Vested Capital
Vested Capital

Episode · 11 years ago

How To Start A Software Company And Exit At The Top: Interview With Michael Fountain, Co-Founder Of ModernBill

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 [ Download MP3 | iTunes | Soundcloud | Raw RSS ] I was speaking to Michael Fountain on a 30 minute coaching call, which he qualified for as a bonus because he purchased a product via my affiliate link recently, and he happened to mention his previous life as a software developer. It turns out Michael was one of the co-founders […] The post https://yaro.blog/8719/michael-fountain-modernbill/ (How To Start A Software Company And Exit At The Top: Interview With Michael Fountain, Co-Founder Of ModernBill) appeared first on https://yaro.blog (Yaro.Blog).

Hello, this is yarn stark and welcometo an entrepreneur's journey. podcast today, on line with me, is MichaelFountain. Now Michael came to my attention recently because he was aperson who claimed a bonus after purchasing through one of my affiliatelinks for a product that sold earlier in the year and the bonus included somehalf an hour consulting inter you well a chap on the phone basically andduring that call Michael mentioned one of his previous businesses, whichimmediately sparked my interest, because I was aware of that businessand Michael had a great story to tell, but I'm not going to spoil the surprise.So Michael, thank you for joining me. No thank you for having a year I'llappreciate it. So just so, we can set the the conditions before you can tell yourstory. What is the business that you started and maybe in like one minute,you know what does it do in or what did I dowhen you were in charge? The thirty Second Elevator Pitch Right, yeah, the business that you're alwaysreferring to, is modern bill that spawn out of a college extra curricular activity and grew up for several years. So that'sthat's what we'll get into okay and at the end of the day, or you were obviously living off thisbusiness right, so we're about to hear ye a software start up, and there was anice cash out sail at the end of it all to yes, sir. Yes sure so we're about tohear a story of how you can do a start up software company and go from startto selling. So let's go from the beginning, like you well born and raised here. Whereare you from I was? I was born in Biloxi Mississippi,so I'm a southern boy, my father was in the air force. So what that meant forme, as I moved every four years, so I didn't stay in the south too long. We were mostly state side lived inSeattle, Washington, Las Vegas, Nevada, Allan, more go to New Mexico and a fewother nifty places in between being the oldest of five boys. Didn't really and being on a militaryincome was was pretty big stretch, so we learned to do it very little growingup and learn to play outside a whole heck of alot. Of course, there were not really was no internet back then, and videogames were there, but they were really expensive and- and we didn't have thosetypes of things so growing up moving every four years wasa great opportunity to kind of reinvent yourself. So I think that is probably one of the thebest things in my childhood. You know I didn't get a lot of long term. Friendslike most folks to I m growing up in one place or very few places, so my relationships ended up beingcrely short, but I have a lot of like good ones that I remember kind of fast forward. A little bitended up in Memphis Tennessee during my high school years and in Memphis is a crazy place to livetoday like to visit it. But I don't think I'dlike to live there today, but growing up in high school. It was pretty nice.I met my eye school sweet heart back then, who I later married and and amstill married to very happily, I must say, and was in the music program there didmusic growing up and played the saxophone and really didn't know what Iwanted to do with my life outside of dating and playing the saxophone andgoing to school and being the oldest of five brothers, things were always tight.Everything was you just may do with what you had when I graduated high school. This wasback in ninety two. I ended up getting...

