The Backup That Built a Business: Inside Rewind with Mike Potter

I have often watched Rewind break and make mistakes on purpose. Like, you know, again, I can go in, I can fix things, but sometimes I run tests where I just let stuff go and see what happens. I let a customer issue go through the process and see how do we handle that. I might notice that something, you know, something's broken somewhere and I just let it go and I say, okay, like, let's see how does everybody react to that actually happening. You can't always step in to fix everything because that's really not how you're going to scale the business itself. I don't ever want to fix one issue. I want to fix the system around it. I want to fix the processes around it so that everybody makes sure that that doesn't happen again, not just me.

Welcome to the Startup CEO Show. I'm your host, Mark MacLeod. In this episode, I sit down with Mike Potter, co-founder and CEO of backup company Rewind. Rewind is Mike's second startup. His first startup almost cost him his marriage. And so those hard-won lessons forced him to create intentional boundaries and to prioritize having a sustained life, not just for himself, but for every single member of his company. It's become a core value of his company. And yet, despite that, and completely against the prevailing narrative in startup world these days of just bro hustle culture, 996, working 9 to 9, 6 days a week, He has built an amazing company that has attracted not one, but two tier one venture capitalists. He completely illustrates the balance that I believe is possible for CEOs. And so this has been an amazing episode for me, and I really hope you enjoy it as much as I did. Mike, welcome to Startup CEO Show. It's a true pleasure to have you here. How are you doing today?

I'm really good, Mark. Thanks for having me.

Awesome. Yeah, no, it's a real pleasure. I've known you for many years and, uh, but even before you did Rewind, so I'm really looking forward to this conversation. And, you know, an obvious place to start is, is the origin of Rewind. I actually remember when you started it and I actually assumed that the big platforms did what you do and that there wasn't a need. I was like, isn't that like one of the benefits of the cloud? So obviously I was wrong. Maybe just tell people what you do for context and And then we can jump into, yeah, kind of basically how you created a category, 'cause I don't know if there was a category for this before Rewind.

Yeah, we do. So Rewind does backups for mission-critical SaaS applications. What a lot of people like you don't realize is that while the platforms themselves have a backup, it's really an all-or-nothing approach. It's if everybody loses data, then they can use their backup to restore data. But if something happens to just your account and not everyone else's, their backup is useless. They can only really put everything back or nothing, and they're not going to restore data for, you know, all their customers if just one of them has a problem. So Rewind provides that mission-critical backup for your SaaS accounts so that something happens in your account, an employee makes a mistake, an employee goes rogue, an AI, increasingly we're seeing AI make problems. You upload a CSV file that causes issues, third-party application has a problem, Rewind can roll that back in your account the way it was before the problem happened, and your data remains completely intact.

Wow. You know, when you describe it, it seems so clear. So, I guess the obvious question is like, man—

I think it's good explanation where people, where we can explain it quite clearly. There's been a lot of iterations trying to explain the difference between, you know, what they do and what we do. And I think we've finally figured out how to do that. That in a good way.

The key insight obviously is, I guess, I don't know how many merchants Shopify has, but it's, it's well over a million. They'd have to restore a million accounts, which they're not going to do, and therefore an individual merchant is screwed without you.

Um, exactly.

So it's almost like a, a data insurance policy.

Very similar. Yep, it is. It is protecting your data. At the end of the day, you're responsible for your data, just as the same way you're responsible for your data on your, on your laptops, on your mobile phone, on your devices. You're responsible for your data in SaaS. And I think what we're finding is that finally enough people have spent enough time in SaaS where they have lost data, where they have been affected, where they've experienced a problem or they know someone who has. And so, the category that we're in is starting to really grow and get the attention. Gartner's starting to cover it, for example. And I think that's just because, yeah, enough people have spent enough time where they've lost information.

Right. I've often said, you know, back when I was a VC, one of my observations was when I looked in the rearview mirror, the biggest opportunities, like the best investments, were based on a crisp, simple insight, meaning that it could be articulated really in a sentence or two, just the way you did. But unfortunately, the obviousness of that insight was only evident after the fact, right? Like after you made the investment, hence the venture aspect.

Yeah.

And so I appreciate it probably took you a few iterations to get to the CRISPRness that you just articulated, but where does this insight come from?

Yeah, I'm honestly, so I used to work for Adobe a long time ago. I think even before we met, I was at Adobe. I was a technical evangelist. I was doing a presentation in front of a few hundred people, went to advance my slides and nothing happened. And I was like, well, that's weird. So I rebooted my computer in front of, I think it was in front of like 200 people in Chicago.

