How to Know When it is Time to Sell your Startup with Ben Jabbawy - Mark MacLeod

May 1, 2024 - Marina

How to Know When it is Time to Sell your Startup with Ben Jabbawy

Here’s a transcript of my conversation with Ben Jabbawy on The Startup CEO Show. Ben was the mastermind behind Privy’s remarkable journey to a $120 million exit. 

Ben Jabbawy was the co-founder and former CEO of Privy, a marketing automation platform that scaled phenomenally within the Shopify ecosystem.

Explore the Episode Transcripts for Valuable Takeaways:

Mark MacLeod:
In this episode, I sit down with Ben Jabbawy, who is co-founder and CEO of Privy. Ben led and grew Privy to $120,000,000 exit back in 2021.

In this episode, we unpack the key success factors behind that great exit, how we engineer the actual deal process itself. We debunk the whole myth that is bad to exit early. We look at Ben’s activities on the other side now that he’s a super-active investor, and we cover many more topics.

I’ve known Ben for years, and it was a true pleasure to sit down with him again. I hope you enjoy this episode. All right, Ben, it’s a true pleasure to have you here today on the Startup CEO Show. Welcome.

Ben Jabbawy:
Thanks, Mark. Pumped. First podcast in God knows how long. Thanks for having me.

Mark MacLeod:

There you go, back to the future. You know, so Ben and I go way back. We’re going to get into that in this show. I had the true privilege of working with Ben on the sale of his company, Privy, and was a follower of Privy before we had a chance to work together. And there are lots of lessons here for us all to take from, first of all, the journey with Privy, and second, kind of your decision to exit and the life you’ve led afterwards.

And so I’d love to get into all of that. And let’s start with Privy itself. Maybe just set the stage briefly and tell folks kind of what it was, what it was all about. But you were capital-efficient. You built what I consider to be a great outcome and would love to just have you unpack kind of looking back, kind of how all that happened.

Ben Jabbawy:
Yeah. So Privy, we were focused on the Shopify ecosystem. We were a marketing automation platform serving the smaller end of the market. So stores that were just getting started all the way up to mid-market Shopify stores doing a couple of million in sales was lead capture coupons email marketing and eventually SMS marketing. And I scaled the business from my parents’ house to about 80 employees, and at the time of the sale, 10 million in ARR. And we had raised a total of 10 million in a combination of angel investors as well as VC. And then we sold in 2021 for $120,000,000. Thanks to your help.

Mark MacLeod:
First of all, thank you for being so transparent. I think that’s super helpful for the listeners to actually hear the numbers. When I look back on all of the companies I’ve been involved with in one way or another, operator, VC, angel investor, banker, and now coach, I feel looking back, like the single most important factor is market timing.

You could have this amazing team, amazing product, but if you get the timing wrong, you won’t have the great outcome. And so looking back, do you feel like obviously looking in the rearview mirror, 2021 was generally a great time to sell, but even getting up to there, it sounds like maybe you nailed the timing just in terms of move to e-commerce and all that stuff.

Ben Jabbawy:
Yeah, there were so many things that went right for us. Some of those were decisions we made. Some of those were decisions that I made, just like not shutting down the business early on. And some of those were out of our control, like e-commerce and Shopify’s ecosystem just growing like crazy.

I didn’t quite know why it felt like the right time, but we had reached. So first of all, our revenue growth rate had been significant. It was like we’re growing 3x early on, year over year. Then it was 2x and we got to about 8 million of ARR. I didn’t quite know why it felt like the right time, but we had reached. So first of all, our revenue growth rate had been significant. It was like we’re growing 3x early on, year over year. Then it was 2x and we got to about 8 million of ARR.

And inside there were a few things happening for me. We were about 80 employees and I was just fucking exhausted. I wouldn’t say this out loud at the time, but I actually hated being the CEO of that company. And I also started to feel a lot of change externally inside the Shopify ecosystem that was out of my control.

And then simultaneously in 2021, I watched our two larger comps, or competitors, Attentive and Klavyo, raise mega-rounds. It was like a couple of hundred million each. And I was just like, man, in order to really compete, we would have needed to do something like that. I couldn’t tell you at the time with a straight face was something that I wanted to do. My board wanted me to do it. I didn’t want to do it.

