In episode 597, Rob Walling chats with Ashley Baxter, the founder of With Jack. With Jack gives peace of mind and protection for UK freelancers through insurance, professional indemnity, public liability, contracts, legal expenses, etc.
We dig into the lessons Ashley learned from a failed insurance business she inherited from her father, how she used her freelance photography to fund With Jack in the early days, along with sharing many of the successes and failures she has had on her entrepreneurial journey.
Topics we cover:
[1:49] Tickets for MicroConf Remote 4.0 are now on sale
[2:55] Putting a tech twist on a regulated industry
[3:27] Improving the onboarding experience
[5:24] How Ashley came up with the name for her business, With Jack
[8:24] How she used the money from her freelance photography business to fund the early development costs for With Jack
[10:16] Lessons learned from taking over her father’s insurance business at 18
[15:20] The danger of depending on only one channel to run your business
[17:49] Ashley’s three pivotal business moments
[21:27] The concept of a vitamin vs. painkiller business
[27:10] The challenges of hiring an executive or admin assistant in a highly regulated industry
[28:42] How Ashley responded when a competitor stole her website design
[31:17] Why you shouldn’t be intimidated if a competitor gets funding
Links from the Show:
If you have questions about starting or scaling a software business that you’d like for us to cover, please submit your question for an upcoming episode. We’d love to hear from you.
With Jack gives peace of mind and protection for UK freelancers through insurance, professional indemnity, public liability contents, legal expenses, et cetera. Today, Ashley and I dig into her pretty incredible story about losing her father. She was relatively young and she took over his insurance business and it failed. It didn’t work out. But how she bounced back, started With Jack and the successes, failures, trials, and tribulations that have happened since then has been a pretty incredible journey.
She actually spoke about it at MicroConf Europe. I believe it was in 2019, so almost three years ago. She’s come so far since then, and is really still pushing the boulder up the hill and making progress.
Before we dive into that, tickets to MicroConf 4.0 are now on sale. During this event, we’re talking about all things money. We’ll be talking finance for bootstrap founders covering topics like pricing, budgeting, accounting, financing, and investing. This fully remote and virtual conference takes place May 3-5, 2022 from 11:00 AM to 12:30 PM daily. Register now at microconf.com and use promo code MC money. I hope you enjoy my conversation with Ashley Baxter.
Ashley Baxter, thanks for joining me on the show.
Ashley: Well, thanks for having me. It’s been so long since I last spoke to you.
Rob: I know. We met at MicroConf Europe 2019. For some odd reason that I’m still trying to figure out, I never had you on Startups For the Rest of Us. It kind of doesn’t make sense to me, because I think there are a lot of interesting things to talk about with your story building Jack. You call it Jack or With Jack?
Ashley: I call it With Jack.
Rob: Okay, so withjack.com. I would describe it as insurance for freelancers. But do you have a tech twist on it? I mean, you’re a MicroConfer. You’re an entrepreneur. When I think of insurance in the US, it’s like there are farmers, and it was like my uncle sold insurance and he wore a suit and he had an office in a strip mall. I don’t think of you as that. Can you talk to people about what the difference is and how you’re approaching this with a different mindset than perhaps it’s typically someone who’s brokering insurance?
Ashley: I think like originally, I really wanted to explore how to improve the whole onboarding experience of getting a call and buying insurance. I think one of the things we’ve done quite well that’s different to a lot of other providers is that we’re super niche. Instead of all of the big competitors that I’m up against, that are selling business insurance, they’re trying to do it for estate agents and freelancers as well, and accountants—everybody.
You end up getting products that you don’t understand how they work. You end up buying products that you never need because that experience has not been tailored for you. That’s kind of where I started. How can we make this a really pleasant onboarding experience, a really slick experience of getting a call, buying a policy, and doing it in a way that because it’s so laser-focused on creative freelancers, they’re getting exactly the products that they need?
Rob: Got it. So you understand that niche so well. I said withjack.com, it’s with jack.co.uk. I apologize. Your h1 is “Be a confident freelancer. We protect you and yours on the high seas of freelancing.” If you haven’t seen this site before, listener, you should check it out. The design is on point and it does not feel like traditional insurance. Are you a designer? Did you design it yourself?
