Profits are often underrated in software companies that are scaling up. Why run profitably if you could raise funding and grow faster?
Selling equity for growth funding can create a great ROI for founders. Sometimes, but not usually.
VC funding always creates more risk and a higher exit point for founders.
Many practical founders don’t want to take on that higher risk, higher goals, and VC investor involvement. VC funding is never free.
Joe Hyrkin is the former CEO of Issuu, a content publishing platform for interactive marketing content.
Issuu allows marketers to easily publish printable and PDF materials in various formats to websites and social media.
It’s a global product-led success story with millions of customers and a successful and sustainable business.
Issuu was started by four Danish founders before the company was moved to Silicon Valley in 2013 when Joe was hired as the CEO.
Joe ran the company for almost 12 years, growing it profitably most years to almost $30 million in revenue.
It was acquired in mid-2024 by Bending Spoons, an Italian holding company that is an active acquirer of software companies.
Joe worked with their early venture capital investors with a practical and patient approach.
Then, in 2021, Issuu raised $20 million in debt to invest in marketing and address technology issues, which helped them grow faster before being acquired.
As Joe describes it:
“From 2016 to 2020, we ran Issuu profitably, with what I like to call a ‘pro-grow’ approach—profitable and growing. Then, we raised debt to grow faster to about $30 million in revenue. The final year before we sold, we got back to profitability. So we got to profitability twice.
“By being profitable, you’re committing to your customers that you’re going to be around and that they will not have to go find some other solution. You’re communicating to your team that this company can be counted on. In 2024 and 2025, everybody wants profitability, unless you’re an AI company.
“Not having a profitability plan actually creates a lot of risk. I’m not saying you always have to be profitable, but you always have to have a foundation to know how we get to profitability. It’s a different way of thinking.”
On the Practical Founders Podcast this week, Joe also talked about being a CEO who wasn’t a founder, selling sales and marketing tools to global customers, and their product-led growth motion.
Check out this amazing interview with Joe Hyrkin on the Practical Founders Podcast.