Mark MacLeod:
You probably could have.

Ben Jabbawy:
I don’t think so. Well, I would have had to really put on an Academy Award fundraising. And so, you know, for all of those reasons I kind of wanted to sell and I was very vocal about that. And it came with a lot of pushback in the board conversation, even. And the reason it came with pushback was because we were still growing really quickly.

Mark MacLeod:
By the way, that’s a great time to sell.

Ben Jabbawy:
Well, we should get that.

Mark MacLeod:
Not when the growth is declining.

Ben Jabbawy:
Right. That’s when founders don’t want to sell. But what I’m now realizing, in retrospect is there’s so much that was out of our control. So had we even waited six months to kick off that process, we would not have been able to get the outcome that we got. And I might still be sitting here running the company with a very different growth profile with a very different exit. But anyway, so I’ll never forget. I mean, I never told you this before I engaged with you as my coach. I actually had to bring that up at the board level.

And I’ll never forget, I got so much pushback in that conversation. No, wait till after Black Friday. Let’s talk about it later. Not because people didn’t like you or didn’t know you. They just didn’t want me to run a process. And I’m so thankful for all of the obvious reasons that we sold in 2021 that we sold when our growth rate was still incredibly strong and all that good stuff.

Mark MacLeod:
I definitely want to go deep into the exit. But taking a step back, it seemed like, I think one of the strengths of Privy. You talked about tripling and then doubling, and Jason Lemkin from SaaStr refers to that as, like, a SaaS benchmark. Right? Triple, triple, double, double.

Like, best-in-class companies do that. I feel like you did that, but in a capital-efficient way, in large part because your inbound was so strong and you invested a lot in kind of inbound content. I wonder if you could maybe just unpack some of that secret recipe or not-so-secret recipe for other founders who might be listening.

Ben Jabbawy:
Yeah. So the first three years of Privy, we had no traction. We weren’t touching e-commerce. We had no growth. It sucked. It was horrible. We found e-commerce, and then we found growth through integrations and App Stores. And you could probably find some of my content about that on my blog.

I think I wrote a good piece about that, but that was, like the beginning of everything. So we were growing through App Stores initially, App Stores with a freemium model, amazing support, really easy to use, and onboard software that literally every e-commerce store needs, right? That was our strategy. What we ended up layering on top of that was when I brought my CMO Dave Gearhart, you know, he… He was like the media company guy. I’d seen him do that at Drift.

It was amazing. He and I were actually cousins. We’ve been friends. We worked together. And I just saw him do that. And so he brought that approach to Privy, and we ended up launching this podcast, and I became the host. I think I had done like 500 episodes of that, and we started to get 40,000 podcast downloads a month.

A lot of them were customers, a lot of them were not. They were just e-commerce businesses that really liked to listen to tactics and other founders. And our blog and our newsletter, we got pretty serious traffic. And that kind of just layered on top of the inbound model through the App Stores, and that was just such a learning for me.

You can’t build a company without really early on thinking about distribution, and I’m doing a new one now, which is crazy. Early on, it’s all about, okay, solve a customer’s pain. Make sure you talk to a lot of customers and figure, is there something real there? Is there a real pain that you can solve? If there is, yes, start building for it.

But also be really thoughtful about how are you going to get to, depending on how much they’re going to pay you, whether it’s you need 100 customers or you need 20,000 to get to a good scale, how are you going to get to those people? And I don’t think enough founders think about that.

I didn’t think about that early on when I started Privy, and it took me three years and probably $2 million to get there. But once we found that, we actually could have probably got, I mean, we did get to about 4 million of ARR from zero with essentially no money. But we realized, wow, this thing’s growing really quickly. And if we layer on product two and product three, we can actually become a full suite, charge more for it, and get the numbers way up. And so that was why I want to take our series a, which is where the rest of the capital came from, and the 10 million, basically.

Mark MacLeod:
Yeah. I often say, when you look back at all the elements of value creation over the life of a company, by far the biggest single slice of the pie is distribution. Product, obviously matters, team matters. But it’s once you’ve found that repeatable formula and you just keep executing it, you figured it out, and you’re just making the recipe over and over and over again, and each cake or sausage or whatever it is tastes the same. That’s when enterprise value really gets unlocked. So, yeah, distribution is everything.

