546: In Retrospect - Building BigCommerce: Mitch Harper’s Guide to Scaling a SaaS Empire

Summary

The Foundr Podcast with Nathan Chan
Episode 546: In Retrospect - Building BigCommerce: Mitch Harper’s Guide to Scaling a SaaS Empire
Release Date: January 10, 2025

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Introduction

In Episode 546 of The Foundr Podcast with Nathan Chan, Nathan reconnects with one of his old mentors, Mitch Harper, the co-founder of BigCommerce. This episode delves deep into Mitch's entrepreneurial journey, exploring the inception and scaling of BigCommerce, his strategies for mitigating risks, and the personal challenges he faced along the way. For aspiring entrepreneurs and seasoned business owners alike, Mitch's insights offer a blueprint for building a successful SaaS empire.

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Mitch Harper's Early Beginnings and Entrepreneurial Spark

Mitch Harper's journey into entrepreneurship began at the tender age of 12. Growing up in Brisbane, Australia, Mitch developed a passion for software engineering, teaching himself programming through platforms like Cubasic on an old XT computer.

[01:08] Mitch Harper: "I love to take an idea from my head and bring it into reality. And the easiest way to do that is not to build units or houses, it's to do it with software and code on the computer."

By age 19, Mitch had already sold his first venture, devarticles.com, a website akin to Site Point, which boasted around five million visits in its first year. This early success not only honed his technical skills but also instilled a deep-seated passion for helping small businesses thrive through technology.

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Building and Selling Interspire

After selling devarticles.com, Mitch continued his entrepreneurial endeavors by developing various SaaS products, including a content management platform and an email marketing tool. His collaboration with Eddie, whom he met in a Perl chat room, led to the creation of Interspire in 2003.

Interspire, launched in 2003, combined Mitch's products with Eddie's WYSIWYG HTML editing component, offering a suite of tools for small businesses. Operating bootstrapped until 2007, Interspire achieved remarkable success, generating approximately $10 million in annual revenue from one-time software sales.

[12:52] Mitch Harper: "We built that up to about $10 million in revenue in four years, solely from one-time payments of about $500 each for the software."

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The Genesis of BigCommerce

In 2007, customer feedback consistently highlighted the need for a robust shopping cart solution. Recognizing this opportunity, Mitch embarked on developing what would become BigCommerce. Over three intense months, he built the initial product version to 80% completion, working tirelessly to meet market demands.

Upon launching the shopping cart product, BigCommerce soared, pre-selling $250,000 in licenses through Mitch's proactive blogging efforts. By 2008, the product alone was generating an estimated $2-3 million in revenue, compelling Mitch and Eddie to pivot entirely towards the SaaS model.

[15:26] Mitch Harper: "BigCommerce had about 9,800 paying customers, while our email marketing product had around a thousand. That made the decision for us to focus solely on BigCommerce."

This strategic move resulted in exponential growth, culminating in $100 million in annual recurring revenue by the previous year.

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Raising Capital: Strategic Growth Over Necessity

Despite BigCommerce's strong performance, Mitch and Eddie recognized the importance of scaling strategically through external funding. With BigCommerce already profitable, they approached fundraising with a unique perspective, aiming to capitalize on a burgeoning market before it became saturated.

[25:37] Mitch Harper: "We saw that Opportunity, we realized that we could keep bootstrapping the company with our profits, but we wanted to build a billion-dollar business. So we decided to raise capital to accelerate that growth."

Their approach differed from many startups; they were not desperate for funds but sought investors who aligned with their vision. This mindset enabled them to secure substantial investments without relinquishing significant control or compromising their business ethos.

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Mitigating Risk: A Foundation for Sustainable Success

One of the standout themes of the conversation is Mitch's emphasis on risk mitigation. Contrasting the common belief that entrepreneurship requires taking colossal risks and potentially jeopardizing personal stability, Mitch advocates for a balanced approach.

[35:57] Mitch Harper: "The first thing you want to do is build a cash flow business... I use that cash to fund my new companies so I don't have to dip into my own money or I don't have to go to VCs."

Mitch draws inspiration from Richard Branson's strategic risk management with Virgin Atlantic, where Branson incorporated clauses that minimized potential losses. Similarly, Mitch ensures that his ventures have minimal downside risks, allowing for significant upside potential without endangering personal or financial stability.

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Personal Struggles and Overcoming Burnout

Behind the scenes of BigCommerce's meteoric rise, Mitch faced profound personal challenges. Between 2007 and 2010, the pressures of scaling a rapidly growing company led to burnout, depression, and unhealthy coping mechanisms like excessive drinking and erratic eating habits.

[42:03] Mitch Harper: "I was burnt out... trading off between like, do we take a salary and live poor for a bit while we bootstrap this, or do we go and raise money and risk losing it all."

Recognizing the detrimental effects on his mental and physical health, Mitch took decisive steps to regain control. He focused on building a robust senior leadership team, reducing his workload, and prioritizing personal well-being. This shift not only salvaged his health but also set BigCommerce on a sustainable growth trajectory.

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Scaling with Talent: The Cornerstone of BigCommerce’s Success

Mitch attributes much of BigCommerce's success to the exceptional talent he and Eddie cultivated within their team. Understanding that a great product alone isn't sufficient for sustained growth, Mitch prioritized hiring individuals who not only possessed the necessary skills but also shared the company's vision.

[46:54] Mitch Harper: "A great product doesn't necessarily build a great business, a great team does."

By empowering talented individuals to lead their respective domains, Mitch ensured that BigCommerce could scale efficiently without becoming bottlenecked by the founders. This strategic focus on talent acquisition and delegation allowed the company to navigate challenges and capitalize on opportunities dynamically.

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Conclusion

Mitch Harper's journey from a young software enthusiast to the co-founder of a billion-dollar SaaS company is a testament to strategic planning, risk mitigation, and the unwavering importance of building a stellar team. His experiences underscore the significance of balancing personal well-being with professional aspirations, offering invaluable lessons for entrepreneurs aiming to scale their ventures sustainably.

