Transcript of the Practical Founders Podcast interview with Melissa Kwan, founder and CEO of eWebinar
Greg Head: And we’re live with Melissa Kwan of eWebinar. Hi, Melissa.
Melissa Kwan: Hey, Greg!
Greg Head: Where in the world is Melissa? Every time I talk to you, you’re in a different place.
Melissa Kwan: That’s true. I am currently in Singapore. I just landed a few hours ago.
Greg Head: I think I’ve talked to you in Amsterdam and Vietnam. So you’re moving about the world and not just traveling for fun. It’s part of your story. So it’s one of the things we’ll talk about today. You’ve built several software companies. You’ve sold one of them along your journey. How did you come to start what became known as Spacio?
Melissa Kwan: Yeah, I mean, that’s such it’s such a big story. It was 12 years ago now. Yeah. But I did a lot of odd jobs right out of university, I was working for a real estate developer selling real estate. And then after that, I work for SAP to sell software. And I absolutely hated working at SAP. It was my first big company experience. And then I quit my job within the year and started my first software company, which combined real estate and software, and that became an agency that built real estate marketing apps for buildings.
Greg Head: So you were kind of a software development shop, a builder of apps with a focus on property technologies, and real estate applications.
Melissa Kwan: Yeah, particularly new buildings. So imagine walking into a showroom of a building that’s pre-built and getting a coffee table-style brochure. Back then we were the iPad interactive brochure. That was my first business that started as a product but turned into an agency because we said yes to everybody. It was also bootstrapped and we needed the money, so people listening might be able to relate to that.
Melissa Kwan: Yeah. In fact, the funny thing was I didn’t even know I was an agency until someone told me, Oh, I guess you’re running an agency. I’m like, No, I’m not. I’m a product company. He’s like, No, you built different apps for different people. That means you’re an agency. I was like, Oh, yeah, you’re right. And so I actually did that for four years and got to know the real estate tech market. And that’s when I was traveling to New York and looking for bigger opportunities.
Melissa Kwan: I remember the last cold call that I made, and I was like, this can’t be my life. I can’t just chase invoices and chase the New Deal and chase invoices. I wanted to, at that point, build a product that I could sell to everybody instead of begging everyone to build custom apps. So that company morphed into Spacio, which was my first real SaaS kind of product company and that was an open house check-in product mainly for the enterprise. So we didn’t sell direct to agents, we sold to brokerages and franchises. So I ran that for five years and that was acquired in 2019.
Greg Head: What was it about SAP that was frustrating for you? Was it just that it was a big company or is it one of these big enterprise, complicated companies that is different than selling stuff to real estate agents?
Melissa Kwan: Yeah, I mean, I did a lot of odd jobs. I really kind of summarized a lot in a few sentences. But I mean, I’ve worked in so many odd jobs, but always in sales. So that was kind of the common ground. I only went into SAP because one day I realized if I ever were to have a big company, I should work for a big company and see how that’s run. And I was in my mid-twenties and I only worked for SAP because it was across the street from where I lived.
Melissa Kwan: SAP was the top software company listed in some book of lists in Vancouver where I was living. And Oh, that company’s across the street. If I work for them, then I can just walk across the street and go to work. That was my first foray into a huge company, and back then I was working for small midsize firms where I was able to be kind of my own person. So I realized I was always kind of creative and an intrepreneur within a business.
Melissa Kwan: Whereas when you go to SAP, it was the first time I realized it wasn’t about doing your job well. It was more about managing your managers so as they would call it, managing up. And I was not that person. I wanted to just do my job and do it well and do it effectively and make sales. But you needed to please your manager so you get a list of good accounts and that’s just a different way of working. And I hated being told what to do. That’s the thing that a lot of people say, You can’t hire people that only work for big companies for startups and vice versa. And there’s a reason for that. Your priorities are just very different.
Greg Head: So you bought your freedom by creating this real estate app development agency effectively. But then you realized you were living project to project, invoice to invoice, like a lot of services businesses do and they realize I need to get into something more steady, repeatable that makes money when I’m not there. And you created a product business.
Greg Head: How did you find the idea for Spacio? If I’m hearing you correctly, I go to a residential real estate open house and it used to be a piece of paper that people would make you sign in. But now there’s an iPad app to do it that collects more information, presumably, does some follow-up, and things like that. How did you get to that idea?
Melissa Kwan: Yeah. So I actually spent a significant number of years in real estate, like selling real estate, working for developers, also selling residential real estate. So my first job was sitting at a sales center and every time somebody came in I would give them a check-in card where they would fill in their information, and their address. We try to capture information from them. And I was the person, I was a receptionist, that would type them into a CRM, but maybe 15% of them would be legible. And also, when I was selling residential real estate, I was the person asking people to sign in. But the thing is, it’s not legible because it’s purposely that way. Right? Nobody wants you to see their information and type it into the CRM. Nobody wants to talk to a real estate agent or be in their database. So I just saw kind of a gap between how agents or developers want to get leads and how unwilling, like home buyers, want to actually give away their information. So and I also saw how little innovation was being applied to open houses.