Ben Jabbawy:
Yeah, there was a moment in time where I had taken my first vacation or whatever after a couple of years, and we still got a couple of hundred merchants downloading and trying and upgrading while I was gone. And that was a moment where I was like, holy shit, we really have distribution nailed down here. And it was a once in a lifetime opportunity for us now. So much changed in the Shopify ecosystem after that.

So I don’t think had I started that company now and taken the same approach with integration, you can’t replicate that today. You talked about timing. I didn’t know it at the time. Shopify was already a public company when we entered the App Store. So it wasn’t like we were early to Shopify, but we actually were early to their app ecosystem in terms of the major growth years. So I’m thankful for that too.

Mark MacLeod:
Now, you weren’t just email, but email was a thing. You talked about Klavio raising a growth round like Shopify deciding to dip its toes into having its own native email category. The bun fight between Shopify and Mailchimp, did that give you pause? Was there those inputs into the decision to sell?

Ben Jabbawy:
Yeah, I mean, there were a few things. Shopify was always a great partner to us, even though we were, interestingly, at our peak, we had about 100,000 Shopify stores. I think it was about maybe 5% or 10% of their stores. But our revenue was small because it was the smaller stores. But they were still great to us. Like they told us ahead of when they launched Shopify email, and that happened. That was definitely part of my thought process to sell. The Mailchimp thing actually was a huge boon for Privy Email, that kind of put us in business.

But, yeah, Shopify building their own products was definitely part of it. Small but noticeable and impactful changes to the App Store algorithms were a larger part of it.

Mark MacLeod:
Like negatively impactful?

Ben Jabbawy:
Yeah, negatively impacting Privy. This was like, I forget a couple of years ago. And that was what made me realize, wow, a lot of this business is still out of my control. Now, we worked our asses off. We built a great product. We supported customers in a way that no one else could. So that put us in the position to ride the growth.

But just as quickly, there were some things that were out of my control. So had we not built product two and product three, email and SMS, and I still have some peers that were our competitors when we were just pop-ups and lead gen and coupons. I haven’t caught up with them, but we would have been fucked had we not expanded into a full suite. I can’t even imagine the carnage that’s gone in for some of those.

Mark MacLeod:
Maybe two more questions just kind of on Shopify. One is, did you ever worry about platform concentration? I think Shopify’s clearly won the developer battle. There are very few people developing for BigCommerce, Magento, but did you feel like you needed to develop for those platforms or did you just like, screw it? Shopify is the horse to bet on.

Ben Jabbawy:
So that was a big conversation when I thought we were raising a Series B with investors. Everyone was asking me that, even internally, our shareholders and board were kind of like, should we be expanding? What’s the deal? And so we put a lot of time and energy into building for Wix and building for BigCommerce. Hindsight 2020. I wish we had done none of that, because what happened was it took precious engineering resources away. Those engineers became skeptical because it took three or six months longer to build on top of BigCommerce or Wix because the APIs weren’t as strong. The App Store ecosystem and engagement around those App Stores was nowhere near as strong as Shopify’s. And so they were flops for us. And so the engineers got pissed.

I kind of lost credibility in product direction with some of them, and we lost time that we could have easily used to beef up our email and SMS products, right? And so now this is ten years later, basically. For me, I look at this and I’m doing a lot of investing in this ecosystem. And when a founder asks me about that, I give the perspective of like, commerce is synonymous with Shopify. There is no other ecosystem. And so the way that you de-risk the platform concentration with Shopify is to build your own customer acquisition engine outside of the App Store. You want to be acquiring more Shopify stores. You just don’t want to be dependent on them coming to you through the Shopify App Store. That’s it.

Mark MacLeod:
Yeah, totally agree with that.

Ben Jabbawy:
And if you can do that, I mean, what happened with Mailchimp, if you can do that, if you can build your own acquisition funnel, if you pay your revenue share and don’t be shady, there’s not a lot of risk, I think.

