UserVoice: The Startup Years

Three years ago, I got the papers from our lawyer saying that UserVoice was an official Delaware C-corp. I found it amusing that the company's birthday was my own as well. That wasn't planned but it's quite fitting as the two of us have been soul-mates for these last three years.

A lot of entrepreneurs have told me our blog post about our first year, the Year of the Scrappy Startup, was great so I figured a follow-up was in order. When we last left off we were the guys, one woman, two kids and a dog living in a house on the west side of Santa Cruz...

While we were writing our year one post we were actually finalizing our first (and to date, only) round of funding -- an eight-week roller-coaster of a ride. I'm pretty proud of the fact that we were able to raise money during one of the worst investment periods in recent memory. But that’s a separate post for another day...

What's most interesting looking back is how easy raising money was compared to growing out a business.

Yay, we’ve got money! Now what?

Most people I've talked to say that by the time you finish your fundraising round all the excitement of it has worn off. It's really anti-climatic. You get the handshake deal and then it's weeks through the doldrums of due diligence to the finish. So by the time you get to the end you're mentally over it and focused more on how to put that money to work.

What was most difficult was figuring out how to spend the money. Clearly we needed to hire some more team members and we had things to do. We had infrastructure that had been creaking along and could use an upgrade. We still had a lot of day-to-day things to deal with. You're still only four people, even if you have $800,000 in the bank. You think you'll take that money and do a lot of amazing things from day one but the reality is that things don’t change as much as you think and you spend a lot of time putting out the same fires... just now without the “if I had money this would be different” excuse. Money is certainly an enabler but you still have to get your lunch pail and go to work every day.

We survived the whole first year of the company on $125,000 of friends and family money and I think we spent that much in the first three months post-funding. Everything suddenly costs real money and people no longer do you favors or (rightfully) give you the deals they once did when you were essentially a starving artist. We had revenue projections that said that our spending plan was sound and that we'd get to profitability long before we ran out of money...but when you're burning $60,000 a month and those projections are based only on 45 days of data it's pretty scary. I think at times we'd worry too much about not blowing it rather than blowing it up. In the end those projections ended up being off by only three percent. You just have to believe in what you’re doing -- and having a decent business model doesn't hurt.

Does it smell in here to you?

One of the other casualties of having a business bursting at the seams is that sometimes you put off things longer than you should. Soon after we raised money we moved the company to San Francisco. My partner, Scott Rutherford, and I scored an apartment first (making sure we didn't have any adjoining walls between our two bedrooms after spending 6 months in a studio together) and set up a makeshift office in the living room. We figured we'd get a real office when we had more people and more time to look for one.

Unfortunately, we never seemed to have time to take a few days off to look at offices (imagine that), so we ended up working out of that apartment for six months. At first it was just a few of us and was a totally fun time hanging out and hacking. But as the team grew, it got a bit cramped and uncomfortable. We had a great view of the Bay Bridge, which came in handy when people were forced to work out on the balcony, because the main room was too crowded (or loud). By the time we moved out we had eight desks in a 500 sq ft room.

When we moved into our office on Bush Street it was a huge relief. We were completely over the lack of work/life separation. More importantly, having a dedicated office had a positive effect on our collective psyche. We took ourselves a little more seriously and I think potential hires did as well.

Turning the corner

It's often said that a startup is your baby and UserVoice certainly has grown up much like a child. Year one was about doing whatever it took to survive. Year two was learning to crawl.

Year three was the point where we actually started becoming our own person. We put out a lot of the major (technical) fires, rectified hiring missteps, and got some of our swagger back. We got back in touch with our customers and really started not just listening but focusing on understanding where we could be doing more to help them. We started to lay the foundation for the rest of our growth as a company. We completely rebuilt our admin tools, launched a new API which served as the backbone for an iPhone and Facebook versions of UserVoice, tripled our revenue, launched, redesigned our sign in process to make it the easiest process among our competitors, but most importantly we’ve re-emerged as much the fiery, competitive company we were in year one. Now we had the knowledge and experience to get things done more efficiently.

I’m most proud of the team and product we’ve put together. One of the hardest lessons to learn as a workaholic entrepreneur is you can’t do everything. You just don’t scale. What scales is a great team all rowing in the right direction.

About Richard White

Richard White is a Co-founder and the CEO of UserVoice, where he focuses on making sexy products for un-sexy markets like customer service. He’s proud to say that his works give people more time to waste rather than waste more of their time.

One Response to UserVoice: The Startup Years

  1. Ed Lea says:

    Probably besides the point, but I always wonder how your co-workers felt going to work in your flat? I presume you had the same bathroom etc. How did you get any privacy if people were working late and you just wanted to get some shut-eye?

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