In this episode of Startups For The Rest Of US, Rob interview Laura Roeder, Founder and CEO of MeetEdgar. They talk about her fast success with growing MeetEdgar, dealing with platform risks, and the humbling experience with her second venture.
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Rob: In this episode of Startups For The Rest Of Us, I talked with Laura Roeder about here uncanny ability to power through roadblocks. This is Startups for the Rest of Us Episode 451.
Welcome to Startups For The Rest Of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at building, launching, and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Rob and today with Laura Roeder, I’m here to share our experiences to help you avoid the same mistakes we’ve made.
On this show, we talk about building startups in an organic, sustainable fashion that allows you to build a better life for yourself. Every once in a while, we’ll sit down with an experienced, knowledgeable, founder who has overcome seemingly insurmountable odds, and we learn from that founder. We learn from their experience of growing their startup, of facing the roadblocks and turning them into speedbumps. Today is no exception.
I’ve been a longtime fan of Laura Roeder since she started Edgar several years ago. That’s at meetedgar.com. It’s social media management software. Laura grew Edgar to seven figures of annual revenue within the first 12 months. It was one of the fastest bootstrap SaaS growth trajectories I had ever heard of.
But in 2017, 2018, Facebook and Twitter, some of the underlying platforms that Edgar relies on really started to pull some shenanigans with their APIs. Edgar ran into some pretty intense turbulence. We dig into that. I had not heard her talk about this experience on a podcast before. Frankly, I wanted to hear what it was like in the inside and how that felt. She talks about the ups and downs of it in a very honest, raw, and transparent way. I really appreciate that about the interview today.
The other thing we dig into is she went and started another SaaS app, raised an angel round, and rented some pretty major roadblocks with that early on. It’s fascinating to hear, essentially a third time founder, looking around and realizing, “Wow, this may not work like my other companies did. This may not go as well as my prior startups.” You can hear her thought process in what it was like to experience that in today’s interview. With that, let’s dive in.
Laura, thank you so much for joining me on the show today.
Laura: Thank you. I’m excited to be here even though we’re going to talk about some tough topics. I’m a little nervous.
Rob: I know. We were talking before we got on this call that just like entrepreneurship, is about bumps and bruises; sometimes it’s a speedbump, sometimes it’s a roadblock, sometimes it’s hard to tell the difference. You’ve certainly had your share with the past few years.
Laura: Yes. I’ve had speedbumps and roadblocks.
Rob: Yeah, that’s tough. I wanted to start by talking a little bit about Edgar, which is frankly, a widely successful app. I remember that when you launched, I believe, you made it to seven figures within 12 months of launch. It was ridiculous in a great way. I don’t know that I had ever seen a bootstrapped SaaS app hit that level of success that quickly. What do you attribute much of that to?
Laura: So much of it is just right place, right time, right brand. When we launched, we were really innovative in the market. Social media, scheduling tools, had been created, but they were literally just like, “Type your tweet in this tool and then hit send.” That was kind of all they did. The innovations that we created within the Edgar when we launched, it was just very noteworthy, like, “Wow, this is a tool that can do a lot more than any of the other tools can.”
Rob: Yup. That makes sense. You had this amazing success early on. You say, “Right place at the right time,” but I remember you also had worked your ass off to build an audience in that space. You would set yourself up for success. You weren’t just blindly going in and doing this. I think there’s a little bit of nature and some nurture in that one. Two factors came in—multiple factors. I think the thing that I want to chat with you today about is over the years that you’ve been running Edgar, there have been just crazy API changes and partner changes—Facebook and Twitter. I don’t know if other APIs have changed as well. I got the impression from the outside that has to be tough on your business. Has it? Talk me through that.
Laura: Yeah, 2018 has been our toughest year at MeetEdgar. We’ve got hit with a lot of changes at once. Some of them were in 2017 as well. The biggest one was Twitter not allowing repeating content. A big angle of what we do differently at Edgar is we allow you to keep a library of your content that gets repurposed. That’s a big reason why a lot of people use Edgar. All of a sudden, Twitter came out with this rule that said, “If you have the exact same tweet, if you sent it out more than once, that is against our terms of service.” There was no nuance to this rule. If you send out something that says, “Good morning.” Then you sent out something else that’s just says, “Good morning,” four years later, that’s technically against their terms of service.