For those looking to delve deeper into Mitch's strategies and insights, he encourages listeners to connect via his website and Twitter.

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Notable Quotes

• [01:08] Mitch Harper: "I love to take an idea from my head and bring it into reality. And the easiest way to do that is not to build units or houses, it's to do it with software and code on the computer."

• [12:52] Mitch Harper: "We built that up to about $10 million in revenue in four years, solely from one-time payments of about $500 each for the software."

• [15:26] Mitch Harper: "BigCommerce had about 9,800 paying customers, while our email marketing product had around a thousand. That made the decision for us to focus solely on BigCommerce."

• [25:37] Mitch Harper: "We saw that Opportunity, we realized that we could keep bootstrapping the company with our profits, but we wanted to build a billion-dollar business. So we decided to raise capital to accelerate that growth."

• [35:57] Mitch Harper: "The first thing you want to do is build a cash flow business... I use that cash to fund my new companies so I don't have to dip into my own money or I don't have to go to VCs."

• [35:57] Mitch Harper: "If I can't get the downside to be zero, I want it to be minimal. If I can't get it to be zero or minimal, I won't invest in the business, I won't start it, I won't do whatever the project is."

• [46:54] Mitch Harper: "A great product doesn't necessarily build a great business, a great team does."

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This episode not only highlights the entrepreneurial acumen of Mitch Harper but also provides actionable insights for listeners striving to navigate the complex landscape of building and scaling a SaaS empire.

Transcript

[Nathan Chan]

Hey founder fam. Today we're jumping back into the archive to bring you an all time favorite episode with one of my old mentors, Mitch Harper, who's the co founder of a massive company called BigCommerce. Now Mitch is a longtime mentor to me and coach and the driving force behind founders success. And the things that I learned from him were so invaluable. And this interview is just a small fraction of of just how incredible this guy is. So I want to share this with you guys again. We've got so many incredible interviews, sometimes it's hard to find and sift through all the noise. So let's jump in. Welcome Mitch Harper.

[Mitch Harper]

Hear the stories, learn the proven methods and accelerate your growth and future through entrepreneurship. Welcome to the founder podcast with Nathan Chan.

[Interviewer]

The first question I ask everyone that comes on is how did you get your job?

[Mitch Harper]

My job? My job as an entrepreneur or my first real employee job?

[Interviewer]

Yeah, I guess. How do you find yourself doing the work you're doing today?

[Mitch Harper]

Oh wow. That goes back. So I started building software when I was 12. 12 and 12. It was a pretty, pretty loose definition of software. So I was using. You're probably way too young to know what I'm even talking about, but I was on Cubasic on an old XT computer back in the day, probably around 1994. I was 12. Yep. And I was building games, so ASCII based, text based kind of games back in the door days before Windows. And I would print out the source code to other games and I would just type that into Q Basic. So there might be three or four hundred pages of code. And that's how I learned programming essentially in Cubasic. And then I had a few jobs, built a few early businesses around teaching coding. So one of my first businesses was a website called devarticles.com kind of like Site Point. I sold that when I was about 21 and that really taught me programming, software design. I did a few courses in classrooms and online and everything like that and realized that number one, I love to take an idea from my head and bring it into reality. And number two, the easiest way to do that is not to for example, build units or houses, it's to do it with software and do it with code on the computer. So self taught software engineer, designer, product manager, marketer, just by reading books and asking smart people and yet turned that into about eight companies now since 2001 when I got started. So really it's been the last 17 or so years implementing what I was teaching myself from when I started when I was 12, which is software engineering, design, and then of course all the other stuff like hiring and raising capital and all that kind of stuff. So, yeah, just. Just a passion that I had when I was younger. I don't know why I liked coding and building software. Maybe because of the maths, maybe because of the creativity, but that's kind of how I got my start. And I had a lot of jobs. I started at Burger King or what we call Hungry Jacks here in Australia, worked in fruit shops, worked in kind of computer hardware repair companies, but then got to the point where I was out of school and I just wanted to do my own thing and wanted to be my own boss and do what? Bill Gates and Steve Jobs back then, they were my kind of mentors and idols. Do what they were doing at the time with Microsoft and Apple, which is built a big important technology company that could transform the world and democratize or take something that was only available to larger companies and give it to smaller businesses. Because I love helping small businesses.

[Interviewer]

Yeah. Wow, that's crazy, man. So, like, did you go to uni or anything or. Because, yeah, you've been, you've been an entrepreneur, you said, or founder for 17 years.

[Mitch Harper]

No, I didn't go to university. So I did a few private college courses back in the day to learn different programming languages like ASP and. NET. I mean, this was 15 years ago or something like that. And I kind of didn't like the classroom environment. I like to teach myself. I like to find people who are the best in the world of what they do and get them to mentor me. And so I just, I didn't find the dynamic of sitting in a classroom listening to someone from an academic background try and teach me practical skills in software engineering and design. So that was the main reason I never went to uni. And by the time I was ready to go to uni, so that would have been around 90, the year 2000. So I finished high school in 99. So around 99 or 2000, I mean, I had my first company up and running by then, which was DEVArticles. I started another online e commerce site that was getting, you know, generating $500,000 a month in revenue. And so by that time, the opportunity cost of going to university didn't make sense to me. So I kind of said, why would I spend four years sitting in a classroom learning how to build software when I already know how to do it? How can keep learning on the job and make a lot of money, help a lot of people at the same time. So that's kind of how I weighed it up and decided not to go to university. And I think when, when you are into software, when you're into entrepreneurship, when you're into computer science and those kinds of things, my personal opinion is that it's better to learn by doing than by sitting in a classroom and learning from someone with an academic background that doesn't have the practical skills that you need to either be an employee in a tech company or to run one as an entrepreneur. So I decided not to go to university.

[Interviewer]

Yeah, I see. And, and like, were your parents very supportive of that? Like did you have like a family or did you know anyone that were, was an entrepreneur? Because I find that really, really interesting because you know, back then that, that wasn't, that wouldn't be something that would be very common and it wouldn't. Would be shunned upon even more in, in society back then.