Melissa Kwan: There were small little apps that were out there. But there, there wasn’t one big software that was industry-leading. And that’s just not where people were spending time. They were building CRMs, they were building ad-tech. They weren’t spending time in open houses. So it was just something that I had experience in and something that I thought was possible and within reach.
Greg Head: Well, you did this for several years and eventually sold it. Was it easy to get your first 100 customers? This is a known problem and you knew people in the industry or was that way different than you thought it would be?
Melissa Kwan: Yeah, actually. So I ran that company for five years, but we didn’t get our first $10 until 2.5 years in. And I wrote a lot about this as well on Medium. It was my first product company. I really didn’t know what I was doing. So the biggest mistake I made there was we built a product before we found customers. I thought I knew what I was doing. I built this thing because I thought I had a lot of experience and then I took the product and tried to find customers. Even though it was an open house solution, I’m kind of dumbing it down, the first version of Spacio was not what we got customers for.
Melissa Kwan: Interestingly enough, we didn’t get our first $10 until we started removing features, right? When we started making the product simpler was when people began to understand it. So it actually took 2.5 Years before getting our first paying customers. And that put me in SO much debt and SO much hardship that…I mean, actually, I still feel like I have PTSD from that.
Greg Head: I bet. But you didn’t give up.
Melissa Kwan: Well, I think the thing that I’m particularly good at is selling a product that doesn’t really exist on the market yet. So I’m really good at crafting product positioning, sales pitches, you know, things like that. When we finally found the product that people would pay for, which in its most basic form was digital paper, it was an iPad check-in. As soon as we found that product. It was fairly easy for me, at that point, I was living in New York, to go to different brokerages because New York is such a real estate city. It’s the only city in the world where they make a show about brokers and people actually watch it. Yeah. So I basically just knocked on doors and asked brokers if this was something that they wanted to buy. Positioned ourselves kind of as the cutting edge technology for open houses that doesn’t exist. And as you talk about our first hundred customers, actually, we only had 100 customers when we sold.
Greg Head: You sold larger deals. The brokers would give it to their agents.
Melissa Kwan: Yeah. So it was almost a perk, right? So when companies bought it, it was almost, well, if you work with us, then you get all these different pieces of software. And Spacio was one of those things and back then it was more compelling because nobody else had it. So it was kind of a cool, nifty tool that was also customer-facing that would make the agent look really good, especially luxury agents in front of their open houses.
Greg Head: Did you have expectations this was going to be a big company with VC funding or was your expectation that this would be up and running and pay the bills for you?
Melissa Kwan: I didn’t really have the luxury, I think, of getting VC funding because honestly, looking back, I did try to get VC funding because the situation was so desperate. We were constantly…I was funding it. I had taken out a loan from my previous company and against my own name to fund this company, to begin with. We had some government grants because that was available in Canada. My parents had to bail me out multiple times, it just wasn’t a pretty situation.
Melissa Kwan: And yeah, I did try to go out and talk to VCs and things that. But, honestly, in hindsight, it wasn’t a great business. It was so niche, you know, it was open houses really just in North America but really just in the US. And only a percentage of agents who open houses and the percentage of that would actually host open houses or be tech savvy. Right? So it was niche of niche of niche. So I tried to spin it in different ways.
Melissa Kwan: But what the really interesting thing was having moved to New York and being surrounded by people who were measured by how much money they raise and also, you know, you’re in these meetups or startup events and everyone’s talking about the funding that they got. And you kind of feel bad about yourself, right? You kind of think, Oh, if I didn’t get it, then I don’t have permission to succeed. Or if I don’t get it, I’m not ambitious enough. So for years I kind of told myself that this was going to be a much bigger business than it was because I felt like that’s what the story I needed to tell I had told it so much that I started to believe in it. It’s kind of messed up, right? Because you’re almost like you become someone else because you want to be accepted in your community.
Greg Head: That is one of the most powerful reasons that the “everybody gets funding” myth exists.
Melissa Kwan: But it wasn’t until maybe a year into after we started making money. Once we found the first $10, it only took 12 months for us to break even. Also because our team was very small, we were also bootstrapped, very small. We’re out of Canada. I wasn’t really paying myself. I was paying myself very minimum just to make the rent and just my basic expenses.
Melissa Kwan: It wasn’t until then that I realized how awesome it was to call all of my own shots and how great it was to never think about needing to go ask someone else for money again. And also, at the same time, I was building a bigger and bigger community in startups, so I was also hearing stories from my friends about how they could choose over again, if they were to do this over again, or if they have an exit, they just wouldn’t go and raise VC money. And then so you start to hear, Oh, actually, maybe I maybe I’m doing it, I guess, right. Right? According to what I want. And maybe all of that other glory is not as you know, it’s not as good as it sounds. So I kind of went through that transition of really wanting to be like everyone else. And then after a few years, earning that freedom and thinking, I’m so glad I have this right now.
Greg Head: When was that? Was that 2015, somewhere in there?
Melissa Kwan: I sold the company in 2019, so I think that was around 2017.
