Why I Merged My Profitable One Person Software Company with a Bigger Player

Recently I announced that WP Simple Pay was joining Sandhills Development (the team behind Easy Digital Downloads, AffiliateWP, Restrict Content Pro and more). That post was intended for customers and explained what the merge meant for them and the product. But I wanted to express a bit more here about the business and personal reasons for the move.

Why would I do this?!

For a little background, WP Simple Pay has been my single source of income for over a year now, and the majority of my income the 2.5 years before that (the point at which I left my last full-time job). WP Simple Pay, as well as other WordPress plugins I formerly owned, are fully bootstrapped product businesses, with no outside funding and initially built as side projects.

I sold Simple Calendar two summers ago, and for almost that same time period I’ve been the only full-time person working for my company. I’ve had some fantastic support help from wpSaaS and content writers from AudienceOps. WP Simple Pay saw gradual revenue growth over time and served what seemed to be a great niche considering the size of the company.

With a sustainable business, product-market fit, and over four years of steadily growing revenue, why consider giving up full ownership now?

Speeding up product growth

WP Simple Pay proved to be a perfect solution for many folks using WordPress and Stripe, but the feature requests didn’t stop. And I mean features that have been asked for over and over again by paying customers. Features that Stripe has made available to developers via their API and libraries, but that I kept putting off due to a never-ending to-do list.

I believe this was because I was wearing all the hats: running the business, keeping the marketing engine going, and maintaining the codebase to name a few. Revenue was gradually growing, but at the same time, I felt like I was letting customers down by not pushing the product faster and releasing features more frequently.

Growing as a founder

I’ve always loved developing software and being in the code, but I’ve also learned to enjoy the other aspects of growing a business over the last eight years related to product direction, marketing, strategy and the like.

Over the last few years, I’ve felt frustrated that I couldn’t give my full attention to either the development or business sides of the business for any significant length of time. As a solo founder-developer, I’ve usually had to work on both every day or at the very least split time every week. I felt like I wasn’t producing my best work on either simply due to the lack of focus.

I’ve also tried running two WordPress plugins a couple of times solo or with a very small team (max three of us). Twice I sold off a plugin due in large part to this split focus.

At this point in my founder journey, If I were to choose to focus on the development side or the business aspect of growing a product, I’d pick the latter. I was ready to give up working in the code every day and let other folks better at it than me handle it.

Staying Sane

After leaving my last full-time job in early 2015, there have been too many long stretches that I holed up in my home office just trying to get as many product and business tasks crossed off the list as possible, barely interacting with anyone in the process.

Sometimes I wouldn’t leave the house for a couple days. Sometimes I wouldn’t connect with friends locally or virtually for a week. Making all the decisions in the business, whether they had to do with tech or marketing or whatever, can cause decision fatigue and become a bit much at times.

It’s just too easy to become isolated.

I do have to say I’ve been in some great mastermind groups and plan on continuing with the one I’m in now. These groups have been key to a lot of big business decisions going back to before making my first dollar online. But that didn’t change the fact that within the last couple years I felt this need to switch to working with a team and/or other co-founders.

If you’re still a small solo company and plan on being so for a while, there are a few good ways to battle isolation, burnout and other traps that we as entrepreneurs can easily fall into if we’re not paying attention. For this, I highly recommend The Entrepreneur’s Guide to Keeping Your S**t Together by Dr. Sherry Walling. There are too many reasons to list here to read it when it comes to staying mentally healthy as a founder whether or not you work with co-founders or a team.

Going solo has its benefits

To be clear, there’s nothing wrong with running a product company by yourself. I’ve done it for a while and it has its perks.

You have complete ownership and control. No employees to hire or manage. Only one person on payroll (yourself). Very simple. I have some good friends that have done this longer than I have and continue to make it work, such as Dan Cameron of Sprout Invoices and John Turner of SeedProd.

Update: As I was writing this, SeedProd was acquired by Awesome Motive. No joke! But John did run it solo for over 6 years.

For years, Derrick Reimer was the technical co-founder and development team lead at Drip. The team started small but grew pretty rapidly after Drip was acquired by LeadPages in 2016. But now Derrick’s back to building a new product by himself: Level, a Slack alternative for dev teams.

Paul Jarvis makes a great case for staying a company of one, even partnering with others on projects as an alternative to becoming co-founders.

Rob Walling and Einar Vollset just started TinySeed to give founders “a year of runway so you can quit your day job and focus on your startup full-time” along with guidance and weekly calls from other experienced founders.

But I’m ready to team up

Justin Jackson, who had success as a solo founder himself, talked about what I was thinking in Maybe you shouldn’t be a solopreneur: “‘Trying to do it all’ is one of my weaknesses. I’m realizing, that by forcing myself to be a solopreneur, I’ve been slowing myself down.”

Cory Miller, who’s company iThemes was acquired by Liquid Web in early 2018, has quoted and elaborated upon an African proverb in many talks and posts over the years which says it all: “If you want to go fast, go alone. If you want to go far, go together.”