And you're like breaking a sweat.

Yeah, yeah. It was the first time my boss is watching me present and do my job and stuff, cuz he lived in Chicago and I was in Ottawa. And I went to advance my slides, nothing happened, reboot my computer and up pops an icon of a hard drive with a big question mark over it. It's like early MacBook days, right? And yeah, and I lost everything. Like the hard drive was completely toast. Everybody got an early lunch that day and I just remember thinking like, man, like, I am totally screwed. And from that day on, I was just determined to make sure that I didn't lose any data, and I became obsessed with backups. I'm the guy at home, I've got a hard drive— I actually have a mirrored hard drive at home, like a RAID drive at home that I back up my computers to. I sync that data into the cloud even though most of my data is already stored in the cloud. Like, I do not want to lose any information. I am petrified of, you know, losing my kids' photos, for example, when they were babies. And so we took that same learning and approach to Shopify about 10 years ago. We said, you know, Shopify is growing like a weed. My business partner James and I really wanted to work at Shopify. I thought the best way to get a job at Shopify would be to build a third-party app. What app can you build? Well, there's, there's no one doing backups, but they, you know, there's a few articles on it. Their support site had a how to back up your site, so I figured that the support team had already had enough, you know, requests that had come in that they had created an article for it, but it was 14 manual steps. And I was like, people aren't gonna be doing 14 manual steps.

No way.

We could just automate that. And, and yeah, and that was the, that's the original sort of starting story of Rewind and why we started on Shopify. And then from there we just, we grew, you know, we backed up BigCommerce because they came to us a little while after we launched and they said, hey, you know, our enterprise customers have the same problem. Can you build Rewind for BigCommerce? So we did. A few years after that, we bought a company that did backups for GitHub, and we were really interested in them because their, their ASP was about 10 times Rewind's ASP, and we wanted to move upmarket into larger customers. From the GitHub backups, we now really sort of conquered, I'd say, the developer backup space where we're doing backups for Jira, where we're doing backups for Confluence, for Bitbucket, for Azure DevOps. And that is really what's propelling the growth. We've been somewhat fortunate that Atlassian has end of life to a couple of server products that have forced people into the cloud and it's providing a real nice tailwind for Rewind these days. Hmm.

What a journey. So you talked about Gartner, you know, I bet you there's lots of folks listening or watching who are trying to blaze a trail, creating a new category for themselves. If you look back, and I realize it's still in process, but like, what are the key steps that you have taken to A, define this as a category and then position Rewind in the top right quadrant of it.

Yeah, I think, I mean, certainly having the initial idea was difficult enough, right? And I think one of the things that a lot of people focus on is trying to build the sexiest startup. And one of the pieces of advice I got from my dad really early on was like, you know, you really wanna make money, do stuff that no one else wants to do. And I don't think a lot of people really want to work on backups. It's not cutting-edge technology, it's not AI. I mean, I think it is difficult, it's very difficult to do what we do at scale for, you know, about 50,000 accounts that we're backing up. But at its core, it is copying data from one location into another location and then recreating that data in the event that a problem happens. That doesn't seem to interest a whole lot of people. So that was the first thing that I think you needed to be willing to do was to actually work on what I would call boring software that is not exciting. And there's not a lot of people who want to do that. Everyone, I think a lot of technology execs or startup people want to work on the latest cutting edge, cutting edge things. And so I can remember very early on, you know, two, two things that happened to me personally. One, I emailed a friend who worked at Shopify wondering if anyone would pay for the software. And he said, no, like you'll have to give it away for free. I've reminded him since then that he might have been wrong on that one. So you have to have, you know, you have to have belief that what you're doing is right and sort of, you know, sometimes ignore the advice that you're getting from other people. I think that was one of the key moments in sort of creating that category. And then the other just, you know, yeah, kind of sticking with it and getting, Yeah, just being determined that it's gonna work out. There was lots of times where people would, like, we'd go out for dinner and people would, would kind of laugh at us and say like, oh, you're doing backups? Like, who wants to do backups? Sort of thing. And I'd just be sitting there and I'd be like, man, that is perfect. Please don't do backups. Like, you compete in your, in your areas where all these other people are starting applications and you've got all this competition. Meanwhile, we're building a category which really had no competition until, you know, maybe 3 or 4 years ago and on the Shopify side. And yeah, I think, I think sort of those two things are, are, are what are required, like sticking with it and then finding something that you really, really believe in and ideally in a situation or a, or a space where, you know, few people really want to compete with you, I think was one of the key things that helped us be as successful as we were or are.