...a Kay full year, scholarship for musicfor Tennessee Tech, university and Cookeville Tennessee. If anybody knowswhere that is great engineering school by the way,but had a phenomenal music program as well- and I did that for a year and doing that for you- I reallyrealized that that wasn't what I wanted to do for the rest of my life- I lovemusic and all, but going to music director out was a hardpath, a really hard path. I have a great respect for those that havechosen that path, because it's not an easy one. At that time, I guess this was aroundNinety Tue, a D. Ninety three, my wife was graduating. Although shewas my girlfriend at the time we just ae trying to figure out whatthe heck we wanted to do with the rest of our lives, and we ended up in attysMississippie at the University of Southern Mississippi. So Back DownSouth again down to my roots had some good times there I wasactually going into accounting. I was always fairly good at math really goodat my studies. I wasn't necessarily a straight a kid, but a math andscientists seem to come pretty naturally to me so as like O, okay I'lldo Mapletolt, okay, I'll, be an accountant, and that was an interesting first couple ofyears and to pay myself through college. I endedup waiting tables, and so it's kind of a turning point for me because being a waiter being in the foodservice, industry really kind of opens your eyes to just the dynamics of people and people management, skills, kind of really blossom there. For me, let's see going from there, I realizedthat accounting was not what I wanted to do ended up getting really close with a guy thatopened restaurants and got into restaurant management and boy. That's athat's another lifetime from here, but I did restaurant management for acouple of years and that got us to Raleigh North Carolina where I wasmanager of a restaurant and Raleigh, and this is where my computer exposurehad come in because up until then, I never you know really touched acomputer and we never could afford a computer growing up. I really had no interest in computersthat I knew of, but in the restaurant industry we had to keep. We had to keep up with our daily statsand our daily sales and all that on the computer, so I got used to using excel,and this was back when windows. Ninety five was just coming out and so we've had excel and we had thespreadsheets of daily sales and so on, but the bigger part of that was everyWednesday. This guy would come in from R T, which is research triangle parkand Raleigh. German, he was a computer guy and I over the course of a year. Igot to know him pretty well because he came in here. You know every Wednesdayhe was in for lunch, it's kind of his regular routine. He was a single backhe's a computer guy and we got to talking and I was really interested inwhat he was doing. I was like wow. This is this is something I could really getinto and I never owned a computer, so I went out and- and I couldn't afford oneat the time- you know restaurant mentors don't make much money anyway, so I ended up splitting a at the cost ofcomputer with my brother in law. I was married by then and- and I had a greatbrother in law- and we went fifty fifty kind of computer and- and that was a Jeez- is a compensate I believe got itfrom. I can't remember where we ended upgetting it from, but Internet back then was a Ol four dollars an hour, some crazy messlike that and missed and quake where the games toplay. So I had a good time, you know kind ofbreaking windows every opportunity. I could get and kind of figuring out howto fix it, and...

...so that that started my love ofcomputers, but still I had no idea what I wanted to do. I just knew it had tobe in computers. How old are you then Michael? This wasninety five, so you know fifteen years ago, I'mthirty six, thirty, seven now so it was yea. I was still young, I'm still in myties, you know and really just didn't know. You know Itried a few things been waiting tables did restaurant management for a whileDondon and music, a just. It was computers, but I still didn't know whatthat meant. You know, I just know that's what I liked and that's kind ofwhere my passion was, and so I just followed my passion and that got me back to the Universityof Southern Mississippi. For the second time, which I thought I would ever goback to Hays Burg Mississippi, but I ended up back there and I luckily that was the business programstuck sure I was going to go for an intestine and two years prior all my accounting stuff in my corecourses. Stick with me so really all I had to finish up was about two and ahalf years of school, and I a lot that's pretty cool, it's kind of like Itook a break and came back and now I kind of knew what I want. I was in in Graduate Class Mat gravate classes, but I knew the courses I needed to take to get ittime and, and so ended up back in Mississippi,ended up back that US was still waiting tables, because that's how I was payingmy way through school, and but this time I was going to finish-I was a dead set at about ninety eight. I believe Internet was starting to pick up alittle bit and I knew I kind of I liked it, but I didn't really know what itwas and mis degree they don't teach youprogramming. I think that we have like a cobalt Class A and that was probablythe extent of the programming we had, but I met this guy there. His name isJeremy Chris and little I did. I knew at the time hewould become my future business partner and my best friend, you know. I know he lives two streets over from metoday and we've been best friends since collegeand you know we grew motor bill together. So that was something that I definitelydidn't expect and it didn't really materialized like that for some time so,but you know going back looking at it talking about. It now is kind of a neatturning point as well. Okay, so yeah I mean missing a few things here. YeahI understand. So, let's take the next step. Obviously this is a softwareproduct I mean. Maybe you should explain. First of all, what modern billactually is, or was when you first went to create it, and how did you create it? No absolutely so. He really the Moner Bill Product is abilling application and it is it's so purpose was to envoys and build customers that were ona recurring cycle and we were focusing on the web busting and I p industry and what God, as there was really thethe the story that I just kind of finished up with, because in college we had we're tryingto figure out what we were doing and we new restaurants and we were trying toget restaurants to get website and we were trying to get these basically putmenus online back in ninety nine, and it was a really hard sella then,because most of the restaurant owners didn't really say well, who's going togo online to look in my menu and little did day now, and but we weren't thatsuccessful, then I mean we had thirty or forty restaurants signed up and wewere building them manually, and I say we but really jar was billing. The manyou like, he managed the business development part of of our company andevery month he would be a manual and we were using after I tat Ed at the timeand it was discal locking up or I got NAT, go to their virtual terminal andand enter the credit card information...