Greg Head: Yeah, because that was when SaaS was really starting to take off. Practical Founders were really not very cool yet. It’s getting cooler, but it wasn’t very cool yet. So you’re kind of on the early wave there. Eventually, you sold Spacio. Did you grow the business fast enough and somebody made you an offer you couldn’t refuse or was it something different?
Melissa Kwan:I mean, that’s an interesting question, right? I think when people think, Oh, you sold your company, you must be doing really well or you must be shopping it or the truth is, I’d spent ten years almost in real estate, like a few in the business, not in tech. And then almost eight years of it in technology. And selling technology to agents like real estate agents, which is a group that is not used to buying technology, is an incredibly hard thing to do. Especially when I was selling a really niche product. Maybe two out of ten agents in the US would actually even consider using this. And then not to mention it is one of the highest churn industries out there because they’re not churning from your software, they’re churning from their job. Right. So that’s the thing that I had to deal with. I realized I just wasn’t having fun anymore.
Melissa Kwan: But I also was starting to pay myself, finally, a reasonable salary, I’m talking 75,000. Not something huge, but something that didn’t make me feel sad every month. But I just didn’t want to do it. I was also at the time, you know, this was the end of 2018, I was just seeing so many cool things that were happening in the world that I wasn’t a part of.
Melissa Kwan: So the opportunity cost of staying in the industry was becoming bigger and bigger. And I was also seeing that if you’re in real estate, your multiples are 2 to 5 times [revenues] at best, right? If you’re a good company you’re generating a profit, you’re not losing money, and your multiple is 2 to 5, right? Whereas anywhere else, companies are selling for 5 to 10, to 20 [times revenue]. Right? The best company in real estate ever sold to Zillow at 12 times. And it’s happened once.
Greg Head: 12 times revenues or 12 times profit?
Melissa Kwan: Revenue. But in another industry that’s normal. So not only are you spending so much more time trying to build your business, your multiples are lower. So it was just a compounding effect of seeing what was happening. So I remember there are a few peers that I talked to every few months, just to catch up. It’s a very small industry.
Melissa Kwan: I was talking to my friend Erin, who eventually bought my company. I was actually just complaining to him and I’m so sick of this. I wonder if my co-founder will let me sell my share so I can move on. And that was when he was like, Oh if you’re serious, you know, we’re looking to make our first acquisition. But, you know, you’d have to stay on for at least two years. And that was actually the beginning of the conversation. And the great thing about that was, I had earned my freedom at that point because I was already nomading and I didn’t have a boss and we were profitable and I was slowly paying myself more and more every quarter. And there were so few people I would actually work for. I wasn’t going to earn my freedom and then sell my company to someone that I didn’t like.
Melissa Kwan: And there was just a handful of people in the industry that I thought I would actually work for. And Aaron was one of those people, so I actually didn’t even shop the company. People think that’s crazy, but I just didn’t need to because Aaron was a friend. I’d known him through the industry for years. I knew he was fair, and the coolest part about that was he knew where I was, Mentally because he was my friend. I didn’t have to go and put up a dog and pony show. If I had shopped the company I would need to do and then I would need to live up to those things that I sold people on. And with Aaron, he knew that I mentally didn’t want to be there, but he knew I would show up. You know, he basically took it back to a CFO, made an offer, we chatted about it, and we closed the deal in three months.
Greg Head: And was that life-changing wealth for you? Or pay off the debt wealth and get it off your back acquisition?
Melissa Kwan: Yeah, it was definitely life-changing, but it was not retirement level. But it was okay because I had, don’t forget, I had done this at that point for nine years or going on to ten and I never had money, ever. I still to this day when I go to a restaurant, I would look at the prices first before I order something. And I don’t need to do that, but I am so programmed. So, it allowed me to do some cool things, buy my first home, and do some traveling. I gifted myself a trip to the Maldives, and I had some freedom to start my new company. But, you know, it wasn’t retirement-level wealth.
Greg Head: You know, entrepreneurial poverty is a real thing, right? Especially now, in the bootstrapped world, you think all entrepreneurs are rich, but most are not. They’ve put their life savings in there. They’re in over their head and wait long. And you were definitely there and you didn’t give up. But you’ve learned through these, I don’t know if it’s a different way to learn it, but you learn some very profound lessons about business, about products, about SaaS, about what you want in life, that I don’t know if you could have learned it any other way, but you’ve already dropped some very deep knowledge bombs just from the brutal execution of your business with Spacio. These lessons found their way into your current business eWebinar.
Melissa Kwan: Yeah, I mean, you say you didn’t give up, but it wasn’t so much I didn’t give up. It was more that I couldn’t give up. I couldn’t because I had my co-founder who gave up bigger opportunities to work for my vision. Right? I had my parents who had bailed me up multiple times, who didn’t even talk to me for two years because they didn’t think that I was taking my life seriously. Not once did they think, Oh, she doesn’t have money because she is taking her life seriously. Right? It’s kind of reverse thinking, right? Because they were thinking, Well, if you’re successful and if you’re trying hard, why aren’t why don’t you ever have any money? And you don’t know how to answer them because they’re not entrepreneurs. So I had them to prove and I was so deep in that hole. I had so much debt. Also, because don’t forget I had pulled out a loan from my previous company, also under my name to fund Spacio so I didn’t really have anywhere else to go but forward.
