Optimizing Life: Fitness, Health, and Startup Success with David Hauser

In this episode of The Startup CEO Show, I sit down with David Hauser to discuss optimizing routines, building processes, and achieving startup success.

Delve Into the Transcripts for Crucial Insights from this Episode

Mark MacLeod:
In this episode, I sit down with David Hauser. David is a multi-time founder. He’s founded bootstrap companies like Grasshopper and venture-backed companies like Chargify, so we talked about the differences between those two and when he chooses to raise capital.

He’s also a prolific angel investor, having done over 50 angel investments. And so we talk about what he’s learned from being on the other side. And finally, he now buys companies. And so we talked about how he brings his systems from being an operator into his role as an acquirer. And so if you’ve ever dreamt about one day being an acquirer yourself, you’ll learn a lot from it.

Finally, he’s written a book on personal health called Unstoppable. And so we talk about how founders can be unstoppable. I really enjoyed this conversation. It was wide-ranging. I hope you’ll enjoy it as well.

David, welcome to The Startup CEO Show. It’s a true pleasure to have you here. How are you doing today?

David Hauser:
Great, Mark, thanks for having me.

Mark MacLeod:
Yeah, it’s a real pleasure. It’s been a very long time since we chatted and followed your journey, which I’d love to just get into here. You’ve done so many things and there’s so much variety to discuss.

And I think when I first met you, maybe you were living in Boston and you might have been doing Chargify at the time, but there’s been so many things before then.

I was actually a Grasshopper customer when I started my investment bank and I was thinking to myself how brilliant that business was because I needed to have it but it rarely got used. I just turned it on and I just paid the bill every month. That was that and I just needed to have it. So, I wasn’t going to churn.

So, yeah, it’s kind of beautiful. It’s not necessarily the sexiest category, but I’m guessing the unit economics were pretty darn good in that thing.

David Hauser:
And yeah, I mean, it definitely wasn’t the sexiest category at all because we stayed away from voiceover ip and we said a really hard line in the sand and said we’re not going to go there because we think that’s going to be a commodity market. But it was cool at the time. We said, no, we’re just going to do what we do, which is make entrepreneurs look better.

So, how do we do that? They need phone numbers. If it’s a toll-free number, a local number, or whatever it was then we’d just provide the best service. These technologies have been around for a long time. We just packaged it the way our customers whom we got really great at marketing it to.

Mark MacLeod:
Yeah, that was genius. Makes sense. And yeah, I used both services and they were really great.

But maybe let’s walk through, we don’t have to talk about everything because you’ve done so many things, but when you look back, is there an arc to your story or you just were following your curiosity? Let’s talk about your journey from your perspective.

David Hauser:
So, there’s definitely not an arc in terms of the industries I chose, but there is an arc in terms of who I like to serve. And ultimately it took us a number of years at Grasshopper to really codify that into words. But our core purpose was empowering entrepreneurs to succeed and I really love serving and having customers who are entrepreneurs like myself.

Obviously, I built Chargify which had much more enterprise customers but that wasn’t who I loved and that’s probably why I didn’t stay around as long. We sold that company much faster. After twelve and a half years at Grasshopper, we sold the company. Chargify was a much shorter period of time.

But if I think about my whole journey as a whole, for me, I always knew I was going to be an entrepreneur. Thinking back to way early in grade school, struggling with reading and writing, and then figuring out that I liked computers. I always sold things and did stuff, but when I really understood I loved computers, that’s when it clicked in my mind, I’m going to do something for me.

Mark MacLeod:
You’re reminding me of Toby from Shopify when you say that. Because it’s a similar thing, right? His parents bought him a computer when he was six and he was just like, oh my God, I just so much prefer spending time here than anything else. This is my future.

David Hauser:
And it was very clear to me that it was something that I could excel at, and I wanted to prove people wrong. I struggled in school, wasn’t the most popular, none of those things, but I wanted to prove to people that I could be successful. And the computer gave me that ability. I just excelled at it. So it was an easy track directly there, and I loved it. I loved spending time there.

But really, one of the key moments in my life was when my dad said to me because I wanted a Dell computer at the time, which cost around $3,500 for a very, very slow computer, comparatively speaking now. And he said, okay, I’ll get you the computer, but I’m going to loan you the money and you have to pay me back for it.

Obviously, he could have just paid for it and said, go play games, do whatever you want. But that really made me understand that this was a resource to get things done, and I had to use it that way if I wanted to be able to pay for it and get another computer and continue on that path.

Mark MacLeod:
That’s wild. Was your dad an entrepreneur?

David Hauser:
So, interestingly, he was. He actually ran his father’s company. So a different entrepreneurial path than me where his father started a company in New York City a long, long time ago when they came to the country and he took over that company.

So a different entrepreneurial path, but definitely a business mindset and understanding of how to instill that in kids.

Mark MacLeod:
Yeah, I love that. I don’t know if you’re a parent now, but it’s amazing. These lessons we get, I think guys particularly get from their dads. And in high school, I wasn’t the best student. I was a drummer in a rock band. Thankfully, it was before social media, because I had long, permed hair and I was convinced I was going to be a rock star. And therefore academics weren’t super important. In the summer before my final year, my dad got me a job at the company where he worked in the maintenance department.