Ashley: I’m not a designer, but I really love good design and technology. That’s the whole reason that I didn’t get into insurance for that reason. The whole reason that I ended up sticking around in insurance was because I felt like at that time—things are much better now—insurers were not paying any attention to good design and current technology.
I’m not a designer, but I really appreciate good design. I worked with Scott Rayleigh, who I don’t think freelances anymore. I think he is in full-time employment now, but he was my designer. So I do have an appreciation for good design.
Rob: Where does the name come from? With Jack.
Ashley: I named the business after my dad, because he was the whole reason that I got into insurance. When I was 18 years old, I was at college studying music. I wanted to be a famous drummer. My dad was running an insurance business solely online, focusing specifically on landlords.
He passed away when I was 18. And because I was the only person in the family with some experience building websites and deploying them—because I’d done so far a bunch of bands that I played in—it kind of fell on me to keep my dad’s business going. He was never able to make a success of his business. I wanted to take everything that I learned from that and put it into my own thing, which was With Jack.
When I was coming up with a name—I’m terrible at naming things, actually. I knew that I wanted it to have a nod back to my dad. So in the end, I just ended up naming it after him and the character that you see on the website, that is of course based on my dad.
Rob: That’s super cool. Wow. I do want to dig in. You sent me a really nice email with more to that story of basically how you weren’t able to make his business work. You used the phrase, you ran it into the ground. That feels a little harsh to me but I do want to cover that.
Before we do, I think there are folks listening that might be curious what stage you are with With Jack. I have to say two withs, but oftentimes founders come on, and few of them will share MRR, but a lot of them will say, well, I’m profitable, three people on a team or whatever, and we’re profitable. But what can you share to give us an idea of where you are?
Ashley: Yes. I feel like I’m not 100% happy with where I am with With Jack. I feel like it could be a lot further along. There are a lot of positive signs there. I’m fully supporting myself. I’ve just brought on somebody to work with me one day a week for the first time. We are charging ahead towards a really cool milestone with a business where within a few months, we’ll have written £1 million of premium. We’re growing every month so we’re heading in the right direction.
I am able to live this life that I like. I have this cool little office that I’m in right now. I have my strength coach that helps me lift heavy weights, and I have my season ticket at a football stadium that I love. So I really liked the life that I’ve built for myself but I still think With Jack should be a lot further ahead, especially considering the length of time that I’ve been in business now. But mostly considering how much work I put into this business, I feel like I’ve not yet seen that return on investment.
Rob: I think most entrepreneurs would echo that statement of I’m happy with my business but I wish it was further along. It feels like it should be further along. When you say you’ve put a lot of work into it, how long have you been full-time on it?
Ashley: I actually think it might have been just before I spoke at MicroConf so I was shooting weddings because I used to be a freelance photographer. That’s how I funded a lot of the tech side of things—the website, the core system, all that stuff was funded through doing photography. I’m pretty sure—I might be wrong—it was either 2019 or 2018 that I shot my last wedding. I just felt like I’d lost a lot of interest in shooting weddings.
It felt very not fair to take people’s money when my heart wasn’t in it anymore. I found it a bit soul-destroying to be working all week on building With Jack and then messing with weekends because that’s when people get married. So yeah, pretty sure it was 2018 or 2019 that I went full-time on With Jack. With that said, let’s just discount 2020 from everything since that […] during that period.
Rob: Speaking of your strength coach, I think I saw a picture of you on social media throwing, Were you deadlifting? You were throwing a lot of weight. What was that? You hit a PR (personal best) right?
Ashley: Yeah. It was 150 kilograms.
Rob: 330 pounds, 2.2 times, 330 pounds. Holy moly. It’s like twice what I weigh. My gosh.
Ashley: Is it really? That’s so cool. I like being strong. This is kind of a new thing that I got into because of lockdown and I really missed not being around a barbell because gyms were all locked down here in the UK. Then when they opened back up, I was like, I missed the barbell so much, I’m going to go hard on that barbell. Yeah, I really got into deadlifts and back squats and all that fun stuff.