Greg Head: Wow. Well, that’s a reality for a lot of people. They get people on the bus, and it also happens with investors. So you felt this responsibility to go forward. I guess you had debt and responsibilities there. But sometimes when it’s no fun and you’re kind of running out of steam, it’s you’ve taken a big investment and you’re obligated to go forward. What was the biggest lesson you learned that helped you create your next company, eWebinar?
Melissa Kwan: I mean, there’s, there’s so many. But the number one lesson, because I did not do this with Spacio, is to find customers before you build a product. And I don’t actually mean go talk to customers go do customer interviews. I don’t mean that. I mean build a product that already exists on the market and make it better. And I learned this from a friend who is so good at being the second mover and he taught me this. He said, You don’t want to be the first mover because you want someone else to have educated the market before you go out there. Jack Ma from Alibaba, also famous for doing that. But you don’t have to be first. And then that was kind of a light bulb for me because I’m, Oh, you’re right.
Melissa Kwan: Everyone tries to sell their product or sell their pitch to VCs or to customers as We’re cutting edge, we’re first. But it’s, No, you’re first. There’s nothing wrong with that. I don’t want to do something that’s blue ocean. I want someone else to have already proved the market and I want to be out there to make it better because now there’s something to compare it to. So I think that’s the absolute biggest lesson that I learned.
But the one that’s kind of a close second is you have to do what makes you happy. And I didn’t think about that when I was going into my first company and my second company, I started a company based on my experience and knowledge and expertise. And not once did I think that I could do something else out of the real estate.
Greg Head: Was it really about your life choices first, or was it about creating a business that sustained a better lifestyle?
Melissa Kwan: I mean, for me, when I say do something that makes you happy. What I’m talking about is creating a business that allows you to design the life that you want to lead. For example, if you want to work remotely, you cannot have a business that requires you to be there physically to meet with customers. I think how people define happiness is very different. But when I say do something that makes you happy, I mean something that allows you to live the life that you want to live every single day.
Greg Head: Does that make it a lifestyle business? Sometimes it’s that’s used negatively or a lot of times that’s used negatively by funding people to say, Oh, just a lifestyle business.
Melissa Kwan:I mean, the word lifestyle business is so loaded, right? Because it’s almost VCs, the money people have made it such a dirty word, right? Oh, you want to build a lifestyle business. I guess that’s okay. Right? They completely diminish your ambition by adding a negative connotation to lifestyle business between zero and unicorn.
Greg Head: Yes.
Melissa Kwan: There are, I want to say, maybe millions of businesses that sustain people’s lifestyles. And I would say there are more of those businesses than billion-dollar exits. If a lifestyle business means anything between zero and unicorn. Then, Yeah, I guess so.
Greg Head:Let’s talk about eWebinar. What is eWebinar and how did you get the idea for that?
Melissa Kwan: eWebinar saves companies and people from doing the same webinar over and over again. So things like sales, demos, training, webinars, onboarding, something that someone has to do live on Zoom over and over and no one actually wants to do them. We basically automate it with a video, so we turn any video into an automated webinar that you can set on a recurring schedule or make it available on demand. So you can run hundreds of webinars every single month without actually being there to run it live.
Melissa Kwan: I got the idea for this because, anyone that’s running a SaaS business right now knows exactly what I’m talking about, whether you’re doing demos over and over and maybe the most soul-crushing thing is doing demos for unqualified leads or people who don’t even show up and you’re still there. And especially for a SaaS business, your revenue is dependent on conversion and lower churn rate, increasing conversion, and lower churn. So if your user is if your customers are not getting educated on your platform right away and they leave your platform, it’s not their fault is your fault. So whether you’re training them on Zoom or a knowledge base with a video or whatever it might be, someone’s doing that. So I was that person, with Spacio, doing all these repetitive demos, training, onboarding every single day for new customers that would come in daily or weekly. The problem was, no matter how many I did, it was never enough, because 100 people will sign up, and ten people would show up. And then the company that just signed up with you would want you to do it again and again and again.
Melissa Kwan: And back then I was already nomading and all my customers were in Canada and in the US. So not only was I doing these webinars back to back, but I was also doing them in the opposite time zones of my customers. There were days when I would land in a new city. The first thing I would do is go to the hotel or Airbnb and test the Internet speed. And then if it wasn’t fast enough to run a Zoom, I would go and buy a SIM card or a mobile wi-fi to make sure that I could run this, I would not have a drink at dinner because I knew in 2 hours I would have to go home and do this webinar.
Melissa Kwan: [And it was just crazy to me that a person, let alone a founder, would have to do this every single day repetitively. But because we were bootstrapped, I was everything except for code. So I had to do that. And doing these was actually infringing on my lifestyle. The craziest thing was I felt like I had spent almost a decade earning that freedom. However, instead of living my life, my entire schedule was tied to my customer’s training schedule.
Greg Head: Careful what you ask for, Melissa.