[Mitch Harper]

Right, Yeah, I mean we're talking the year 2000 and I grew up in Brisbane, so I was living in Brisbane at the time. I hadn't moved to Sydney yet. And actually, sorry, I grew up in Brisbane and I just moved to Sydney in 1998. So I was fairly new in Sydney. And, and back then, I mean, we didn't have the Atlassians, the big commerces, the, the big tech kind of success stories that we have now. And so my view was always us centric. And so I'd always look at what was happening in the U.S. i mean, this was the height of the dot com bubble at the time where, you know, pets.com had a little bit of revenue and was valued at a billion dollars with no profit. Right. So I was looking at the US and mainly to get back to your question. So I was raised by a single mom. My dad left when I was two. Very hard upbringing. And so my mom always encouraged me to be able to do whatever I want. She never pushed me to go to uni. She never pushed me to do well in high school if I didn't want to because I was always working on my companies for 12 hours a day when I'd get home from school. So yeah, I had a very supportive mom. She obviously is still supportive today. Um, and yeah, her view was you can do whatever you want. She never pushed me to do anything or go in a particular direction, I think because she saw that my mind was creative and curious, more so than academic to go down that education path. And you know, that's, that's really been important to me because I've never had any pressure from anyone to go down a certain path or to perform in a certain way. And I think that gave, gave me the space that I needed growing up to, you know, choose my own adventure, for lack of a better term, decide to do what I want to do on my own terms, how I want to do it and to do it at the speed that I wanted to do it. So yeah, my mom was, was amazing and still is in letting me essentially do whatever I want in terms of work and even school back in the day.

[Interviewer]

Yeah. Wow, that's, that's, that's amazing story, man. Like, so, yeah, I find this really interesting because these are some things that I've never asked you before. Right. So that is true.

[Mitch Harper]

We've spoken a lot and we've never gone into my background. It's always niche. Really.

[Interviewer]

Yeah, that's right. So, so like just for the context of everyone listening and I mentioned at the start of this podcast, like I've been very privileged and lucky to have. Mitch is like a mentor and coach and he's taught me a lot. And I can credit a big part of like, you know, founders growth and what we're doing to, and what we're. This crazy strategies to meet. So one thing I really want to talk to you about, which I think is extremely impressive that you've done is, is you. Is. Is eventually founded Big Commerce. Now I want to come to that and, and because I think it's just incredible what you've built and how you started out of Sydney and you know, you've built, you know, this massive, massive, massive startup. So for first of all, so you're working on dev articles and you ended up selling that. And so what happened next? So you're building this website and you said you had an E commerce player doing half a million a month.

[Mitch Harper]

Yep. So that was a. The E commerce play was where I was an employee, an employee during the day. They were a hardware kind of company. I don't think they're around anymore. My job was essentially to come in and build their online presence from scratch. Because this was in the early 2000s. There was no Big Commerce at that time or no point and click type tools to set up an online store. So that's really where I kind of got my skill set around E commerce. I got the entire online platform from scratch using, I mean back then it was ASP and DLLs for anyone that knows what I'm talking about. And so it was really cumbersome. Took me a long Time took me about three months to build that and we launched and within six months we were generating about $500,000 in revenue from store. So that's really how I got my domain expertise in E commerce. And little did I know that that would come back and help massively when I decided to build BigCommerce probably about five years later. So yeah, to get back to your question, started DEVArticles sold that, you know, when I was, I was probably about 19 or 20 or something like that for, for a good sum because I had two US companies and I got them into a bidding war, which was awesome. So we ended up getting double the initial offer price. And when you're that age, I mean it's a great outcome to be able to sell a company like that considering we had no revenue. It was just an online site very similar to Site Point where we had, I think we did about 5 million visits in the. Sold that. And then I was building products that you would install on your own web server and run as part of your website. So this was again for SaaS. Cloud was really early. Salesforce was around, but SaaS and Cloud weren't common terms that everybody knew. And so I built a content management platform. I built an email marketing platform similar to Mailchimp. This was, yeah, 15 years ago, built a knowledge based solution and was selling them online. So you'd come to the different websites for the products, you would pay, I think it was about $500 one time and then you would install those scripts on your web server and run the products. And so that was doing really well. And then I was in a chat room, a Perl chat room, Pearl being like a programming language similar to php and it was an American room. And I was asking for help and I happened to meet a guy on there called Eddie who was also in Sydney and he was asking for programming help as well. And I was like, all right, what are the odds of another Aussie guy being in this American Pearl coding chat room? So we started talking and long story short, I was in. Where was I at the time? I was in Roselle at the time. Eddie was in Marrickville at the time. And we met up and got along really well and decided to kind of merge what we were doing together. So Eddie had a WYSIWYG HTML editing component and an online website, CMS if you like. And I had three of my products and we brought them all together and that's how we started Interspyle, which we launched in 2003. And we built that completely bootstrapped up until 2007. And we got it to about $10 million in revenue in four years. And that was, that was not recurring revenue. We had to earn that revenue every single month. So that was $10 million a year in about 2007 from one time payments of about $500 each for the software.

[Interviewer]

Yeah. Wow. And. And when you said, when you said about dev articles and you said we. Did you have any partners back then or it's just you?

[Mitch Harper]

No, it was just me and some, some writers that I found online, freelance type writers who wanted to contribute because they liked teaching and they were really good at it as well. So it was just me. I mean, I was running it from my bedroom at nights. I would write articles and then reach out to some advertisers. I mean, we had a little bit of revenue, but it wasn't a lot. And write the email newsletters. I had an email list of about 250,000 people and it was just me, me and a server in. I don't know where I was, somewhere in the us Just a crappy little web server that did the job and managed to hold up for 5 million visits in the first year.

[Interviewer]

I see. And then you said you sounded like you were building, you built some other products that you and Eddie both combined when you started Interspire.