Things like these are especially frustrating when you’re a tool. Obviously, people aren’t getting their accounts shutdown for sending out “Good morning” twice within 10 years. But as a tool, you have to make sure that you are in 100% compliance with the APIs, with the policies, and the terms of service because we’re putting our customers at risk if we’re not following Twitter’s terms. It would really suck for someone to sign up for Edgar, the tool is doing something knowingly against Twitter’s terms and conditions, well, now we’ve put our customers at risk for getting their accounts shut down.
There have been many tools out there that did that especially for Instagram. There used to be a lot of tools that went against Instagram’s terms and they all got shut down. No big surprise there. We did talk about, “How do we want to handle this. Is there anyway that we want to try to fudge this?” We’re like, “No, we can’t put our customers accounts at risk.” We are going to stop repeating content on Twitter. That was the biggest one.
Around the same time, Facebook stopped the ability for third party tools to post to Facebook personal profiles so you can still post to Facebook pages and groups but not personal profiles. We just got our access cutoff to Facebook groups for a while just from bad luck. All the social media tools are doing a lot more invitations and manual approvals, and that kind of thing as opposed to just open API. We just hit some bad luck for we got stuck in the approval queue. They didn’t have any problem with what we’re doing or anything like that, we just got to the bottom of the list somehow. It ended up being two or three months where our customers couldn’t post to their Facebook groups where a lot of our competitors didn’t have any downtime or had a week of downtime for groups.
Rob: Wow. That is brutal. What a tough space. Take me to that moment. Let’s start with the Twitter stuff because that, I imagine, was just like a punch in the stomach when you read that. That moment where you read the email or whatever it is from Twitter—the press release—what were you thinking?
Laura: You know, I’m such an optimist. I actually didn’t even realized how bad it would be. Because I was thinking, okay, the good part about this is that all the tools are in the same boat. We’re not going to be able to repeat content on Twitter, but no one else either. It’s not like they have nowhere to go. It’s not like our customers can leave us and choose a different tool. I’m like, “This is really frustrating, but maybe it won’t be that bad.”
It did help that I understood why Twitter was doing this. Obviously, why Twitter’s doing this is to prevent spam. They don’t want people setting up Twitter bot accounts repeating the same message over and over. It’s just frustrating that they did it in such a way where they made this just extremely broad stroke that in addition to eliminating spam, is also eliminating just some really standard usage of the tool.
Rob: Yeah, the collateral damage of the Google, Facebook, Twitter, when they change their APIs or change policies, I don’t think that they fully understand what they’re about to destroy. Oftentimes, they are doing it, I think, in a way to take out spam or for the better of their platform or for the better of the internet. I think internally they do believe that. It’s kind of like, “Are you questioning that?” Totally. Maybe not. Are they just doing it to grab more market shares? Is that what you think for their clients? That could be, I guess, a negative motivation.
Laura: Yeah. I think in this case, Twitter was, I do think that they were just trying to cut down on spam. They just didn’t think of it much beyond that. That was kind of it. I don’t think they’ve given out much thought since. It wasn’t something that they announced very widely. I find that most small businesses still don’t know about this, which makes it even more frustrating for us because it kind of makes it seem like we’re the ones enforcing this rule because people have never even heard of this Twitter rule. They try to use our tool, we say, “You can’t use it that way on Twitter.” It can be a frustrating experience for the end user.
Rob: Yeah, I’d imagine. You just talked about three kinds of breakages of your built-on platforms, these platforms can make a change and can really have a serious impact on your business. Of those three kind of, I would say, semi-catastrophic events, did you see an increase in churn? Did you see reduction in topline revenue? How did it impact your company?
Laura: Yes. We saw just a certain percentage of our customer base. Here’s what we discovered. I thought, when they made this announcement, some people are going to leave because some people are going to say, “Well, I use you guys for Twitter. I’m repeating on Twitter and I can’t do that anymore.” What I didn’t anticipate was that a certain percentage of our customers were just like, “This was the only thing I used you for.” I didn’t realize that a percentage of our customers were, “I used you guys for repeating on Twitter. You don’t do that anymore. I’m out. I’m not going to another tool. I’m just not going to use Twitter anymore.” That’s actually a big thing that we heard. There are other social platforms out there like, “This doesn’t go with my strategy. Maybe I’ll post to Twitter manually every so often but I’m out.” That was a surprise.