Melissa Kwan: So I was living this for a few years and I had just envisioned in my mind this perfect product that would do my job for me while I could go and have fun and I could go live my life. And eventually, when Spacio was acquired in 2019, this was the problem that I wanted to solve because I realized I wasn’t a unique person that was living this problem. A lot of my peers, whether they were in technology or not, if they had a product or service to sell and train on, we’re living this problem.
Greg Head: If it’s not the entrepreneur, it’s the sales rep, the marketing person, or the onboarding person that does these repetitive over and over again the same thing. It’s fun for the first 20, but it’s not fun after, a thousand of these. So was there a product in the market, like you said, that you followed, that you did it way better? Or was it just you could see people were doing this on Zoom and apparently a YouTube video wasn’t enough?
Melissa Kwan: Yeah. There were products out there that would deliver a video like a webinar. If you’re in marketing, you probably have seen some of these as well. But they were not thoughtfully designed. It was the difference between Geocities, remember Geocities? And Wix, right? There were products that were built for marketers that kind of did the job, but they were almost built to deceive people into thinking that when it’s not so you could upload a fake chat conversation and there would be a fake counter, but it was sleazy, right?
Melissa Kwan: It was it wasn’t the experience I wanted to deliver to my customers. I wanted to deliver an awesome, beautiful kind of Netflix of webinar experience that, it didn’t matter if it was live on the other side or not. They were just getting really good content. And then I wanted the ability to hop in and respond through text because people like texts, they don’t want to hop on the phone. If I wanted to, and I wanted to be able to respond by email if they’re offline. So almost a chat support, right? Like Intercom or Zendesk, asynchronous communication. And it just didn’t exist.
Greg Head: So unlike sending somebody a YouTube video, here just watch this video, it’s nicely produced and everything was it choose your journey, ask a question, go this direction or was it mostly, there’s chat support if you need it.
Melissa Kwan: Yeah, it’s not choose-your-own-adventure because that’s a different type of software. But the thing about webinars is it’s just boring, right? If the presenter is great, if the content’s great, then it’s great. But a lot of times it’s not. And what I found was webinars are more of a one-way experience and what they should be is a two-way experience. It should be more like interactive TV where there’s something that keeps you on the screen. It stops me from going to my phone and Instagram. So what we put into the product was the ability to program interactivity. So you could have a question, a poll, a resource, a banner, an image, things that kind of pop up. So it feels more like a two-way participatory experience and not a one-way, come here and I’m talking at you for an hour, and that’s it. So you could be talking about a new feature and then deliver a resource that people could look at later. So it’s more of a holistic experience than just a Zoom or a YouTube where there isn’t chat support and people can kind of just bounce.
Greg Head:So it’s very interactive, but it’s not like they think that there’s somebody live on the other side, which not everybody wants to talk to a live salesperson. In the modern buying process, not everybody wants to talk to a software sales rep.
Melissa Kwan: I mean, I would say nobody wants to talk to a software sales rep. Right. How annoying is it when you go to a website, if any SaaS company and you say, I want to demo and then you get a form that then returns a calendar, then you have to pick a time and they have to hop on a call with a salesperson? Sometimes it’s not even a salesperson, it’s just a qualification call. The person that’s qualifying you doesn’t even know anything about their software. And then when they feel like you’re worthy enough, then you get a demo. This happens a lot. And it’s a very, very frustrating buying experience.
Melissa Kwan: And all you want is to see how it works. I call this the B2B buying disconnect. Right? It’s like when you want to buy a TV, what do you do? You ask your friends, you go to a review site. Right. That’s it. You don’t go and call a guy at Best Buy right away. Or you walk into a Best Buy and the first thing you say is, I’m just looking around. But then when we want to buy software, all of a sudden the vendor gets to dictate everything. That’s not a great buying experience. That’s not how we buy anything. Right? So I actually see that as a huge opportunity for if companies understand that, then there’s a huge opportunity for you to create competitiveness by just offering your prospects and your customers transparency.
Greg Head: You’re still running eWebinar. How big is eWebinar? Employees or customers?
Melissa Kwan: We started it in early 2019, so we built it for about a year and a half before the product, you know, saw the first customer. So it’s only been live for two years. We just, I think, went over 600 customers last month and we’re at just over 600K ARR right now.
Greg Head: And you don’t have any outside investment. Did you fund that out of your prize winnings from selling Spacio or do it some other way?
Melissa Kwan: We do have some friends and family funding. Myself, my co-founder David, who’s also my life partner, by the way, that’s kind of a separate story, we both put in some money we both haven’t paid ourselves for the last almost four years, so I guess it’s sweat equity. And then we have some friends and family funding to kind of get it off the ground. I had a dream to build a company with friends, so part of getting some friends and family funding in was because I wanted to be able to share our successes with friends if this became successful.
Greg Head: That’s awesome. And how many employees or full-time equivalents? I’m sure you have contractors all over the place.