[Mitch Harper]

Yeah, so this was really early on. Again before SaaS, before products like BigCommerce or Mailchimp or you know, Help Scout and Zendesk. And so we both, funnily enough, saw the need for tools that would help small businesses run their website, do customer service and do marketing. That's why I built a CMS for the website, an email marketing platform so they could send out newsletters and a knowledge based tool so they could help their clients. And funnily enough, Ed had the same kind of thing in his products. And so when we merged the products, there wasn't too much of an overlap, but we ended up having five different products that we could sell essentially to the same kind of customer. So instead of just selling one product to one customer for $500, we had a shot at selling them four additional products over their lifetime. And so we could increase their lifetime pay from say a one time payment of $500 to maybe 2 or $3,000 if they bought a few of our products and use them all at the same time. And so we saw the synergies there. I put in the money that some of the money that I made from selling dev articles, I did go out and buy an S2000, which was the Honda S2000. I don't know if you remember those. One of the sports cars that I wanted at the time because I was 19 and, you know, when you're 19 and you sell a company, you buy a sports car. Ended up crashing that into a pole, almost killing myself, but that's another story. And so, yeah, I put in a good six figure sum into Inspire. Eddie had some money from some freelancing and web design work he was doing. He put that in and yeah, we were off and running. We had some cash to invest in marketing and we hired a few people and yeah, built that up really well. As I mentioned, up until about 2007 to around 10 million a year, doing 8 million in profit.

[Interviewer]

Wow, that's a pretty awesome business. So why didn't you just stop there?

[Mitch Harper]

Because in 2007 we had the idea to build a shopping cart product. Customers actually gave us the idea. So we, we would always do customer feedback and customer development. And not only would we ask them, hey, what do you like about our current products? It would also be, hey, what other pain points are there in your business that we could help you with? And shopping cart just kept coming up. And initially, you know, we resisted. We were like, we had, we've got enough products, we don't need to build any more products. I mean, by that time I think we had seven or eight products. And I thought, do we really need like a ninth product? And I remember Eddie and I were standing at the front of our old terrace on national street in Roselle. If anyone's in Sydney and familiar with the area, which is where we were running the company from, probably Elite. We had about eight people working on the top level of the terrace. But we did, we did have harbour views, which was awesome. And I did live on the bottom level, so it was free rent for me, so. And we had a gym in there and we'd have crazy parties anyway, I'll save that for another time. So we were standing out in front of the terrace. I think we just had lunch. And Eddie basically convinced me. He said, dude, we should build this. I was like, all right, man, I'll see you in three months. He said, what are you talking about? I said, I'm going to go dark for three months. You're going to run the company and I'm just going to sit in a corner and build this product. I don't want to talk to you, I don't want to do any customer service. I want to deal with anything in three Months, we'll have a product. Maybe it was six months, but I think it was three months. And he kind of was confused and said, okay, go and build it if you want. I said see soon. And so three months later I built the entire product to about 80% completion. And it had online ordering, catalog and search and a back end and you could upload your products and import from CSV and all that kind of stuff, reporting, analytics, insights, multiple users and. And then I just, I was burnt out. So I worked in that for three months non stop. And at the time I was probably doing 16 hour days. I was single, I hadn't met my wife, didn't have any kids. And so I said let's go and hire people to, to help me finish this off. And so we hired a young guy called Chris and a few other people and Chris went on to get to this later. But Chris has gone on to be in a really lead role at BigCommerce even still today and was the catalyst for the success of Inspire Shopping Cart, which is what we called it at the time. And then we pulled that out of Inspire and pivoted to a SaaS model with BigCommerce. So long story short, we launched that in. It was probably late 2007 that I'd finished the Inspire Shopping cart product. And I mean out the gate it just blew up. I mean it, it killed all of the other products in terms of revenue, in terms of customer count. We pre sold a quarter of a million dollars in licenses just by me blogging about it as I was building it, saying hey, I've just built this feature for a shopping cart product where launching soon, what do you think of it? And there will be a little promo below it that said sign up now before we launch. And I think you got 50% off or something like that. And we had about a thousand people do that at $250 each because we were going to launch it at 495 US when it launched, which we did. And so yeah, we generated a huge amount of cash pre launch. And then I mean when we launched, I can't remember the numbers because it was 11 years ago, but I mean we probably did something like 2 or 3 million bucks in 2008 just from the shopping cart product alone. And the profit on that would have been 80%. So that's when we really thought whoa, this is insane because our email marketing product was, was doing really well at the time, probably generating $5 million. And so we said this product has the potential to outstrip Growth and revenue generated, generated from Email Marketer. So we decided to really focus on the shopping cart product. We discontinued all of our other products except the shopping cart and the email marketing product. And that's how we ran inspire for another two years. So until that 2009. And then we said, all right, SaaS is here. We, we, we need to move away from this on premise stuff to SaaS. We essentially, and cut me off if I'm rambling. We essentially said, okay, let's launch a SAS version of our E commerce product and a SAS version of our email marketer product. We'll put the same AdWords budget behind both of them. And after, I think it was a year, we'll look at which one has the most revenue and we're going to cancel everything else and go all in on that product. And so we were split, testing our products to figure out the future of the business because we knew we wanted to be in sas, we knew we wanted to focus on one product. And we started to have this idea that, hey, we might be big enough to raise money from US investors in a few years. So we wanted to have a singularity of focus. And after the first 12 months, BigCommerce had 9,800 paying customers and bigger response, which is what we called out. SaaS email marketing product. I think it had something like a thousand customers. And so that made the decision for us. We split, tested two products against each other with the same marketing spend, same support resources. Over a year, BigCommerce, yeah, had as I mentioned, 9,800 paying customers. We were aiming for 10,000, but we missed it. And Email Marketer had something like a thousand. So that, that made the decision for us. Shut down all the other products, rename the company to BigCommerce. And from September 2009, it was on that when we said, we're in SAS, we're in E Commerce, we're not doing anything else. And then, I mean, it just took off. Like the first year I said we did 9,800 customers, now probably paying US$25 a month. So I'm just doing some maths here. So we got it to about a quarter of a million dollars in monthly recurring revenue after the first year. And then at the end of the second year we had something like 25,000 customers. So it just kept growing and growing and we took our average revenue per user up from $24 to hundreds of dollars. And you know, now the company is just huge. We announced last year that we did $100 million in annual recurring revenue and it's still growing massively. So that's kind of the long winded version of how we ended up getting to what became BigCommerce.