Yeah, I love that. And Is getting on— getting Gartner to write stuff about you, do you think that's just sort of a prerequisite for larger customers to consider this as a serious thing and budget for it?

There's been a couple of things I'd say in the last few years that have helped propel larger, larger customers to being interested in SaaS backups. So certainly Gartner covering it is an important milestone. Microsoft launched backups for Office 365. About a year and a bit ago now. Salesforce bought a company called OwnBackup for $1.6 billion about a year ago, actually almost exactly a year ago, which sort of validated the category, if you will, like the SaaS backup category in general. And so there's been a couple of important moves. Salesforce and Microsoft admitting that backups of SaaS are critical has been really important. Gartner's coverage of the category has been one of the critical moments. But honestly, I don't think anything beats experiencing the problem. And we are constantly getting stories of people who have accidentally deleted data, accidentally deleted Jira projects that have caused massive internal problems. We know of many stories that unfortunately we were not allowed to publish names of, but, you know, companies that are launching on Shopify who have had their stores almost completely wiped out before launches or even after launching. So there's, there's enough people I think who've experienced the problem. And as you get into that community, you start talking to other people and, and letting them know like, hey, you know what, you might not have thought about this, but this is really an issue. And I think that word of mouth in the communities is really what's, what's propelling a lot of it. There are some fairly well-known companies that have experienced massive data loss internally because employees are making mistakes and accidentally deleting things that, that, you know, I think is driving the adoption that we're seeing these days.

I'd love to talk about supporting multiple platforms. You know, I've had many companies I've worked with that support many platforms and I've seen sort of two patterns emerge. One is kind of the more platforms you support, every time you build a feature, you have to sort of tweak it for each platform. So you end up being like an inch thick and a mile wide and you can't move super fast. And then second, actually three issues. So that's the first. Second, you know, there's certain platforms that are developer friendly and like it's easy to develop on. Like I think within commerce as an example, Shopify has definitely won the developer battle. Uh, their ecosystem, right? The GMB of the Shopify ecosystem is larger than Shopify's GMB. Um, you know, BigCommerce, Magento, those, those folks can't say the same thing. And then of course the last one is maybe when it comes time to exit, if it's one of these platforms that wants you, they don't really value their competitors' revenue. And so there's probably other issues, but I'm just wondering like, yeah, what, what have been the pros and cons for you having such broad platform support as you have?

Yeah, so we, we've tried to solve the first problem. I mean, we certainly have the first problem. But we've tried to solve it by essentially building a platform that has what we would call integrations that go in, and each supported SaaS application would be considered an integration. So, the Rewind platform supports single sign-on, role-based access control. It filters your data and displays the data in a very consistent way across all the platforms that are supported. It stores the data in a structured way. And so, all the features of Rewind are consistent across all the platforms, and so it's sort of built as a platform integrations come into it. That doesn't, that doesn't mean that people run into the problem you're describing, which is, you know, we support so many platforms, they're under such active development, we have to constantly update our software to reflect the changes that they're making. If someone is focused on just one or two of those platforms, they can often go deeper with additional features that maybe Rewind doesn't have that aren't what we would call core backup and restore features, but might be applicable to the same customer that we have. And that's really where we find the competitors that we work against are the strongest, where they focus in on just 1 or 2 platforms. They go deeper than backup and restore. They add a whole bunch of features that really wouldn't, that we wouldn't consider backup and restore features. But because they're going deeper into that audience, they've got a more, a fuller product that goes beyond what we would be offering. So if you're looking for backup and restore across platforms, we win. If you're looking for a specific solution on them, we tend to have a more difficult time competing against them. So we certainly see that. I think when we first started, I think we thought that the technical part would be the most difficult part, and it turns out that it's not. It's actually the go-to-market. Each platform is somewhat different, even if you take Shopify and BigCommerce, where you'd say they're two SaaS applications that focus on e-commerce, relatively similar audience. I think maybe Shopify has, you know, a larger SMB play, but they certainly are fairly similar., you know, just an extremely different way that you go to market in with those two applications. You, you list in the marketplace, but from there it's completely different, to be honest. You know, Shopify does a, I think a very, very good job at driving traffic to their app store. And so you can get a lot more natural traffic through the app store than you can on BigCommerce. Like everything is, is different. And I think we see that across every platform that the, the challenge that we have is when you go as broad as Rewind does, and we cover, I think like 16 different integrations across, so it's 16 different marketplaces. 16 different potential billing integrations that we have to build because some of these platforms, you know, bill our customers on our behalf. 16 different ways to go to market, 16 different ways you can partner with the, with the SaaS platform, figuring out who the players are in the ecosystem. That's the, the go-to-market has been definitely by far the most challenging aspect of trying to scale out to, to cover the vision that we have, which was always we want to back up every SaaS application that a company uses. Technically, we can absolutely do that. From a go-to-market perspective, it is incredibly challenging. There's different partners in every ecosystem. Well, in each ecosystem, there's some overlap sometimes, but, you know, the partners are different. And even how you go to, even how you're willing to partner with the SaaS app is different. You know, we signed a deal last year with monday.com where their team is actually reselling our software on their paper to their customers. First time we've ever been able to do that. But that's a, you know, that's a 1 out of 16 that we have. So you have to learn like, what are we able to do with the partners? What are we able to do with the sellers? Every platform is different and that becomes really the most challenging thing and the one that is sort of holding us back from adding support for more platforms. Technically, we could do it fairly easily.