And he only told me when I graduated from undergrad that he had deliberately found me the hardest job there and told the maintenance head to give me the shittiest jobs. And I quit halfway through the summer and I had no money. I was bored out of my mind. I came back in my final year and I was straight ‘A’s and a peer tutor. And anyway, the rest is history. So it was a quiet but powerful lesson.

David Hauser:
I am a father now, and I really struggle with the lessons that are most important and how to teach them. And I look back to my childhood, and this was long before there were all of these books and social media and all this stuff to tell parents what to do. And I think that’s what we really struggle with now is there’s so much information about what we should do and how important it is.

But really what my parents did was they allowed me to be independent. And I think that was the really most important lesson. Obviously, they had rules and there were things that were important, but when I did something wrong, it wasn’t about punishment, it was about disappointment.

And then the rest of the learning experiences they gave me were very much hands-on like what you just described, touching and feeling and doing something is very different than being told something.

And that’s how I try to think about my kids today, and I’m sure I fail a hundred times at it because I want to have them learn quickly and I just tell them to do things. But really, I’m sure the lessons that they’ll take away are the ones that they learn themselves by touching and doing.

Mark MacLeod:
So, Grasshopper was your first startup, is that right?

David Hauser:
It was my first startup that was successful. I had lots of little things before that. I think as we all do, right? We just try different things to see what’s going to work.

Mark MacLeod:
And you bootstraped that one, whereas I think with Chargify, you raised venture capital. How did you decide on bootstrapping versus VC?

David Hauser:
Yeah, it’s a good question and one I get asked a lot, especially for new entrepreneurs. And I think my default answer is to always bootstrap as long as possible and buy that optionality over time where you can then raise capital.

We got into Grasshopper twelve years in and took a little bit of debt because we were spending twelve and a half million dollars a year on radio. We had to just from a cash flow perspective, take on some debt. We never raised any other capital. I think that there are limited circumstances today where capital is required.

Dual-sided marketplaces require building both supply and demand at the same time. AI, arguably now maybe a lot of capital is required. I think that capital requirements will continue to go down as we see more commodification of the resources, the models, and the things that are available to us. We’re already starting to see that if you don’t want to own the necessary underlying model.

Other than that, there are probably a few circumstances where speed to market matters, those are the categories where capital makes a difference. Otherwise, it’s probably a drag and takes away optionality for the company and the entrepreneur.

Mark MacLeod:
I love that. I think on that last point, speed to market. If I compare Grasshopper to Chargify, Grasshopper serving the SMB, sort of mathematically impossible to run out of TAM, so speed to market is irrelevant. It’s up to you. You can go fast, you can go slow, whereas Chargify has slightly a larger customer base, and therefore fewer of them, more attractive customers. So someone else probably sees the same opportunity you do so it’s a little bit of a race. I don’t know if that distinction makes sense.

David Hauser:
Also, there’s a little bit of a flywheel effect in Chargify, which is different than Grasshopper, where we had that referral base that continued to allow us to grow, but that was different than needing market attention. Where Chargify, you had to have an enterprise buy-in, that this was a reliable long-term solution for billing, the most important thing in your company. So you just had to have those customers and logos and things happening at a good speed and momentum.

Similarly, I built a company in the fintech space. Now, there are probably about 150 employees there, raised $42 million of capital in a very short period of time, and have raised more since then. And that company really mattered for momentum and logos, large enterprises, things like that.

That capital requirement is there because you have to be able to build at a trajectory that’s really, really fast.

Mark MacLeod:
So the company still exists, but you’re not day-to-day in it, correct?

David Hauser:
Yeah. So after the capital raise, I stepped back from the CEO position. I built it from the ground up with the team and really understood that I was not the right person to spend $42 million. I’m not comfortable in that space. And that was a hard realization to understand because I could have grown it, I could have raised more capital, I would have retained more equity because of all of those pieces, but I’m not comfortable in that space, and I didn’t want to operate in that space.

I like the profitable bootstrapping experience compared to how fast you can spend that capital. It’s just a different experience.

Mark MacLeod:
So you knew that raising that money was the best thing for the company, but then as a result, you weren’t the person to lead it.

David Hauser:
Yeah. And sometimes we have to, as entrepreneurs, accept that we’re not the best person for the next stage of the company. Sometimes we are. And it’s really important to do what’s best for the company, which is not always aligned with what’s best for the entrepreneur. I find that most of the time it is right when you’re in those really uncomfortable positions that you’re not the right fit and you can feel that. Maybe you grow into it, maybe you don’t. But doing the right thing for the company to continue to succeed, the employees, all of those things, I think, is most important.

And we always looked at Grasshopper the same way. Did we have to sell it? No. Was it the right thing for the company in the long run? I think so. It found a good home with cross-sell and upsell opportunities and all of those things.

We never expected to sell the company. Never, never had a plan to, never had an exit plan. Just said, no, no, no, no along the way.

Mark MacLeod:
I love that. So you never ran a process, just someone came in and finally gave you the right number and you’re like, all right, screw it, I’ll take it.

David Hauser:
Look, I honestly think that we overestimate the importance of running a process as a whole. We hear about those stories where Cisco and Microsoft competed, and it was great and there was competition in it. But that’s not the common scenario that most entrepreneurs go through.

We wanted to build an amazing company which just so happened that someone wanted to acquire it. That was our goal. It wasn’t the other way around. How do we build something to be acquired?

Again, we were bootstraped so we didn’t have to have that capital pressure requirement. But really what it meant to us was we could say no again and again and again. And then someone offered significantly more than we believed it was worth at the time. You have to at least entertain that.