I thought, “We’ll have an announcement. It’ll change then we’ll see who leaves.” The first month we had to make the change, people left, and it feels like, “Okay. You never want customers leaving, but this feels manageable.” The nature of our tool, like I said, you have a library that at some point, if you’re only sending things once, obviously, that library is going to run out similar to the way Buffer is. It’s like a one time queue. When you get to the bottom of the queue, it’s gone. For Twitter, our tool became that way.
The thing is people load a lot of content into our tool. People had sometimes content for a month, three months, or six months, before their Twitter content ran out. The good part was we had an extra four months or whatever it was, obviously, a revenue from them. But that part, it just kept going. We’re like, “Okay. The people who don’t like the Twitter changes left.” Every month, more and more people would figure it out because obviously people don’t read every message that you send. People will just be like, “What happened? I’m not sending out content anymore on Twitter. Is the tool broken? What’s wrong?” We’re like, “Oh, no. You’re not sending out content anymore on Twitter because you used up all your content. You need to create new content now.” They’re like, “That sucks. I’m leaving.”
Rob: Geez. That was such a big selling point of Edgar above other tools. As you said, like Buffer, you create a content, you schedule it, and you post it and such. I can imagine that hit really hard. Churn went up, which obviously means you’re growth either stalls or flatline, whatever that does.
Laura: Declines, yeah. For us, we had a decline in our user base. It ended up with these three changes together. We lost a significant amount of our customer base; maybe we lost a quarter or a third of our customer base.
Rob: Oh my god.
Laura: It was really big. I don’t want to make it sound like it’s only external things. We made mistakes, we could have responded faster and better. The positive thing is that it forced us to innovate. One example of that, now we have a feature we call autovariations where you put in your blog post and we automatically pull five poll quotes from that post to serve as your status updates. That’s just one way to paste it in the URL and get five status updates to Twitter and all the other social networks, but we didn’t have that ready when Twitter shut down. We didn’t introduce that until nine months later, something like that.
You have to roll with the times when these things happen. But yeah, it was a significant loss for us. We had to make some layoffs in our company which we never had to do before, but we did remain profitable and survived through the whole thing which I’m really proud of.
Rob: Yeah. I would be as well. Honestly, it could’ve been business ending to lose 25% or 30%, whatever the number of customers would end a lot of companies. In fact, the interesting thing is, I don’t hear many bootstrapper who have to do layoffs because it tends to be this very slow growth over time. You build up as higher as your revenue. With SaaS, unless you have an odd event like this, almost like a black swan thing that comes and gets you, your growth is just going to keep steady or whatever. I think you’re in a unique situation that you had to deal with. Have you ever had to lay people off before?
Laura: No. I’ve let people go, but I had never had to do layoffs before. I’m very thankful that we had a really great team backing us up especially our head of finance, Tanya Crino. She was very cautious about seeing this coming. Like I said, we saw the initial way, but then we kept having more and more customer loss. If you Google, “How to do layoffs?” The first thing you see is only do one round. Whatever happens only do one round. Tanya and Sara Park—who’s our head of operations at that time and is now the president of the company—they were really looking at, “What do we need to do so that we can only do one round and so that we can offer some kind of severance?” We were able to offer two months severance to every person who was laid off and help them find other positions at companies we were friends with and things like that.
Another thing that was so fascinating from the layoffs is we have full financial transparency within our company. We don’t share individual salaries, but we share everything else. We do financial reviews with the whole company every month. Everyone can look through all of our expenses and income. People saw the writing on the wall, you know what I mean? These are obviously, very intelligent people working at MeetEdgar. You can’t say, “Hey, we might have layoff soon. Don’t worry. We’ll let you know.” You can’t really say that until it’s a done deal. But people are smart. They see us losing customer base. They’re like, “Okay. This is a bootstrap company. It has to remain profitable.” The only way that’s going to happen is lowering expenses. We found that while, of course, it is a terrible, heartbreaking, and incredibly stressful thing to be laid off from a job, we also were able to maintain positive relationships with everyone who was laid off. Everyone understood that it was something that needed to happen for the company to survive.