Well, I'm envisioning like a matrix with all the possibilities and permutations and it's complicated.

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So I, my personal mission is to help CEOs, to encourage CEOs to put themselves first, to prioritize physical health, mental health, and if they're willing to go there, spiritual health. The thesis being that this will give a significant increase in physical energy and mental clarity that they then apply to the thing that matters most, which is unlocking revenue growth. And when you do that, that's the magnet that attracts investors, customers, ambitious talent, and ultimately strategic buyers. And you know, you said something really interesting the last time we spoke, which is, um, The, your first, the company that you ran, you know, took a big personal toll on you, you know, had a big impact on your marriage and you've been running this one very differently. And maybe not with the words that I just said in mind, but certainly a similar outcome. Like you've got true boundaries that I think lots of CEOs don't even know that feel like they have the permission to, to apply to themselves. And you've been able to do that and build a growth stage company with two tier one investors on the cap table, which I'd like to deal with later. But this is a really important lesson, I think, for everybody who's listening, which is like, yes, you can actually have a life today and build a business that is valuable, that, and that is worthy of tier one capital. And so I'm wondering if you'd be willing to, first of all, maybe give a little bit of context for this hard-won lesson that you know, really had you prioritize boundaries and then talk about the boundaries you've been able to put in place and how you've been able to kind of have your cake and eat it too. I'm not saying it was easy, but you know, you, but you've threaded a needle that a lot of CEOs don't think they can.

Yeah. So the first, first company I started was the company called Add In Social or Arclly initially. And it was one of the companies that got into Extreme Startups first cohort in Toronto. And, uh, me and Andrew Draper, uh, and, and Mark went down to Toronto, the three of us, uh, with an idea. Not really— we didn't really have much traction on the product, had an idea. We went down to Toronto. At the time, my wife was pregnant with our third child, and my kids, my two boys, were, I think, uh, 3 and 4, or yeah, 3 and 4 years old. So she had her hands full, and very full. We had to move like I had to move to Toronto during the week and go to Extreme Startups, work during the week, and then we would take, typically we would take the train back, or I would take the train back, the 4, 5 o'clock train on Friday night, come home for the weekend, leave Sunday night and go back and did that for 6 months back and forth. And you know, it's just super stressful when you don't have any revenue, you're trying to figure out product market, well, trying to find a product really, to be honest with you. I was gonna say product market fit, but we had a couple of ideas and we were just trying to really figure out what the product was that we were going to build and scale. While I was there, yeah, the company, we weren't really getting much traction. It was my son's birthday in March. I ended up having a panic attack reading him a bedtime story because I had been up way too late, staying up way too late, not sleeping very well. I never had a panic attack before. So if you haven't had one, you literally think you're dying. Went to the hospital and this was diagnosed as just a panic attack. The company, you know, the company we were working on, it didn't really go anywhere. And so that failed, felt like total crap. My wife and I, as you sort of alluded to, I think when we talked to, you know, almost got divorced over it. It was just, it was an all-around, like, just shitty situation, right? And so I remember telling her when, when that was done and we reconciled and I said, you know what, like, don't worry, I'm not doing that again. Like I'm not doing another startup ever again.

That famous last words.

