Thread by @dunkhippo33

Listening to @ericbahn tell everyone on our online event for part-time founders on how he started Beat The GMAT.

1) His mother told him towards the end of college that he was "too dumb to become a dr or a lawyer" and that he should probably consider business school.

2) He started studying for the GMAT. And started documenting his journey and problems he was working through.

It eventually turned into a part-time startup.

3) He could not afford to do this full-time, so he worked full-time at Intuit while working on Beat the GMAT part-time.

4) Need to make sure that you are absolutely separating your former employer's devices / accounts /etc from your side project's.

@rbucks also emphasizes this in his book The Parallel Entrepreneur.

5) The first 3 years, he was completely alone. And that wasn't fun.

He got obsessed with the idea. But no money to bring on a team. And can move quickly since it was just him.

But also stuck in your own head.

6) This is when self-sabotaging voices can show up in your head. Esp when things start to go badly -- and they will!

Need to power through those voices. But hard when it's just you.

7) Eventually recruited his boss from Intuit to bring into the company.

Being a workplace with a high density of talented ppl is one of the best places to be when you are starting your company.

8) You can share ideas as you are evolving your company. Being part-time can be a real strength - not only for paying yourself but also for recruiting - that ppl don't often think about.

9) He also was able to try to get onto projects at Intuit to learn new skills. And Intuit paid for him to go to workshops for work -- such as on Adobe Photoshop -- that he later applied those skills to Beat the GMAT.

10) You can also access more senior people at your big company easily. Ppl want to meet for coffee an talk about themselves.

It's harder to access this higher level people once you leave your company.

11) How did he fund his company?

Just himself. Needed only $1000/yr for hosting and tools. He was focused on just building the community -- spent 2.5 years just on this.

The real cost was his time though.

12) He wanted his community to have high quality and speed.

The metric for him that he wanted to measure was response time. If someone posted a GMAT question, he would respond immediately.

He would drop everything he was doing to respond to every GMAT question within an hr.

13) He set up a system so that he would get an alarm if someone posted a question.

If he were driving, he would drive to the nearest Best Buy and log onto a computer to answer the question. (This was pre-smartphones)

14) It would also wake him up in the middle of the night as people would post questions for literally anywhere all over the world.

So he would wake up in the middle of the night to answer those questions as well.

15) One day, he got an email from Manhattan GMAT asking for a partnership with his company.

The CEO at the time was @AndrewYang

They did the partnership and his first $3000+ check was some external validation to help his sabotaging voices.

16) At times he tried to raise money from VCs.

And he was rejected every time.

And if he were to objectively look back at his own company Beat The GMAT as a VC, he would not have backed his own company.

17) It ended up being a good business from a revenue standpoint.

But VCs need to look at multiples -- what is the outcome it CAN be? (And on what timeline?)

The market size for Beat the GMAT was way too small for a VC.

18) In addition, it's really difficult for a VC to assess which part-time founders are actually going to go all-in and which founders don't take the business seriously.

19) This is a huge gatekeeping factor, though -- it ends up keeping out a lot of people who don't already have money from being a backed founder.

BUT, VC is just one way to get $$. @HustleFundVC we are working on other products that are better suited for part-time founders.

20) (BUT this is a work-in-progress and will take a bit of time).

The way @ericbahn solved for this is through revenue. They pre-sold so many things without building.

21) One day, he walked into Chase bank, and without being a customer there, he walked out with a $250k line of credit.

BUT, he had been running his business (part-time) for about 5 years already, so there was data on the company.

22) Today, there are many other alternative forms of funding that didn't exist back then:

-Hustle Fund Flywheel (revenue based financing)
-Clearbanc
-Pipe
-Lighter Capital

etc.

23) VC financing is one of the HARDEST forms of capital that can be really expensive when you have an exit.

And, other forms of capital are open to part-time founders.