Mark MacLeod:
So you had no prior relationship with that buyer. They just came in, they knew about you, and that was it.

David Hauser:
Yeah. So they had acquired one of my friend’s companies. So that was their way into me. They got a warm introduction.

Mark MacLeod:
But the expensive way to get an intro is by another company.

David Hauser:
Yeah, we had no relation to them. And we found out three really interesting facts. One, this is a company, Citrix, which had done around 70 acquisitions, so they were very experienced. They came in and they said, we’re really interested in this space. We’re really interested in you guys. We should have a conversation. We said, okay, we’ll talk. We talked to them. We said, no, we’re not interested. It’s just not the right time. They said, okay, sounds good.

They came back to us the next quarter and we had given our plans and said, here’s what we’re going to do. They said, how are things going? And we said, well, we beat our plan. They’re like, we’ve been doing this a long time and no one has ever beat their plan in that period of time. But we ran a really rigid process internally, so that accelerated their interest, I think. But what we found out later was there was an external report that they were given that they said they needed to fill two gaps in their company.

One is telecom, where they just didn’t have a strong telecom offering within Citrix for the SMB market. And two, they needed people earlier in the life cycle of building a business because they had people later in the life cycle with virtualization and other pieces of the technology stack, but they were starting to run out of the ability to market to that later stage. They needed to get people earlier in the funnel of the life cycle of the business. And we fit that perfectly, right?

So, from a board perspective, the value was not our customers, it was our ability to market. So they far outpaid compared to revenue or the number of customers or any of those metrics.

Mark MacLeod:
That’s the perfect thing that you want, right? Those synergies are just so valuable and you get credit for some of them.

David Hauser:
Yeah, you never get credit for all of them. They’re always saying to not worry, we’re going to do all this stuff later.

Mark MacLeod:
Yeah, yeah, that’s it.

So a key thing that you said there is that you gave them your forecast, so you must have had some level of seriousness to do that, and that enabled building some serious trust between you.

David Hauser:
Yeah, it’s definitely a process that takes time and trust to be built. We looked at it as if this could hold ourselves accountable similarly to a lot of the other tools that we used. So there was no proprietary information in there. Quite honestly, we didn’t have the best technology. That’s not what we were. We were a marketing organization. If you look back at the Grasshopper technology itself, we didn’t have text messaging for three to four, maybe five years after our competitors because our customers weren’t willing to pay for it. That’s what mattered to us.

Was it a cool, sexy thing to build? Sure, absolutely. Was the same with voice transcription? Now voicemail to text transcription customers were willing to pay for. So we built it before text messaging. Those are the choices that we make on a daily basis. What will customers be willing to pay for? And that’s what we cared about.

So sharing with them our forecast was a matter of letting them know where we thought we were and what our CPAs were going to be, those types of data points.

Mark MacLeod:
That sounds like a very pragmatic way to run a company, which you have to do when you bootstrap, right?

David Hauser:
Yeah. Very simply, you run it based on data. And I think that has become more popular than when I started Grasshopper a long time ago. Then there was this kind of popularization of metrics, data, data-driven decisions, and data-driven marketing in the early days of Offermatica and A/B testing and those types of tools.

Now we just accept that that’s how it is. But honestly, we had to build internally this testing culture, and that took us a long time and lots of pushing and challenging people because that’s not how things were. There wasn’t an A/B testing culture at the time.

Mark MacLeod:
Where did that insight or inspiration that that was the way to do it come from?

David Hauser:
Interestingly, we had a consultant come in who worked with the Obama campaign and some others, and he was early on at Offermatica, where this is one of the first companies that was really making software around this idea. And we bought into the idea that building a real testing culture could make a difference in how we were doing marketing and looked at some of the data points and the things that were happening around us. So we weren’t the first, but we were definitely early on, and making that change changed everything that we did.

Mark MacLeod:
You’ve been CEO multiple times. You’ve been the CEO of a bootstrap business and of a venture-backed business. I’m curious about how those experiences were different for you, particularly around the altitude that you operated at.

Is it fair to say in the bootstrap business you had to be more in the business because you couldn’t hire a bigger leadership team? How do you compare and contrast the two in terms of how you live the CEO role?

David Hauser:
So, I think it really depends on stage, because if you look at the later stage of Grasshopper, we definitely built a very strong executive team with people who were paid far more than I ever made from a salary standpoint. And there were five or six of them on the team to the point where when Citrix bought us, me and my co-founder didn’t stay on at all. They just took the executive team and said, see you guys later, bye. Because they were running the business.

Now, did they have the vision and some of the goal-setting that we were doing? No, but they were running the business. So, in the later stages of a bootstrap company, you get there either way if you want to continue scaling.

I think in the earlier stages it’s a little different. But really what I find different between those two experiences is the pressure and expectations from the board and board members. And what the job is as a CEO is much more focused on capital raising and board in a venture-backed company, where in a bootstrap company, it’s much more about operations, goal setting, and culture-building.

Now, of course, those things still have to happen in a venture company, but if you look at the time split, a significant amount of time ends up getting dedicated to capital raising and board if you want to be successful in the venture world.

Mark MacLeod:
I don’t know what your batting average is, but it feels pretty high just in terms of creating companies, bringing them to an exit, and then doing it over and over again.