Yeah. That lasted about 2 years when I went to my friend James and said, hey, you know, let's work on this thing on the side. And so when we did that and we were working on Rewind, so when we started working on Rewind, we each had full-time jobs and we kept those full-time jobs. We started working on a product before Rewind. So we actually pivoted into Rewind about 6 months after another product we were working So we started in October of 2014, I think, worked 6 months, didn't get anywhere. Launched Rewind in June of 2015, started getting paying customers in January of 2016 and continued to scale the business through 2016 and then finally got to a level where we were, where we could go full-time in 2017. So from October of 2014 to 20— sorry, 2016, um, we worked two jobs essentially, like day and night, nights and weekends. And we, we did, we did the best we could, but, you know, we also wanted to make sure that we had full-time jobs and, and ongoing salaries. And when we went full-time on it, we— I remember we went out to dinner in downtown Ottawa and we said, you know, the, the number— well, The number one thing for both of us was that the business could not destroy relationships. That was the number one thing. I'd seen it happen the first time, and I said, that's the one thing that I want to make sure doesn't happen here. I don't want him to go through that with his wife. I don't want me to go through that with my wife again. And so that was sort of the start of setting those values and setting the boundaries for the business and saying, okay, you know, like it has to have some sort of respect for the relationships that are going on outside of the— outside side of the business and we do the best we can, you know, and that was really the attitude I think that we took for the most part. We didn't raise a lot of money. We bootstrapped quite a bit of the way.

For a few years, right? You bootstrapped for a few years.

Yeah, I mean, it's funny because we did bootstrap, but we raised, like we raised a friends and family round of $30K. We raised a pre-seed round of $100K. We were always raising, but like really, really, really small amounts. So I do consider bootstrapping Uh, yeah, for, for quite a few years. And then we can talk a little bit about the transition to, from, you know, bootstrap to VC funding and why we made that change. It was very deliberate and very thoughtful. But throughout the, the time, I think we always had these, these really good boundaries. And I remember, I remember one story that I'll share that I think is really appropriate of this is one, one day we were doing a massive, um, database update for Rewind. Like we had to really change how the platform worked. Really, really early days. The 4 of us were working full-time on it, or like 2 other sort of early, what I would call co-founders, were working on the business at this point. And we had to make this massive change. So I told her, I said, listen, I might not be home to put the kids to bed tonight. You might have to do that on your own. And that was fine because it wasn't a regular occurrence. She knew that, you know, in this case it was really something big and serious because it, it never really happened. I was able to come home and put the kids to bed and really help out. By that time my daughter had been born, and so there was 3 kids at home all under the age of 4 or 5. That one day we started working. I can't remember if it was 11 o'clock or 1, and we worked on this problem. You know, the initial upgrade went quite quickly, but the system was slowing, like just working at a crawl pace. It couldn't process the backups fast enough. And we worked and worked and worked, and around 3 o'clock we were still working, and 5 o'clock we're still working. I think I called her around 6 and I said, you know, I'm not gonna be home to put the kids to bed. I ordered pizza for us. We worked until 9, 10 o'clock. At 11 o'clock I said to the guys, I'm like, look, I don't know what's going on. Like we've been working on this for, you know, at least 10 hours at this point. I have no idea why this is happening, but I'm going to go to bed and we'll just, we'll deal with it in the morning. I think they kept working. I woke up pretty early because, you know, this business that I've quit my job for is broken essentially at that time. Went back early the next morning, me and Julian, who was one of the 4 guys who was working on it, you know, we solved that problem in I think 20 or 30 minutes the next morning. Because if you have a clear head, you just, you can—

That's the first thing that came to mind when you said that.

And I think everybody has a story like that. I think everybody has a story of, yeah, when I just got away from it and I could think a little bit more clearly, it turns out by the way that because when we were testing the code, it was going so fast, he had added code to slow everything down and we had pushed that into production. So it was essentially like this sort of wait statement that said like, wait a second. And we had pushed that into production inadvertently. And so when we took that one line of code out, the whole thing exploded and was working like super fast.

Amazing.

Right. But I also remember, you know, early days we were at Invest Ottawa and I would talk to, I would talk to so many founders and they say, you know, I'm working all the time. Like I'm working day and night and I'm just not getting anywhere and I can't figure it out. And I was like, yeah, like, do you think that's your problem? Like, do you think you don't have the time to get away and just free your mind and think and to, and to get away from the business and look at it in a different way. And maybe if you do that, you'll actually see better growth. I think everybody thinks that it's just more work, more work, more work is going to give you better results. And that's not always the case. It's a, you know, in the case of knowledge work, I think you definitely need time to free your brain, to give you that creativity, to give you that space to think more clearly. And I think in the end, that ends up driving better results than than the other way.

