

Rob Walling:
By 2013, you’re full-time on Shugo. You get up to 230K in ARR and, in 2014, momentum kicks in, and you end the year around 400K ARR, and Rob stops consulting. Finally, the two of you, this is after six years of working on it, are both full-time. What was that like, because this is a fascinating part in an entrepreneur’s journey, when you go from 40 hours a week day job plus 20-plus hours at night to suddenly you have no day job anymore?
I remember having this whole thing of like, “Do I still work 60 hours? Do I do 60 on the thing or do I just back off and have a real life now?” You know what I mean? It was like this. My head kind of exploded when I did that. What was that experience and that mindset shift like for you?

Rick Hymanson:
I think it was like I just knew that those hours were still there, but I can now focus on this venture. I didn’t have to worry about context switching all the time between consulting and the business. I don’t think the number of hours changed to be honest with you. I think we still worked those hours, but the satisfaction of just knowing that we were building this business, and I think you used the word building the equity of this company, was way more satisfying than what we ever experienced before.
I just remember being in the office at night sometimes till 7:30, 8:00 at night. Again, I had young kids at the time, too, and I’d still be doing this, and I loved it. It was just great. You’re there. You’re building this thing that you know is going to set your future up and you know were helping so many people that, for me, the satisfaction level just rose through the roof.

Rob Walling:
That’s something that I like to touch on periodically to remind folks is when you are building a SaaS company, and we’ll just take a generic SaaS revenue multiple once you’re above about a million, a million and a half that let’s just say you’ll get five X of your ARR, so let’s say you add 5K of MRR in any time period, in a month, in three months, whatever it takes, you multiply that by 12 to get ARR, so that’s 60K, multiply that by five based on our sales multiple, that’s $300,000 of net worth that you are adding to the company. If you’re 50/50, then you’re splitting that in essence. This all assumes an exit. It assumes a bunch of stuff, but that’s how I started thinking about it. At a certain point, I was like, whoa, this is $300,000 of net worth. I don’t know that any relative of mine really had that, aside from their house, in my entire upbringing. You know what I mean?
I didn’t come from that type of money, so I feel you when you say I’m building something real here. I’m building something that can fund my kids’ college funds, all of them. If I work another year of growing this, I can maybe never have to work again. We are in such a unique space I think for that, because e-commerce, if you build an e-commerce company up to a million or 2 million, and you can sell it for one X, two X, right? It’s net profit, and it’s like we have the luxury. What an incredible luxury that we can take advantage of as SaaS founders. Did that occur to you as you were building this business that it was that big?

Rick Hymanson:
It didn’t. I’ll be honest with you, it didn’t. The irony is, when I’m building this new venture, I think about it all the time and especially because at the beginning of this venture self-funded a lot of what we were doing. I kept on thinking to myself, “This little bit of an investment is going to be worth X in the future when we get to that point,” but at this point in time, with this first company, Shugo, I didn’t think about that at all. Again, I was laser focused on can I control my own destiny and get myself to my world of retirement which just meant can I do what I want to do moving forward and not have to feel like I have to do something?

Rob Walling:
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We’re about to get to where your acquisitions started in a minute, but I want to touch on one, maybe two more points before then. In 2014, not only did you end it with 400K in ARR, but you expanded your feature set. You moved from just a secure exchange platform to essentially a lightweight HR platform, so maybe a land and expand is what it feels like a little bit. What was behind that decision?

Rick Hymanson:
Yeah. There was a couple of different points. One was, I think, in the payroll industry at that point in time, I always felt like the employee experience was neglected. A lot of the payroll software vendors really focused on how do we process payroll and do that efficiently, but what about the employees? They’re the guys who are getting their pay stubs, who have to record their hours, who have to request time off. I felt like nobody was really tackling that.
The other thing was just, again, we were in constant communication with our customers. They felt that need, too, and none of their main software providers were offering those solutions, and so we thought this is an opportunity for us to jump in and provide something a little bit different. That’s when we built this mini HR system, lightweight HR system like you said, which basically the employee touched from the moment they were hired, they completed their new hire paperwork, their W-4s, their I-9s, everything else through there, to the moment they were terminated.
There was a huge neglect in the industry, so it was more of us seeing that, but really just constant communication with our customers in what was the void. Everything was built on that secure data exchange platform. That was the underlying piece. Because we had a lot of PII that we were transferring, we had a lot of PII that we were storing, so it was a natural fit from there.