David Hauser:
Yeah, but that’s not fair though, because we only see the successes, and I told myself that lie many times. Oh, I can build anything, when in reality I failed so many times at Grasshopper. You saw Chargify, but that was one of six companies we built. The other five failed and we lost millions of dollars doing it. It was a tremendous distraction for Grasshopper. It was a very bad idea, but we built Chargify that was successful.

So from a capital perspective, yes, we were positive and we made money because of that success. But it was a poor idea, poor structure, and poor execution where only one of those six projects worked out.

So I think it’s important to understand that behind those successes we see there are tremendous numbers of failures we don’t.

Mark MacLeod:
Yeah, that’s totally fair. If you look back, because you have had more successes than many, what’s your retrospective on that? What were the keys to success?

David Hauser:
It’s hard, as I think times have changed a lot. You asked me about the things that I did to be successful at Grasshopper are different than the things I do today to be successful because times have changed and things are different.

But the most important thing that I learned that I continue to use is building a team around me that is better than me. I know everyone says that, but you really have to buy into that and be comfortable with hiring people who are better than you. Otherwise, you’re never going to get to that scalable point. You could build a lifestyle business, but if you want to scale and grow, you have to be doing that around you and be willing to step back and say, I’m not the right person for that role anymore so I’m going to move over here.

The other piece that we continue to use is culture, and culture gets overused. But core values, core purpose, super important, and not BS ones, but rather real ones that I’ve now put more emphasis on much earlier. At Grasshopper, we just ran and we did whatever. That was a mistake where we had to go back and fix our culture, really write down our core values, and integrate them into everything we were doing in year four, year five, where today people are wondering why are you doing that when there’s one person in a company at the very early stage. Because that’s the most critical. That’s the time when it matters.

We ignore it because it’s easy to just say me and Mark are sitting in a room, we know what our values are, we’re going to hire one person, and most likely they match our values because they talked to us and we hired them. But very quickly, you lose control of that.

So I think front-loading that, and then similarly front-loading process. So I’m a big believer in a framework and whatever framework you decide to build within your company, it’s super important to start on day one with that. It took us years to learn that. It doesn’t matter what framework it is, but use something that keeps you accountable and can give you the action plans of how to get to where you want to go, rather than just kind of flying around doing whatever.

Mark MacLeod:
So you mean introducing systems as a repeatable way of doing things as early as possible?

David Hauser:
Yeah, I had a planning process. Thinking about this on a monthly, quarterly, or yearly basis. What are our plans? How are we going to get there? What’s going to get in the way? That kind of discipline early on, I think, really matters. I personally love processes and playbooks and building those things because I think that’s an easier way to scale my brain but you don’t have to love that. But what you do have to do is know where you’re going, make sure the team knows where you’re going, and keep the discipline to keep on a rhythm.

Mark MacLeod:
So you’re right. Everyone says hire people smarter than you, and yet a lot of people don’t. So, how were you able to do that? Does it only work if you are humble and recognize that that person is smarter than you? What are your thoughts on that?

David Hauser:
I think the most important thing is actually doing the job before you hire. As much as possible, I tried to actually physically do the job in Grasshopper before I’d hire somebody. Whether it was running the technology team, if it was doing customer service, or whatever it was, actually physically understanding the job at an intimate level allowed me to understand the skill sets that were needed and required and where I was falling down. So it was very easy for me to identify where I was not doing well because I was physically doing it.

If you combine that understanding and do it humbly enough to say you’re willing to be the least smart person in the room, that’s how you get there. But it’s hard for a lot of people. They want to be the most important person in the room. And importance doesn’t come from intelligence or ability. In my world, it comes from the ability to actually create a plan and drive towards that plan. If I can get a bunch of people all driving towards a plan, that’s where I’m important. Not if I’m intelligent or not.

Mark MacLeod:
If I think back on the CEOs that I’ve known and worked with, I think they’ve had two struggles around this notion of hiring people smarter than them. One is getting their ego out of the way. The other, I wouldn’t call it intelligence. It’s more that that person has specific technical or domain knowledge that they lack, and therefore they’re like, well, who am I to manage David? Because he just has been there, done it, and got the t-shirt.

So maybe just a little distinction there. I don’t think it’s an intelligence deficit. It’s an experience and credibility deficit, which just brings up imposter syndrome. Who am I to manage that person?

David Hauser:
We struggled with that early on because I founded this company when I was a sophomore in college, so I was going to school three days a week and hiring people twice my age. So no matter who I was hiring, I was having that challenge pretty early on. Why should I manage them? Why should I direct? If I can show them a path to success and then a group path altogether, that’s why I should manage. And I think if we can buy into that, that’s how we get over that struggle.

Still today I have imposter syndrome. That never goes away. But can we build the tools around us to make sure that we lessen that as much as possible? And then understanding that if you do take the ego out of it and understand there are way better people to manage a technology team or program.

I wrote the original software, I could have stuck to it and said that was the best software but no, it was the worst software, yet it was the minimum that we needed to sell. That’s all that mattered. If I wanted to stick to that and say it has to stay because I wrote it, that’s detrimental to the company.

Mark MacLeod:
Let’s move to the other side. Now, you’ve made over 50 investments as an angel. We actually have one of them in common, Unbounce. And yeah…

David Hauser:
You might have introduced me to that team, I don’t remember.

Mark MacLeod:
Yeah, that’s possible. I’ve known them for a long time and Rick is still a close friend.

So, what have you learned from being on the other side as an angel? And you still operate now, so how have those learnings informed how you operate?

