Edited transcript of Practical Founders Podcast interview with Perry Rosenbloom, founder and former CEO of Brighter Vision

Greg: And we’re live with Perry Rosenbloom, the founder and former CEO of Brighter Vision. Welcome to the Practical Founders Podcast, Perry. 

Perry: Thank you so much for having me. Greg, I look forward to being here.

Greg: And we’d love to hear about your journey. We generally start with kind of the big moment, the end in mind, and then we’ll go back to the journey. But you grew up, with what turned out to be a software platform company and you sold it in 2020.

Perry: August, 2020.

Greg: Yeah, a couple of years ago.

Perry: Brighter Vision, when we sold it, was a full-on marketing platform for behavioral health professionals. Our bread and butter was websites and we offered, essentially, fully custom websites on our templates for a subscription model price. And then we also offered a few other products such as social media marketing in kind of a software platform way, HIPPA-compliant email and a few other products that helped support that base, but most of our users were on a subscription model for their website.

Greg: So, not just custom websites like an agency; I think that’s where you started, but this was, it’s just for the vertical of behavioral health, which is mental health professionals, therapists, coaches, psychologists, all of that. Independent folks, they need a website, and you had it mostly done for them. Could they log in and finish it themselves or did you guys offer services with that?

Perry: The best way to describe it would be kind of like a modular website builder. A user would come in and go through our onboarding process. They would choose Header A, B, C, D, or E, Body Area A, B, C, D, or E, be able to select the images they want from a variety of platforms and embed them in. And that would get them about 80% to 85% of the way there. And then we had a team of designers that would step in and work with them and provide an hour or two of consultation and design work to help take that website from 80% to 85% of the way there to making it more unique for them in their practice. Customizing the colors, some of the esthetics, some of the the buttons, things of that nature.

Perry: Nothing too in-depth. You know, we had our own themes that we built that enabled our team to focus exclusively on design and not write any code. And so we were able to provide a ton of value in those 60 to 120 minutes of consultation work. The therapist could then also log in, update things themselves. Very few actually did. They’d rely on our team just by emailing us to handle things for them, and that was included and wrapped into the monthly service fee.

Greg: And so, when you sold it in 2020, how many employees and customers did you have?

Perry: We were at around 35 employees. I believe we were somewhere in the neighborhood of 4,000 to 5,000 customers by the time we were acquired.

Greg: 5,000 customers. So, this is like one of those website platforms that you can log in and make your own website, but it was designed for just the vertical industry and you had thousands of customers and a team here. Was this like $50 or $100 a month to have your professional website built?

Perry: Yes, the website was $59 a month, and then we had a few other pieces of software that they could layer on top of that to flesh out the platform. The biggest, the most popular one was this tool called Social Genie. Basically, that was a tool we developed a few years into Brighter Vision which was a library of thousands of social media posts that our users were able to customize, just use as is, and schedule out to social media, embed their logo on it and really just have a custom brand presence on social media without investing the type of time needed to do it all fully customized. And so, overall, our average revenue per account was in the neighborhood of the $68 to $72 range, I believe.

Greg: A month. So that heads towards $1,000 a year, slightly under that. So, were you getting towards $4 or $5 million in revenue, something like that? Can you say how much?

Perry: I can’t really speak to the revenue when the company was sold. I believe it was, in terms of an ARR, it was less than that, but fast approaching. We were growing really, really quickly. COVID was very good to us in the sense that a lot of therapists who were kicking the tires on a digital presence were suddenly like, “Oh my God, I need a website now. I need a digital presence now.” And so we had a dramatic increase in demand. We were consistently growing anywhere from 60% to 80% a year, year over year from the get go. So we had a nice, steady, solid growth year over year, and then COVID came and things just exploded for us.

Greg: Wow. Well, that’s an exciting time, and you sold the company. A fast growing company, right? It was getting big, and you sold it to somebody who wanted to make it bigger. That’s why they would buy it. And that’s all very exciting. And that happened in 2020. Let’s go back to the beginning here.

Perry: Flashback time, right?

Greg: Yes, right, flashback. Are you from Colorado, or? How did you get to Boulder?

Perry: No, I’m originally from New York. I went to school out in Michigan. And after four years in Michigan and seeing the sun for about a total of four days, I was like, “All right, I need to go somewhere sunny.” And after graduating, I just wanted to ski a lot, so I moved out to Colorado. I was in the Boulder area, got a job waiting tables and got about 60 days on the slopes while I was trying to figure out what I wanted to do next in my life, in my early 20s.

Greg: Wow. And so how did you fall in to this area? Did you wander around for a while or was this the first thing you did after being an effective ski bum?

Perry: You know, it’s a funny story. I guess it was in 2008, George Bush sent out stimulus checks. And I got a $300 or $600 stimulus check. And I’ve been meaning to write George Bush ever since, recently, at least. But he sent out these stimulus checks and I bought a year of website hosting and built a website on a park; I spent a summer working out in Glacier National Park. And I taught myself search engine optimization, taught myself website design. One thing led to another; I built that out with a network of other outdoor websites to be one of the largest affiliate website providers for REI in the world at the time. So I taught myself a lot of SEO. I got a job at a Boulder-based startup. A big portion of my job was figuring out how to build websites to kind of manipulate Google at the time so that we could test an advertising platform out. And so I figured out how to build websites at a pretty rapid scale. Nothing compared to what we ended up doing at Brighter Vision, but that kind of taught me what the process could look like.

Greg: And so an affiliate, Perry, is… REI has their online website, and if you can drive traffic to them that’s tracked and people buy stuff, you get a little piece of that. You get the affiliate commission or referral. So you got into the “how can I build traffic around this?” Did you have blogs or were you using pay per click or content to get traffic and then say, “Buy over here,” the classic way that we do this on the internet?