Mark MacLeod:
Yep, I love it. That’s great advice. And then the second question I had on Shopify is, know lots of folks listening or watching probably partner with Shopify because you’re right, they’re ubiquitous. They’re like the Kleenex of Commerce. What do you recommend as best practices for building that relationship? Outside of don’t rely on them for the distribution. But just in terms of managing that relationship, getting awareness internally, getting on joint marketing programs, et cetera. Any insights there?

Ben Jabbawy:
Yeah, I have a bit of a funny story there. Great. We were growing like crazy early on, and there was this guy at Shopify. His name’s Addison. He was amazing. I forget his last name, but he’s great. And we’ve gone out for drinks and stuff. So when we were growing, he was my go-to.

He was like developer relations. He was in San Francisco. We got to a point where I was like, I got to just go out and meet this guy. We had gone back and forth on email so many times. He was so helpful in so many small little ways. We got to a point when we reached a hundred thousand stores where I was like, man, how do we not have a relationship with Toby or Harley? How can I network? And so I did this funny thing where I knew Gail Goodman from Constant Contact, who was on the board of Shopify, and I was like, fuck, I should just email Gail, get on the phone with her, make sure she’s up to date on Privy, and see if she can introduce me to Harley. And so I thought I was like, being smart. And she emails Harley, and Harley immediately emails me and CCs Addison.

I was just like, oh, fuck. Because my intent was not to bypass them, right? It was just like trying to do more. So I think what I realized is to be a good partner and to get on their radars. The first and best thing you can do is to serve their merchants well and just have trust that the people that are assigned to you will escalate things at the right time. And the way that you build a good partnership is get to scale on your own without needing anything from them. And then once we did, I mean, Harley ended up coming on my podcast. We’ve connected a few times. He’s a great guy. I really think he’s a mensch, and he wants to be helpful, but you just need to show that you are helping their merchants.

Mark MacLeod:
You know, I was going to ask this question before, and I think it’s even more relevant now I remember that Dave Gerhardt was part of the story. I’ve been thinking about personal brand and the impact of that, which feels particularly important in light of what happened with Sam Altman and OpenAI and the power that he’s clearly demonstrated with 600 developers willing to follow him. Did you think about that? Was that a concept that you and Dave were trying to explicitly build? Was your brand or his brand? And was that a lever you were trying to build in your distribution?

Ben Jabbawy:
I forgot if we had explicit conversations about that. But at the time, when I started hosting the podcast, it was very clear. And his advice to me was like, Ben, you’re the one that’s on the phone with the merchants and has all this intel and expertise. You should be the one out the. And because he actually started the podcast for us, and then I think, like a couple of months in, we transferred it over to me, and it wasn’t like I was a better host, right? He’s the best. But it was that I knew more about this topic than anyone.

And so that really came through in the content and the quality of the content. And then I think that it really helped during the acquisition. I really do. I mean, I can’t prove that. We had a competitive process. I mean, you remember it. We had three offers, actually, with one of the groups that gave us an offer that we didn’t go through with that CEO and I were on the phone, and he was talking about the podcast e-commerce marketing school. He was talking about the book that we wrote and my personal brand.

And so then amazing things happened around those conversations, Harley came on my podcast, and Dave and the marketing team made those social clips look amazing. You couldn’t have planned it better. And so I really do believe that it did have an impact. Now, it wouldn’t have mattered at all if our numbers weren’t growing like crazy, but when paired with our growth rates and our merchant base growth, I think it really did matter a lot.

Mark MacLeod:
Yeah. Listen, I can tell you, as a guy who’s helped sell a lot of businesses, the meat and potato ones are spreadsheet-based decisions. There’s no magic. The premium ones always involve magic. Category leadership. A founder who just understands the market better than anyone else. A company that’s deeply threatening to the acquirer. There’s many elements, but I do think that you kind of owned your category in some ways, from a thought leadership perspective, and I think that created some magic.

Ben Jabbawy:
Yeah, I agree. I also think and joke that having a really nice Zoom camera added probably $20 million to the purchase price.

Mark MacLeod:
(laughs) Wow.

Ben Jabbawy:
That’s bullshit. But that stuff all ties together, and I do think the brand helped.