David Hauser:
So I’ve learned that one, I’m not a good angel investor because I’m not great at picking. I turned down Uber and other things. So ultimately the portfolio, if you look at it, is positive because of a few outliers and not because of my choices. So I’ve really come to understand that for me, angel investing is about learning and giving back. Those are the two things that I value from it. So giving back to a community that I care about, bootstrappers that might not be able to raise capital in the traditional sense. So, those people I want to support.

Two, learning about industries, things, AI, whatever it is, I’m paying for, buying my learning and I’m comfortable doing that. It can be a 100% loss if I’ve marked it in my portfolio as learning. Those are the two things that I’ve learned. The other piece I learned is that one of the things that is most predictive of success for any angel investment that I’ve ever made is the ability for the founder to send regular updates. Those who send regular updates, I don’t care what the pattern is, if you send them weekly, monthly, quarterly, or biannually. Whatever the cadence you set, those who do it and stick to it succeed.

Mark MacLeod:
Yeah. It’s so funny to say that I’ve seen that exact same pattern. I think it’s just because you’re making yourself accountable.

David Hauser:
I mean, look, the unbound team did it. They send regular updates. It’s just a clear pattern. So it sounds easy and it’s silly, but very few founders actually continue. Some start with it, and then it dies off really fast while some never do it. It’s just a clear pattern.

Mark MacLeod:
I don’t fault you for passing on Uber. First of all, kudos on even getting that deal flow. But when I was a VC, we had an accelerator in our fund called Founder Fuel, and there was basically an Uber competitor before Uber. And I remember thinking this was a solved problem. I can get a taxi today. And second, there are medallions and union rules. It’s never gonna work. I just threw up all over it.

David Hauser:
I mean, I grew up in New York, the capital of medallions and regulations from a taxi perspective yet I was like, there’s no way. So, even if you tried, someone’s gonna kill you in New York and that’s why I didn’t understand how that was gonna work. Clearly, I was wrong. And what I learned from that is, that what I was wrong about is there was a new way to challenge regulations that we didn’t yet understand at the time.

The way that Uber and others have then challenged those regulations, maybe even in crowdfunding and a few other categories where they’ve kind of built this groundswell underneath and started to do things as much as possible to skirt the regulations. Before that was not accepted and it wasn’t even a possibility. And that’s what I didn’t understand about Uber when they started.

Mark MacLeod:
So you grew up in New York. I first met you in Boston, both of which are kind of startup hubs, now you’re in Vegas and the only company I can think of from Vegas is the super-old Zappos. What’s the entrepreneurship community like in Vegas?

David Hauser:
So it’s a great question. I’ve been here almost 14 years and when I moved here, there was no community, and it’s still not a community like Boston or New York but it is a growing community that is very different than when I got here 14 years ago when Zappos was still being talked about. That was it and there was nothing else. I met Tony a number of times and I think he was a great resource for the city, but unfortunately, he was still very insular in what he built. And that failed to create an open community.

And most importantly, what it failed to do was very few people at Zappos became millionaires. So there was no seed capital running through the system. Because of that, it’s taken a long time to get there to have that kind of community. And really what’s happened is people have moved from California. They realized, why should I live in California when I can buy a way nicer house in Las Vegas just on my tax savings, and still have enough leftover to travel? And one of the most amazing things about Las Vegas is how close we are to everything.

I love living here. It’s an amazing lifestyle. I have chickens at my house. It’s not what anyone expects when you think about Vegas. But I can drive two and a half hours and be in Brian’s head for skiing in Utah Snow. I can drive two and a half hours and be at the beach. I can fly almost anywhere in the world or the country from a major airport.

And Vegas is a city built for 20 to 25 million people but has about a million people who live here. So if you think about the infrastructure, the restaurants, the shows, the airport, all of those things built for a major city without the major city problems of traffic, people, etc.

Mark MacLeod:
I’ve never thought of that but that makes so much sense, actually. Are you trying to develop a community yourself?

David Hauser:
Yeah, so I’m involved in a number of communities, most notably YPO, now in the Las Vegas community. It’s been a great community for me. I still am challenged by the people who come in here and think of this as a transitory location. I’m here for a year or two while I sell my company. So you have to filter some of those people out if you want to build community, which takes time and I’m perfectly okay with that.

I have a great community around me. I still think that as a group, we failed to offer support to early-stage entrepreneurs in the community. It’s still an insular group. It’s very much people that we’ve known before and we’ve met and, compared to an open community where we’re supporting the next generation of entrepreneurs, that’s where I think we still fail.

Mark MacLeod:
Yeah. Got it.

So from angel investing, if I understand correctly, now you’re acquiring companies outright, is that right?

David Hauser:
Yeah. So we’ve bought and sold a few different companies. My view of this has been changing over time. I was very early on in the SaaS acquisition space, a very large LP and one of the first two funds that started really doing this that weren’t Large P.

I actually think that there are too many SaaS companies. So I actually stepped back from that and said, I don’t want to buy a SaaS company. I want to buy companies that I determine have durable revenue while really thinking about what are the most sticky things that we buy and do across every industry in every category. It doesn’t have to be SaaS or recurring revenue to be sticky. And that was really important to me.

I look at all sorts of different companies now and want to make acquisitions in the $1 million to $10 million EBITDA space at a majority acquisition, to be able to put in processes, playbooks, scale, and grow, but they don’t have to be high growth companies.