...once a month, and so Monnerville wasn't necessarilyborn there, but that was kind of the seed that really grew to create kind ofwhat our problem was that we had to solve, which became honorable and tothis the Claret. You are running software that our service, then thathad allowed restaurants to put their menus online right a as a result ofthat you have to build a monthly, and this is what sort of germinated theidea from Modern Ville, because you were not enjoying the manual process.That's right! That's right! I mean it was. It was a very manual laboriousprocess and- and it was one that Jeremy did for us for quite some time for thenext year or two- we kind of split up and he moved to Louisville Kentucky andstarted working up. Here I moved to Seattle and went to work for Amazon andwe were you know we kept in touch and we still have these customers, but wewere realizing that we were getting. You know further and further behindbuilding these early customs of ours and and for awhile, we were actually paying for them to be online and we're like there's gotto be a better way. So we did a little research on line tosee if there was some kind of billing system we could put in place and quickbooks was around in, but it was you know far from what it is today andnowhere near a web application- and I was like you know I could probablyscript something up for us. Give me a little bit of time and and that reallyis what became Modebi version. One was just the ability for us to batch theseclients once a month and once once, we realized that we couldjust click a button, and you know build these fucks one some month, then westarted thinking about well. What else could it do and that's kind of what gotus in trouble? It's the. What else can I do what else Gnar software developerask, and you can do that forever and yeah yeah, I'm curious as well. I'massuming it's just you to as the only people in this company at this stageand you're the only software developer right. So anything you have to add tosoftware and even the red, the very first piece of suffer for therestaurants. That was all your work right right right, the a e skill fromuniversity because of the programming courses. You went through absolutelynot and that's unfortunate, but everything that we learned back at USENA was it was all suppo and it was it was going along. Our Passion, you know,I think, Ph p at the time was version to getting ready to go to version threeand my fl was still version three and and our first iteration. We didn't evenuse my skill. We used flat files to store on the data, so it was, I think,Gosh. I was a D v Man or something on something along those lines, but last Gill didn't come along for us for another couple of years, and and not really until we got intothe billing aspect of Monter bill and the batching aspect of it, and so I was it was a self taught prettymuch all the way. No real schooling to speak of other outside of obviously inis in the business degree that gave us a good foundation for a business, andthen we just applied the technology that we knew to kind of get the jobdone. We Wo Clazy to the next question. Then how did you get customers like you made this offer for yourself? When didyou realize that this could be something commercially viable for otherpeople? Good question, I would say, probablyaround two thousand and one two thousand and two when I started doingsome online research to see a lot was out there. I just made some connectionsin the the left hosting space and- and I was just trying to see what peoplewere using and everybody was doing everything manute back in the early. You know two sand:If you want to be a bosting company,...