You know, I'm holding back a giant grin as you're explaining all of this, even though I know these were very hard-won lessons and the context is deadly serious, because I tell my CEOs this all the time. There's this like bro hustle culture in the startup world, and it's even getting worse now in San Francisco with this, that 9-9-6 trend, right? 9:00 AM to 9:00 PM, 6 days a week. And like, we're celebrating it like it's a good thing. But all we're doing is having diminishing marginal returns on our effort. It just gets harder and harder to think and have clarity. And like startups are a creative exercise. You're literally creating a company and A, it's hard to create when you're stressed out, which working all the time, it, you know, creates. And then second, you're, you're making it kind of impossible to tap into intuition like that insight the next morning. The, oh, we just need to remove this one line of code probably felt effortless compared to like the grinding that was going on the night before, right? If there was like a cartoon of what was going on the night before, there would be like smoke coming out your ears because you're thinking so hard, right? So it's like, so it's actually the, the opposite of the prevailing startup narrative is actually the better way. And I'm not saying like, go to a spa every day and work for 2 hours and just saying like, have a sustainable routine where you recharge your battery every night so that you're, you're full power and, and full mental clarity. So I really love that you've said that.

It changes your perspective, right? And, and so one of the, one of the things I remember, we, we've had a business coach or had a business coach for a long time, like from very, very early Rewind days, we had a business coach and I always thought it was interesting to go to this business coach who only saw us about once a month. Because his insight into Rewind was very different than ours, where we were in the business every day, because he only saw it once a month. It's like, you know, you had your dog here, like when you have a puppy and you don't see anybody for, you know, a month, and then you see them a month later, like, oh my, your puppy's so much bigger. You're like, well, is he? Like, it wasn't that much bigger than yesterday, and it wasn't that much different than the day before. And like, you know, every day is just a bit different. But over 30 days, that puppy really grows from like a small dog to a big dog. And if you see things only on like an every 30-day basis or an every 60-day basis or 90-day basis, your perspective of that versus being in the business every day is different. And that's sort of the same way as like getting away from your business. Like if you're in it, in it, in it, in it, you never have the time to look at it in a different way and think, oh, this is interesting. Like, what if we did this in a different way and come up with these creative ideas? I said this was gonna be the most boring podcast you had cuz we'd always just—

this is amazing. I want every CEO to hear this conversation because it's, I think they feel the word that I am on the lookout for all the time with CEOs is should. I should be doing this. I should be working harder, right? Like this comparison and should imply somebody else's unstated expectations. It's not true. It's not fact. Right? If there was only one way to build a high-growth company, someone would've written the book or the checklist, and I wouldn't have a business and you wouldn't have had a business coach. You would just know what to do. Should is bullshit. You know? So this is not boring at all. For me anyway, this is the opposite of boring.

Yeah. Right?

Like imagine, like you said, right? Nothing is worth ruining your marriage over. Let's say you didn't have those boundaries, right? On this second one, you probably would've, and that marriage would've ended. She would've just been like, screw it. You said you weren't gonna do it again and you did it. Like, I'm out. Right? And, and lots of CEOs recognize that, well, well, hey, you know, I'm married, that there's an intention there that I'm gonna be with that person for the rest of my life. Like, that's the, well, A, you say those words in a marriage ceremony. I know it doesn't turn out 50% of the time, but you say those words.

Yeah.

And then, but you also rec— many people recognize like, hey, an average startup lasts 7 to 10 years. You're in your 10th year. Um, you, you know, on a relative basis, the decision of who you spend your life with and who you're going to have children with is far more important than what startup you're going to build.

Yeah.

And yet how we allocate our time and particularly our presence is the opposite of that, right? We give everything to our companies. We find something out of obligation for our kids and we have nothing left for our spouse. I don't know what the divorce rate is for entrepreneurs, but I'm guessing it's way higher than the average divorce rate. So I think it's really important that you're saying this.

I think the important part is also to be very deliberate in your decisions. I know you're a big believer in this too of like, you live with intentions, but it was it was very important for us that, well, James and I both agreed on that particular goal or value. And then we brought that value into Rewind, right? And we had a value that was very much in the, our value used to be called work hard, then don't work. And now it's called respect people's time. And essentially says the company will respect your time, you know, and when it was work hard, then don't work, it was essentially saying, You know, we expect you to work hard when you're at work. We expect you to do a full day's job, but we do not expect you to work 12-hour days, 14-hour days, 16-hour days. There may be times where that's needed, right? There may be times where you have a big release and that is expected that you will come in and work a little bit longer hours. But over the course of time, that will even out and we will not track you on the overages. We won't track you on the underages. It's just, it's going to even out over time. And I think making sure that you're deliberate in whatever your value is and then making sure that you live that value in your business and having that is, is one of the, one of the things I think I'm most proud of it from a Rewind perspective was it was important for us. We made it a value from Rewind and then I think we did a really good job of living that value as we've been building this company.