Mark MacLeod:
Fascinating. So are you running a fund?

David Hauser:
No. So this is my capital. I’m a big believer in deploying my capital first. If I’m successful in what I believe my thesis is and how it works and how I think this scales if I need more capital, I’ll raise it. But I don’t want to do that as the first step. I think that’s the last step. That should really be how do I add rocket fuel to what I’m doing and know is working? And if this crashes and burns, that’s fine. It was my capital, and I could be responsible for myself.

Mark MacLeod:
Sounds very similar to your philosophy around fundraising for companies.

David Hauser:
It’s funny, right? Maybe it’s ingrained in the personality to some extent.

Mark MacLeod:
I think so.

Very briefly, I want to come back to the acquiring, but you brought up YPO, and all of my CEOs either are part of a formal or informal peer group. And I’m just wondering, did you have one of those when you were operating? Or, maybe just talk about the benefits that you see being a part of YPO.

David Hauser:
Yeah. So when I was building Grasshopper, I was a member of the EO entrepreneurs organization, very much like YPO, which had business coaches, had personal coaches. If you want to be a top performer, having a peer network and having coaches is the only way to get there. I don’t know anyone who does it on their own, period. It doesn’t matter if it’s sports, business, music, or anything. You have a peer group and you have coaches.

So how you find them I think is the key and making sure that you’re picking the right people and getting the right people on your side, that’s a skill to develop over time. A lot of vetting, a lot of thinking, but first of all, just start the process and have someone.

Mark MacLeod:
Well, as a coach, you’re obviously preaching to the converted here, but we admire those who achieve excellence, yet they have a team helping them be excellent. You look at Lebron James, and surely he’s got everything, sports psychologist, nutritionist, basically a whole team making him peak LeBron.

David Hauser:
Yeah. And I always think about movie stars and how they prepare for a role. For someone to get in such shape or put on weight or do whatever they’re doing is because someone who is an expert is advising them on that one really specific thing and telling them, hey, you need to build muscles to look like a boxer. This is how you do it, I’m going to work with you every day, this is how we’re going to do it, I have a plan, I’ve done it before, I know where we’re going.

Having those types of people in your corner is how you get there. We’ll just see the end result. We see Mark Wahlberg standing and looking like a boxer. There was a year of work that went into that, and there was a team of not one person, but probably ten or fifteen people.

Mark MacLeod:
Yeah, 100%. I totally agree. So back to Durable, there are a couple of things I’m curious about. One is, I guess, the extent to which the superpowers that you’ve built as an operator translate now to you as an acquirer. So maybe let’s start with that question.

David Hauser:
So, I think that the superpowers translate in terms of building processes and discipline within companies and industries, it doesn’t matter. So that’s one piece that I can transport anywhere. Like, can we take a broken company and fix it? Absolutely. Can we take an okay company and do better? Absolutely. I know that these processes work and these systems work.

So that’s one. Two is I have the benefit of capital now so I can buy companies at a different stage. So I think that isn’t necessarily a superpower that only I have, but is a superpower that can go along with the other things I do that give me access to a different set of companies or a different group of people.

Then lastly, marketing. So if I look back at my career at Grasshopper, Chargify, and every company I’ve been successful at, it’s all about marketing and driving with metrics. So data-driven marketing can be applied to any industry for any reason. It doesn’t matter. It doesn’t have to be only Google Adwords for SaaS. None of those things matter.

But having that discipline, the A/B testing that culture, I think is actually a superpower that very few people really implement. They talk about it a lot, but they don’t want to do the hard work of actually looking at the data and making the decisions that are counterintuitive and understanding that what you thought was going to work didn’t work. And all of those hard decisions that go into that process and that, again, can be applied to any industry and any company.

Mark MacLeod:
On that note, of any industry, when I hear you talk about A/B testing systems process and repeatability, those are very commonly thought of, maybe not commonly delivered, but very commonly thought of in the tech world. And I’m guessing maybe less so in the non-tech world. And so I’m wondering, is that a value-creation opportunity for you? Are you going into places that are outside of tech because you think you can bring a lot of value?

David Hauser:
Yeah, absolutely. Definitely outside of tech. So, I have a portfolio of Airbnb properties. We recently decided to pull in all property management internally because the partner we were using was just quite honestly terrible. And I advise them again and again and again. Hey, guys, let’s just build some processes and playbooks. This is repeatable work. Let’s just do this. And they just want to run around putting out fires.

Now, we’re building that internally because I know how to do it, but that can apply anywhere. It doesn’t matter the company. And I think there’s a tremendous amount of value that companies are losing or not realizing because of that.

Mark MacLeod:
Yeah, that’s for sure. So you brought up marketing as a superpower and now you’re not necessarily a CEO. You have durable capital, but you’re kind of your own brand and have been for some time. You’ve written a book, which I want to talk about later. But now I want to hear about personal branding for a second. I see more and more CEOs posting on LinkedIn doing their thing. So, maybe just talk about that.

Did you set out intentionally to build a personal brand? And if so, what were the goals behind it and how is that working out?

David Hauser:
Yeah, I wish that I had set out intentionally to build a personal brand, and I wish that I had done it earlier because I’d probably be much more successful at it than kind of just doing it because I wanted to do other things. For example, I write a weekly email that I send to 10,000+ people. Now, I didn’t do that to build a personal brand. I did that for two reasons. One, I wanted to get better at sharing, and two, I wanted to get better at writing.