Perry: Pretty much. It was entirely organic traffic. Back in the days when… SEO was a lot easier back then. This was, at this point, 10 or 15 years ago or so. So, significantly easier to do. You just needed to build good content and build a few links and people would come. And so I built out this whole network of outdoor websites, taught myself SEO. Eventually I moved out of the Boulder startup scene. I’m like, “I’m going to start my own business,” and started a pretty generic SEO consulting company, which was also supported at the time by my affiliate business. Well, literally a week after leaving my job, I’m about two months newly married, Google sends out their furry black and white creature updates and starts that whole mess. And so, a week after leaving my job, the Google Panda update came around. Took my income down overnight by about 30% to 40%.

Greg: They changed the way they index content to drive traffic and rank everybody. It wasn’t as easy all of a sudden.

Perry: Right. I mean, you could still do it, but every subsequent cute little creature update took my income down another 30% to 40%. And so, my back was up against the wall. My SEO business, I kind of got it off the ground, but we were pretty generic. It was like, “Hey, I’m doing SEO and web design for anybody who needs a website, anybody who wants search engine optimization.” And it just was not going well. I always had to fish for another fish. It was just another job, and that’s not what I wanted to do.

Greg: A job without steady income or steady work.

Perry: Precisely. I was relying on my affiliate income to help supplement the the other business, but it just didn’t work out as intended. And so my back’s up against the wall. My income is pretty low at this point. Still had some coming in, enough to support myself and my family, but it was getting tight. And so my mother-in-law is like, “Hey, you can help me out. Build me a website.” My mother-in-law is a therapist. She owns a private practice in Jacksonville, Florida. As I was researching other therapists websites, I came across this company called TherapySites. And TherapySites was dominating the market. You know, you could do a reverse DNS lookup and see they had 5,000 to 8,000 websites with name servers pointing to them. So 5,000 to 8,000 customers with really, really terrible, terrible websites. And they were not mobile responsive. And it was at the point in time…

Greg: It didn’t have to be. There was that 2008 period where you could make websites for desktops and if you could kind of see him on mobile, it worked. But then Google changed it. If you don’t have mobile responsive, if they don’t look good on an iPhone, we’re not going to rank you anymore, and that was a big change back then.

Perry: User behavior was changing.

Greg: Yeah, of course.

Perry: User behavior was changing. Like, when I started my SEO business, I didn’t even have a smartphone; I still had one of those flip phones. And so this was more like 2012, 2013, I believe. I noticed with TherapySites, I’m like, “Hey, none of their sites are responsive. Let me just start contacting their customers.” And so I did a reverse DNS lookup and pulled a list of all the sites that had their name servers pointed to them. And I just started calling and emailing them and I’m like, “Hey, you’re paying $59 a month for a website that’s very generic and it’s not mobile responsive. I’ll build you one that’s better.” That’s subjective, of course. “But I’ll build you one that’s better and is mobile responsive and I’ll do it for $49 a month. What do you say?”

Perry: And I just started getting a few customers that way. It’s like, “All right, well, this is interesting.” I closed about 10 customers from cold calling them in one month. And I’m not a good designer, to be perfectly candid. I ended up hiring a designer to help me out building the websites. And we struggled getting the designs right because we didn’t have any themes, we didn’t have anything to offer. Our first theme was a PDF document and we said, “Hey, choose between Theme A, Theme B and Theme C,” and there were three different PDF documents for them to choose from.

Greg: Yeah. Was this on WordPress, a popular website platform?

Perry: All of our websites, even today, were all built on WordPress.

Greg: Literally. The free, open source blogging platform.

Perry: What we ended up doing though… I mean, so we’re talking about the early days of Brighter Vision. We’re doing 10, 15 websites a month. At our peak we were doing 300 to 400 websites a month, all on WordPress. And the way that things worked is our custom software made it so that the users designed everything outside of WordPress and then we’re able to copy that over, paste it into a custom plugin we built, and in our custom theme it would create the actual WordPress site they created in our own separate editor. And you know, we just started gaining traction. We got 10 customers a month, got 20 customers a month, and it was just kind of off to the races from then.

Greg: Classic services kind of thing. I did everything for everybody for a while, hand-to-mouth projects, that kind of sucked. Wasn’t any fun. And then you realize there’s this massive corner of the market over here, all these, let me say, behavioral health professionals that had really bad websites and a really bad service provider and you could sell something to them and it had recurring revenue. Did that appeal to you right away?

Perry: I mean, I love recurring revenue. My affiliate websites were generating recurring revenue. I was able to set and forget my affiliate websites; they still generate some money. Like, they still generate $5,000 to $10,000 a year, just sitting there. So yes, recurring revenue was the name of the game. And it changed the whole sales process. When you’re talking to somebody and saying, “Hey, pay me $5,000 for a website,” it’s, “Hey, pay me $60 bucks a month, $2 a day. You don’t like it, you’re only out a few Starbucks trips.” Well, more than a few, but you know what I mean.

Perry: It made it significantly easier to gain some traction, even though we didn’t have a product, even though we didn’t have good marketing, even though we didn’t have anything to sell except a website. And we were able to gain traction in the market by saying, “You’re not going to pay $5,000 for a website, but we will deliver you a website that looks like you spent $5,000, but it will only cost you $2 a day.” And that was kind of like what our pitch was. And anytime people wanted to update it, we’d update it for them. And I mean, we provided a lot of value for that $60 a month.

Greg: So in the beginning it wasn’t this perfect platform, sign up, try, buy, click this, start that, see that, get going without it talking to anybody, productized, right? It was, “Email me and we’ll get it up for you and…”

Perry: Fill out this awful looking Gravity Form on our website. No, actually, in the beginning we would send them a Word document and say, “Fill out this Word document to be onboarded to us so we can understand what your design preferences are.”