Melissa Kwan: Yeah. So one of the things that I learned in my previous life, was I’m actually a pretty bad people manager. So I came into this business wanting no employees and all contractors. So we don’t have any employees. But full-time equivalents, We’ve got, I would say, eight right now. And then we have a lot of contractors for specific things like writing content, designers for when we need it.
Greg Head: And so every month you’re growing MRR, you’re finding more people to sell, and keeping your existing customers. What is your ambition with eWebinar? Is this something you can run forever and bring more friends into the business and keep traveling the world? Or is this something that someday you might sell?
Melissa Kwan: Yeah. So it took me a long time to figure out what my idea of success is. Because right from my days of being in New York and thinking that I needed more, thinking I needed to be TechCrunch worthy. I thought I wanted the $100 Million Exit or whatever it might be, but it actually took me a long time to realize I’m actually not willing to make those sacrifices to build that kind of a company coming into this business. I really ask myself, you know, how do I define success and what actually makes me happy? And I realize from traveling in the past few years that there are so many things outside of work that I value that have nothing to do with my job. Right. Things like friends, community music, parties spending time with friends and family. None of this has anything to do with my job. My job is something that I know how to do and it makes all those other things possible because.
Melissa Kwan: I also like nice things. I’m realistic about that. I’m actually pretty, pretty superficial when it comes to things. I want this to be a company that sustains my lifestyle in a way where I don’t ever have to look at price tags again. How I define success is if I can travel without looking for the cheapest ticket, right? Or if I can stay in a hotel that I want to in the area I want to, or if I look at an Airbnb I want to buy, I want to book that one, not the one that I can afford, I would consider that success. How much money is that? I don’t know. I think if I paid myself 20K a month, 240k a year, as an executive salary, I think that’s pretty reasonable. I think I would already be fine. And I actually did the math, if I were to have $10 million and retire. I have two options. I can make $10 million a lump sum. Or I can build a business that gives me the equivalent of 10 million.
Greg Head: Yes. The cash flow!
Melissa Kwan: So yeah. So that’s something that pays me. So let’s say it gives me a 5% return. So I need something that gives me 500 grand a year. So then I need a company that pays me 40 to 45 grand a month. And if I start a business with my life partner, I can cut that in half.
Greg Head: Well, that’s really amazing. I spent a lot of years in the shoot the moon, VC-funded growth game of software, and that’s mostly what it was in the early days in the nineties and 2007 years ago, I met with a friend and said, well, I’m thinking about my next thing. And she said, Well, think about the life you want and then design the business to give you the life you want. And I think I sat there for 5 minutes silent like my fuses were bursting, the wires were sizzling. What do you mean, you could do that? I had no idea. And that’s very powerful. Is that working for you, Melissa? You’re not going to go back to not having the life you want.
Melissa Kwan: I mean, how can you ever go back, right? You can’t unlearn what you already know. It’s even hard for someone that’s had their own business that was not successful to go back to a job. I know so many founders that didn’t have an exit and didn’t see a great outcome, and they and they just cannot find it in their hearts to go back to working for someone.
Greg Head: Absolutely.
Melissa Kwan: So they’re still consulting or still trying to start different things like you cannot possibly give up that freedom. Like it’s just too sweet.
Greg Head: Why is freedom so important to you? And this is not you know, it’s not everybody’s thing. This is a possibility for people to see and it’s important to you. Why is freedom a non-negotiable for you personally?
Melissa Kwan: I mean freedom has always been my number one priority. I don’t know if there’s a reason why I want to say that I was kind of just born that way. I never liked people telling me what to do. You know, I couldn’t work for SAP. I couldn’t really have a manager. I mean, freedom to me is to be able to wake up anywhere you want in the morning, to be able to go to any event without asking for days off, to be able to do what you want when you want. Why is that important to me? I don’t know. I just feel like a life that’s not lived on your terms for me is not something that could give me true happiness.
Greg Head: That’s very profound. And I know you’ve learned that the hard way and fought your way to get that. Isn’t it interesting, Melissa, you’ve been in New York and in Silicon Valley, the big cities where everybody’s climbing the corporate ladder and climbing this mountain of success and everybody’s racing around, how these very capable and independent people effectively give up their freedom by signing up for the big funding game or the big corporate life game. Isn’t it ironic that capable people want freedom, but they get the opposite?
Melissa Kwan: I don’t think there’s like a right or wrong right. I think I don’t believe there’s like one way to build a business, but I like the right way to build a business. But I do feel like there is a right way for you. And freedom is defined differently by everybody, right? Like maybe the Silicon Valley CEO feels like if I make that $100 Million exit or $1,000,000,000 exit, that’s my freedom and I’m willing to give up. You know what I have now for the future? Like, I want to think that’s what they’re thinking, right? Like, otherwise, why else would you be doing this? But.
Melissa Kwan: For me, I just think that life is so short. I know it’s like the longest thing you have, but it’s still so short. And as you’re building a company, life is happening at the same time, right? It’s not like, After I build my company, I’m going to get married and buy a house and do all these things. Right. It’s like the equivalent of people saying, Oh, when I retire, I’m going to travel. But why not do it now? Right, because you don’t know what’s going to happen later. So, for me, it’s more important to experience life, but at the same time to build financial freedom. And I’m willing to give up the potential $100 million exit or the billion-dollar exit because I want to live life right now.