Rob: Yeah, which is a big deal. It shows that you handled it with care, thought, and deliberate action. It’s impressive. It’s easy to flab that, I think. It’s easy to accidentally screw that up.
Laura: Yeah, it is. Especially because it’s often something you haven’t done before. We were able to do it in just one go. We didn’t have to do anymore after that. It was hard because the way that you do it in just one go is you have to make deeper cuts than you think you need to. When you first look at this problem, obviously, you’re hoping to just let one or two people go. We had some people that were laid off and then some people, just because it was just a tumultuous time at the company, some people ended up leaving on their own kind of before or after, just along with the tide. I think we had eight people that left. The other, maybe, six layoffs and two people leaving, or something like that.
Rob: Yeah. How big of a morale blow is that to the rest of the team? Do you feel like they recovered quickly or were they pretty devastated?
Laura: It’s interesting because I think it was kind of an emotional rollercoaster for everyone. It’s devastating, and at the same time this means, “Oh, the company’s going to make it.” They have the same numbers. They’re like, “Oh, this is the choice that the company needs to make in order for me to still have a job and the company to still survive.” Obviously, it’s always really hard when that happens, but we were really focused on rebuilding with the team that remained.
Rob: Yeah. I think I’ve been at companies, either worked for them or had colleagues at companies who’ve been laid off, and I think such a big piece of the reaction and the morale comes down to the trust of the leadership. Do they trust the CEO? Do they trust you, Laura, when you’re saying, “This is why. This is what we’ve done. Now, we’re going to move forward and we’re going to survive.” Do they think that somehow you manufactured it? Or made it up? That you haven’t cut deep enough or that you cut too deep or whatever. That’s when there’s this big toxicity comes about. It’s definitely going to be an emotional rollercoaster if they recovered. It shows that you had a good relationship with your team.
Laura: Yeah, I think so. We were able to still have a few people in each department. It didn’t feel like, “And I’m the only engineer now. This is not going to work out.” I think it felt to people like, “Okay, I can see how the company can continue to survive and grow with the team we have left.” Luckily, it wasn’t so dire that it felt ridiculous.
Rob: Yeah. Was that in 2018?
Laura: Yes. In early 2018, yes, that we made the layoffs.
Rob: Okay. You were still acting CEO at that point?
Laura: Yes, although I was actually on maternity leave. Now, I’m remembering the timing. I guess my daughter had just been born when we actually did the actual cut. We have been doing the math and planning up to that. I was actually technically on maternity leave when we had to do the layoffs. I just hopped on and wrote everyone personal emails because the actual conversation happened with our hiring manager anyway. There was only one person who’s a leadership level that we had to layoff, so I had a conversation with them. Weirdly, I didn’t do a lot of the actual conversations.
Rob: Sure. That’s still baller for having a baby and two days later, being involved. It’s tough when the timing works at that way.
Laura: It’s not ideal.
Rob: Yeah, not at all. It’s got to be stressful. Did it take a toll on you personally? Like your psyche and such?
Laura: It was a relief because it made it clear that the company was going to make it. I don’t mean to say that disrespectfully to anyone who’s listening who is working on ur team. It was a very hard decision, but the day that it actually happened, it was a relief to get it over with, get it done, and be like, “Okay. Now, I can move forward.”
Rob: Yeah. Some time after this, you decided to start another company called Ropig. When was that? That was probably mid-2018, I’m guessing.
Laura: I’ve never put the timelines of these things side by side in this way. I think there’s sort of separate compartments in my head, but now that we’re going to put them side by side, that sounds crazy. It’s a lot of tumultuous things happened all in the same year. Ropig launched in March 2018.
Rob: Got it, okay. Launched, meaning, the website went live, product was live, people could use it?
Laura: Launched, meaning the product started taking customers. We’ve actually been working on it for about a year prior to that.
Rob: Okay. You were doing both of these then?
Rob: You were working on both. Ropig was alert management for dev teams. Is that right?
Laura: Yes, exactly.
Rob: Obviously, the punchline—the jump to it—is that you decided to shut it down pretty quickly after launching. Let’s talk through that a bit. I know that you actually raised funds for this. Was that a first? Had you raised an angel round before?