Those two things were much more important to me than personal branding. Did it build a personal brand? Absolutely. Do I enjoy it? Absolutely. But that wasn’t the goal.

I think LinkedIn is the same, as it’s one of the most underrated platforms that exist today from a pure business customer acquisition standpoint. And I’m not talking just about ads, because you really have to engage with it. And I’ll be very direct. I am not on any other social media platform myself. So someone on my team posts on Instagram or Twitter or whatever. I’m not on those platforms because I think they’re a time suck on the phone.

And in general, LinkedIn I actually look at, because there is valuable content that a lot of people are delivering, and their algorithms are actually very good at delivering that content compared to garbage content and I think people really underestimate the power of LinkedIn right now.

I think where I failed from a personal brand perspective, and I should have spent more time, was I did occasional speaking engagements when I was at Grasshopper, I could have done 10x more, and I think that would have raised my personal brand profile pretty significantly.

Today I do them as favors for people, but the demand is far less because I’m not building a visibly large company in that space. So that, I think was a lost opportunity that I wish that I had capitalized on.

Mark MacLeod:
Yeah, those points really resonate. I think people have a love-hate relationship with LinkedIn. It’s not sexy, but there’s real engagement and real people. So, for me, the number one channel that I focus on is speaking. I have mixed feelings about that because that LinkedIn post is building my brand while I sleep, whereas speaking, I gotta get on a plane and go somewhere, and then I’m stuck at a conference for a day or two. But it’s a big commitment.

I just did one a couple of months ago in Austin, and it was just a big disruption to my schedule. It’s nice to get out of the house, but not efficient.

David Hauser:
The way I think about it now is it’s part of a flywheel. If you’re building a personal brand, it’s part of that marketing mix. And that marketing mix includes LinkedIn, it includes YouTube, it includes speaking. And once you get that flywheel going, those are the people that we see most successful from a personal brand perspective. That was never my goal, so I didn’t want to build that. I think that that was still a missed opportunity, though. I could have done 50 of those and built that momentum faster if I wanted to.

Mark MacLeod:
Yeah. You think about social media, right? We follow humans more than we follow brands. So leading with the human, in this case, you. That makes sense.

David Hauser:
Yeah. And look, the speaking gigs I did when I was at Grasshopper were successful for Grasshopper too. I never spoke about what we did, but it raised the Grasshopper profile, so it was well worth the investment.

Mark MacLeod:
A big thing that I’m assuming built your personal brand was writing a book. It would have been easy for me to imagine that you would write a book on entrepreneurship, but you wrote a book on personal health. I’m really curious to know how that came about.

David Hauser:
I thought a lot about this very deeply, actually, because I had a lot of learnings that I’ve still never shared in a written format. From my learnings of building different companies, I’m sure that they would be valuable, but I think, to be quite honest with you, a lot of them are just duplications of other people. I don’t think that it’s all that unique. I wanted to share my personal journey because it was unique to me and life-changing.

I was overweight and I still had that image in my mind. I still do today. I still struggle with that image of being a sophomore in high school, overweight and I can see the picture, so I know exactly what it looks like.

That struggle has stayed with me for decades and gone through all sorts of iterations of different things with the commonality being I’m a very intense person and I kind of do things that are either 100% or 0%. And for me, sharing that story was part of that 100%. I don’t think I could have gotten to that level without publicly sharing the story.

Mark MacLeod:
First of all, personal health is a thing that is very important to me, and it’s actually the number one place I start with my CEOs. I think happy, healthy humans build bigger, better companies. The number one reason why founders sell is because they’re burnt out and they just can’t imagine going on.

Also, a company is all-encompassing while you’re in it, but you zoom out into the context of your life and it’s just a chapter. Your life is far more important than that company.

So, I’m drinking the Kool-Aid about personal health, but if I look at society at large the rate of chronic disease is higher than it’s ever been. So, I’m curious, what are we doing wrong? And your book is called Unstoppable. What do founders need to do to be unstoppable?

David Hauser:
So I think the first thing is to understand that if you want to be a great founder, you need to separate yourself from the rest of those people. We are not average people. If you want to build not average companies, that’s the first thing to understand.

And if you want to be in that category, that means every part of your life needs to be optimized, and you need to be driving and driving and driving. And it’s not about hustle and time. It’s about how to get the most out of my time.

And being healthy is the easiest piece to get more out of your time bar none. Now, easy doesn’t necessarily mean simple. There are complexities to it, but that’s where I would start, for sure. So I agree with you on that. I’m really saddened by our society as a whole, but I’m fine with the rest of the people being different. If I’m going to be different, that’s fine. I want to optimize myself.

So I don’t think that from a founder’s perspective, we should be thinking about how to fix chronic disease. We’re going far, far beyond that. That’s at the beginning of the scale. If you want to be a top founder building a great company, you’re on the other side of the scale, which is far beyond disease, that’s optimization.

And that was really what I tried to write about, how to get to that optimization standpoint with as little amount of time as possible.

Mark MacLeod:
Amazing.

So, very briefly, and I know it’s not one size fits all, but what does optimization look like for you?

David Hauser:
The first thing I tell everyone to start with is sleep and diet. Those are the two highest-value things that are actually quite easy to change. And I eat a very strict diet, probably way stricter than anyone wants to. And that’s fine for me because I like that routine.