Greg Head: I know you think very thoughtfully about it and you talk about your non-negotiables, you’ve written about this. I’ll share the links in the show notes. You talked about the non-negotiables for you personally when you started eWebinar. What you’ve learned about yourself and the business, is that the new business has to meet these criteria or I’m not going to do it. Have you added any new non-negotiables to your list since you started eWebinar?
Melissa Kwan: [00:40:34] That is a great question. I don’t think I have anything new. I don’t think I have anything new to add. I’m still kind of like pretty new in this journey. I’ve had a decade of learnings before that, so I think I really thought long and hard about those non-negotiables.
Greg Head: [00:40:53] So you’ve become a product creation expert working with customers, developers, designers, and building products that people want. And you’ve also become a sales and marketing expert. You’re quite savvy about selling software and marketing software and growing software businesses. Which do you think is most important to the success of eWebinar so far? Was it the product design in itself or your sales and marketing engine that finds and converts and keeps good customers?
Melissa Kwan: I mean, the funny thing is, everything that I knew in my previous business, as it relates to sales, I have not been able to apply to this business. And I’ve also written about this too. This is the difference between like enterprise SaaS software, which was my previous company where you pick up the phone and you call someone or you go knock on their door or you go to a conference and you sell the product. It’s simple. It’s actually super simple. But eWebinar is the first PLG [product-led growth] product, right? For SMBs[small-and mid-sized businesses] Like it’s you come here, you discover, put in your credit card, try it, you like it, you continue. If you don’t like it, you go away.
Greg Head: We don’t talk to you. We don’t call you for the sales process. No touch.
Melissa Kwan: Right. Well, also, I don’t want to talk to you for 50 bucks. It’s not that kind of business, but it’s the business I wanted. One of my non-negotiables was to build a company that could be with a product that could be sold 100% through the Internet. Because of my previous company for the first quarter of the year, I was always at a conference, I was doing booths, I was doing trade shows because that was required and with a big price tag, yeah, we got to profitability pretty quickly, but with a big price tag came high touch customer service and customizations. You know the grass is always greener on the other side, right? People want to sell bigger deals, but they also don’t realize bigger deals come with a lot of headaches. So I didn’t want that.
Melissa Kwan: So everything that I’m doing now to try to get the product out there is something I’ve never done before. And this was actually something that was really unexpected to me. I didn’t expect to have to come in here and learn new things every day. I thought, Yeah, I’ve had two businesses I could come in and do a third time. Getting people on one on one zoom calls got this off the ground, but it is sure enough not how people discover us today. So I think the thing that makes us successful is, we are meticulous about going the extra 5% that nobody else wants to go.
Greg Head: Is that in the design of the product or is that literally in service? You do add a little touch and support.
Melissa Kwan: It is literally everything. The 5% that costs a little bit more or rebuilding something that just takes more time, or working on weekends, responding at night. We built the product with love and that is truly the difference between us and somebody else. It just works. It’s a beautiful product. People are impressed. There are very few bugs and it just works. And if they want to find us, we’re there immediately. And this is where a lot of companies are not willing to go and people take notice. While we haven’t really figured it out what’s the thing that’s going to bring in the most people? Because I’m still learning what we can do. What we have control of is to make sure that when someone comes in that they’re going to stay and that’s what we’re particularly good at.
Greg Head: I’ve seen this over and over and I’ve experienced it myself. There is a huge difference between the one-on-one problem-solution selling of a services business, like consulting or something like that, and then having a B2B product that you sell where you don’t get to make up whatever, like services you make it up and say yes to everything and then product you don’t get to make it up every day, at least if it’s scalable, but with some kind of face to face solution selling in the software business. And then it’s way different, like a magnitude different, to create products and a buying experience and a customer experience that you don’t actually have to talk to anybody. It’s actually a seriously higher bar and I totally understand, everything needs to be that much higher because you’re not talking to somebody, building relationships, or personal selling. It’s a really higher bar for the product to do in the automation and the marketing to do all the work for you.
Melissa Kwan: Well, I mean, everybody says it’s easy to start a business or the barrier to entry has never, never been lower. But my opinion is actually the opposite. I think the barrier to entry has never been higher because of customer expectations or consumer expectations. That’s the moat. That’s why I started eWebinar two months after I sold Spacio because I didn’t want to wait another two years to start something for consumer expectations to be even higher.
Greg Head: Oh, my goodness.
Melissa Kwan: How many seconds do we give an app or a piece of software before we ditch it? How much expectation do we have for something when we log in, how many things do we expect it to do for us? And that’s not going away. That level of standard is only going to be higher and higher. So what does that mean for a company? It just means it’s easy to build your version one, but it is becoming harder and harder to get someone to put their credit card in your solution and continue to pay you. You just have to be that much more, you can’t just be a SaaS product. Everybody can build a SaaS product. But how good is it? What’s your customer service? What’s your brand? What do you stand for? All of those things are evolving. And I think people are more willing to invest in products that they feel like they have a good relationship with, where they feel like the founder and the team actually care about the product and their experience.