...you, you were really a server adman orassistant administrator, and so you did everything man. Now you created thecount manually, you probably used quick books or something. Why is that to youbuilding, but nobody had in the line billing system, and so when we startedtalking about it, that's what gained the interest and it's just- we literally just threw it. I think thefirst advertising we really did was hot scripts was was coming out and therewas no billing category, so we said Hey. Can we can we get a billing category onhot scripts and and put our product in there, and we had a simple website atthe time? Oh my gosh, it was so simple and and that's kind of what opened theflood gates for us and it was a trick. Don't give me right, it wasn't floodyeah, it was still just a turtle, but it was enough to encourage us to keepgoing forward. You triggered a memory of my own hero.You know around the early two sands. I was doing a bit of a hosting as aresell myself or you know, friends of family businesses, and you know theonline here and there, and I know everybody spent a lot of time at theweb hosting talk forums and yes- and I presume I mean that's probably where Ifirst saw the name Modern Ville when I started looking up building solutionsthat would have been modern Ville and what was that other one? There was aPearl Desk. I think that's her was that was a help des. Wasn't it not a not abuilding system bank build to? Could I I can it is a long time ago now I,almost ten years, I quite scary and hot scrips and reever- the Ph per resorcinNex- was something I went to a lot to right. Basically, you tapped into theonline web hosting community and stuck it up there. I'm in a in terms ofmarketing, you know, is: How did you get more customers with it all justword of mouth? Did you spend a lot of time in the web posting top forums oryour tending events? What did you do? There were no events, I think I thinkthe first web posting conference event was probably several years later, butinitially it was. You know we stuck ourselves in hotcrips. We were active on by posting talk, but really we put our own formonline and it was. It was the communicationbetween us and the customers in our own formsthat really kind of grew. What doing could be and a lot of the features andfunctionality of Manerville grew from just suggestions out of that form, Ithink, by the time I handed ran over in that form, I had probably answered fourto five thousand posts and innate the course of a year or two. I would spendprobably a couple hours every day, just on the form. I remember just just openand up browser after brows tractive browser ad ship Click until the wholescreen will sold e Ber housers and I just run down them and answer them andstart the process. It's a great job yeah. Where were these customs comingfrom? I Michael Like? How did you get so much attention and buyers? We we kind of feel like we were. The onlyweb posting solution at are only web based solution. At a time that wasavailable, we really feel that we were kind of first to market at the pricepoint which is fairly low. I think I think our initial license was forty,nine las or something along those lines and getting that price point that low andand just being first, you know everybody tried us, and so we had a lotof the eyes were or on US re seller. Web Posting, as you know, was reallybig in the early two sands. Everybody wanted to be a web of stingery sellerand their biggest struggles were. How do I? How do I am customers? How of provisionthere accounts and then how do I them every, but what happens to say up gradeand and what happens if they downgrade and what happens if their credit cardexpires and and the so there's so many...

...business rules wrapped around just thebilling cycle. You know the life cycle, OBI customer and we addressed all ofthose issues inside of Montaville not not from day one obviously and thosethose features grew over time, but it was really just a completeunderstanding of that life cycle of the customer, and we just tried to match our own software to to solve thoseproblems and what we did know we would partner with and and what we did. Wewould build okay, so it sounds like we've hit the the Star up phase of a company thatright place right time, carving space in a new market which is fantastic. Howdid you manage to hold on to the leadership leadership position andobviously go your company? I would say we got a really goodrunning momentum at the beginning and we grew our customer base. I think wewere growing a hundred percent every month month of er month over month, andso we had a lot of growth and a lot of strength and we were we only hired when we had enoughrevenue to support an extra person. Actually I should ask you: When did youquit your jobs to you? Working in Amazon were you I was. I was workingAmazon from two thousand to probably mid two thousand, and one isthere for a year and a half almost two years when I left and Jeremy Stayed at hisjob in Louisville. For a little longer than that, I took the leap of faithfirst and and once once that kind of stabilizedJeremy took the lip O say: What did the wife say? T that's a big story right there we were all very young and we were allvery. We could afford to take some risks andI'll tell you my first leap of faith. Listen from from Seattle to Louisville.I actually moved close to my family in Florida. They were living in Florida atthe time and I was like hey. You know my daughter's two years old we've beenin Seattle for the past few years, and so, let's, let's move back, you knowclose to my family and and left him to see their granddaughter and- and you know, if worse comes to worst,we got somebody to lean on, and so that's how I handled it and for Jeremy.He was here in Louisville, he had a bunch of family here already, so he hadsome good family support and I get support network up here as well and itwasn't until we started hiring people I was like hey, you know I actually needto get up there to the office, so we've got two employees and- and you know Ineed to be in the office now. So that's when we decided to move from Florida toto Louisville, and I guess that move was done around two thousand and threeyear and two thousand and four I'm assuming by now you're drawing a salaryboth of you from the company as well right yeah, it was a very modest salaryat the time and it was you know, the revenue from the company was enough topay our bills and to pay our server costs, which were relatively low.Anyway. We had distributed software at the time, so you know we weren'tsoftware as a service. Everything was you buy or software you download it.You run it on your server and so really we didn't have a lot of huge overhead.In that respect, we were part of an incubator programhere in Louisville, so we had very, very low cost for our office space and utilities and such and so we kept cost pretty low and,like I said I, as revenue increased, basically meaning we got more licensesevery month and we would shut a hat and we'd find somebody to fill that hat, and you know the first was anothermarketing person and support the developers, and it just kind of we justgrew the team. you know very organically that way all right, so I find it quite amazingthat a lot of this was simply because...