Laura: That was a first. I had never raised money before Ropig.
Rob: Okay. How did you go about that? Did you have a network of people? Did you have to go to […] road and hit the angle groups?
Laura: We raised money in January of 2018. My daughter was born in June of 2018. I was being visibly pregnant when we were raising money. I was like, “I’m pregnant. I don’t want to travel. I don’t want to do it.” I decided that I’m going to get this done my way. By this point, I’ve been an entrepreneur for, I guess, 11 or 12 years now. I’ve built up a pretty strong network. I felt pretty confident that I can raise a small round with my own network. I’m like, “I’m not going to travel. I’m not going to go to San Francisco. I am just going to ask people that I know if they would like to invest in my company.” I looked up the numbers in preparing for this.
I think I contacted about 300 people. These were all people that I have personal relationships with. Some were just acquaintances, but people that I actually knew, not professional investors, people that are either just entrepreneurs, or people who work in tech, or people that maybe did some investing on the side. 300 people just got emailed or texted or Facebook messaged or whatever by me saying, “Here’s what I’m doing. Do you want to invest?”
Rob: Right. You ended up raising $320,000 on a safe? The audience knows, you emailed me. You and I actually had an email thread about Ropig. The only reason that I didn’t invest was because, well, I guess there were two, one was because your pre revenue. I don’t, in general, tend to invest in pre revenue companies just because there’s so much risk. But the second was that it was such a new space. I have confidence in you as the founder that you’re going to execute on it but my gut said it was going to be this very long, very arduous, very painful journey. You would get there eventually, but you didn’t have an audience in the space. I didn’t feel like you had […]. That’s what you and I talked about it in the email. Was that on your radar? Obviously, I must not have been the only person that mentioned that.
Laura: Yeah. A big advantage that I had in MeetEdgar is it’s a social media tool. I had already been in the social media space for years prior doing courses and consulting. I’d already built an audience in that space. With Ropig, the tool was systems admin, people, and developers. It’s not me. I’m not a developer. I’m not in that space. I’m not in that world. Not only do I have no lists built up but I can’t speak at that conference. I can’t go to those meetups. It’s not my thing, it’s not my langauge.
I do think that a big reason why Ropig didn’t work out is that I underestimated how much value I had and continue to give to Edgar in that way. Because with Ropig, I just thought, “Okay, I know I can’t do that but I can just hire people who can,” which is totally a viable strategy and a lot of people do that, but I didn’t raised enough money to do that. The problem was the strategy that I had in my head was really a much better fit for a company that was going to raise a lot of money. Even though I was raising this $300K—that ended up being $320K—I did not want to raise more money after that. I did not want to do big fundraising, I did not want to do VC, I did not want to do any of it. In retrospect, the game plan that Ropig needed to succeed was just not a match for only having a small amount of fundraising.
Rob: Yeah. You didn’t want to do the Series A, the shuffle, and you kind of just want to do this single seed round. I think call-in from customer.io calls it’s fundstrapping, is raising this single round to hit escape velocity. That makes sense. That actually fits my perspective of who you are as an entrepreneur. You are much more a bootstrapper than someone who raises. But raising that one round, really these days, it’s not against bootstrapping ethos anymore. You know what I mean? In some spaces like this one, the alert management tool. It competed with PagerDuty. Is that a good comparison? It’s a very crowded space with a lot of funding in it. It’s competitive. You’re going to need some superpower to get in there. You were saying that you didn’t raised enough money to hire someone to be an influencer. Is that what you were saying?
Laura: Yeah. That’s part of it. I just didn’t raised enough money for any of it. You mentioned that it’s a very competitive space, but it’s also a really expensive tool to build. My husband Chris is a developer. He’s the cofounder of the tool. He also, for MeetEdgar, built the initial version of the tool. He could not build alone, Ropig. It’s not a tool that you can just sit-down-in-your-free time-in-some-weekends-build. We had already spent, we decided to invest our own money, $500,000 of our own money into this project.
By the time we raised the money, we already had a fulltime team of developers just to get the initial product out. It’s alert management. You can’t be like, “It’ll probably work sometimes. It will get most of your alerts.” It’s just not the type of thing that you can have sort of shoddy, half-baked. Also, a lot of the advice is like, “Just ship people a minimum version.” No one really wants a minimum to manage some of their alerts. It just doesn’t make sense. You can’t really just test out some sort of halfway done thing. Like all the advice, “Pretend you have software, but then just do it yourself behind the scenes.”