Rob: So incredible. I’ll just say there were a lot of plates on that bar. When I saw it, I was like, oh, I’m impressed. So let’s circle back. You had mentioned you are 18 years old, your dad passes away, which, obviously, must have just rocked you and your whole family. I guess why was it you that stepped in to take over this business? I don’t know if you have siblings or if your mom or who else was around to do that, but it just feels like at 18, I barely knew which way was up. I was just doing stupid […] on the weekends, and I couldn’t have taken over a business.
Ashley: I think there are two reasons. I do have a sister and she’s very successful now. She runs a fashion business and that’s her thing, fashion. There was no crossover whatsoever with my dad stuff. My mom, she is just not techie in the slightest, so she wouldn’t have known what to do. That’s kind of where it came to me and the conversation that I had with my dad, because when he was ill. His heart was working 7%. So it was pretty obvious where things were heading.
Him and I had that conversation where he just said to me look after the family, and I did that. Like I said, I had a little bit of experience with building websites, just because I’d played in bands from the age of 14. I feel like that’s how a lot of people get into building websites as they start off making them for their bands or their friends’ bands.
I had a little bit of knowledge in that respect, but absolutely zero understanding of insurance, the audience that my dad was serving, which was landlords, so I had to figure all of that stuff out. Obviously, I didn’t do that good of a job because the business didn’t grow. It just gradually went down.
Rob: Which is a bummer. Was he an insurance broker as well?
Ashley: Actually no, he wasn’t. The best way to describe him was, I suppose with our terminology, would be more like an affiliate. I went on and did the whole thing like I’ve committed this whole insurance game. I’m fully authorized and approved by the FCA and all of that boarding, regulatory stuff.
My dad never went down that route. He basically built a bunch of websites and was so good at SEO. He got four, five, or six of them ranking on the first page of Google for his chosen keywords. Then people were coming on to the website, clicking a link and they were getting sent to the insurer or that he was referring them to.
Rob: Lead gen. Okay.
Ashley: Yeah, he did an amazing job of that, just purely through Google rankings. But no, he wasn’t a broker.
RobL Got it. So that’s the difference. Because I was going to say, today, you are making a brokerage work. You’re successful at this. I was going to ask what was the difference there, but it sounds like his superpower was SEO.
I ask people who have often said on this program, like putting a website or business on autopilot. Usually over time, it will decline, it’s hard to keep it stable or growing, especially with Google involved, because Google just tends to do updates. They tend to just not delist but derank things over time. This stuff just kind of falls off if you don’t maintain the leads, so there was no recurring revenue, right? It was just a lead is worth X amount. Then if you don’t have the same amount of leads next month, then it’s declining.
Ashley: Yeah, and the worst part was, his timing couldn’t have been worse, because when he passed away, two massive changes happened in that industry. One was that these comparison websites popped up. I don’t know if you get them in the US, but over here, we’ve got GoCompare, confused.com, all that stuff, they popped up. Suddenly, people were flocking to them to buy their insurance. They weren’t using Google as much. That was one thing, one big change that we saw.
It was difficult for us to get on those websites because what they do is they show you a list of providers. People are just going to choose the cheapest, so that encourages this behavior amongst providers where they are driving the price of their insurance rate down. So you’d only really make money if you bank on that customer sticking with you for 3–4 years. That’s fine for those companies with big cash flow but it wasn’t fine for us, considering we were a small, independent, family-owned business and didn’t get that cutting revenue.
The second big sucky change was that just as he passed away, Google completely changed their ranking algorithm. They went from ranking based on factors like keywords to social factors, content like blogs and things, the stuff that my dad had never focused on. Not only that, but he did do a little bit of keyword stuffing, and we got completely blacklisted.
It was a really hard time to come into the business because we went from that was how he’d made his money, it was a big success and worked for him, to him obviously passing away, and me stepping in having to figure all this stuff out. Then having our websites completely removed from the one place that actually brought us business. I think the big lesson there that we can all take away is to never depend on one channel to run your business.
Rob: Yup, the diversity of incoming leads is a huge issue. It’s platform risk, in a sense, right? We talk about that a lot. These days, you can build a pretty amazing add-on or an App Store app (for lack of a better term) on Shopify, on Heroku, or WordPress. There are all these ecosystems that you can build in. You can get traction really quickly because they already have a bunch of traffic to their app stores or to their add-on repositories.