I decided I was definitely ready for the “go far together” stage. Something needed to change, so I started exploring the possibilities.

How should I do this?

One path was finding and hiring one or two senior-level developers. Like many software products, the number of lines of code had grown over the years and now had quite a few moving parts. This meant that any new developers coming in had to be willing and able to take a codebase like this on. Finding and hiring top talent can be time-consuming and a risky proposition for a one-person company.

Another path I considered was bringing on a technical co-founder. Someone who fit the same senior-level developer status and could focus mainly on the codebase while I focused on business and marketing. Someone who had the desire and availability to work on the product full-time as well as being willing to buy-in for a significant portion of the company.

I even considered selling the company outright and starting something new (but not solo). No one was really asking, but I think I could’ve found a good home eventually. However, I wasn’t really interested in walking away from WP Simple Pay. Compared to past products I’ve owned and sold, I still really enjoyed working in the payments and subscriptions space (and loved working with Stripe).

But instead of any of these paths, what if I could join a great team yet still retain ownership of my product? What if I could instantly inherit the help of top developers, marketers, writers and support folks? What would it look like if instead of one technical co-founder I gained several business partners in one go?

How the merger came to be

At this point in time, I’ve known Pippin Williamson (the original founder of Sandhills Development) for about 6 years. I initially met him in person at the first Pressnomics in November 2012, and earlier that year I started using the then-new Easy Digital Downloads to sell my own WordPress plugins. Since then we met up occasionally virtually and in-person and talked a lot about our businesses. We worked with each others’ products, even integrating and referring them to our own customers.

In June this year, I approached Pippin with the idea of merging our companies. Just an open discussion. No expectations or NDAs or anything of the sort. I offered the idea of a straight merge with a trade in equity instead of a cash or buy out offer. He expressed interest immediately and met with the other Sandhills shareholders to talk it over. Although I didn’t know the other partners that well at the time (except Chris K), they collectively agreed to explore the idea.

As Pippin and I talked over the summer, it was apparent the vision and ideas for our products were strongly aligned. For the rest of the Sandhills team, except for a few folks, I’ve only interacted virtually with some of them through support and in code repositories. But always with a great experience, and I trusted Pippin’s judgment of character and talent.

We openly shared financials, revenue numbers, and all the metrics we could think of that contributed to the value of our companies. After working through the numbers and after many more emails and discussions, we both came up with a final agreement.

Side note: Whether you’re merging or selling all or a portion of your company, make sure to have your finances and records in order. This cannot be stressed enough. I’ve noted several resources in my Simple Calendar acquisition post last year that go deeper on this subject. It helped speed things along immensely in both instances.

The terms of the deal

The terms of the deal that I can share publicly are pretty straightforward: Sandhills Development is acquiring WP Simple Pay, and in exchange, I’m acquiring a piece of Sandhills. In short, I’m giving up 100% ownership of a product for a smaller percentage of a larger company that includes a portfolio of products. I am transitioning as an employee-founder of one company to an employee-partner of another.

Like WP Simple Pay, Sandhills was bootstrapped without outside investment. After Pippin, there are now five minority shareholders/partners including myself. Together we collectively own the above-mentioned products, WP Simple Pay, SellBird (a hosted e-commerce solution currently under development) and even part of Sandhills Brewing.

In the latter half of September, I flew to Kansas to spend a couple days in person with Pippin. We were going to become business partners after all. I got to check out the brewery that I was getting a stake in, but we were also able to hash out tons of plans and ideas for our products post-merger. Seeing as to how much we accomplished within that short period in person, I think it solidified that we’d work well together for quite some time.

Does the merger accomplish my goals?

Will WP Simple Pay the product see increased growth?

I think its customers get a big win-win here. Not only will they see more frequent feature releases, but they’ll have the opportunity to move to EDD or SellBird if those turn out to be a better fit for them, all the while staying a customer of the collective Sandhills products.

Will I get to focus on product and marketing and step away from code?

Besides some ramp-up time, this is a definite yes. Sandhills now runs a total of six products, but there is enough top development and support folks that each person can focus on a particular product without the risk of others getting neglected and falling away.

Not only that, but there are several folks on the Sandhills marketing team, which means we can focus on several initiatives at the same time. One person can work on site personalization, another on paid advertising, while yet another is handling all the content writing and promotion.

Will the merger help me stay mentally healthy?

I think so. I just went from a team of one to a team of 18!

It’s a fully remote team, but folks get together at conferences, for co-working, team meetups, and even annual company-wide retreats. There’s a “health and wellness” Slack channel, occasional video meetings, and an official minimum vacation policy to help prevent burnout.

Finally, now that I have other business partners means I don’t have to make all the big, sometimes overwhelming founder decisions by myself.

To learn more about the Sandhills Development family of products…

2 Comments

  1. Rich on October 30, 2018 at 2:41 pm

    Love this post Phil and appreciate the load that you carry when you’re the solo founder of a business. I’m sure you’ve made the best move.

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