Rob: You can’t do that with this. This breaks a lot of those rules. One of the reasons is because it’s so competitive in the market. It’s fair. It’s somewhat mature, I would say. An MVP in this market, very very different than an MVP in whatever—the VR space or something that’s still a nascent market. That makes a lot of sense.
Laura: Yeah. I think, that was another thing I underestimated because when we launched MeetEdgar, we had funded competitors. HootSuite had raised a ton of money. We’ve still been able to be a successful company in spite of that. I think I was kind of, “Oh, funded competitors. I can do that. I’ve done that before.” But MeetEdgar is also something that Chris could build on his own. The first version, he just built on his own in his spare time. If we don’t send out a tweet, it’s okay. No one’s business falls apart. It’s just a very different space.
Basically, what happened is once we raised that $320K, so we raised the money in January, we had our launch in March. The launch was just like a dud. We put it out there. We opened the doors and not a single person paid for it. Some people had free accounts, but not a single human paid for it which is a very bad outcome—in case anyone’s unclear—not what you’re looking for a launch. We’re going to have to make some big changes if this is going to work.
Rob: How does that feel? You’re a successful founder. You’re a serial entrepreneur. You’ve built up wildly successful online training course and business around training folks for social media. Then you launch MeetEdgar to one of the bootstrapping Cinderella stories, in my opinion, of getting some figures in a year, and then you launch this third app. At this point, you know what you’re doing. How did that feel when it just went completely sideways?
Laura: I was just like, “We picked the wrong market.” That was something we had been worried about when we were developing it. Basically, the whole idea with Ropig is that there are a lot of smaller companies like us with MeetEdgar where we were using PagerDuty but it really wasn’t designed for us at all. Then we saw a lot of other smaller companies on our space that just didn’t use an alert management tool and sort of dug through the logs manually when they had time.
If you look at the Ropig website or look, I don’t know if it’ll be up when people are listening to this, but we had a whole page. The whole point with the page, it said on the headline, “Why would I need an alert management tool?” I look at that now and I’m like, “Duh!” The fact that I had to build that page should have been a really bad sign. Why would I need an alert management tool? Why are you looking in this website. You’re clearly not going to find anything.
I think it’s possible. Obviously, there’s companies that have done it to introduce people to a new idea, a new concept. Again, maybe none would fit with bootstrapping. A fit with bootstrapping is, “You’re already using a competitor, let me show you how we do something different that makes us so much better fit for you.” I think this hurdle of, “You don’t think you need an alert management tool, but we’re going to show you why we do.” It was a failed experiment.
Rob: Yeah, that makes a lot of sense. That’s the thing with mature markets. You know that PagerDuty wants to expand that market, so they’re probably already putting a bunch of time, effort, and money into trying to convert everyone they can away from digging through logs. I’m just imagining, there is only so much blood that you can squeeze out of that turnip. They’ve already done most of that, probably.
Laura: Again. It’s just expensive. PagerDuty is geared more towards enterprise. Maybe there’s a spot in the market here. Maybe if we have spent another year going to every meetup around the world, and tweaking our product to get a better product market fit, maybe it could’ve happened. It was like that small fundraised combined with a dud launch was like, “This is bad.” Because all of our financial projections were like, “We’re going to be at 1 million revenue in the first year because that’s what happened with Edgar. Isn’t that how all businesses go?”
Rob: Yeah, oh man. You launched in March. You basically stopped operations a couple months later. It was a very quick decision that this wasn’t going to work.
Laura: Yeah. In May, we hadn’t told our investors we are shutting down. Basically, what happened is we launched. It kept going badly obviously because no major changes happened. Again, this coincides with my maternity leave because my daughter was born in June. My cofounder was my husband, also a parent to this baby who’s going to be born. It is not a time where we’re like, “We’re going to work 80-hour weeks now to try to make this work by ourselves.” All the factors in this equation do not add up. I’m just going to shut the machine down so that we can take our expenses to zero. Like I said, we had full time developers on the team. Some of them we were able to move back to Edgar.