[Interviewer]

Yeah, well that's amazing. And, and I'd like to delve a bit deeper like so, so you, at first you built, built like out the company in Sydney, right?

[Mitch Harper]

We did, yeah. We were in Roselle in Sydney. We moved to Alexandria. We stayed in Sydney.

[Interviewer]

Yeah, yep. And then why was Chris the catalyst?

[Mitch Harper]

Like, like so Chris. And if you're listening Chris, I hope you're well. Chris is amazing. So at the time of hiring Chris he, he's one of these genius guys. He was, he was running an open source forum software called my bb. I think it might still be around. So my bulletin board. So if you remember 10, 15 years ago, there was forum software like V Bulletin and all these kind of tools. Those forums were cool for social media, right. They were really the precursor or the version one of social media tools like Facebook. And he was, he built this whole product that ran amazing forums and you could customize it and whatever. And that was his side hobby because it was open source. And during the day he was working at Target on the register, so helping people check out and complete their orders. And so we saw this young guy and said, oh my God, this guy's amazing. He's built this open source forum product but he's never had a job in our software or tech company. We're going to take a chance on him. And so he came in and was essentially my right hand man. Finished or helped me finish building out the product and eventually he was the lead developer on it and, and everything like that. And he just, he just took off. He was the, the world's nicest guy. Still is. We worked together for such a long time and he was really the catalyst because he was just an amazing programmer. So I've always said and thought that I'm an entrepreneur. I knew enough back in the day to build software, but my coding was rubbish basically. Right. I knew enough to build stuff and get it to work, but to, to scale a company, I mean the guys that we ended up hiring rewrote most of my code after the first two years. And there was always a joke that if something didn't work in the product, they'd look in the comments and there's Mitch's code. So I said that I knew enough to be dangerous, but I was not on any of the guys levels that we brought in to run engineering and to build the product, especially Chris, I mean, yeah, he was the first glimpse that Eddie and I had of, wow, like, Sydney has really good engineers. They're just not at big companies because we didn't have big SaaS tech type companies here at the time. Atlassian was maybe what, five or six years into their journey. They were built on Java back in the day, I believe they were on premise as well instead of sas. You know, there was no Big commerce, there was no anything. So we, we really had to hunt for these guys who were almost like, you know, diamonds in the rough. They needed a bit of polish. They never had any work in a commercial environment, but man, they, they were programming geniuses and we managed to find a few of them in the first few years. And then I built the engineering team and a lot of those guys have gone on not only to do well at Big Commerce, but they're running engineering at other big SaaS companies here and in the US as well. Because of that experience that they got helping Eddie and I build Interspire and BigCommerce and seeing what it's like to scale a technology company up from hundreds of users to tens of thousands or hundreds of thousands and billions of hits on all of the E commerce stores, for example, that Big Commerce powers. So yeah, he was really the catalyst that made us say, man, we can find good talent. And technology and software and entrepreneurship in general is all about finding good talent. I think we can build this into something big. And that's when the light bulb kind of went off for us. And as I mentioned, we went all in on Big Commerce and had singularity of focus from 2009 until, you know, when I left the company in 2015 or whatever it was, or 2016.

[Interviewer]

Yeah. Wow. And. And along the way you guys raised a ton of money as well. Why did you decide to do that if. If the, if the product was doing really well already?

[Mitch Harper]

Yes. So Big Commerce has raised a quarter of a billion dollars so far. They just raised. And when I say they, it's because I'm no longer active at the company. It's still my baby. Right. But I speak about it as a third person. So they just raised another $80 million. I think it was 80 million 65 from Goldman Sachs just a few weeks ago that was announced. And so I think the thing is, when you see an opportunity to build a billion dollar business, which is what our goal was for Big Commerce back at the time, there's a few different ways you can look at it. And keep in mind, at the time we were both single had no girlfriends, had no wives, had no kids. Right? So when, when you see a billion dollar opportunity in a market, that window is only open for a certain amount of time because if you've seen that opportunity, you better bet that others have seen it. At the time, you know, Shopify had been around for four years. I think it was Magento launched a week after we launched Big Commerce. Right. You know, WooCommerce was probably coming out as well. I mean the, the space is very saturated now. And what you tend to find is if you don't take action within a certain window, so within one or two years after we figured this out, then that window goes away because someone else will take that action. Someone else will go and raise money from investors saying they want to build the world's best e commerce platform. And there's room in the market for three or four companies that want to do that, that say they're going to be big and democratize e commerce and build a billion dollar business. But once investors have made those bets and they see that other investors have made bets in competing companies, there's two things that happen. Number one, they'll either look at the landscape and say, well, this company's already raised a bunch this one. And this one has as well, you guys are a bit late. Or number two, the thesis of the investors will change. But no one today, for example, in 2018 is going to go out and fund a SaaS e commerce platform startup because the markets move past that, right? Today it's AI, machine learning, wearables, IoT. Those are the thesis that investors have. And investors research a thesis around an area or a particular type of product. And they say, all right, for this year, my theses, I think that's a plural of thesis, X, Y and Z. And so if you're late to the game, their thesis has moved on from E commerce, for example, to marketing automation or to IOT or to something else. And so they're the two things that I was really conscious of at the time. And that's kind of how we looked at it. Could we build a business that would give investors a 10x return? And I didn't know any of this until I read a book called Mastering the VC Game that really taught me everything in the early days about raising capital and how to speak the lingo of investors. So it's called Mastering the VC Game. It's on Amazon. It's incredible. One of my foundational books that I refer all entrepreneurs to that, that want to raise capital. And so we saw that Opportunity, we realized that we could keep bootstrapping the company with our profits. I mean by that time we were probably generating, I don't know, five, six, seven million dollars in profit, maybe a little bit less because we'd started building a team of about 15 people. And so we could have kept bootstrapping the business, reinvesting profits. And Today I'm sure BigCommerce would be doing 20 or 30 million dollars a year in revenue and it'd be worth half a billion dollars and maybe a bit less, 3,400 million and Ed and I would own 50% each. And you know, we would have been more than happy, more than grateful, right? But at the time, I mean, our business was already making so much money, so we didn't have to make decisions for ourselves, right? We were 20 something year old guys whose businesses were generating high seven figure profits a year. Not revenue profits, profits that we were taking as dividends, right? So we didn't have to make decisions around what do we do so that we can pay our mortgage next week. I mean, we were already taken care of financially because we built the business in a way that that was the outcome that we got, right, because we both wanted that. I came from, as I mentioned, single mom. Growing up we were dirt poor. Eddie's family, his dad has always been a hard working small business owner. You know, they, his parents came over from Lebanon. He's I believe, first generation, you know, Lebanese, Australian. And so he's always had that work ethic instilled in him from his parents. And so we knew that if we worked hard and we were smart, the money part of it for us would take care of itself, which it did within three or four years. So we have the luxury at the time of not having to kind of trade off between like, do we take a salary and live poor for a bit while we bootstrap this, or do we go and raise money and risk losing it all? Because we couldn't lose it all because we'd already made so much that we'd stashed away or invested that that wasn't, you know, failure wasn't even on the table for us because we'd already made it past that. So I think that was really important as well. Most people when they raise money, Maybe they do $100,000 a year in revenue or a million by that time we were doing 10 million revenue in a year. So when we were pitching our viewers respectfully, take it or leave it, if you don't like our terms and our valuation, that's okay, we'll keep running the company and we'll make a ton of money anyway. Do you want to come on board or not? So we were able to shift the dynamic of dealing with investors because we honestly didn't need their money. We liked it and we saw a billion dollar business, but we weren't in there with our tail between it, between our legs begging for money because we were going to run out of cash in eight months. I mean, we had 10 years of Runway of cash in the bank if we needed to use it. So when we raised, it was a very different approach than what most founders go through. And it was really easy for us to raise because we'd gotten the business to such a point where if they didn't invest, it just, they were silly. So, yeah, that's. That's kind of what made us go all in and make that decision around raising money. And our Series A was, I think we did 15 million in our Series A. And I hope our early investors aren't listening, but they ended up giving us double, almost double the valuation that we were hoping for. So we were very happy with that.