Greg: Fancy.

Perry: Oh, it was super fancy. But I mean, it took us to 500 to 1,000 customers at that point. And then we moved it to a generic Gravity Forms fillable form on our website, which got us to 2,000 to 3,000 customers before we created our own onboarding software to help power that forward even more.

Greg: You know, it’s kind of a straight line. There was your mother-in-law, behavioral health. It sounds like a straight line. Yeah, they’re behavioral health and there’s one, and you went and saw… You know, you sold 10, then you sold 20 or whatever, and then 3,000, 4,000 or 5,000 of these, 300 a month. Was it a straight line, and you just kind of improving your platform and improving your process, improving the value, improving your your marketing, or was there cosmic shifts in there? You had to go build a platform or something like that?

Perry: You know, if you were to take a step back and look at a chart of our revenue, that line is straight. We didn’t go hockey stick; we never went hockey stick, but we went straight. And it was always up and to the right, always by about 60% to 80% a year. You peel back and go under the surface, though, it was not a straight line in any way whatsoever. You know, for one, it took a long time for us to get any kind of unit economics that worked. We always struggled with, “Okay, for every 15 to 20 new accounts we’re able to sell a month, we need to add another designer here who has to service these accounts.” And then our designers… You know, designers are more introverted, generally. They also became account managers. And how does an introverted designer design and manage 50 to 80 accounts at once in their design queue? It’s virtually impossible. I mean, it was impossible. There were a lot of operational improvements we needed to make even before software came to increase the amount of clients per designer.

Greg: So when you say unit economics, that’s one or two or five or something like that you can add on top of everything else, reasonably profitably, reasonably easy, reasonably high-value for the customer, like the increment that you can multiply. So you didn’t have something that you could go get funding and do 5,000 of these right away because it would have just been more frustrating to expand from that.

Perry: Precisely. And that was a big problem for us in that we were virtually entirely bootstrapped. I helped fund the company through my affiliate business. Eventually we got a small amount, a couple hundred thousand to help us build out our social media platform, but we were always a hand-to-mouth kind of company. We built out an entire sales team; we ended up doing outbound sales. And the economics worked for us, but it was always like there was not… We invested every single dollar back into marketing and back into our people. And so there was not much left over at the end of the day to invest in our software until we hit a much more significant volume of customers, a much more significant volume base of ARR that we’d have enough left over that we can invest in hiring engineers and invest in our software in a way that allows us to scale more effectively.

Greg: And you weren’t a coder that created this product and you said, “I’m going to put it out there and not talk to anybody, see if they do it.” And start adding in some touch of sales and onboarding and support, human people doing things, because you had to. You were a service company used to doing it manually yourself and then you had kind of leveraged tools, and you were kind of like moving the dial slowly back over from manually service business for everybody to a slightly more leveraged for your designers, implementing for your salespeople, calling and so forth. So, did you always think it was kind of a hybrid business, or?

Perry: In the early days it was 100% service. And then, like you said, we started dialing that back to 90% to 80% to eventually 20%. I’m much more of a marketing, sales operations guy. At this point, much more operations oriented. And so I was always looking for operational efficiencies that could improve our ability to deliver a product 10% faster, improve our ability to deliver that product 15% faster or 5% faster. And so some of it was leveraging other tools that were out there. Eventually, though, what I ended up doing is teaching myself how to build a WordPress theme and rebuilt all of our themes myself in a way that allowed us to deliver the product much faster.

Greg: Did you have a technical co-founder or a technical lead on the other side?

Perry: Just me.

Greg: Oh, really? Wow.

Perry: Never do that again. But for getting from a generic WordPress theme that somebody overseas built, I then basically took all those themes and merged them and created like the Wiziwig editor in those themes for our designers. So our designers then could choose between Heading A, Heading B, Heading C.

Greg: Template assembler, yeah.

Perry: It was a template assembler, yes. And it created this level of operational efficiency that got us to that next level. And then it was like, “All right, well, this is working like this. What if we then combined all of these five or six themes into one master theme? And we work to combine all of those five or six themes into one master theme, but allow you to mix and match the elements of each.”

Greg: Here you go, yeah.

Perry: And then we went from there and we ended up hiring a Director of Software Engineering who was able to take it to that next level and build out the full platform that we needed to provide more of a self-onboarding solution and be able to translate what the user built, what the therapist built or designed in our system, and clone that over to a WordPress theme in a click of a button.

Greg: How many customers did you have before you hired an actual engineer to build software platforming stuff?

Perry: Let’s take a step back. So, we got a $200,000 investment and we used that to outsource development of our social media platform to a local agency here.

Greg: Your kind of add-on product that you would sell to people.

Perry: Precisely. We could spend an hour talking about the lessons learned there, but to summarize, it was a really challenging experience that resulted in… It was just a really challenging experience that did not work as we had hoped it would. And so then we brought it all in house…

Greg: I could feel the pain there, Perry. You know, you’re being very nice about it. I could feel the pain.

Perry: It was tough. But you know, hindsight, right? It’s a long time in the past. I can move from that.

Greg: And that was a little angel funding. You said, “We’ve got this base thing, we’ve got some customers. If I just hire an engineer, I could build a product and I could sell 50% of them, this $50 thing, and off to the races.”

Perry: Precisely. We had so many users that we knew what they needed and what they wanted. And it’s like, “Okay, now we just need to build another product to sell to them. Cool. Let’s increase our average revenue per account and then we’ll be that much more valuable and have that much more revenue.” And so we ended up bringing two developers in house to rebuild that entire platform. And that was probably… That must have been early 2019. So, the first real engineer we hired was in early 2019.