It’s funny, you asked me if I’ve done layoffs, I was like, “No, but actually I had.” It’s funny because I didn’t even think of that that was a layoff. It was only one person because the other two we could move over to Edgar. Anyway, I actually had done layoff before. We let the development team go. We shutdown the tools. We kicked off our free users so our costs for running the tool would go to zero. I’m just like, “I’m going to take a few months of maternity leave. Then I’m just going to figure out what to do when I come back.” I don’t know what to do with this. I know we need to stop hemorrhaging money for our no customers and no time to work on this. I’m just going to stop it.
Rob: Put the breaks on. 2018 was not a good year for you. It was great because you had a baby but all the other stuff it sounds like, “Oh, good Lord.” Then you go on maternity leave, you must have been thinking about it for solid two months stressing about it, I imagined. Was it pretty stressful?
Laura: It was stressful. This is what’s interesting about the fundraising. If I hadn’t raised money, it would not have been stressful. For me, that was the element that made it stressful because I was so worried about letting other people down. When you raise money, you paint this picture of how successful it’s going to be which obviously, you believe, especially because all of my investors were friends. I had this dream of writing huge checks to my friends. What would be more fun than that?
If I didn’t have investors, I think, I would have been just like, “This sucks. I don’t want to do this. I’m just shutting it down.” After the launch that didn’t go well, I realized that I just did not have the same passion for this product. This product was much more, “Okay, we see a problem and we think we have the solution for that problem. Maybe there could be a business here.” Our audience with MeetEdgar, “I love entrepreneurs. I love entrepreneurs. That is my world. I love listening to podcasts like this one. I talk about entrepreneurs. I love reading books about it.” That’s our customers that we support at MeetEdgar, so I can live in that world. I have no interest in living in systems administration world. It’s just really not interesting to me at all. If I didn’t have the investors I think I would’ve just been like, “Yeah, this is really not for me.” But because I had the investors, I felt this pressure, “How can I make this work? I need to make this work?”
Rob: Yeah, I totally get that. Had you burned through all of the investor money by that point? Or there’s just some left?
Laura: That was the good news. We had not burned through much of it at all. The launch, we didn’t do paid advertising or anything. The only cost that we had incurred was just paying the developers for that few more months. When we put the breaks on everything, we had the 75% of the investors’ money still in the bank.
Rob: Yeah, okay. That’s a good thing then. How did you finally make the decision? Obviously, you shut it down. I’m assuming you returned the money to investors. How did you come to that? Was it really just like, “It’s going to take too long. I’m not interested in this space.” Talking to system administrators don’t have the influence, was it just all those factors that eventually led to that?
Laura: Yes. I was thinking, “What’s going to happen with this? How can I make it work?” Any path to make it work clearly involved raising more money—a lot more money. At this point, you can’t just keep hitting people up for another $200K or $300K. I would really need to do institutional fundraising. I had got a glimpse of institutional fundraising doing my friends and family fundraising. By the way, not family in my case, just friends. I don’t have any family with money. Friends and friends fundraising. There’s no rich uncle, unfortunately. I wish.
I had met with some institutional people in Austin and San Francisco, had phone calls. I think as bootstrappers, we have this really negative view of institutional money. It was all true with the conversations that I had. Every horrible stereotype I had about traditional VC was just 100% confirmed. They would ask me how big the business was going to be. They were not interested unless it was an ubersize situation. They were not interested in anything less than like, “I’m going to keep raising money, as much money as I possibly can, as fast as I possibly can.” That was the path that they wanted to see. They’re not interested in profitability, just interested in growth. Because I have seen that little glimpse, I was like, “No, this is not for me. No way.”
The thing that finally convinced me to make the decision, I was talking to a friend of mine, and I’m like, “I really think it’s going to be really hard. I don’t know what to do, but I have this duty to my investors.” He said, “You have a fiduciary responsibility to your investors, to return as much of their money as possible. Knowing everything that you know, if you were an investor, would you ask to just get your money back and get out? Or would you want to continue?” I said, “If I were an investor and I knew everything that I know from the inside, I would want to get out.” I would say, “Thanks, give me my money back. I don’t think this is going to work. I’m out.'” That conversation just absolved me of all of my guilt and stress because it made me see that shutting down was being responsible to my investors.