I really, really love that. Again, counter to the standard startup narrative on this sense of we just have to work all the time. But the thing that is, and by the way, for what it's worth, I ran an investment bank with a similar value. And you think about investment banks, right? Our peak, we were doing 6 deals at a time.

It was bonkers.

You could have easily let that just take over and now you're a passenger surfing the waves.

Right.

But my belief was, I didn't articulate it as crisply as you did, but when you're working, you are, you're all in, right? But then unless there's an emergency, which by the way does happen in the deal business, you're not in. I'm not gonna bother you till the next day, right? Because I'm also recharging myself. Like early on, I fired a very competent employee because that person had Facebook Messenger open at the same time and was having chats with people. And I was just like, hey, stop it. You can do that when we're not working. You're here to serve clients now. And after the third reminder, I was just like, you're out.

Yeah.

You know, cuz you're not living this value.

Yeah.

So I really, I really love that. Now, a thing that's really important here, people might hear this value and think that the cost of that is lower growth and let your, yet your growth was strong enough to attract Bessemer Ventures and Insight Partners. I've dealt with both many times. They're tier 1 investors and they have high expectations. They invest in the best of the best. They have deal flow that most VCs would only dream of, and yet they invested in you. So I, uh, would love if you could just expand on how this balance enabled you to achieve growth that was worthy of tier 1 capital.

Yeah, I mean, I think let's go into why did we— what we talked about bootstrapping and why did we decide actually to raise funding? Because that was a big change for us. Because essentially, you know, when we first started the company, I'd say we were very heavily influenced by the team at 37signals and we were in some cases running Rewind very similar to the core mantra that they've got. And we decided to change that when we raised an A round from Inovion, then our B round from Insight., and a round Bessemer participated in as well. And, and I think when we were looking, you know, we, we were, we were astounded, I guess, at the, at the growth that we were seeing from a Rewind perspective. There are very few companies that were growing as quickly as Rewind was at the scale that we were at, you know, north of 100% into the high single-digit millions is, is a rarefied company in terms of growth rates. And we didn't want to look back on life wondering what would've happened if we had raised money? What could we have built that company into? And so when we raised our A round, that was really the decision that went into that was, I don't want to look back, you know, 100, well, not 100 years, 50 years from now wondering what could we have built that company into? What would it have been like to raise money? Mm-hmm. What, what, what could Rewind have become? And that was really the impetus to us deciding to, to raise our A round. And then, you know, the B round a little while later was just basically on the same sort of level of, you know, again, we were in the midst of COVID when we raised our A and just towards the tail end of COVID when we raised our B. And luckily from a Rewind perspective, everyone was going online at that point. Shopify was exploding. And so our e-commerce business was, was following Shopify's trajectory and growing extremely quickly. And we were fortunate from a timing perspective to get both of those investors on. I think from a values perspective, we actually included all of our values in the investor deck that we presented to people because we wanted to make sure that the investors were aligned with our way of working and our line and our way of thinking that it wasn't a company that was expecting its employees to work 12, 14, 16-hour days that we really wanted them to average out to an 8 to 9-hour day in similar sort of regular working days that most people would have, but that we really wanted to be a high-performing team. And I still maintain that. I think you can, I think you can do both. I think it's challenging to do both, but I do think that you can become a, or maintain your level of growth and maintain your exceptional level of performance even on what I would quote a regular workday. Some people might disagree with that, but I think that, that has generally been proven, I think, to be true. But I think the core message there was just we were very transparent and we were very selective with the investors that we chose to be part of Rewind. We wanted to make sure that we had investors who were aligned to how we like to work and to the performance that we expected from us. And from our perspective, Insight and Innovia both sort of fit that bill for our A and B rounds.

I love it.

I had, well over a year ago, I think I had Jason Fried from 37signals on the podcast and he talked about one of his mantras, which is 8-8-8. You're gonna work for 8 hours, you got 8 hours to do whatever you want and 8 hours to sleep.

Yeah.

And that's how you have, you know, a really great life. Definitely doesn't, hasn't held them back. You're being modest in a very Canadian way in your description there because implied in what you just said, in choosing investors is you had choice, right? Many people listening are just like, oh fuck, I take whatever money I, whoever gives me a term sheet, I take it. But you clearly had performance where you had multiple offers and therefore could select. And so that's an important element as well.