Rob Walling:
The next question I’m going to ask you is a recurring segment on Startups for the Rest of Us, so much so we actually have a sting, an audio sting that my editor puts in after the fact. The question is, Rick, when did you know you had product-market fit?

Rick Hymanson:
Yeah. I think the biggest way was I was at an industry event, and we had built part of our solution for a specific payroll platform, and there’s probably like five or six major payroll platforms out there in the market, so we really had hit this one platform, and a customer of ours who was only using a specific piece of feature set that we had grabbed me aside and he pushed me into the corner. By the way, I’m really good friends with this guy today. He said, “I know what you’re doing for XYZ platform. I need you to do it for mine now.”
That was the moment I think I said to myself, crap, we’re onto something. We could get to X amount of customers with one payroll platform, but if we can get to that second payroll platform, we could double. If we get to the third payroll platform, we could triple, and I think, once that second platform came in and that moment happened, I think I knew.

Rob Walling:
That’s a cool story. Taking us back, at the end of ’14, you’re at 400K. At the end of 2015, you’re at 650K. At the end of 2016, you’re at 850K. I mean, you guys are really executing. These are nice growth numbers, and then, in 2017, you’re basically approached about an acquisition. I know there’s a story of how that came about. In 2018, January, it finally closed. Do you want to walk us through how the acquisition came about? By this time in 2017, you’re north of a million ARR, which is a sweet spot for SaaS. Talk us through that story.

Rick Hymanson:
Yeah. We kept on thinking who are the potential folks that could acquire us at some point. We knew that that was going to be our exit strategy from day one. We really focused a lot on partnerships, how could we partner with other vendors in the industry to really offer a better solution for our customers, because we had a lot of joint customers with a lot of our partners. This one partner, we had built a good relationship with to the point where we would go to industry conferences and we would see them, and the CEO and I would actually plan our travel around the same times and meet up in the airport secretly just to talk, catch up, see how things were going. Really, that’s how it all came about was we had a partnership. The CEO of that company and I became pretty close.
At that point, our acquirer, they had just been purchased by a private equity company, so they knew right away that they were going to add on to the platform that was acquired. I think they got acquired in July 2017. Literally, two days later, the CEO called me, “Rick, we haven’t talked in a month, and I want to tell you why. We were just acquired by a private equity firm. I want you to go meet them.” Ironically, I live in South Jersey right outside of Philadelphia, the private equity firm was right outside of Philadelphia. Literally, it was like a 30-minute ride for me out there to meet these guys. I just remember walking into that office the first day so nervous. I didn’t know what to expect. I’m this guy with these really smart PE guys all around me, didn’t know what to expect. That’s how it all started.

Rob Walling:
From first conversation until close of the deal, cash in your bank, how long did that take?

Rick Hymanson:
It took six months.

Rob Walling:
Oh, wow, that’s not too bad.

Rick Hymanson:
No.

Rob Walling:
That’s not bad at all. Yeah.

Rick Hymanson:
I thought we were going to finalize before December. There was one thing that held us up, and this is just my one thing that I am so laser focused on now. There was one question about IP, and it had to do with a company that we just had a conversation with about product features. I think the private equity guys were a little bit spooked that there could be some sort of IP question. We had to wait to get a sign off from that company that we had that conversation with, so it delayed us probably like two, three weeks. I just remember going, “If this screws out this deal, I am going to go crazy.”

Rob Walling:
Yeah, that’s the thing. When you say two or three weeks, it’s like, okay, two or three weeks or whatever, you are in an incredible pressure cooker, and you’re like, no, any day now, I can have millions of dollars in my bank account, and this (beep) thing is holding it up. I had one of those. It was only like a 48-hour delay, and it was something similar. It was a guy I wound up giving some money to do an IP assignment. It was a contractor. That wasn’t even with Drip. That was with HitTail. It was a much smaller deal, and that still drove me nuts.