...of license fees, and not some sort ofyou know rebuilding process where you once a month or something like that,considering it a it's a it's a billing product, too, you know it's kind ofironic you're, absolutely right that was you know going back and looking atsome of the things you say, if I could have changed this, what would it havebeen? You know our first licenses. Our license structure was what we calledowned licenses or basically perpetual licenses, and we had in the beginning.It was you know by one license and it's up grade for life and, of course, wedidn't really know any better back than that seemed to work for us and thatbrought the people and- and it wasn't for a few years later, that we realizedthat we were really needed. A recurring multiple and so we use modern build abill from Onerbel. I mean at the end of the day we had a. We had a very stripped downversion of Monter bill and that's what we used to build ourcustomers all right. So, let's, let's take this floor, then companies growingyou bring it on New People. How big you get! I think if memory serves me correctlyin two thousand and six we had twenty four employees. Four of those employees were outsourced. I believe those were outsource India to do technical support. We had asupport manager in House that would manage that team. Everybody else was inhouse in our Louisville Office, so twenty four giver take so to comewith twenty four salaries or almost twenty four salaries. You know, what'syour business moral, that pointed a chain significantly or are you justselling that many units? I'm Tom Licenses that you're? Now we definitelyyeah? We definitely diversified the the modern built product for us, beyou know it was our entry into everything that a web hosting customerneeded and we really understood kind of the lifecycle of El web posting customer and and we kind of thought as a two ter.You know we had our customers, which are we hosting companies, and then wehad their customers, which were basically the wetht in users, and itwas really understanding the life cycle of that end user that helped us better, prepare the WESTPOINT companywith the tools they needed to help service their customers, and so we didpartnerships with certificates and we created a product that basically automated the buying andselling of vessel certificates, and we incorporated incorporated that intomodern bill. So that was making purchases by a secure server, which issomething that became more important with with credit card building rightabsolutely yeah S. FL starts in the beginning, you knowthey were they're really expensive in the beginning and and the practicereally came down and- and we created a partnership with- I believe Registro at the timeand- and we use go trust certificates through that partnership, because weweren't a big enough customer to actually be a a do, trust recyte. So wehad to go through a partner which breaks me to a good point, ourbiggest partner, I guess earliest part partner that we had was actually Enaand the enamel ation hip for us was wassomething we didn't realize, how big it would become, because every indus are needed to mainnames and we were trying to to get our customers to use a domain registrarthat we integrated with and obviously had a resell relationship with, and soonce we started to generate revenue through Eno and we realized wow o thepower of the resee channel. And so that's when we started to diverse uponmy motor bill from you know, from a revenue stream standpoint having monerbills or avenue and and all the revenue...

...of our Antelao services merchantsaccount. Merchant accounts came on board. You know, obviously I saiddomains inserts and we had a fraud program because wewanted to keep our customers in business and you know so all these things bundledinto one was what paid the bills for us. So it's almost like you had a softwareproduct that was getting you the customer in the door, and then youcould just basically be an affiliate for everything. A hosting company wouldneed to sell the main names. Merchant accounts, certificates for security. Isthat good summary? No, that's a great suster. It wasrealizing what we were were strong at, and you know if there was a partnershipthat made sense. We would pursue that partnership and if nothing exists, thatwe would wether tempt to build it ourselves. Okay, so most of your staff, then wouldhave been what software development so tech supports. What else marketing or yeah we had the software development team was atits height, was at six developers. We averaged about three to fourdevelopers: technic Popal support was forty five folks and we had sales ofmarketing and luckily the third person we actually hired onthe team r John Mc Carrick. He was a lawyerinitially and we contacted him for legal health. I should say: JeremyActually contacted him for legal health to help us get some of our trade marksand copyrights in place, and it was extremely passionate in ourcause and and we were racking up some legal bills in the beginning. So youknow it just made sense to kin, hire him on retainer and that slowly mergedinto hiring him full time, and then he became our primary sales and marketingguy. So it's an interesting. It was a nice asset to have when you havesomeone that has multiple multiple tools in their chests for saying right,and that leads me to question. you start off as the programmer and yourJeremy is maybe the the marketing manager or the manager in general, andthen suddenly you bring on staff, and I really doubt that you two were doingthe same roles. How did you manage the transition from essentially being, Iguess, engineers within your business to tomanagers and then pen, business owners, yeah, the? I think it's a nice transition, like you said you know, Jeremy, and I I really worked welltogether from Jeremy- was front of the house- is kindof what I called it and then I was back of the House and those are kind ofrestaurant terms, but everything that was customer facingbusiness development partnerships was really Jeremy's domain and andeverything on the back to the house. You know the research, the developmentand support was was my idomen, and so we divided and conquered, and that'sthat's kind of how we did it in the beginning and then, as we hired people,it was really just trying to figure out who had the biggest load on theirshoulders and you know finding someone to fit those shoes and you pull that Oufand put it on theirs, and we kind of did that you know every other for sometime. You know. Jeremy got someone to help him with accounts, and I gotsomeone to help me with development. Then we got someone on support and thenwe got some one. The marking we just went back and forth to grow the teamand every person we grew allowed us to do even more on our own and up untilyou know, I still did development and probably up until around two thousandand six and and then we had a really strong development team by then andthey were taking over the development duties and we're trying to forge otherpartnerships in relationships. So I was helping more or on that side, more onthe research side and Jerbine. Good people is one of thehardest things you know. How...

