From Idea to Startup: The Birth of Less Annoying CRM

Here’s what you should know about Tyler:

• Grew up in St. Louis, Missouri
• Went to college at Washington University in St. Louis (“Wash U.”)
• Majored in Computer Science
• Became a web developer through side projects and internships
• Played guitar in a heavy metal band called Embers Rise (listen here)
• Left his Masters program early to join a startup called Zane Benefits (which is now part of PeopleKeep) in Park City, Utah  
• Met Rick at Zane Benefits in 2007
• Survived a lay-off with Rick in October 2008 and became head of product
• Worked with Rick to pivot the business model to get to cash flow positive
  • Zane Benefits provided a software-enabled service to small businesses that allowed a company to reimburse its employees for individual health insurance tax-free
• Had no interest at all in entrepreneurship prior to Zane Benefits
• Got frustrated having the responsibility to lead Zane Benefits without the power to make key decisions (i.e. “board decisions”)
• Founded what is now Less Annoying CRM in 2009 with his brother Bracken King
• Less Annoying CRM is a simple customer relationship (CRM) tool for small business people
• Got the idea from working with insurance agents and Salesforce at Zane Benefits
• Less Annoying CRM is 100% self-funded and bootstrapped
  • Launched the product at the beginning of 2010
  • At the beginning of 2011, hit  50 users / $6,000 in annual recurring revenue (ARR)
  • At the beginning of 2012, hit 500 users / $60,000 in ARR
  • As of the recording of this episode, at 22,000 users /  $2.6 million ARR growing at ~20% per year. 
• Wants to run Less Annoying CRM for the rest of his life
• Unique perspectives
  • Fan of bootstrapping
  • Thinks raising venture capital is limiting for a company
  • Thinks more founders should look to run companies for life versus selling

Where were you born?

Tyler: Cool. So, Rick, you are interviewing me today. Where would you like to start?

Rick: I'd like to start at your birth.

Tyler: Ah. Tucson, Arizona is a hot, dry-

Rick: Were you really?

Tyler: Yes.

Rick: Oh, I didn't know that.

Tyler: Yeah. I was there for like a year.

Rick: Yeah. Tell me your personal story.

Tyler: My personal story. So yeah. I grew up in St. Louis, moved there when I was one, and basically, I'll focus specifically on how I got to the startup world, right?

Rick: Mm-hmm (affirmative).

College and major

Tyler: I had no interest in it at all. I think everyone wants to have that, "Oh, I was selling lemonade when I was a kid. I was a hustler." I didn't have anything like that. 

Rick: What year?

Tyler: Well, they forced me to take a computer science class my freshman year just to meet the requirements for electrical engineering. I went to my advisor and I was like, "I promise you I will never code. I hate computers. Don't make me take this class. It's a complete waste of time." My advisor was like, "No, you have to take it." I took it and I just loved it. So I didn't switch freshman year, but that was really the start right away. And then I worked as a student web developer for the business school that summer and then did internships and stuff. I didn't particularly love classes, but I loved the process outside of school, like building personal websites. I was in bands and I made a message board for a heavy metal band, Embers Rise, just fun projects.

Rick: Where can I find a copy or a streaming song of Embers Rise?

Tyler: Embers Rise. I think there's another band called Embers Rise now, so if you Google it, you'll find a band. But it's not mine. My Dropbox is the only place to find recordings.

Rick: I'm going to have to find one of those and publish it on StartupToLast.com.

Tyler: We'll see if that happens or not. But yeah. So I was more of a hobbyist. Even though I was majoring in computer science, I was never good at the academic side of it. But I was kind of a hobbyist, and that's where I really developed a passion for building software.

Working at Startup in 2007

Rick: So what happened after college?

Tyler: This is when I met you, as you know. So I was actually supposed to do a fifth year. I was in a bachelor's/master's program, and during the fifth year, a friend from high school, Tom Elgin, reached out to me and was like, "Hey, I live in this place called Park City, Utah," which I'd never heard of before. It's a ski town in Utah. "And there's this startup here that's like about to go... It's about to explode. It's about to be hugely successful." I actually at the time, because I wasn't good at school... I mean, I wasn't terrible, but I was a B-minus student. I didn't have a lot of confidence in my professional capabilities, and I thought, "This might be the only chance I have in my whole life to just ride other people's coattails success." So I wouldn't say exactly dropped out. I ended up getting my bachelor's because I had finished the requirements for it, but I left school in the middle of the semester, drove to Utah, and started working at this tech startup called Zane Benefits.

Rick: What year is this?

Tyler: This was 2007, which, for people who were around back then, was an interesting year to enter the workforce because for that first year things were pretty normal. You joined at the same time. For the first year at this company, it was a normal venture-backed startup. They just raised... What is it? A series A or a seed or something.

Rick: They call it a series A. Three million dollars.

Leading a startup from 2008 to 2009

Tyler: Yeah. So I was just like an entry-level programmer. I had bosses, and I was just learning the normal corporate world. And then I assume we'll talk about this when I interview you as well, but 2008 hit and global recession and all that. I don't know the whole... You know the whole story a lot better than I do, but basically, 20 out of 25 people or something like that got laid off at the company. Both of us were lucky enough to be survivors of those layoffs. I tell every person we hire, everyone who wants to really know my story on entrepreneurship, this was the defining moment because we showed up the next day to work and there was... Our bosses had been fired, right? The CEO fired himself. So we just showed up and we're like, "Well, I guess we're in charge of the company now." I don't know if... Did we realize that at the time?

Rick: Oh yeah.

Tyler: Yeah. We were just like, "Nobody else here is going to care enough t...