Rick Hymanson:
Yeah. It was tough because, to your point, at this point in time, you’re eating, drinking, sleeping this deal. You’ve been through these where you’re going through hundreds and hundreds of pages of documents. Frankly, I don’t know about you, but I don’t understand 50 to 60% of what’s in those documents. I’m just relying on my attorney to guide me down the right path. Even though I try to read it, I just get confused and I don’t really understand what’s going on, but for two to three weeks it was at the back of my head like, “Could this derail what we have going on?” I knew the company we talked to, it was just conversations. There was nothing that really could be impactful. I mean, I understand it now, and that’s why I am so laser focused. Anybody we work with, we’re getting something signed just so that I have it right off the bat.

Rob Walling:
These are things you learn doing it multiple times. You were acquired. Congratulations. You said already that you worked there two and a half years, and then you decided you wanted to start detamoov really in 2021 and then launched it in 2022. You now have close to 70 customers. Are you above that now?

Rick Hymanson:
Yeah. We’re about 70 now. We’ve been adding a few each month. The beauty of our world is we add a customer and they process payroll for hundreds or thousands of clients around the country, so we have the opportunity to hit a lot of small businesses with our solution.

Rob Walling:
It’s a nice way to go. I want to ask you in a second, you’ve basically bootstrapped two businesses now, the one that you’ve already exited and then detamoov. I want to ask you about it. I want to ask you, you took TinySeed funding, kind of ask you why that decision because you obviously could have funded detamoov yourself, but, first, you mentioned specifically offline that Startups for the Rest of Us, you discovered it in 2021, and the quote I think I have from you is, “Where was this years ago?” First, I’m like how did you hear about it in 2021 of all years and, second, I guess, what mindset do you feel like this podcast brought to you, the lessons that it’s brought to you that have been helpful?

Rick Hymanson:
Yeah. It’s funny. I go for a run or a walk every day, and I was just getting bored of listening to music. I’m not a big podcast listener, but I just was like, “Let me just search Apple Podcasts for something like startup businesses,” and I really just stumbled upon it. I remember the first couple of episodes I was listening to, and I was like, “(beep) If I would’ve had this back in 2010 or 2011, those mistakes I’ve made would never have happened,” or they probably would’ve happened, but I probably would’ve learned from them a little bit quicker. I think about some of the guests you’ve had on. They talk about, look, when you’re a startup founder, especially if you’re a technical startup founder, getting into that sales side is difficult. You have to put yourself out there. That was me.
I think I mentioned to you before that I came at first thinking that it was going to be the field of dreams. If you build it, they will come. It doesn’t happen that way. I mean, it sounds great to be that, and you could have the greatest product in the world. That’s not normal. You have to create relationships and be out there. Really, that’s how I came about the podcast, stumbling upon it like that. Some of the lessons that I’ve taken from it is, you talked about, I’ve taken TinySeed funding this time. Why? Part of it was, hey, it’s great to have the funding, but having the mentors, the relationships to grow the community of folks that we have, that was my biggest piece of it here was I knew if I have a question I could ask you or somebody else who’s been through this or another founder who’s been through this, “What do they think?”
I think frankly, too, I enjoy helping the other founders in the TinySeed community. I think I’m in a little bit of a unique position where I’ve been through this once or twice and now I’m going through it again. I think, a lot of the folks, this is their first one. I think that’s been a unique opportunity for me personally, too, because I find that a lot satisfying on my end.

Rob Walling:
It gives you some purpose to be able to give back to folks who are a little bit behind you and then rely on folks who are a little bit ahead of you. That’s I think the best of any community, TinySeed or otherwise. In the spirit of that, of giving back to folks who are listening to this show who may not have built a SaaS company to a million, bootstrapped it and then sold it, you’re now on your way to doing it the second time, and there are differences between the first and second. One, there’s TinySeed you mentioned, of just having some funding and mentorship and all that. Another thing you called out to me, you’ve called it to me a couple of times, are utilizing existing relationships and how the first time maybe you didn’t do that as much, but these days it’s like you’re all about relationships. Would you call it your network? It’s like the people you know who respond. Yeah, talk us through your thought process there of why that’s so valuable to you now.