But very simply, get rid of sugar, get rid of processed foods, and eat mostly whole foods closest to their natural state as possible. Doing that already equates to 80% of the benefits. If you want to really go further than that, do it. Go to bed around 9:30 p.m. or 10:00 p.m. and get up naturally without an alarm clock.

Those things matter and are very easy. How do we optimize for that? Make sure the room is dark. Make sure we don’t look at screens really late at night. I’m still really bad. I wake up and look at my phone. It’s part of my routine. It’s probably really bad for you, right? But it’s been my routine for a long time and I’m actually okay with it. I’ve accepted it. But I follow that every day of the week. Weekends don’t matter.

So with those two pieces, I think you can get most of the way there. Lots of other things. Should you be lifting weights and moving, breathing, and doing other stuff? Absolutely. Do I have an ice plunge in my house? I do and I love it. Do people need to do it? Absolutely not. I don’t think that that is what’s going to change us in a market way.

But there are lots of tools that people spend far too much time focused on rather than just the big pieces that matter.

Mark MacLeod:
I love it.

A lot of my CEOs talk about burnout. A big thing that I talk about is boundaries and how work will expand to fill all available time. And you talked about going to bed at 9:30 p.m. or 10:00 p.m. and I personally start to panic if it’s after ten and I’m still up so I’m all in on that.

But, very often those CEOs are in meetings all day, and they spend some time with family. 10:00 they’re settling in for the second shift. It’s a daunting concept for them to think, oh, my God, I should be in bed at 10 p.m. and it’s because they haven’t created sufficient boundaries.

David Hauser:
It is. Because people ask me this all the time saying there’s no way they can go to bed at 10 p.m. I’m like, okay, let’s actually break down your time. What did you do after 5 p.m.? Let’s really talk about it, honestly. And most of it is bullshit time. Kind of making the excuse that you’re working while watching Netflix or doing something else. If you told me from 5 p.m. to 10 p.m. every bit of that time was used with your family. Awesome. That’s great. Go to bed at 10:30 p.m. then. Like, I could buy that. But I’ve never met someone where that’s true.

So I think that’s our first challenge. The second challenge is, what are you actually doing in the mornings as part of your routine? How are you optimizing your morning to be most effective in gaining back time at the beginning of the day?

I actually love doing work in the morning. So that boundary, for me is much more fluid in the morning because I can get a lot more done without distraction. I then go to the gym. I stay on a routine to buy back my time and make sure that I know exactly where I’m going to be and when I’m going to be there.

If you have 12 hours that you can play with, there’s no way you can’t figure it out.

Mark MacLeod:
I’m a CrossFit guy and the first rule of CrossFit is to always talk about CrossFit. It’s the opposite of Fight Club. So I’ve done that. My CrossFit coach talks about how we basically get jet lag every weekend because we go to bed at the same time on a weekday, and then we throw it to hell on the weekend. So I’m curious, do you have the same sleep schedule seven days a week?

David Hauser:
Yeah, seven days a week. Same gym schedule, same eating schedule, same everything schedule. All of those things are on the exact same schedule. So there’s no difference between a Sunday and a Monday, other than I don’t go into the office on Sunday. That is the difference between the days. But the beginnings and ends of those days were very much the same.

And the eating schedule, I think, is very important to stay the same as well, knowing that the body knows when it’s going to get fuel. So whatever schedule you’re on should be consistent across all days because the body doesn’t care that it’s Saturday. But then we freak the body out and we don’t eat for half the day, and then we have a huge dinner or whatever stupid thing we’re doing rather than sticking to that schedule.

I always get challenged on the food topic. But it’s not fun to go out, and I stopped drinking some ten years ago. It’s not fun. First of all, I’m perfectly happy to go to a restaurant and not eat. I’m not worrying about what to order. It wasn’t on my schedule, and it’s not on my macros so I’m not eating it. I can engage in conversation, be present, and all those things. And I think it’s actually a more enjoyable experience.

Mark MacLeod:
I love it. So cool.

Maybe one brief observation just to wrap this thing up and then one final question. So, I had Jason Fried from 37signals on recently, a guy who’s had lots of success. And his work gets 8 hours, sleep gets 8 hours, and everything else gets 8 hours. And that hasn’t stopped him from being pretty darn successful. So it can be done. It just requires intention and boundaries.

David Hauser:
I would say discipline and routine.

Mark MacLeod:
Yeah, yeah, exactly. For my final question, you’ve had so much success in different areas, as an operator, angel, author, and now as an acquirer. What is your vision for David Hauser? Where are you taking yourself?

David Hauser:
So I ask this question very often, and I have a challenging answer or kind of an interesting answer. I want to run or exit a billion-dollar company. That’s my next thing. And this is very challenging for me because I actually don’t care about money. I’m very frugal. People around me hate it, family hates it. I’ll spend it on experiences. And one of our family’s core values is experiences over things.

I still have the same car that I had before I sold Grasshopper. I don’t care about that. But the way our society measures success is in increments of dollars. And if I want to look at what is the next thing I can be successful at, from a measurement perspective, it’s that billion-dollar company or exit.

I don’t know how I’m going to get there. I don’t have that plan laid out, but that’s where I’m going.

Mark MacLeod:
Going for the next zero. I love it. Awesome.

Well, David, thank you so much for making the time. I really thoroughly enjoyed this conversation.

David Hauser:
Thanks, Mark, for having me. This was a great conversation.

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.