Mark MacLeod:
So you’ve touched on some aspects of the exit process, but I’d love to go into it a bit more, right? Like, there’s so much written about how to raise money for your company, and yet many founders struggle with that, particularly in these times. Now that the market has cooled, there’s very little written about how to sell your business. And so it’s just this opaque black box, maybe just walk folks through kind of how that process was for you.

Ben Jabbawy:
Yeah. So probably about a year before we sold, maybe a little bit less, I had started a spreadsheet and it was just like, maybe it was 20 rows. And I would just put a company name down there of someone I thought might be interested in buying this and who within that company might be the right person or sponsor.

I categorized the businesses I had, like, ESPs, I had you know, I forget, I don’t know, SMS companies. I had the platform companies like Shopify and BigCommerce and Wix. And I had like a comment column for why I thought they might be interested. And then I think I ended up, you and I worked on that spreadsheet together after it was built, right?

And you added some names and stuff, but that took an hour, right? And then I lived in that spreadsheet when I was like, all right, I’m doing this. And I would carve out a couple of hours a week where I would open that up and I’d look, okay, how do I network into this person or that person? Many of them I already had conversations with or shared context because of our integrated approach.

We had integrations with everyone except for one or two that were on the list. And so that makes it really easy. But I reached out, I talked about our growth. I was very open about where we were and that we were genuinely noodling whether we were going to raise a series B or if this is a good time for us with everyone kind of raising mega-rounds to partner up.

And it was received really well all the time. And people, because of our presence, because of the merchant base, because of the numbers, I don’t think anyone chose not to take a call in that process.

Mark MacLeod:
Right?

Ben Jabbawy:
I worked through that spreadsheet. Some I turned to red because they were just like very clearly it wasn’t going to be a fit and they weren’t interested, and that was okay. And then I remember at one point we had, I don’t even think I had Attentive. Well, no, I had connected with Brian Long, maybe in January, actually, and I had marked them red. I was just like, no, we had a great call. I don’t think there’s anything there. And the list was whittled down over six months to three names, something like that. And that was like a little nerve-wracking for sure.

But we pulled it together. We got an offer from one. I used that to get an offer from a second that was on the list. And then all of a sudden Attentive came back in. Literally at the last minute.

Mark MacLeod:
That’s amazing. So many, I think, takeaways for me there and for people listening, Right? The notion that Paul Graham, founder of Y Combinator, has famously said companies are bought, not sold. And that is true in some ways, but also dangerously untrue in other ways. Nothing great just happens. Products don’t just get built. Executives that are going to unlock the next growth in your company, they don’t just apply.

Everything that is important you have to work on proactively. And I think selling your business is no different. It’s the ultimate enterprise sale. And so I think, as I kind of translate your story into kind of generalizable insights for people listening, the big thing for me is like, well, first of all, you worked on it proactively long before you were actually for sale. You paved the way, you built relationships. Selling your business begins with business development. Strangers rarely marry. You had integrations with so many companies, so they had data.

Whether it was good, bad, or indifferent, there was data, right? So there was evidence, right? Like, if I buy shares of a public company, I can change my mind and sell them tomorrow. If I buy a privately held company, I’m screwed. Like, it has to work. And so you’re selling trust every step of the way. And so I love that you were removing risk systematically by building relationships, not just going like, this is the other thing, right? I think investment bankers have a well-deserved bad reputation, and most of them, in the mid-market especially, are pretty useless.

But this kind of historical, like the stereotypical banker approach, I’m going to prepare this book, I’m going to send it out to people, I’m going to collect the bids, and I’m just going to run this auction process. I don’t think that works for buying technology companies because it’s not a financial decision.

If a bank’s buying another bank, it’s a spreadsheet decision. It’s math. It’s easy. But the magic comes when you get outside of a spreadsheet, and that only happens through time. Evidence, joint customers having a vision about that market category that aligns with the buyers. And any buyer that can afford to pay an outcome that matters isn’t waiting for a banker to give them an idea, right? They’re going to be proactive right? So I just love that you were proactive in this and you took charge of the process.