You get search traffic. Usually, their SEO is not that hard because we’re not as sophisticated as Google and you can rank and then you can build pretty, pretty interesting businesses pretty quickly. The rub comes when you have any modicum of success—I mean, get to half a million to a million a year—you start crossing that line, the provider that the main platform takes notice, and then they come a knockin ‘.
I’ve seen it happen to at least one business that was doing several million a year on a platform just got destroyed. It sucks and it feels like it’s not fair, but it’s their platform. They can do what they want. Google is the same way. How many businesses have you and I seen first or second hand just get destroyed because all of their reliance was on Google? It’s unfortunately a common story.
Ashley: It’s certainly—on the positive side—something that I’ve been able to take into my own businesses to make sure that I’m not depending on that is one channel. It is one channel and we do really well from it, but there has to be others, too.
Rob: That’s how all the businesses I built always had multiples, except for the very, very smallest ones. Usually, I remember even in the days when I was focusing really hard on Drip and wanting to rank for email service provider, email service software, whatever. It was like 10% of our leads, maybe 10%–15%. There was a variety of it. Now, I would have loved for that to be better. It would just happen to be really competitive when you’re competing with MailChimp, AWeber, and Infusionsoft.
It’s a trip, because if I was in your shoes, and I inherited this business for my dad, then I couldn’t make it work, I would personally probably run as far away from insurance as I could.
But you now got your broker’s license; you leaned into it. What was that transition like? Did you ever have that feeling? Like that rage quit, table flip feeling of I’m going to get the hell out of here and go do something else that has nothing to do with this.
Ashley: No, because I really like the challenge. I feel like I’ve had three pretty pivotal moments in my career in insurance. The first is purely circumstantial. It was the circumstances that happened to me. I found myself in insurance because my dad passed away and I was left with his business.
The second transitional moment came when I realized I wanted to stick around and give this industry a good shot, because I had developed an interest in design and technology, as I’ve mentioned. Back then, insurers were just doing a terrible job with bringing their processes up to date, up to the current age. I thought I wanted to have a go and see if I can do that, if I can improve the onboarding. We were using software that was 20 years old, like proper legacy software.
That was the second moment, realizing okay, I found something. I’m not interested in insurance at this point, but I found something about this career that I quite enjoy and I want to see if there’s anything more to that. That’s when I started to learn to code more back-end stuff and work with designers.
Then the third pivotal moment, which is where I’m at right now, I would say, and hopefully there are more pivotal moments to come, it’s when I realized that, sure, it’s great to build things that look and function nice. But let’s be honest. Absolutely nobody in the world is walking around today going, wouldn’t it be great if I could shave 60 seconds off buying insurance, like if it could take me 30 seconds instead of 90 seconds. Nobody is walking around thinking that.
It wasn’t really a big problem that I was trying to solve just by making things look nicer and improving the onboarding. Sure, the conversion rate will increase, people will have a nicer time buying insurance, maybe they’ll get the products that they actually need and all that lovely stuff. But my audience (freelancers) are walking around worrying about when their clients are going to pay them, or worrying about having so much work on their plate, are they going to get that deadline done, or having a difficult conversation with a client, knowing that’s placed with insurance where I want to create products or sell products that actually solve these types of problems.
So that’s kind of been how I got into insurance. That’s what kept me in insurance, the interest in design and tech. Now, I’m really excited about actually coming out from […] a problem perspective. What is it that freelancers want to achieve? What insurance products can we build to help them get to that desired state?
Rob: I bet you’re thinking about it in such a unique way, because no mainstream broker who serves a bunch of people has any idea, who serves a bunch of niches or just as a broad horizontal offering is going to be thinking about it at that level that you are.
Ashley: So far, I haven’t really seen people think about it at that level. Just today, I saw another competitor pop up, and I had a look at their website. Again, it’s just all the same stuff—buy insurance in 60 seconds, manage your policy online, all of that stuff. Like I said, it’s nice, it’s going to help you, but that’s not why people are buying insurance.
We have to understand the reasons why they’re getting a policy and for us, that’s why the whole ethos With Jack is to help you be a confident freelancer. Believe it or not, I wholeheartedly believe that insurance can help you be a confident freelancer.