Greg Head: Right. These are very deep lessons learned. I know you’re very thoughtful about it. You’ve actually shared your Aha moments, which are kind of universal principles that you’ve learned through this journey. And I’ll share those links in the show notes. And you’ve also got your non-negotiables, which is how you’re designing your business based around what is non-negotiable for you personally. Melissa, what else would you like to tell practical founders? If you had a crowd, you could tell them one more thing for the new practical founders that are coming through the chute, building something serious and valuable, whether they sell it or not, without big funding. What other final bit of advice would you like to share with them?
Melissa Kwan: Yeah, I would say take some time to think about what your personal idea of success is. And I don’t mean the TechCrunch-worthy or a story about your friend that you want to compare yourself to. Just what does success mean for you? And then intentionally design your life around that. Because if you know what success means for you and you make that your ultimate goal, then every decision in your life becomes very easy. Every decision in your life, you can ask yourself, Does this serve me or not? And if it does, you do it. If it doesn’t, you don’t do it. But if you don’t have that guiding star, then everything becomes uncertain. So I would really encourage every founder to think about What does success mean for me and then make it an intention to just design your business and your life and everything around that.
Greg Head: The contrast between big-funded, shoot-the-moon companies, and there’s a place for that completely, but there isn’t a place for having the life you want there. It’s hard and difficult and time-consuming. I totally experience that where I basically didn’t have a life other than my family in these VC-funded adventures. Very exciting, and they paid pretty well and won some prizes, but there wasn’t anything other than that for me for about 20 years. And so I could totally relate to it. And one of the things I’m excited about practical founders is I think it’s possible to have success in a software company and success in your life at the same time now. Whereas I didn’t really see that 20 years ago, 30 years ago, even 10 years ago, and it’s more common now. So thanks for sharing your story, Melissa, on the Practical Founders podcast here today from Singapore. And where’s next for you?
Melissa Kwan:] Yeah, I’m going to go to Bali, for the first time actually, in a week.
Greg Head: Awesome. And how long are you going to stay in Bali?
Melissa Kwan: I think we’re going to stay for three weeks and then maybe go back home to Amsterdam and figure out what we want to do there.
Greg Head: Well, it sounds like an exciting life. Congratulations on your success with your eWebinar. I’m sure a lot of practical founders who are listening to this podcast are great candidates for using eWebinar. Thanks again for being on the Practical Founders Podcast.
Melissa Kwan: [00:50:01] Melissa Thanks so much for having me, Greg.
Melissa Kwan created her first software company in 2014 and then sold it in 2019. It was extremely difficult to start and even harder to grow, but it’s how she learned what not to do in her next startup and what was really “non-negotiable” in her life. Now she’s a nomadic world traveler and the founder of a growing software business.
Melissa started Spacio to provide a technology solution to residential real estate agents to capture visitor names electronically at open houses. It took years to find the right features that someone would pay for while tapping out her savings–and her family support. She sold the profitable business in frustration when she was no longer having fun and wanted new challenges.
Melissa started her second software business, eWebinar, to solve a painful problem she faced while selling and supporting software. eWebinar is an automated webinar platform that provides interactivity and real-time chat support for software companies. Her latest business also supports her personal priorities, including traveling around the world and working from anywhere.
“It wasn’t until then that I realized how awesome it was to call all of my own shots and how great it was to never think about needing to go ask someone else for money again. I was also hearing stories from my friends about how if they could choose all over again they just wouldn’t go and raise VC money,” Melissa explained.
“And then so you start to think, maybe I’m doing it right. According to what I want. And maybe all of that other glory is not as good as it sounds. So I kind of went through that transition of really wanting to be like everyone else. And then, after a few years, earning that freedom and thinking, I’m so glad I have this right now!”
In this episode, Melissa explains:
- The hardest lessons she learned from her first software company which helped her design her second startup in a different way
- Why she was frustrated selling to the real estate market and why she chose to serve software companies with eWebinar
- The pervasive myth of big funding, unicorn exits, and ego-driven ecosystems that ultimately rob founders of their own freedom and control
- What success means to her and how she is creating her business to support her version of happiness
- How she bootstrapped eWebinar with small investments from friends and how she is growing it steadily each month
- Why a “5% better” product design and customer experience “that just works beautifully” is their key competitive advantage
- Why nobody wants to talk to a salesperson just to get a demo of a business software product
Spacio Company Facts
- Founded: 2014
- Practical Funding Type: Self-funding, friends and family angel funding, personal debt, and debt from her parents
- Number of Employees: 5
- Acquisition: Acquired by Homespotter in 2019 for an undisclosed sum
- Location: Vancouver, BC, Canada
eWebinar Company Facts
- Founded: 2019
- Practical Funding Type: Self-funded with some angel investment from friends and family
- Number of Employees: 2 co-founders and 6 full-time contractors
- Location: Vancouver and Amsterdam, or wherever in the world Melissa is traveling
- Melissa Kwan on LinkedIn
- Articles from Melissa
The Practical Founders Podcast
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