Greg: So you were still kind of “Perry’s Semi-manual Template System.” Did you have thousands of customers?

Perry: We did, yeah. You know, we did have folks overseas who helped us. By that point, we were working on combining all of our themes that I had built into one master theme. And so we used like an overseas engineer to help us with some of that stuff. But it wasn’t until early 2019 that we got two engineers in house to take over our social media platform and build that out and then build out the whole website building platform. And that website building platform actually started getting built out in early 2020.

Greg: Wow. Just before you sold the company. Really? That’s amazing.

Perry: I mean, by the time we launched, it was actually almost coinciding with the sale of the company, by the time we launched our website platform. It was a major selling point of the company that ended up buying us, EverCommerce. They had mid-tier price web solutions of $5 to $10K. They had a company doing high-end web solutions of low five figures to even six figures. But then they also had hundreds of thousands of customers across a variety of verticals that a more self-service solution like Brighter Vision could service. So that was like a really significant driving factor behind the acquisition for them and the value that Brighter Vision could bring to their customers. And it was a phenomenal match, a match made in heaven because we were planning to expand in early 2020 to other verticals. We were like, “We did this with behavioral health; we’re crushing it. We’re the go to name here. How can we take what we’ve done and find similar niches like dentists or attorneys or physical therapists?”

Greg: When did you start Brighter Vision? Sounds like 2012-ish?

Perry: Mid 2013 is when Brighter Vision kind of started, I’d say.

Greg: Did you feel like it was a software company with this kind of WordPress thing, or this was a better kind of services company, a productized service company with recurring revenue or something like that?

Perry: The phrase productized service didn’t really exist back then, or if it did, I hadn’t heard of it. So we’re talking like mid 2013, let’s say even like up to mid 2015 before we had any software that we started thinking about. We were just a business. We were just a bunch of kids in our late 20s, early 30s that were trying to build something of value and have fun while doing it. And we were a small team of, at that point, 5 to 7 people. You know, the idea of building a software company wasn’t really what we were focusing on. It was just like, “All right, we have customers, we have revenue. How can we get more customers and drive more revenue and keep our current customers happy?” We kept track of all those typical SaaS metrics such as churn, LTV, average revenue per account, but we weren’t really a SaaS business or even a productize… I guess you could say we were a productized service, but it’s not like that’s what we were thinking about building.

Greg: Well, that’s a little unusual because SaaS was taking off. And in Boulder, Colorado, it’s kind of a hot spot for startup SaaS software technology funding, right? That’s what the cool kids do. Were you not really in that game or you would kind of go there and explain what you do and they’d kind of kick you out of the cool club or something? How did you not get on the cool startup bandwagon in Boulder?

Perry: I was so naive. I had no idea what any of that meant. I actually worked out of the Foundry Group’s office for like six months. Like, our company was based in their office. And so I would go in…

Greg: Like a VC office, yeah.

Perry: …And the VCs at the Foundry Group were working out of that office as well, and I had no idea what I was exposed to or an understanding of that world. You know, by the time I left that company and started Brighter Vision, I just kind of pulled myself out of the startup scene. I didn’t have time to be distracted by the startup scene. I was building a business and just focused on that. And eventually, when it became clear was like, “Hey, we need more capital to grow this business faster.” Or, “We don’t need more capital, but if we got more capital, we’d be able to do a lot of really powerful things.” That’s when I kind of dipped my toes back in the water. And that really stunk, man. I got a few meetings and it was turned down because we weren’t able to be big enough and I wasn’t thinking big enough for them.

Greg: So you built this steady little, you know, let’s say boring company according to the funders, right? And it wasn’t cool, sexy software, and you weren’t on the, you know, trying to act cool about it. Then you went out and said, “Gosh, if we had a few hundred thousand, we could build a little software product and make a few million and make this thing all more valuable.” But a few hundred thousand to make a few million is not really what big investors or serious SaaS investors want. They want to put in millions and make tens and tens of millions. So you weren’t even cool enough yet.

Perry: I didn’t know that game. I wasn’t exposed enough to that game. And so my options… And it’s a really challenging spot for companies like what Brighter Vision was at that point in time. Because, I think when I was looking to raise some capital, we were somewhere around like one or one and half million in ARR. So we had a foundation of an ARR business, a recurring revenue business, but we didn’t have the kind of capital needed to scale and we weren’t playing the VC game. We tried playing it and we were not able to play it. We weren’t a VC-investable company, and I get that. On the same hand, though, we didn’t have any real assets, so we couldn’t get a real loan to support us. Despite the fact that like, “Hey, you have a recurring revenue model business. You’re pretty solid.”

Greg: Steady.

Perry: Exactly. Like, “Things can happen, things can go bad. But like, if you take a snapshot a year from now, even if you don’t grow at all, you’re still going to be at a million dollars in revenue.” There are a lot of companies out there that need some capital to help them get to that next stage, but you can’t get it without mortgaging your house. And that wasn’t a risk I was willing to take. And so I ended up getting an investor on board, my former boss, who was a really excellent advisor.

Greg: An angel investment from an individual.

Perry: And that helped propel us to that next stage. How things are today might be a little different, you know, with SAFEs being very popular. And now that I have a track record, it’s much easier, the conversations. But on the same hand, I wasn’t good enough, in my mind, to be able to play that game. Whereas you see some people in like 2020 or 2021, it’s like, “Hey, I have a business idea. I graduated from Stanford. Here’s my business idea on a napkin.” “Cool, here’s $10 million dollars, go build it.” Which, you know, led to problems as well.

Greg: They’re having no fun right now, as you know.