Rob: For sure. It’s interesting. Something we talked a little bit offline, but I was going to bring up is this concept of a vitamin versus an aspirin. Vitamin businesses are, we all know, we should take our vitamins, we know we should eat our spinach, but if there’s no impetus or a push to do it, I don’t know, maybe I’m not going to buy insurance this month, because nothing bad happened. There’s just nothing to push me to do it versus aspirin is like, oh my gosh, my hair’s on fire.
I need a way to record a podcast, so I’m going to sign up for SquadCast because it’s a desperate burning need that I have today. You’re in a vitamin business and that’s tough. How have you thought about that? Because I imagine that might be part of what you talked about, it’s not where you wanted to be, the business isn’t where you want it to be. Have you ever thought that well, maybe that’s just the way these go because they are vitamins in essence.
Ashley: Yeah, 100%. What I’ve noticed is that insurance, in my opinion, is the best thing in the world when it works, but only 5% of our customers actually make a claim. You’ve got 95% of people who are buying a product that on a practical level they’ll never have to use.
I do believe that every freelancer benefits on an emotional aspirational level, because like I said, it helps you be a competent freelancer because you can go into projects and be a bit more confrontational with clients who are maybe going to try to take advantage of you because you know that if they do ever take things a little bit farther, you have a team of people in the background ready to help you. But let’s be honest, most people don’t ever think they’ll find themselves in a situation where they need to use their insurance, and 95% of them are […].
We know that there are two million freelancers in the UK so it’s a decent-sized market. I would guess that 75% of them are uninsured. The difficulty that I’ve had is not just selling a product, but it’s been trying to educate the market about why they need this product. That’s the bet that I’m finding really difficult. I agree with you. I think that’s why I’m not getting the growth that I want.
The way that I’m kind of thinking about things right now is, like I said, we’ve got a bunch of customers that insurance is great when it works, but it only works when a fairly specific set of circumstances happen, which is either a threat of legal action, or somebody trying to recover money from you.
We know that there are all of these other freelancers experiencing definite problems that are falling through the cracks. That for me, is the missing piece of the puzzle. I need to figure out what to create—might be insurance related, might not be—or what to build that helps the freelancers that are falling through the cracks. There’s 100% a missing piece of the puzzle with my business right now. I’m trying to figure out what that is. I haven’t figured it out yet but I think I will. I think once I do, you and I will be having a very different conversation.
Rob: Do you think this ties into you becoming a delegated authority? You mentioned this to me in an email. I had no idea what that meant but you said delegated authority means the insurers authorized me to quote and bind on their behalf, which then means I can build the tech to do it for me as opposed to sitting at a computer all hours of the day.
You were saying you do “sales renewals, midterm adjustments, cancel it.” You do all this busy work. It’s admin work that really you as the founder of this business shouldn’t be doing. Does it feel like that’s going to be a turning point in that could be a turning point in the business?
Ashley: Yes, it does for a variety of reasons. Firstly with a delegated authority I can actually create my own products. That’s going to be really exciting. Instead of selling somebody else’s, I can identify things that we can add in there that will serve our customers even better, so I’m excited about that. But also having the technology to do everything for me, instead of me sitting at a computer at all hours of the day processing quotes, sending out renewals, binding people’s policies when they bought one.
It will free up my time to then work on other areas of the business that will bring more value to people. But also, it will just free up my mind, because I’m so tired of sitting there doing this work. I feel like I’m not getting an opportunity to let my mind go to places where I’m thinking about new products or new services. I’m finding, as I’ve mentioned before, that missing piece of the puzzle. I feel like I’m unable to figure out what that is right now because I’m just constantly consumed by doing all of that manual work.
When I get my delegated authority, and I have the technology to do it for me, that is going to free up my time. It’s going to free up, give me some more mental freedom and space to come up with new products and services to bring more value. I do think it’s a really important step for the business.
However, one thing I worry about is—Rob, you have come across these founders in the past, and I’ve come across them too—we need to build a product, to build an app. They have a handful of users and you’re asking them how they’re getting on. They say, yeah, things are fine. I’m just in the middle of refactoring the app so that it can scale just in case I miraculously get 20,000 new users overnight, or they focus on building a massive new feature based on the request of one non-paying user, and you’re from the outside looking in, look at that and think this is not right.