Rick Hymanson:
Yeah. I think it’s because, especially in the industry that I was in, people would not want to work with you unless they trusted you. I think you had to build trust in a lot of folks in order to have success, in order to grow your client base. In my world, again, at first, I think I was very shy and quiet, and I kind of mentioned that if-you-build-it-they-will-come mentality until I realized like, look, this doesn’t matter. I could have the greatest product in the world, but unless I meet people and talk to people, number one, they’re not going to trust me, and I think, number two, I’m not going to learn where’s the product good, where are their deficiencies, what do we need to improve on, so I just find so much value even day to day.
When we were acquired, I remember at the acquiring company, I said to myself after the first year there, “We’re too comfortable in the walls of this office,” meaning, we weren’t going out there and talking to enough people in my mind that I just felt like it’s such an important piece. I’m honest to a fault. When we goof, I tell people right away, “I screwed up. This is my fault. I take it.” When we have success, it’s great, but it’s because of people who’ve helped us along the way.

Rob Walling:
Something else that you mentioned to me was that one thing you’re doing different this time around is around product and feature requests and saying no. I think you said, “I almost enjoy, yeah, I almost get a little bit of pleasure in saying no these days.” Why? Where does that come from?

Rick Hymanson:
I think, especially if this is your first startup, you think you have to do everything to please everyone. I don’t know how many times, in the first time I went through this, people said to me, if you build X, Y, and Z, it’s going to help us so much. I use this example of this new venture in detamoov. I had a customer in, I guess, it was probably November of 2022, said to me, “If you build this feature, it is going to enable us to help so many companies. We’re going to have hundreds of clients that we put on detamoov to use the product.” I’ve heard that story before. In the past, I built it and then I learned that they never used it. This one around, and the way I do it now, Rob, is if someone really wants something really important, they think it’s huge, I will give them a proposal for us to build it, they’ll pay for it, but I will make it available for every other user of ours, and so basically you’re paying-

Rob Walling:
… and you own the IP.

Rick Hymanson:
I own the IP, so you’re paying to get on the roadmap basically. We just did this with this company back in November. We built this. This feature is going to be amazing. It’s going to solve so many needs, but zero customers on that feature.

Rob Walling:
But they paid for it?

Rick Hymanson:
They paid for it. In the past, I would’ve built the feature, spent development time and have lost out on other potential features or sales and marketing time I could have done to try to get more customers. I do have a lot of pleasure in saying no, but I think, when I hear the same thing four or five times, then I know it’s something we need to build.

Rob Walling:
Those are lessons from a veteran who has… You have battle scars of building features that nobody uses even though they told you they would. I’ve been there, too. Last lesson I think I want to call out and then we’ll wrap is something you mentioned already, which is intellectual property. The fact that it postponed your deal or held up your deal for two to three weeks I’d imagine these days, is it as simple as every employee and every contractor and anyone who works on your code or writes copy or whatever, you sign an IP ownership agreement?

Rick Hymanson:
It’s as simple as that. There’s probably some off-the-shelf that you can use, but I know I have one for every employee, any contractor that we utilize. It’s the first thing. We have to own the IP.

Rob Walling:
Because you don’t want to be there again.

Rick Hymanson:
Exactly, and then, look, as a SaaS-based software company, that’s the value of your business, like you said. I’ve been in this payroll world for 20 years. Payroll companies maybe get one to two X on their revenue, and a lot of that can be held back based upon performance and how many folks stay as part of the customer base. SaaS companies as you well know are completely, completely different, so IP is key.

Rob Walling:
Rick Hymanson, thanks so much for joining me, man. If folks want to keep up with what you’re working on, it’s detamoov.com. It’s D-E-T-A-M-O-O-V dot com, or they can find you on LinkedIn. I will link up your LinkedIn profile in the show notes. Thanks again for coming on the show.

Rick Hymanson:
Thanks, Rob. That was fun. Appreciate it.

Rob Walling:
Thanks to Rick for joining me, and thanks to you for joining me this week and every week on the show. If you keep listening to these episodes, I will keep recording them. This is Rob Walling signing off from episode 669.