Ben Jabbawy:
Yeah. So I’m now building a new company in tangential space, recipe publishing. It’s called Grocers List, and I started it 60 days ago. I’m having so much fun. I have no intent of selling this business. I already have that same strategic spreadsheet that I’m building because as you learn so much about your industry and you take some of these meetings, just have a repository of who could be a great partner. Yeah, someday they could buy you.

But I don’t think it’s too early for me to be building these relationships. And some people take the approach of being stealthy and not talking about it. I found 100% of the times when I’m sharing things in public or sharing our numbers with a potential partner or buyer, only good has come from that for me, only good. I understand there’s a risk and people copy you and whatever. We had some of that at Privy, but for the most part, every time I’m forthcoming and transparent about publishing stuff that I’m working on, good things happen, and the same is already happening six days into my new company.

Mark MacLeod:
I definitely want to make sure we talk a little bit about your new company and how that experience is before we wrap up. But going back to the exit, maybe there’s this almost a shame in selling quote unquote early. And I found, like, Series B is a turning point.

When you make the decision to raise a Series B, you’re actually foregoing where the bulk of the exit volume is. And I think a lot of founders don’t realize that. And we read TechCrunch all the time, and we see these big exits, and so we just think, people just say with a straight face, oh, yeah, I want to build to a billion dollar outcome. It’s so rare. It does happen, but, like, a fraction of 1% of the time, and you had a tier one investor on your cap table in the form of Accomplice.

They invested early enough where $120,000,000 exit is going to move the needle, but nevertheless, they are just hardwired to swing for the fences. Companies like FanDuel, DraftKings, et cetera. I would love for you to just debunk this notion of why it’s bad to sell early, because it clearly wasn’t for you.

Ben Jabbawy:
I’m trying to think about how to say this in a way that doesn’t make me sound like an asshole, but I’m very thankful about my life and the position I’m in right now because I built something amazing. We had an incredible outcome, and now I can do whatever I want with my life. And since that time, I loved working for Attentive. I worked for their current CEO. I learned a ton, that was an amazing experience. They treated us great. That was a really fun part of the journey for me. I know a lot of people don’t feel that way, but I actually loved it.

And maybe that was unique to Attentive. And then after that, my family and I have two young girls. My wife and I, we always dreamed of a big travel trip. We went traveling for four months around the Mediterranean. That was insane. That was so cool. And it just gave us security in our lives. There’s nothing wrong with that. What’s wrong with that? That’s the dream.

And so the experience has really taught me that, especially if you’re a founder, you’re a first-time founder. Could you maybe grind it out a little bit more and maybe get to nine figures in the exit? Maybe. But could your ecosystem crumble six months from now? Could your growth rate crumble six months from now? Absolutely.

And so I think that there really is something to selling. When you’ve got an offer that makes you happy, your team happy, it may not make your largest investors happy in comparison to other deals in their portfolio. That’s the type of stuff that I tell founder friends right now is like, make sure you don’t raise too much, make sure you don’t optimize for valuation, because you need to at least three exit at a sale, or you need to, rule of thumb is multiply the amount of capital you raise by ten at your exit price.

Mark MacLeod:
That’s pretty much what you achieved, right?

Ben Jabbawy:
That is what we achieved in both of those metrics. And so we were able to get a deal done, but there were still hard conversations, and so I would never take back my decision to sell, and I will be thankful for the rest of my life.

Mark MacLeod:
I don’t think any of that makes you sound like an asshole. I think that’s, like the dream. That’s why founders kill themselves, right? It’s why they raise capital. Because there are far easier ways to earn a living than being a founder of a venture-backed startup.

Ben Jabbawy:
I mean, if I didn’t have the risk profile that I do, and now certainly I’ve got a platform to launch from with the Nest Egg, I would just go work at a big tech company 100%. Because you can make killer salaries, and life can be great, you know? I genuinely believe that they pay incredibly well, especially with this stuff happening in AI. You can make a great living for yourself, for your family, whatever it is. So, yeah, you’re right.

Mark MacLeod:
So you’re on the other side of the table now as an investor, you’re operating, but you’re also investing, maybe tell us about that. And is it in a capacity as an angel or do you have a small fund? And how are you thinking about that now? Just, I guess in light of, first of all, everything we’ve talked about, about kind of just how hard it is to get to an exit that matters. And also just with the capital markets cooling down.