[Interviewer]

And like, did you guys have to go to the States? Did you go together or just you or like, how did that work?

[Mitch Harper]

Yeah, we did go to the US So we decided to set up in Austin, Texas, because we had a marketing advisor there and he said it was a great spot. It was near the University of Texas where they had 200,000 students that had a good computer science program there. And there were big companies like Dell where they had lots of young sales reps. So it made sense for us. So Eddie went to live there for nine months. So he took his. They may have been engaged at the time. His girlfriend slash fiance. Yep, Micheline at the time. And he lived there for nine months. And then once he got the office out there and hired a few people and whatever, I went over.

[Interviewer]

Yep.

[Mitch Harper]

And we'd. We'd go back and forth then. So we would go four or five times a year for two or three weeks at a time because we had the Sydney team and the Austin team. And yeah, when it was time to raise money, I mean, I built the pitch deck. And we had so much inbound interest from investors leading up to raising that we just would reply on email and say, all right, we've decided to raise money. We're going to be in the US on these dates. Are you available? And we've done a lot of phone calls with these investors leading up to the pitch, because investors always want to check in with you. They want to see how you're going. They want to quote, unquote, share their view of the market. And so it build these relationships in the 18 months leading up to deciding to raise money and actually doing it. And so, yeah, we were in the U.S. i mean, we, we for the Series A, we went up and down the west coast for I think it was two weeks. And then we hopped on a plane and we did New York and Boston and then we came back to the west coast and did a follow up with all of the partners at the firms where the initial partner liked the idea of the company and liked our pitch. And like us. And I believe, I mean, it was 2011, we raised our Series A, so it's a while ago, but I believe, I mean, we had the term sheet done, I think before we got on the plane to come home. We went out to dinner with Larry and Nitesh from General Catalyst, two amazing guys. And we were maybe drinking too much wine because Larry likes red wine. And he gave us a term sheet at dinner. And we had to keep our poker faces because it was double the amount we wanted to raise and at almost double the valuation that we were hoping for. And we kept our straight faces and said, okay, we'll think about this. And I mean, after the dinner, Ed and I were jumping up and down like little girls because it was a really good deal. It included some secondary as well, which means we were able to sell down some more of our shares and put some money into our pocket to mitigate that risk. Jumped on the plane, came home. Larry came over to Sydney from the U.S. i think he wanted to make sure we weren't just two guys in a garage pretending we had a company. Yeah, we did. You know, we took him out to dinner, met his beautiful wife, spoke a lot about the business in the future. Then we did the contract and everything closed. And yeah, that was how we raised our initial series A of 15 million in 2011. And then pretty much every year after that, we raised at almost double what we raised the previous year. So I think we did 15 and then we did. It was 20 or 30 for the series B. And then Steve Case, the founder of AOL, came in for our Series C at 40 million. Then we did. I'd left the company before the D round, but we did a D round and then we just did an E round for, I think it was 65 million with Goldman Sachs. So, I mean, American Express is an investor. Telstra Ventures, Softbank, lots of different amazing investors and funds are in the business now because we've raised 250 million. But yeah, that's kind of how we got started on the path to raising money. The big thing we did is decide to bootstrap the company and fund it from our interspire profits. So when we went to raise, we weren't desperate. We could do it on our terms. We could find the investor that we wanted and we didn't have to be nervous about pitching because if we, if all else failed and pardon my language, shit hit the fan. We came back to Sydney, we still had a bunch of cash in the bank, and we just keep doing what we were doing. So we mitigated purposely the risk before we even pitched.

[Interviewer]

You talk about mitigating risk, that's one thing that I've, you've taught me like in a big way around, like maximizing the upside and minimizing the downside. Can you just like elaborate on that? Because I think it's a common. Do you think it's a common misconception that, you know, entrepreneurs are like, taking risk?