Perry: It wasn’t a club I wanted to be a part of, I just wanted capital to grow my business.

Greg: So what year was that? Was that 2018 or 2019, something like that?

Perry: Around 2018, yeah.

Greg: So that was the beginning. Let’s say, venture debt and this SaaS revenue factoring capability could pop in. Founderpath and Bigfoot, that showed up. Did you ever see that or consider a little debt? Because you could have taken down $200,000 on a $1 million and a half ARR.

Perry: Yeah, so I actually spoke with Bigfoot. Brian Parks, a really, really nice guy. I spoke with him; spoke with a few others. I could have raised from them. At the end of the day, I went with my former boss and advisor, Pete. I’m really grateful I did. He was instrumental in helping negotiate things during the acquisition process as an advisor.

Greg: So it wasn’t just money. It was a little therapy and support. And then some big game advice when you sold the company.

Perry: Yeah, very big game advice. Again, I didn’t know how I was playing, but with good coaching, I was able to play that game.

Greg: Did you just grow calling on mental health professionals, their offices, like you did in the beginning? Knocking on their doors saying, “Hey, do you want to pay less than you’re paying for a way better solution?” Or were there some other growth accelerators? That can be just as hard as the software building game as well as the growth game.

Perry: We retained calling on therapists as a channel. We had one sales professional in house all the time. When I stepped away from sales… I stepped away from sales probably like 6 to 8 months in. Sam Chlebowski, my current co-founder and second employee at Brighter Vision, stepped in and handled sales and grew us and led the sales team all the way through until the end. And then we end up hiring two outbound folks. They handled all of our outbound and they did a fantastic job.

Greg: It’s not typical, Perry, for a $ \69-a-month software company to have anybody who talks to anybody in the sales process. Even if they are filling in forms and trying your trial and so forth, it’s not very typical, but there must have been a very high hit rate when you called on somebody.

Perry: Yeah, I mean, we did. We had a very efficient and effective sales process which allowed us to take an $840 average revenue per account, average contract value per year, and make that work, financially. It was a matter of scale. If we were selling 50 accounts a month, no way could that work. But when you’re selling 200 to 300 and then 300 to 400, you can have a sales team supporting that. We did, at least.

Greg: Was there marketing that would create the awareness and then the websites and the trials and the inquiries and the follow-ups, the inbounds?

Perry: Absolutely. Inbound drove most of our business. Outbound drove a percentage. But as we grew up as a company, inbound drove like, everything. I tracked our average ROI on a per channel basis. So I knew podcast sponsorships, which podcast sponsor drove the most leads, drove the most business, what’s the CAC or the customer acquisition cost for that podcast sponsor.

Greg: So you were very analytical and very… You measured to the penny, these things, because you you didn’t have a lot of capital, you didn’t have a lot of big price points. You weren’t wasteful. Very efficient there.

Perry: We were a very capital efficient company. And that allowed us to understand, “Okay, hey this channel, this podcast, the CAC is like $700 bucks. We can’t keep investing in this podcast. Let’s try something new.” And we try a new channel. “Oh, the CAC from this channel is $400. Great. We can do that all day.”

Greg: And CAC is, of course, customer acquisition cost. If you spend $7,000 on an ad and you get seven new customers, that’s $1,000 each to acquire a customer, CAC.

Perry: And then we’d also have to factor in service costs. But as we hit more scale, those became minimal on a per customer basis. We did everything from a marketing perspective. PPC was a decent channel for us. You know, AdWords, PPC. But what really drove a lot of our customers was partnerships, B2B partnerships as well as influencer partnerships. So we built out an affiliate model. So there are all these private practice coaches…

Greg: So, you built out an affiliate. The behavioral health bloggers and speakers and the rest could refer your product and make a certain amount of commission every time somebody signed up as a new paid customer, just like you did for REI.

Perry: Yes, exactly. And in the early days, we didn’t have much of an audience. We’d have to work with these people and leverage their audiences. So we’d work with people and, “Hey, you have a much larger audience than us. Anybody you send us, we’ll give you $100 bucks.” And so we built out pretty much a large affiliate army. We did a lot of podcast sponsorships, we did a lot of webinars. We do monthly webinars. About twice a year, we would have a month where our goal was just to dominate everywhere. So a therapist, any time they listen to a podcast, any time they read a blog post, we were there, Brighter Vision was there. So we partnered with so many folks…

Greg: So, back to your digital marketing organic experience. There you go.

Perry: We crushed it on the digital marketing side and drove in just a ton of leads. We’d bring in outbound reps. So we’d drive 200 to 300 webinar leads in and then they’d call all those webinar leads. Just built out all our funnels, appropriately.

Greg: Yeah, your reps mostly called the in-leads that you were generating and got them to a close. So what was the lifetime value of a customer that was, you know, $600, $700 bucks a year times probably three years on average. Your churn rate for these little guys was maybe lower than average. You don’t want to change your website once it’s up and working or something like that. But I don’t know, was it a few thousand?

Perry: I tracked in a spreadsheet every single new account that we ever got. Every single new account that came in, I tracked on a spreadsheet. And when they would churn, I’d highlight them in red. Eventually, I automated all of that, but it was all manual at first. Of our first 10 accounts, by the time I sold the business, three were still there eight years later. And the number of red rows of people who churned got fewer and further between. I can’t speak to what our actual churn rate was, but it low. Our lifetime value was certainly longer than three years, on average.

Greg: That’s a long term magic trick of the recurring revenue game. If you can keep people on your platform forever, slightly raise the price, sell more stuff, increase their average lifetime value, eight years paying a $1,000 bucks a year, eight years paying $1,500 bucks a year, 10 years, right? You can spend more in marketing to acquire them profitably.