Ben Jabbawy:
Yeah. So I’ve been an active advisor for a period of time in this category, and a couple of the angels from Privy that did really well in our outcome said like, hey, you have amazing deal flow. Let’s just formalize this and let’s let me basically make investments into the space. So I formalized a little fund on top of AngelList, which was amazingly simple. And we’ve been investing for over a year, probably in about 25, 50 companies, somewhere between there. Yeah, a lot of those were founders that I had relationships with prior, and it’s been fascinating. I loved it. And working with those early stage founders is a lot of what gave me the energy and reminded me of how fun and exciting it can be to build again.

I definitely, probably could have raised a bigger fund based on the success of this first one, but I realized that I just have a lot of creative energy that I don’t think is done. And so taking the break, traveling with the family, investing in working with these early-stage companies, I think all of that was important. And by the way, just doing no real operating work for six months or whatever, really was important for me to get back and say, wow, I actually do want to do something again, but I want to do it completely differently this time.

Mark MacLeod:
Tell me about that.

Ben Jabbawy:
I decided to raise a little bit of capital. We raised just over a million dollars from people that I know and trust or firms that are fully aligned with me as a founder. Small firms that don’t need massive outcomes. And that was one. So I’m treating that million dollars like it’s the last money we’re ever going to raise, as opposed to just being an entry point into the VC treadmill.

And I’m now a big believer that small teams can move really, really fast. And so I think that when we were 80 people, that was really challenging for me because I was just doing stuff that I didn’t care about or like. A big challenge for me and my co-founder is, hey, could we get this to a couple of million ARR with four or five people and a million raised?

And I think that we can, because of the past experience, like, you know what needs to happen, you know you need distribution. I learned a lot from Privy and the freemium model that we’re bringing to the table for this one, but that’s also part of the challenge for us this time, and that’s fun.

Mark MacLeod:
I love that.

Ben Jabbawy:
And now, I should also say that it’s not that I don’t believe in raising more money, but there’s a great time and place to use that, and that’s only after you really have hit product market. You’re growing like crazy, and at that point, you see a much bigger opportunity that you can’t execute on without the cash. And so I think so much has changed in the ten years since I started Privy around building software that I really, like at Privy I was focused on one to one being the ratio of amount raised to ARR. For this one, I’d love to see the amount raise be much lower than our ARR.

Mark MacLeod:
Is that because of AI and its impact on productivity, just more robust, like, less for you to code from scratch? Are you using no code tools? What’s behind that?

Ben Jabbawy:
Definitely some of that, yeah, we are using a lot of AI. I’m not out talking to our customers, calling us an AI company, but there is a lot of AI that’s driven efficiency for us. So that’s part of it. The other part of it is, I just think having more money and you just think you need to spend it and you need to fill roles because other people on your team tell you they need hires and it’s too much work. I just think that we are moving at lightning pace because we don’t have a lot of that stuff. And I’m right now working with people that I’ve already worked with, and there are no cultural distractions inside the company, to be honest. No one cares about perks right now. We’re not, like, doing company events.

Everyone’s fully aligned on what we’re doing and why, and impact and performance is the thing that is motivating everyone in the company, and I’d like to keep it that way forever, honestly, for this one.

Mark MacLeod:
So pure. (laughs)

Ben Jabbawy:
Yeah, right. I mean, don’t get me wrong. I loved the culture we created at Privy. It was a lot of fun. I think people will look back on that experience as one of the best working experiences of their lives. I’m very proud of that. But I think that it was just a different business than what I’m trying to create right now.

Mark MacLeod:
Are you fully kind of distributed now with this one, or is it folks in the Boston area?

Ben Jabbawy:
That’s a good question. So, pre-Covid Privy was concentrated to Boston. We had a Boston office downtown. I’m building this. My co-founder was one of the early developers at Privy. He’s ten minutes away from me.

We go to the gym in the morning, and then we work in the cafe after a couple of times a week, and then we’re home just kind of doing the work that we need to do. The other person on the team is also local to Boston. Doesn’t mean that I’m opposed to hiring remote, but I think that there’s something really powerful about in person every now and then.