That’s not what you should be doing. I do worry that I sound a bit like those founders when I’m like, as soon as I get my delegated authority, everything will fall into place. But I do think it’s important just to free up time, and help me get my life back and be able to start working on the important parts of the business that are going to help me deliver more value for freelancers.
Rob: Do you have anyone? You said you have a customer support person, I believe, helping you part time. It sounds like the stuff you’re doing could potentially, in the short term, be delegated to an admin assistant, an executive assistant, someone like that. Do they have to have a broker’s license to do what you’re doing?
Ashley: They don’t have to have a license, but they do have to adhere to some regulatory stuff. There’s just a certain amount of CPD and stuff that they have to do. But yeah, that’s going to help me enormously. I don’t know why I haven’t done it sooner. I’ve just been very resistant. I’m a bit of a control freak. You probably speak to a lot of founders like that, where you just want to do things yourself because you’re capable of it and you’re worried that somebody else doesn’t do as good a job as you.
At the same time, this is a really good stop gap between me getting the delegated authority. I can still at least outsource a little bit, block off eight hours on my calendar that day to focus on working on the business. We haven’t quite got to that stage yet because it’s early days, and she’s just learning the ropes. I reckon that this will pay off in another month or so. I can honestly see myself getting to the stage where I’m like, why did I not do that sooner? Or even asking her to do more hours. I’m really excited about that. We’ll see where it goes.
Rob: Yeah, very common, right? Hard to let it go. They’re not going to do it to get a job as I do. It’s the kind of mental refrain. Then usually it’s why didn’t I do that a year earlier or more.
I kind of want to wrap us up with this story you were telling me offline about basically having a competitor steal all your stuff. I’ll just leave it at that vague description, and then you can share whatever you feel comfortable sharing.
The reason I want to cover this is this has happened to me multiple times. This happens to a lot of founders. I’ve had probably two or three conversations with TinySeed founders in the last probably nine months, where they’re like, this competitor is stealing all our crap and it’s really bothering me. Usually as we dig into it, it’s like, yeah, they don’t know what they’re doing so they’re copying you because they don’t know what is making you successful.
They think copying your font or your headline, or your naming, or your features, or whatever is what it is. But it’s not, it’s the magic that you have. Usually that’s the case—not always. Talk us through what happened. How did that make you feel? I’m sure it made you feel like crap, and then how it turned out.
Ashley: It’s happened a couple of times, actually. But the sore one was the first time it happened, because I think the first time it happens is a bit of a shock. I was the first provider on the market to focus specifically on freelancers. That obviously doesn’t mean that I’m the only one that should be in that space. Other people are going to come in but I was the first to do it.
I remember my designers came to me, and obviously you looked at With Jack’s website, and it’s got a very distinctive design. They came to me and they were like, just a heads up, a company approached us. They said that they’re a competitor to you, and that they want something similar to you. We just thought you should know.
I took a note of it and I knew how hard it had been for me to start this business with all of the regulatory and compliance stuff, so I wasn’t too worried at the time. Then their name popped up again when I was having a chat with the insurer that I work with. I realized, oh okay, I really have to look into these people a bit more. Then I looked into it just to see if I’d ever had any previous dealings with them, put their name into my inbox, and I popped an email from them a few years before being like, hey, really interested in what you’re doing, we’d love to pick your brain sometime.
I just realized that at that point, they hadn’t launched so I didn’t actually see the visual aspects of the website. But when it launched, there were definitely a lot of similarities. There’s the whole, nautical vibe going on, too. Same insurer, had tried to work with the same designers, same demographic, going after the same market, a lot of similarities with the design element of it, too.
What really, really scared me at the time was that they had funding. I just thought, well, this is it. This is it for me, because I can’t compete with that. They’ve got more resources, bigger team. Honestly, I was terrified about the whole experience. I remember finding out about it when I was on holiday as well. It ruined the holiday because I couldn’t stop thinking about it.
Fast forward, and however many years later, and honestly, it ended up not impacting my business in the slightest. I know that they actually had to do a bit of a fire sale. Just as an aside, I’m not fully convinced yet that funded insurtechs, as they’re called, is the route to go because (obviously) with funding, you need to get a lot of traction to show that you warrant that next round of funding.