[Mitch Harper]

Yeah, great question. I think it is a massive false belief that entrepreneurship is about putting it all on the line. Mortgaging your house, you know, living on ramen noodles and whatever and going all in. That, that stuff works when you're 17, 18, I mean, if you're in your late 20s, early 30s. Like I am 35, so I guess I'm almost over the hill. I mean, a lot of people have husbands, wives, boyfriends, girlfriends, kids, parents that rely on them. So it's not always practical to just go balls to the wall and go all in. So I've never believed in that. Right. The big, the big proof point for me was how Richard Branson started Virgin Atlantic. And this is in his book. The first book. I think the first book was Losing My Virginity and the second was Finding My Virginity. Both amazing books. And so he wanted to, he wanted to buy a few planes or get a few planes for Virgin Atlantic. And I think he went to Boeing or got some from Singapore. And the first thing he did was say, all right, how do we mitigate the risk of this airline not working out? And so he had a give back cause in the lease for the planes. I think he had three planes or something like that that he started with. And the clause was basically, if this airline fails, you guys will take the planes back. And there's no downside for me. But the upside was if the airline works with three planes, you guys are going to give us another 10 or 20 or 30 planes or whatever it was at the same rate. So he literally created an airline MVP where he could walk up to Boeing, if it didn't work, throw the keys at them and say, I'm out with no risk. Here are the planes back. Thank you very much. Love you guys. But I'm going to stick to Virgin Records, right, as an example. And of course, I've worked out and, you know, Virgin Atlantic Spawn, Virgin Australia, Virgin Blue and Virgin Australia and Virgin America, all these different airlines. And now the conglomerate is worth billions to Richard Branson. But that story always stuck in my mind of all right, if one of my idols, one of the smartest, most successful entrepreneurs in the world, mitigates risk that heavily up front, I've got to do that too, right? And so everything I go into now, whether it's investing in a business, starting a business, buying real estate, you know, shares, whatever it is, my number one question is not how can I 10x my investment? It's how can I mitigate the risk so in the unlikely event that all of this doesn't work out, I'm no worse off than I was when I started or if I didn't do this in the first place. And that's a very different angle from how I see most entrepreneurs looking at a business where they're going to go all in. They're going to mortgage their house, they're going to put in all of their savings, they're going to skimp for five years, and there's a 1% chance, maybe 2% chance that things will go how they want, but they risk it all up front. And then when things don't work out, because most of the times they want, if we look at the metrics around small businesses, within the first five years, I don't know, something like 90% fail, another 8% just survive, and another 2, 1 or 2% of breakouts. So they're going to that 1 or 2% chance, but risking everything they've worked for and saved and accumulated up until that point in their life, which has never made sense to me. Right? So a lot of your listeners might be thinking, well, dude, how do I, what do I do then? And I wrote about this on Medium. Maybe we can link to my article under the resources for this post. Yeah, sure is. The first thing you want to do is build a cash flow business, such as an agency, a digital agency, or create an online course, or even sell your time by the hour to build up a cash reserve to fund the first two years of your startup so you Essentially become your own bank or your own vc. And I still do this today with all of my companies. There's a reason I'm doing consulting and I work with dozens of entrepreneurs. A, it pays a lot of money and B, I use that cash to fund my new companies so I don't have to dip into my own money or I don't have to go to VCs. So I still use this model today and I teach it to every founder that I know. We were speaking about it, you and I, last week, right, about something related. And I mean that's, I'm the most risk adverse person I know, which may come as a surprise to a lot of people. And you know, my companies have done over $200 million in sales. We've raised a quarter of a billion dollars at Big Commerce. I mean, I'm the most risk averse person I know, maybe besides Richard Branson. And so I think that was, that was something that I've always, I've always been risk adverse. I don't know why. Maybe growing up we had nothing and I, I wanted to make sure I never went back to that kind of dirt poor way of living. And especially for me, when I got started, I knew I wanted to have a wife and have a family and have kids which have two beautiful girls at the moment. And you know, that was a big driver for me even 10, 15 years ago that one day I want to have a family and I never want to put them in the position where we've sacrificed everything for some stupid idea I have that may or may not work. So I've always structured everything, as I mentioned, to be zero downside and uncapped upside. And if I can't get the downside to be zero, I want it to be minimal. If I can't get it to be zero or minimal, I won't invest in the business, I won't start it, I won't do whatever the project is. And you can ask everyone that knows me, that's how I've always been. And a lot of people will say, you know, you've, you've made all this money, you've done all this stuff. Why don't you just, you know, gamble some money and put it on this. And I still won't. I just, I can't because I don't believe that's the right way to be an entrepreneur where you can impact millions of people and of course make a lot of money and do all that stuff at the same time. So that's how I think about risk.

[Interviewer]

Yeah, I love it, man. And we have to work towards wrapping up, but got a few other questions. One thing, that one thing you mentioned to me was around the hard times, like it wasn't all easy and you said like, I don't know, maybe you went through some like depression or like it was really tough and, and you said, yeah, it was like, you know, turn to drinking and stuff. Like what was up with that? Like what happened? Are you able to share?

[Mitch Harper]