Mark MacLeod:
Absolutely. Yeah. Nothing beats it. Nothing beats in person. We’re just social animals.

Ben Jabbawy:
Yeah, for sure.

Mark MacLeod:
I’d love to maybe wrap up a big theme for me. First of all, in my personal life, hard earned lessons. And second, with all of the ceos that I work with, is kind of personal health and boundaries and having a work life, whatever integration, balance, whatever you want to use, whatever word you want to use that is sustainable. I’m wondering, you had the exit, this amazing four-month period with your family. You have young daughters. How do you think about that now? Did you think about that in Privy, or was it just sort of a crazy tornado? And how do you think about sustainability and balance now?

Ben Jabbawy:
Yeah. So Privy really started before them. My wife is amazing, and she always kind of pushed me for being present, even when it was just the two of us. And then we had both of our daughters. And I think I did a really good job, honestly, of balancing because I was never, like, an 80 hours a week guy. I just get fried. And having that separation was great. And I really feel like I was part of both my daughter’s early childhoods.

I think Covid and the remote thing made that even more true for me. And growing up, my dad was always there. He was always a soccer coach. And that’s what I wanted to be for my family. And so building this again, I think I am fortunate that I know that I’m a better founder if I’m prioritizing my family and my health first. And so I think it’s just built into this company from day zero as opposed to trying to figure it out.

Mark MacLeod:
You use such an important word, “being present”. I could tell you, looking back, especially running an investment bank, right, we’re doing six deals at a time. Office in Toronto, office in San Francisco, clients in Europe. If I was awake, I was working, I might have been physically home, but I wasn’t mentally home. I was processing the day. I was preparing tomorrow.

Ben Jabbawy:
Right?

Mark MacLeod:
I was off, you know?

Ben Jabbawy:
You can’t blame yourself, especially if you’re the principal, right? It all rolls up to you. There were definitely times I remember doing our acquisition where we’d put the kids to bed, and then I’d come down here and I’d be doing a Zoom call with my brother, who was our outside counsel. There’s just times where you gotta do it. But I think I was pretty good at shielding the kids from that. Hopefully, we’ll find out in ten years.

Mark MacLeod:
Yeah. Well, I’m sure the four-month trip helped repair.

Ben Jabbawy:
Definitely. My wife is saying that I was pretty good out of the kitchen, so…

Mark MacLeod:
Amazing. Well, this has been great, Ben, first of all, so good to reconnect. It’s been a long time.

Ben Jabbawy:
Likewise. I know.

Mark MacLeod:
We still have to get together in person.

Ben Jabbawy:
I know. My God.

Mark MacLeod:
Yeah. That’s long overdue for a guy who used to live on planes. Now I very rarely get on one.

Ben Jabbawy:
No, I get it. You’re in Toronto, right?

Mark MacLeod:
An hour north of Toronto.

Ben Jabbawy:
Okay. I think I have a friend’s wedding up there, so I’ll reach out. We’ll get together, Mark.

Mark MacLeod:
Yeah. 100%. Where can people follow you if they want to keep following your journey?

Ben Jabbawy:
The new company. Check it out. We’ve got a consumer angle, grocerslist.com — It’s super fun, helps you turn Instagram recipe posts into shoppable ingredient lists.

Mark MacLeod:
Oh, my God, that’s good.

Ben Jabbawy:
Yeah, it’s fun. And then I’m on Twitter @ Jabbawy. I don’t know, you can find me wherever.

Mark MacLeod:
Yep, Google knows where you are.

Ben Jabbawy:
Yeah.

Mark MacLeod:
Awesome. Thank you so much, Ben.

Ben Jabbawy:
Thanks, Mark.

Mark MacLeod:
A real pleasure.

Ben Jabbawy:
Yeah.

Mark MacLeod:
Take care.

Mark MacLeod:
Hey, thanks for listening to the Startup CEO Show. If you’d like to connect with me, be sure to visit my website at markmacLeod.me, or follow me on LinkedIn at The Mark MacLeod, or X account @markmacleod_, and if you want to tune in again next week, be sure to subscribe on YouTube, Spotify, Apple, or wherever you get your podcasts. We’ll see you next time.

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