Rob: Yeah. It’s crazy how a conversation or a single question can get your whole mindset to shift and make a decision. It sounds like you knew the right answer too, but you’re burdened by this other piece, and it was the fact that you felt an obligation to your investors. Suddenly it was, “Wait, the obligation actually goes better.” You actually serve them better if you make the decision you already know you want to make.
Rob: That’s fascinating. That’s a good friend. He’s a good friend to keep around. He’s a keeper.
Laura: He is. It was November—I looked up the timeline—it was November 9th that I sent the email to investors saying, “I decided to shutdown and here’s why. You will be getting 75% of your money back.” That felt really good too.
Rob: How did the investors react? Were they supportive? These are folks that you knew, they were at least acquaintances or friends, was there any negative reaction to it or was it mostly like, “Sorry, this sucks. Thanks for the money,” type of thing?
Laura: It was very positive. People said, “It’s very unusual to be able to make this call and return the money. I really respect you doing that instead of just trying to burden through every last dollar.” People were very kind and very supportive which I’m very grateful for.
Rob: Yeah, that’s cool. I’ve found that with angels—angels are investing their own money—they just tend to be more relaxed. I’ve done about dozens of angel investments. I’m nowhere near the VC level institutional money manager in terms of how they view these stuff. I think it’s an interesting callback because you were saying the VC stuff you heard about is true, like the stereotypes you’ve heard are true. That’s why I believe that this world needs funds like Indie.vc and TinySeed to be that in between where we can write checks.
Now, maybe we could’ve written a check as much as you needed. You really did need a legit Series A to compete in the space, but there is an option for people to take money where it doesn’t come with that same stereotypical stigma of, “No, you have to be $100 million. How are you going to get there in three years or less? How are you going to hire 20 people a month?” All this stuff. You and I both know that we can build businesses and help those eyerollable constraints that venture capitalists are going to put on it.
Laura: Yeah. All the investors knew what they were in for. I hadn’t tricked anyone into thinking this was a get-rich-quick scheme. Anyone can afford to lose the money. It was just one of those lessons of always how important it is to be in integrity. I felt like I’ve been in integrity throughout the whole process. I’m still in integrity when I ended the process.
Rob: Yeah, for sure. Laura, we’ve covered quite a bit in this interview. I really appreciate you taking this walkdown bad memory lane of 2018. The positive end of the story is Edgar is doing really well after all the tumult that you went through with it.
Laura: Yeah. We are growing again. We’ve had growth every month in 2019 which has felt amazing. It’s just so good for the team after having such a hard time for such a longtime. I mentioned that it has forced us to be more innovative. I feel like it’s made me a new entrepreneur because I had never been through anything really hard before as an entrepreneur in retrospect. I thought I had, I had little ups and downs, but I had never had, “Okay, we have to do layoffs. We’ve lost a huge amount of our customer base. I’m shutting down this other company,” all happening at the same time.
It’s true that it makes you a lot smarter because you no longer have these false assumption that everything would always go up. You know that if you’re in this for the long haul, you’ll have ups and downs, and that’s okay. It’s not a disaster when something goes wrong. It doesn’t mean that nothing will ever get better and that your company is over forever. I’m really glad that I’ve had this experience of proving that to myself.
Rob: You took several things that looked like absolute roadblocks and turn them into speedbumps that you drove over and to come out to the other side of that successful with the company that’s continuing to grow after all these years. It’s quite a testament to your chops as a founder.
Laura: Thank you.
Rob: Well, we’re going to wrap up today. If folks want to catch up with you, I see your website at lauraroeder.com. Obviously, if folks are looking to manage their social media, they can go to meetedgar.com to see what you’re up to there.
Laura: Yes. I’ll do a MeetEdgar plug. They can enter the coupon code PODCAST and get a free month of Edgar.
Rob: That sounds great. Thanks again, Laura. Thank you so much for coming on the show.
Laura: Thank you.
Rob: I hope you enjoyed my conversation with Laura Roeder. I was truly impressed and impacted by her ability to turn roadblocks into speedbumps, and just her fortitude and perseverance in getting through hard things. These are hard things that we face as founders. She really stepped up, made it happened, kept her company alive, and made hard decisions about the next companies. Really impressive.
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