Perry: Exactly. And when you have channels that you could get $200 CAC costs, or customer acquisition costs, man, you just leverage that all day.

Greg: All day long, yes, right. And, you know, VCs understand that. They speak that language as well. But your math didn’t appeal to them. You had a straight line of recurring revenue, but it was this kind of “servicy” business and you had good metrics, SaaS metrics, but it wasn’t, “Could this be 100 million business anytime soon?”

Perry: There were two struggles in that. One was my own ignorance of what was needed to make a $4 or $5 million ARR business become a $20 to $30 million ARR business. And two, we didn’t have the software to speak that language and play in that pond. And by the time I sold the business, we did. We were ready to play in that game. My employees owned 8% of the business, my investor owned a percent, so at the end of the day I owned about 85% of the company. And by the time that we were at the point where it made sense, where it really made sense to get some growth equity, whether it was from private equity or it was from a VC, we were going to need to grow a lot faster. So by the time I sold the business, I was having conversations with growth equity folks. And I had a few LOIs come in. But in order to take the business from where we were to where we needed to go, it was adding a ton more risk onto my plate when I owned 85% already. If I had taken on VCs early on and I did play that game, well, by the time I sold and the number we sold for, I wouldn’t have been able to sell. Every time you take on venture capital or growth equity…

Greg: The bar goes up.

Perry: The bar goes up. And the range of outcomes gets narrower. And your ability to hit those numbers becomes more and more challenging. And so, my perspective and the perspective of my advisor as well was like, “Just ignore them. You don’t need to play that game. You have a real business here. And you can sell for $15 or $20 million and have a remarkable exit because you own so much. If you take on venture capital, though, you have to figure out how you’re going to exit for $70 to $100 million. Are you able to do that? And do you want to do that?”

Greg: To get the same result for you.

Perry: Right. And do you want to do that? Is that something you actually want to do? Because that’s a lot more stress. That’s a whole different game you’re playing there. And so at the end of the day, for us, for me and my family, as I was thinking about an exit or taking on venture capital in 2020 or PE, it became very clear that, “Hey, if we get a good offer, it’s not worth taking on any kind of capital at this point because you’re going to have to grow this company significantly larger than it is today in order to have the same kind of outcome that you could get today. So either keep bootstrapping it and keep growing it this way, or if an offer comes around, let’s hop on that.”

Perry: Well, I did want to grow it; I did want to grow it. I didn’t want to take on investment to grow it further. I could still keep growing it. And we can grow at a really healthy 80% year-over-year clip or even more now that we hit certain unit economics and economies of scale, but I didn’t want to take on investment to get to that next level.

Greg: So let’s talk about your exit, your sale of the company in 2020 to EverCommerce. You kind of had this, “Gosh, we’re getting big enough.” You were getting investment, people calling about investing in your company and people calling to acquire it, knocking on your door. Was EverCommerce the first company you talked to or did you start shopping it around and playing one off each other or get a banker and talk to hundreds or something like that? How did that occur?

Perry: Thankfully, I didn’t need to get a banker as Pete, my investor, kind of served as the banker. He’s had experience negotiating nine figure exits. So he was a phenomenal investment banker for me to provide that guidance. Throughout the history of Brighter Vision, we would get inquiries to sell. And so I’d always take calls. We’d get inquiries from PE firms to sell or inquiries from investors. I always would take these calls just to learn because it was a game I didn’t know how to play. I didn’t know how to play, what the language was, how to make that dance work. So I’d always take these calls.

Perry: By the time EverCommerce came around… I knew the CEO of EverCommerce for a long time, as he was just getting started, Eric Remer. We got lunch. He lives in Boulder as well, ironically enough. And so we knew each other for a while. I would check in with him every 6 to 9 months, let him know how we’re doing, how we’re growing, just keeping that relationship going. We’d hop on a phone call here and there. Because I always imagined that as we’re growing, there’s a list of companies out there that are acquisitive and would fit for us to be acquired by. EverCommerce was one of them. There were a few others. And I maintained those relationships over time.

Greg: Meaning, they did websites for vertical industries or had this kind of marketing technology, lots of small business websites, was a big enterprise software, something like that.

Perry: That was EverCommerce, but there were other companies that were more behavioral health focused as well.

Greg: Oh, I see.

Perry: There are other companies out there that were behavioral health focused that I had built relationships up with through the years, really good relationships. Like, I’d reach out to the CEO if I was in town and we’d grab dinner. We knew each other’s kids names and we built business partnerships as well. And just as things evolved, keeping those conversations going so that if the point came that we were ready to be acquired, if there was something on the table or conversations were proceeding in a way that looked like it, hey, we could pick up the phone and talk about things and see if there was interest.

Perry: You know, I never actually shopped Brighter Vision around, but there was always a list of companies that were interested in acquiring us if the timing worked out for both parties. And price of course. And in the case of EverCommerce, the timing worked out really well. We were growing very rapidly with COVID. They were a very rapidly growing company, and a lot of their growth came via acquisitions.

Greg: And they were funded, presumably, to fund those acquisitions and investors?

Perry: Yeah. They’re public now, but the last funding that they took on was a big investment from Silver Lake. And they were funded as well from Providence Strategic Growth and Providence Equity. They were very acquisitive. We were probably the 40th company they acquired; they ended up acquiring about 50 or so. And in the the doldrums of COVID, April 2020 to July 2020, the M&A market really dried up.

Greg: Exactly.

Perry: The timing worked to our advantage at Brighter Vision in that, “Hey, I have this relationship with EverCommerce. We fit a need for them in their product suite. They need to be driving their business forward both organically and through acquisitions.” And those things just kind of worked out really well together to give a good result for both. And I think it was just an email from Eric saying, “Hey, let’s catch up. Hope things are well. How’s COVID? Hope your family’s good. Let’s catch up.” And so we just had a call and did a little dance, got an LOI, danced some more.