With insurance, it’s such a slow burner, as we’ve established with the way that my business has been growing. Even if you build the best company, the slickest onboarding, the nicest design, whatever, people do not feel that way about insurance that they’ll cancel their current provider and come flocking to whoever the new kid on the block is.
So yeah, it didn’t end up working out for them. They had to sell it. It’s a very similar story with the next startup that did a somewhat similar thing, too. It’s quite cool that I feel like yeah, me, the one person bootstrapped business is still here to tell the tale. We really shouldn’t be afraid of all these big scary VC-backed businesses that try to come into our turf.
Rob: It’s often the case, where mostly bootstrapped startups who are quite capital-efficient, executing, getting customers, doing all the blocking and tackling the SEO, the content, the cold outreach, closing sales. They always want to go faster, but then they see the big funded competitor, and they think, oh, no, this is a huge deal.
More often than not, that funded competitor is less knowledgeable of the space, less experienced, and just has a bucket of money. Sometimes that bucket is half a million, sometimes it’s $2–$3 million, unless they are prior founders or have some unique insight into the market. It’s often kind of dumb money, for lack of a better term. Other people will say, smart money is from a VC or an angel investor who knows what they’re doing, who’s been in startups, and dumb money is from a dentist or a doctor who’s just writing some money.
That’s not what I mean, here. I mean, it’s just money that’s been pushed into a market in a way that’s not being deployed as surgically. Because if you, Ashley Baxter, had half a million dollars in funding versus no name clown who raises half a million dollars and doesn’t know insurance. I’ll say I’m no name clown. I could raise half a million dollars and say, I’m going to compete with Ashley. It would be really hard for me to do that because I don’t have the years of experience that you do and I don’t have the patience.
A lot of capital doesn’t have patience, right? That’s the difference between how I invest in TinySeed invest, it’s very longer term. It’s not like, oh, we need to get our money out and have an IPO and this and that, and you need to hit these growth targets for us or we’re not going to fund anymore. That’s often what happens.
At one point, with Drip, we had a competitor raise buckets of money. I remember telling my co-founder, well, let’s set an alarm for a calendar reminder for 18 months down the line and see if we can buy their assets when they close up shop. You know what, I was kind of joking and it happened. They ran out of money. They hired a bunch of people. They tried to build what we had plus some stuff, and it just didn’t resonate fast enough. They were trying to artificially accelerate growth.
Again, it’s not all cases. There are cases when someone is actually quite smart. They know a space and they raise money and then they’re really dangerous. Then it’s like you being funded in a space. Let’s say I raised $2 million today to start another ASP. As much as I don’t want to do that, I would be dangerous because I’ve been there. I’m a smart actor in that space.
Ashley: I also think if you raise that kind of money, though you also have different intentions to what the bootstrap solo founder has. I said there are two million freelancers in the market. If you raise the amount of capital that these companies are raising, you’re clearly making a statement to investors. We’re going after the big chunk of that two million.
I have it in my head, I want to get to 10,000 customers. I just feel like that’s a really nice, manageable number. That’s what I need to stay in business. It’s very different to what they need to stay in business. But it’s happened so often now. It always has the same outcome. They either have to sell or have to shut down.
Even today, I noticed that quote come through on my website. You can sometimes tell people just put in false information because they’re playing around with the UX but they use their real email address. I put in their domain name to have a look. It was obviously a new startup that’s moving into my space, and they’re having a little look around, and that’s fine. In the past, I would have freaked out. And I’m just like, cool. Welcome to the space. Good luck.
Rob: I got all the bumps and bruises. I know what it takes to stay alive here, when many have not made it. Ashley, thanks so much for joining me today. Your twitter handle is @iamashley, and of course withjack.co.uk if folks want to see what you’re working on.
Ashley: Thanks so much for having me, Rob. It was really good to chat. I hope that next time we catch up, I figured out what that missing piece of the puzzle is.
Rob: I look forward to the day. It’s going to be awesome. Thanks again to Ashley for coming on the show. And thank you for joining me this week and every week as we continue to produce the show for you. If you keep listening, we will keep shipping these episodes. I look forward to being back in your ears again next Tuesday morning.