...challenging was that, for you? Did youhave to fire a lot of people? I would say we got we like to say that we werelucky and and found some really good people early on. I think our court team,which was there from the beginning, was a really strong team for us, so these first few people that we hired they had the same passion that we hadand that passion carried them all the way through to the exit, the people that we brought on after thecourt team. You know their passion was probablymore in a pay check and while we had some good folks in thereyou know we had some folks in there that turned over a little bit. But you know we from a hiring standpoint. Job on thecare actually did a good job at going out and and recruiting sales andfiguring out how we can go out into our Louisville area and try and get people.We have some in terms from the University of Louville. We had we hired a few people from outof the state. You know we hired somebody from Washington to come workfor us for hering somebody from Atlanta to come. Work for US and Lowville was an attractive city,low cost of living and and a great bank for your buck here, and so that was agood incentive, but I had from my restaurant days and I hadhired and fired lots of folks, so I had a lot of experience in and thethe hr side of of employment. Sodoing that you know for developers. Wasn't that difficult. On My side Ishould say I had already had a fair share. So you're ready to kind of likeruthless. You had no problems with that job. I don't know if I was fitless, but youdon't o yeah, I didn't no. Now it was probably to Niait in a lotof cases. Just so like you know, it was all about go ahead. This is going to say goingforward now when did the possibility of selling the business come up? We we carry the business on for a longtime as what you know was classified as a lifestyle business. It was. It was good to run ourlifestyles. It was everybody, it was, was making a decent living that wasworking for us, and you know we had health care and we had a four onk andwe had some some good grove opportunities. People were making a great connections in the in thatindustry, with big players and around three thousand and six and earlytwo thousand and seven. We started to try and shift gears from going from a alifestyle company to a company. This looking to exit- and a lot of that hadto do with the market, was just changing the market. Was it was reallynot necessarily going in a different direction? It was just changing. Therewas a lot of different opportunity out there for folks from a buildingstandpoint and a lot of just the ability to automate. You KnowYour Business, your weapon, his almost became second nature, and it wasinteresting to see that customers were extremely technical in the beginningand, I would say, probably not so techno technical towards the end justbecause he, the automation, was there to kind of help them along the way. Soyou had more and more people joining and it you know honestly, it becameharder and harder and harder around the business, and so when we were lookingat it go okay. Well, you know: where can we take this and what can we do andwe had a lot of opportunities there to keep driving it forward, but the opportunity came to exit in twothousand and seven and Jeremy, and I took a long stroll on Dan were like Yep.You know this is the path we're going to take and that's what we pursued so as how you pursued it.