Greg: And the dance was, “Are you open to being acquired and what would it take? Should we put out a…” Did they put out a number first or did you put out a number?

Perry: I never put out a number first, no. It was something like, “Well, are you interested in me? How’s business? Business is going great. We’re growing like gangbusters right now. Can barely keep up with our demand. New platform coming. New platform coming that’s going to allow us to scale from 300 to 400 websites a month to thousands a month.” And I mean, all was true. We were growing like gangbusters; we did have this new platform coming out. And so it was really, really… It does help for sure. “Well, are you interested in being acquired? Would you have an interest in joining EverCommerce?” It’s like, “Maybe. But I’m not really thinking about it.”

Greg: Hard to get.

Perry: “Here are some top line metrics I’ll share with you. Why don’t you look at them? Give me a ballpark range of what that would mean for you guys from an LOI perspective. And if we’re in the same ballpark, let’s continue the conversation. If not, let’s pick it up in 6 to 9 months when we’ve grown some more.” We just kind of had those conversations, got an LOI, talked some more. Eventually, signed on the dotted line.

Greg: Okay. Well, that sounds also pretty simple, right? You know, the due diligence and all of that here.

Perry: So much fun, the due diligence.

Greg: Can you say how much it was acquired for?

Perry: The publicly reported number on their K-1 is $17 and a half million, I believe.

Greg: Okay, so you had this lower single digits thing. So that wasn’t a service company multiple, wasn’t the crazy 20, 30 times revenues that we saw during the boom times of 2021, COVID tech boom.

Perry: I think it was a really fair price for both parties. Given where we were from an economies of scale perspective, what they needed, the risks of taking on a more productized company like ours. It worked out for everybody. And my employees owned about 8% of the company. They got, especially our early employees, some life changing money to buy homes, pay off debt, get married, pay off…

Greg: So it was cash, not stock, right? You didn’t roll some of it over and have earnouts or did you have a little of that?

Perry: I can’t really speak to that.

Greg: Okay, great. So that was, you know, compared to a little affiliate revenue and running a little agency, this was life changing wealth. All of a sudden you’re one of the cool kids in Boulder again, right?

Perry: I live on the outskirts of Boulder for a reason. I love Boulder, but my family and I live out on the rural side of Boulder where we have a little more land.

Greg: You’re a practical founder, so I’m sure you didn’t buy the ranch and the fast car or anything. What was the prize that…

Perry: I’m still driving my Prius from 2012.

Greg: There you go. I know your type here. How did it feel when the money hit your bank account?

Perry: It was pretty wild, man. By the time we closed, it was late August 2020. So, COVID’s still going, running like gangbusters. The world’s all weird and… Ooh. And so my in-laws at that point… We live on three quarters of an acre here. My in-laws were actually living in my backyard in their RV at the time. It was also the last Friday before… My wife is a teacher and I have two young kids, and it was the last Friday before they were going back to school. So I spent all summer in due diligence during the depths of COVID. My wife was like, “Where is my husband? I’m not seeing you at all. I know what we’re doing here, but like, man, this really, really stinks.” And the money hits the account. I remember I’m out back by the RV and just opened my J.P. Morgan account. I showed my wife the number on my phone and it’s like, “Holy cow. All right, let’s put some aside for the government and let’s get back to work.”

Greg: Well, congratulations on that. Did you stay on for a while?

Perry: Yeah.

Greg: So you had a transition time to keep running this thing and transition it. Was that difficult to hang in there and play inside a bigger company and all of that?

Perry: So, I stayed around for a year.

Greg: Not a year and a day, a year.

Perry: Yeah, a year. They almost got me a stay around a little longer. I had a really excellent boss there and the vision of how Brighter Vision was going to get merged was really compelling to me. It worked out all right for me. There were challenges of course, but we got to operate relatively independently. There were other people in my company that their jobs changed much more significantly as they got absorbed by the larger entity that is EverCommerce. But most of what ended up happening was things operating independently and then me needing to change the game I was playing. And in all truth, it really helped to level me up as an entrepreneur. Being exposed to people…

Greg: See how the big game is playing from the inside.

Perry: Exactly. That was a big reason why I wanted to sell so that when I do this again, I’m going to be that much better at it. See how people who have been doing this for 20, 30 years longer than I have, executives 20, 30 years older than me, how are they operating? What are they doing differently than I was doing and how can I learn from that to make a better organization the next time around?

Greg: Well, you know, it is one of the options for practical founders who don’t raise a lot of money. If you say, “I’ve been heads down driving this business forward. I’ve created a multi-million dollar business, breakeven, slightly profitable. It’s worth a lot of money.” You actually have to decide, “I want to learn a completely new sport from $3 to $20 million and risk it again, be a different kind of CEO.” And one of the ways to play that game is what you did. Sell it to a company and have them grow it, because it’s still growing, and have you learn a lot. And that’s one of the ways to play the game, not just funding or keep doing what you’re doing. Like, the business has transitioned and sometimes the markets have as well.

Greg: Well, congratulations. What a journey, right? And, you know, sounds like a straight line, but it wasn’t. And you know, many ways to play this, but you built something valuable, valuable to someone else, and got through a transaction which doesn’t always happen as well. There’s always risks with that. And now you’re on the other side of that. Now you’ve got a new venture. Briefly, what is your new venture that you’re working on?

Perry: My new company is called Motion.io. What we’re doing is creating a client collaboration platform. So, very often client projects get stuck for a variety of reasons, and we’re working on creating a platform that enables client projects to move forward and enable better transparency and collaboration between the client and the person delivering the work. Better managing client projects. What we found is that project management tools work really well for internal organizations and internal projects.

