Ep08: Spencer Fry, CEO Of Uncover, On Bootstrapping 3 Companies To Profitability

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Today’s interview is with Spencer Fry, CEO of Uncover, which is an employee rewards program for your company. Spencer previously co-founded TypeFrag (at age 19) and Carbonmade. All 3 of his companies were bootstrapped and Spencer talks about the benefits of bootstrapping. Find out more useful tidbits on how much entrepreneurs should be paying themselves (and when). You’ll also see a recurring theme for his 3 companies in terms of early stage user acquisition.

Key Takeaways

• On bootstrapping – Spencer thinks a lot of people raise money too quickly because the clock is ticking as soon as you raise cash. Having the luxury of working at your own pace is nice. He thinks lots of companies raise too early. Raise when you have figured out your product and who your customer is.
• On acquiring the first 100 users for TypeFrag – find out where your prospects are hanging out. Spencer went to IRC channels and started offering free accounts. He tested out radio as well and it worked for them.
• SEO – Content marketing worked out well for them (even all the way back in 2003).
• Recurring theme – Start out by doing the things that don’t scale. Spencer agrees that this is important.
• On pricing your product
  • Spencer went with his gut and felt that a monthly fee was best (SaaS). They charged per slot because they had to pay a licensing fee to their partner per seat.
• Biggest struggles at TypeFrag
  • Didn’t know how to manage when he first started at age 19.
• As a bootstrapped company in the early stages, what you can really give away is equity to start with.
• He has no problem giving up to 10% equity to someone if they can really help make the business something. He would prefer 1-3% though.
• On paying yourself and the amount – “cash is king”. Fair to start paying yourself as soon as you feel comfortable. You don’t need to horde your cash especially with a SaaS business because you can project your cash. Don’t be flashy As low as possible. The goal is to build a sustainable business for 5-20 years.
• On learning to code
  • Spencer decided to learn to code because he wasn’t close enough to the product. If you want to learn to code, start with Code School, Treehouse, Ruby On Rails Tutorial by Michael Hartl.
  • Programming is cool because you start to see things working. You get a huge rush when things start working.
  • Spencer got his technical co-founder by learning how to code.
  • Do as much work as you can do until you can’t do anymore.
  • Took Spencer 3 months to code his current startup, Uncover.
• On building small teams
  • Must be passionate and talented.
  • You have to be willing to spend a lot of time with them and not be annoyed aka like them.
  • Hire people with an entrepreneurial flair.
• Productivity hack – Spencer uses Harvest to track his time. When he turns on the timer, he becomes fully focused on the task at hand.
• Must read book – Brad Feld’s Venture Deals. If you’re interested in venture capital, you need to read this.