The parallel was the company that acquiredmodern Gigabyte, which was the our company name at the time, and parallels was a partner of ours forquite some time. They were one of the first control panels that we integratedwith and parallels, was on an acquisitionspree at the time and again, I think for us it wasanother right time right place. We were ready from a business standpoint from abusiness owner standpoint to kind of hand over the reins and, and they werelooking for something that would integrate intotheir suite of tools that would benefit their customer base as well.Also it was. It was a really good marriage for us and very interesting times going throughacquisition, tons of tone the tons of due diligence looking back at you know, you almosthave to scrutinize every transaction that you've ever made, and so you goback and you you know, I'm thankful that Jeremy had the best transaction logging capabilities, so he did a really good at keeping ourbook straight keeping them in order and and dotting all the eyes and crossingall the teas for us. Had I been in charge of that would have been atotally different foresay, but Jeremy did a great job, making sure thateverything we did was well documented. So when it came time to do diligence,it could have been a lot harder than it was, but even that took six eight months you give Er take, andI don't know if the dates are actually correct, but it seems like a reallyreally long time. A EFIM for people don't know what parallels are. Whatwere they doing and what's this energy with what? Because you had a billingplatform and I guess a bunch of services related to web hosting whatdid Parrit do and why they see you as an obvious smart purchase. Well, parallel parallel started out as S W soft and S.soft was a control panel and parallels was a control most commonly known today:Control Pals for Web Service, okay, like as you would pan like like we havenowadays right yeah. The big four I believe at the time were in some clask,which is a teva which is parallel, so batche control panel, a s soft list,the company re branded as parallel. I actually a task so as exactly, and there was in some therewas sea panel and there were a handful of others that we integrated with. Sowe provisioned our software modern bill, actually provision to all of thecontrol panels and we didn't have any strong alliance to any of the controlpanels. We wanted to be a some kind of agnatic as possible, so we were so okay.We we'll provision to anyone that doesn't matter. You can use montorbuilt provision any number of control panels, and so that that I think, was abig asset to parallel roll up strategy because theywere acquiring in some at the time and and they acquired several other controlpanels and the fact that Monter Bill could actually provision to those, Ithink, was a big asset to them, and you know in I can't speak for parallelsin terms of what their their overall strategy was, but a lining, moter bill and all of theactuary products that we sold and rolling goes up under the parallelsbrand was definitely a win for them andobviously I went for us. So I'm curious, you know, as a business owner, you musthave been excited like. How did this happen? Did a person from parallelscall up and just say, hi we're intrusted in buying you N, and then itwent from there or how does this happen?...

I think it started with with basicallyan email and stain if we were open to acquisitiondiscussions and it kind of went on from there. I think the biggest the biggestreality check for us was was going to one of their events and actuallysitting down with surge there, their co at the time andand a few of the other order, not necessarily borderdirections, but the top management there and really just kind of sittingdown and seeing what this energies were and and seen. If it made sense to goforward, and we all came out of that meeting very positive. And so then wesigned all of the necessary documents to proceed, and then you start thatjourney, because it's not over until it's over if they say Kayan. I know, if you don't can'treveal these things, they don't say so, but I'm always curious what at theheight of Your Business, I e what sort of numbers were you turning over? We can't give exact numbers, obviously,because we were required by parallels, but you know it as it was significantenough to pay for the twenty four employees that we had and we were doing quite well as as alifestyle company. So when they came in and offered you a purchase acquisition.Was this the sort of thing that was setting you guys up for life as owners?Or you know we you to the only shareholders of the company that stageor how did the break down happen? I think we would have all have loved abeen set up for license. I think anybody that kind of plates being goingthrough an exit really wants to see huge multiples onwhat you have coming in and some of those are kind of unrealistic, and youknow our initial thoughts to acquisitions. So we want you know wewant this man in Mex and this manicis kind of didn't make sense. What was what was the benefit ofparallel? Some, you know acquiring us at a you know a huge mark up basically-and you know we weren't to twitter or we're in a face book and we weren'tsome of these other companies being snapped up. We were just a smallsoftware company and we had a growing client base and we were pretty dominantin our market place, but we weren't the only player in the market place, and so all of those factors came intoplay- and you know parallels is a privatecompany. So there's the potential for that. You know I'll, let you let your mind to go there, and so itwas a very attractive offer for us and it was something that we reallycouldn't pass up and really was you every day was a learningexperience. You know I was working with their legal team. You know we hadlawyers on our side at the time just going. You know not necessarily backand forth forth with contract, but really just back and forth, making surethat we had all of our all of our data and check you know and a lot of duediligence, and that was the majority of that's. What took up the majority ofthe time was just making sure that we had all the data that they requested. So for you, this exit, was it really anexit, or did you stay on and work under the parallels company from that pointforward? It was an exit for Jeremy and I we hung up our hats that day and weencouraged all of our employees to hang on to the opportunity to do that.Parallels was was going to offer the unfortunate thing for them is, you know,parallels wasn't based totali Kentucky and while they kept the livil officeopen for about a year or so those folks were going to have to makea decision on if they wanted to stay with parallels that were going to haveto go where parallels was located, and that was it heard in Virginia and theyjust recently moved to Seattle, Washington, which is kind of her oni,because that's kind of where I wanted to end up again and several of ouremployees are now in Seattle, Washington. So I'm a little envious inthat respect. All right. So that's...