Greg: Yes, one side.

Perry: But as soon as you invite a client in, everything breaks down and there is no tool out there that works really well for collaborating with a client on a project. And we’re focused on building a platform that is designed for that better onboarding, better client communications and then better offboarding as well.

Greg: So what are you going to do differently about this? It sounds like a software product in the beginning as opposed to a “servicy” thing. What else are you going to do different about Motion.io that you’ve learned the lessons of and you’d never want to do or make those mistakes again? Just pick out a couple for us, please.

Perry: Yeah, certainly. So one thing is culture. And we didn’t really get to talk about that too much here, but culture. We’re starting with culture first. We actually wrote out an entire culture doc of what the culture is at Motion.io today, what it is we want it to be, and to let that guide us as a North Star. So that was one big thing. The other big thing is co-founders. I have two phenomenal co-founders. One is my former employee at Brighter Vision, joined as the number two or number three employee, Sam Chlebowski. He’s a co-founder here as well as my good friend Zach, who’s our CTO, who also built up a software company and productized service company and had a nice exit to a private equity firm.

Greg: So are you all just living off your own savings and your affiliate revenue and things like that? Are you going to raise funding? Have you raised funding or is this going to be another bootstrapped software growth story?

Perry: Zach and I each invested some amount into the company, and then we raised a couple hundred thousand off of a SAFE to help us do things faster when the time is right, but being very capital efficient until that time is right, then being capital efficient from there on out. I don’t know if we’re going to look to raise venture capital in the future, but for right now we’re just bootstrapping with a little bit of… We’re fundstrapping, I guess, is kind of like the new phrase du jour, with a little cash in the bank to help us accelerate when the time is right.

Greg: So do you have a product with users and paid customers yet? Do you think you’re on to something?

Perry: I think we’re on to something. We’re recording this here in early 2023. Zach, Sam and I have been speaking about this and speaking with potential users since March or April of 2022. We spent six or seven months of customer research and development and didn’t write our first line of code until August of 2022. So then six months later, we’re at like an MVP. And we have users, we have a handful of users right now who are getting value out of the product. We’ve executed well on a few things on the product. Didn’t execute as well on some other areas of the product that we’re working on going back to fix. But we’re at the point where we have a handful of free users now, growing our funnel via marketing, and I’m on the phone three to four hours a day, speaking with users, speaking with potential users and understanding how we can improve what we’ve built to get it to the point that we’re able to charge what we want to charge for it. And so probably like, end of Q1, early Q2 is what we’re shooting for to launch paid plans on the product.

Greg: All right. Well, how long did that take in between your year and a day leaving the previous company and starting this other one? Is that 25 minutes?

Perry: Technically, it was supposed to be a full gap year, as we called it internally here at my house, at the Rosenbloom house. It ended up being close, pretty close to that, but I started kicking around ideas and talking with potential users about seven or eight months after leaving EverCommerce, which felt like a good time to start getting back into the game, back into the swing of things. I didn’t start working full time until a solid year after, though, of leaving EverCommerce.

Greg: Generally in line. Six months to a year is usually when people get the itch and find something. And this is kind of related to the world that you were in. Perry, that’s an awesome story, and best wishes on your new startup there. Perry, what advice would you have for practical founders of all types, there are all kinds of ways to do it here, that are thinking about starting a company and having some type of journey like you had. Serving customers, doing it pretty efficiently, growing something, winning a prize. What advice would you have for them as they’re just starting out?

Perry: I think this advice can be applicable whether you’re just starting out or really far along: It’s never stop talking to people. Never stop talking to potential users, existing users and future users. You know, I did all the sales at Brighter Vision from day one. I understood what every single person’s major pain point was. By the time we sold, I knew our customers in the behavioral health market as well as… There might have been like a handful of people who knew it as well as I did in the entire world. And that’s from talking with people. And so understanding therapists for me, understanding what their needs were in those early days, allowed us to build a product that was successful.

Perry: You know, it was hard to get people on the phone, hard to get them to talk with me. But at the end of the day, we were able to understand what their problems were and understand them better than anybody else in the world, especially as it pertained to marketing. And that’s what we’re doing today with Motion.io, speaking with people who are delivering client projects, mostly creative type folks, and understanding what are their problems and how do we build a solution that solves their problems better than anybody else out there.

Greg: What is the best question you ask them to uncover something useful for you?

Perry: Oftentimes in those conversations, let’s say it’s a 30 or 40 minute conversation, the last five minutes is where all the value is going to be. Generally speaking, not always, but generally. You know, the guard is down and you’re just having a free flowing conversation. But often people who aren’t product people will say something to the effect of, “Well, I really want to be able to do this. I really want the product to do this. I like how this tool does that.” And the best follow up question to that… It’s not really a question, it’s more of a statement. Well, it’s a question. It’s, “Well, tell me what that would allow you to do.” And so it’s trying to solve what job they’re trying to accomplish through a specific feature or a specific tool set. And so that follow up question there of… Not just saying, “Oh, you want us to build this feature.” It’s, “What are you trying to do with that?” And then you’re able to drill down to understand they’re not really wanting to do X, they’re really wanting to be able to do Y. How can we do Y for them? And how can we build something that solves that job of Y?

Greg: That’s very wise. The five Y’s, some people say. Why would you want that, why would you want that, why would you want that, five times. That’s a great one there.

Greg: Well, Perry, thank you for sharing your story here on the Practical Founders Podcast. Congratulations again on your success and best wishes to your new Motion.io adventure.

Perry: It was a pleasure being here and I hope your audience got a ton of value out of this. So thank you so much for letting me be here and share my story.