Yeah, of course. And again, I've written about this as well. I mean, between 2000, roughly 2007 and 2010, you know, before my wife and I got married, before we had kids and you know, BigCommerce was doing amazingly well, like amazingly well. But I mean it was a lot of pressure, you know, it was very intense. I was essentially a first time founder at that point. Even though I built two companies before because the size and scale of the company and the number of employees we had, you know, around there would probably would have been 50 to 100 people that we were employing. I mean, I'd never done that before. So I was learning on the job and you know, so I found it, I found it really tough and I'd have to keep upskilling. It seemed almost every month I'd have to learn something new, hire someone new. I mean, I had people who were 40, 50, 60 years old reporting to me in senior leadership roles. So to me that was intimidating because I didn't know that older people were okay to report to younger founders. Of course it's normal today and I know that now, but I didn't know that at the time. And I mean, the travel was getting to me. You know, I was in the US four or five times a year. Sometimes my wife or fiance at the time would come sometimes, sometimes she wouldn't. So I'd miss her. You know, my family, my friends. I'm very close to my brother and my sister and my mom, a good group of friends. And so I felt like I was missing out on a lot of life to build a business. And you know, when times got hard, I mean, yeah, I was drinking more than I should have. You know, never blackout drunk or anything like that. But I mean, compared to how I am now, you know, I don't drink very often. I mean, you know, if I go out to dinners or whatever, that's it. But yeah, it was a lot and it was taking its toll on me mentally. And I'm the kind of guy back then that would keep everything to myself and bottle it up Just because of my upbringing, I'm not like that anymore. But you know, drinking to me and, and you know, even eating at the time, my weight would kind of go up and down massively. For six months I'd just eat whatever I want. And then for six months I'd be on the treadmill seven days a week, running for an hour a day. So there were definitely some issues there, which I got sorted, clinically diagnosed with depression, started seeing someone tell me with that for a year, you know, I moved past that stage with the help of my now wife, my friends, my family and really stepping back. And yeah, I was burnt out. And again, that's a common misconception for entrepreneurs that you've got to work 14 hour days, 7 days a week, sacrifice your life, your health, your marriage, all that kind of stuff. And I was doing that and I was miserable. And you know, my, the, the saying that I came out of that with is you never want to be the richest guy in the grave or girl, right? Depending on who you are. And so that, that someone told me that at the time and it really shaped my view of how I saw the business. And so at that time I decided to really step up and build a senior leadership team and started to think about this was five, five years before I did it, or even longer, like how can I, how can I get out of the weeds of this business? How can I get out of the day to day, how can I work two or three days a week on the right things with the right team? So I don't need to be in there running everything all the time. I don't need to be a blockage point for everyone in the company. And so that's what got me out of it. Long story short, building a great leadership team, reducing the amount of travel that I was doing. You know, then my wife and I got married and we had our first order in 2013. And I mean that it was a night and day shift from, for me, from balls to the wall, seven days a week entrepreneur to family man who runs a beautiful and successful company, but with a great leadership team that's there to do the work that they want to do and that they're paid to do that report to me. And I've taught you this using traffic light metrics where I can manage by exception instead of having to be in the business and freaking out about all these fires that are going on in the business. And that's really what pulled me out of that funk that I was in for two or three years. And allowed me to go on and build the additional businesses that I've built or that I'm building and not fall prey to the common misconception that entrepreneurs go all in, pull their money on the line, cross their fingers, work their butts off and build a successful business because it just doesn't work. You just burn yourself out and you wish it never started.

[Interviewer]

Yeah, thanks for sharing, mate. And look, we have to work towards wrapping up one last thing that I'd love for you to touch on because I think it's really, really important. You kind of hinted at it before and this something I'm learning now is, is like one of the most powerful things when it comes to scaling, I believe you taught me, is, is just finding like incredibly talented people, especially if somebody's done it before, like that's, that's exceptionally powerful to building a great company and taking a business to the next level. Would you should like be able to touch on that just briefly?

[Mitch Harper]

Yeah, most definitely. So I think once, once you've achieved product market fit, which you know, if you Google Sean Ellis product market fit, he's got Survey IO or if you've got a net promoter score from your customers of 60 or above, they're the kind of the two ways that you look at whether you've got product market fit. So once you've got product market fit, it means you've got a good product in a market that's willing to pay for it. And beyond that point, the impact the founder has on growth starts to drop. Because it's not about can we add more features, can we hustle and spend more money on AdWords or can we write more content on our blog. It's how do we build a system that's based on great people that have done this before or done a lot of what we want to do before that have done what I call see the movie, bring them in, empower them to build great teams and to scale this thing way faster and way better than I could on my own as a one man band. And so that's another trap that I see a lot of founders in. They don't want to hire people because they don't know how to. Right? And when I don't know how to do something, my default view is not I'll leave it, it's who's the smartest person in the world that I can tap into to get me to. Sorry, to teach me how to do that or to do it for me. And I will relentlessly not stop until I find that Personal people. And then I'll learn how to do it or they'll do it for me and then I'll move on to the next challenge in the business. Right. So I always say that a great product doesn't necessarily build a great business, a great team does. And founders always get all of the credit. Do you really think Elon Musk built Tesla? Do you really think Elon Musk has built SpaceX, the Boring Company, Solar City? No, he's the figurehead for the company because the media love him. He's a very smart guy. No doubt he's had a lot of impact, but there are tens of thousands of people working for him that are doing the real work, that are building those businesses. It's the same for big commerce. Eddie and I got all of the credit, right? We had the idea, sure. I built the first version, we raised a bit of money. But without the team, it'd still be two guys in a terrace in Roselle or 12 people in Surry Hills trying to build this product down, generating maybe a few million dollars a year. So if there's one thing that transforms any business once it's beyond product market fit, it's thinking about who do I hire, when can I afford to hire them and what are they responsible for when they come into the business?

[Interviewer]

Love it.

[Mitch Harper]

Now more than anything, we'll grow a company.

[Interviewer]

Awesome. Well, yeah, look, thank you so much for sharing that, mate, because I know that like this is something that you've really drilled into me, but I think it's really important to share. So look, we have to work towards wrapping up. But mate, I just want to say thank you so much for everything you do and. And where's the best place that people can find out more about yourself and your work?

[Mitch Harper]

Yeah, probably my website and Twitter. So MitchellHarper me and then I'm on Twitter, just Mitchell Harper. Mitchell with two else. Harper, you can look on there. I post a lot about startups and give advice on there as well.

[Interviewer]

Awesome. Well, look, thank you so much for your time, mate and yeah, I really appreciate all your help and support and everything you've done for me and yeah, I can't thank you enough.

[Mitch Harper]

No worries. It was good talking on this podcast.

[Nathan Chan]

Hey guys. That's it for today's episode. So I got one quick favor from you. We put in so much effort to find the most craziest, hard to reach founders, super successful fans, the greatest founders of our generation of. All I ask is can you share this with a friend? Just one friend. It really, really helps us grow this show, and it's going to help your friend, right? So please share this with just one person. It would mean the world to us so we can grow this show and build this community. All right, that's it from me. I'll speak to you soon.