...that's the tale from from side tofinite yeah and then just like Uoy. What did you do? What year was thiswhen you, when you hung up your hat? As you say, this was in early two thousand and eight, I think,was when everything became public and most of two thousand and eight I justkind of, took a breather and took a break and spent a lot of time with myfamily and and just kind of took her took somenice time off. This was two thousand and eight for me and and then reallykind of figuring out. You know with the way the market kind of took a shift outwas like okay, let's, let's get back to the ball again and that's when I gotinto consulting all right. So let's just wrap thisinterview up with, I think a question, a lot of people in Distringi, an answerto is: If someone is out there listening to the story and they want tostart a software company and they also have in mind some kind of exits o. Whatwould be the most important things to consider, based on your experience andconsidering the market to day as well, which I'm assuming is a littledifferent from what it was back, then you know being a developer being anentrepreneur. The biggest asset that you have is really understanding theproblem that you're trying to trying to solve. You don't want to go out and sawsomeone else's problem really experiencing that problem yourself,because understanding the business side of of its kind of the live. Why are you doingthis, and once you really understand that, then you can use what you do best,whether it's coded or or program or working with programmers, really allthat problem, because there stand it and to this day t s, that's kind ofbeen how I, if I was going to do this again, you know that that's exactly what Iwould do. I go after my own problem and and figure out a soft ware solution forit and have another crack at it all right andin terms of actually making a company. That's sellable at the end of the day,especially because you had a software company right, you know, can bedifficult to sell depending how how automated the whole business is. Youknow what's the key there, I would think it's about aligningyourself with partners, so you're going to try and find people that you can align your business with that someone else. Another business sees as either an acid or a threat, and it kindof depends on which way you want to go at. If you go on the asset model, you wantto make yourself such a big asset that they really can't live without you, and if you want to go to the threatmodel, you want to become such a threat to them that they're so scared thatthey're going to buy you and that's that's a lot harder to do. The asset model is really what I thinkwe went after was kind of aligning ourselves with parallels, and I guess there was a little thread inthere, but it was really just a matter of being able to provision to everybodythey were acquiring. So we became a pretty good asset and that's that wouldbe my advice. Is You know scratch your own itch? You hear that a lot, but it'sso true in the software were all you solve your problems because you'regoing to know your problems better than anybody else and then, as you do, thatthink about you in the industry. You can align yourself with and you know, try to become an asset to thatparticular company or a group of companies so that you get out of thereadar and and just be fears, keep don't give up,don't give but yeah you don't sound too farce, Michael Bit, I'm sure it wasdifferent when you're running with his colio know talking now. Okay, thank you very much for that wrapup. I guess for anyone who want to check out what you're doing nowadays isthere a website. We can direct people...

...to right now. I've got my Michael Fountain side. It's just aside. I put up there to put some portfolio stuff up there and really got PH P com, which is got P H.P com is a site where I'm just putting upsome tutorials right now as a developer, as I'm getting back into the covemyself and and working with a new platform, and I just kind of sharingwhat I'm doing and then the new software product is NI, Stad, l, Y N C,he dot Ly, and I hope to have that software product down the next month orso all right awesome, be interesting tosee what you get up to next since you're starting a completely newventure. Yes, thank you for taking a time to do that, Michael I'm sureeveryone got something from that, though it's interesting story and itwas an exciting time. You know it all as a long long business girl cyclethere. So it was really interesting to hear what you went through, especiallyas the Internet grew at the same time. So thank you for sharing that and we hecould luck. Thank you all for your time. I appreciate it and for anyone listening if you're,just it in catching more podcast interviews with successfulentrepreneurs, bluggers and inter marketers, I, like Michael, you canhead to my blog, which, as which is at entrepreneurs, hyphen journey or youcan google my name Yaro Yaro, and you will find lots more just like this. Sothank you for listening I'll catch you another podcast very soon. I.

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