I think it starts with building a great business, right? It starts with building a great business. And Rewind is at its core, it's a great business. It is a, it's got the software margins that you would expect.. It has retention that is world-class. It has a service that is required for customers who are going through SOC 2 or ISO 27001. So there's a high willingness to pay for it. It has a solid go-to-market motion through marketplaces that allows us to attract customers at fairly low cost. Like, the business is a very good business. And so when it came time to raise money, I think that comes from the, the fact that it had been bootstrapped for so long that when it came time to raise our A round, we had a really solid business and we definitely had multiple offers where we could choose which investor we wanted to invest in. We had the same thing happen in our B round. In fact, in the B round, we didn't even take the investor with the highest valuation. We picked the investor that we thought was most aligned to Rewind's success and we picked somebody in Insight who had a ton of experience in the backup space, having invested in OwnBackup that we talked about earlier, having invested in Kaseya and Veeam. Like, we, we were, we were very selective, I think, in who we wanted to partner with for, for both the rounds. And a lot of that just comes down to, did you build a great business in the first place, right? And did you, did you build a company where people wanted to work, where customers wanted to do business with you, where they stuck around and paid you on an ongoing basis? That is, I think, the The key to the rest of the success that Rewind has seen is at its core, it's a solid business.

I love it. Hearing you describe that reminds me of another Ottawa-based business that has achieved some success, which is Shopify, right? I helped Shopify, or had helped Toby raise the Series A, and we were a 6-year-old company at that point, right? And so When Bessemer looked underneath the hood, they didn't have to wonder what the unit economics were and speculate what the lifetime value was. They had years of cohorts and therefore they knew, right? And like risk is inversely correlated with valuation, right? The more you lower the risk, the more the company's worth, the more people are gonna want to invest. And by bootstrapping for so long, you removed a lot of the risk because people were able to see Yeah, this is a real business. People stick around. So I really love that. I think, I think a lot of entrepreneurs try and raise money too early and therefore are getting investors to invest based on a leap of faith and which may or not turn out to be true. And of course we don't even necessarily know what we have on our hands yet because it just needs time to bake. So I love that. Maybe, um, final topic, Mike. So we've already talked about one of my big soapbox pillars, right? Which is this two-pronged belief of like putting yourself first so that you have more physical and mental energy to unlock revenue. You illustrate both points. And then the other implied in all of that, like keeping up with that revenue growth forces you to grow faster than that, which means any limits you have you have to unlimit yourself, right? And like many of the limits that we have in our mind are fictitious and are temporary. But I'm curious if you just kind of think back over the journey, what you had, you mentioned you had a business coach pretty early on. A lot of it, to be honest, is once you unlock revenue growth, you're just hanging on for dear life and that forces you to grow. But were there other tactical things that you did to remove your limits along the way as CEO?

I mean, certainly I think hiring great people has been key. I think the team that we have at Rewind, it's one of the strongest teams that I've ever worked with, and that has definitely been helpful. There was one lesson I think really early that I learned. I've always focused on making sure that I could leave a job with really no impact to the business. Regardless of where I've been, I've always wanted to be able to quit without, without it being a disaster. And by that, I think you have to, you have to build processes, you have to build structure and scale so that you can leave eventually. And that was, I think, really important from a Rewind perspective, was I always wanted to make sure that I could quit and not have any, and not have any negative impact. And so in doing that, you have to make sure that you're hiring great people, that you're building systems, I remember really, really, really early, early days where my support person didn't answer a question from a customer correctly. And I remember thinking, oh, like I could easily step in and fix this problem. Like I could just reply to the customer, but that's not going to scale. Like I can't be the one replying to customers. So I have to focus on like, hey, why did she not know what the proper answer was, right? And what should the training have been? It was always. It's always my fault that, that she wasn't answering correctly. It wasn't anything that she'd done. She had been trained by us. We had told her what she needed to do. She had learned the product, learned the systems. There was something in our training that wasn't correct. And I think making sure that you can build those scalable systems, I, I think has been important. I have often watched Rewind break and, and make mistakes on purpose. Like, you know, again, I can go in, I can fix things.. But sometimes I run tests where I just let stuff go and see what happens. I let a customer issue go through the process and see how do we handle that. I, I might notice that something, you know, something's broken somewhere and I just let it go and I say, okay, like, let's see how does everybody react to that actually happening. You can't always step in to fix everything because that's really not how you're going to scale the business itself. Yeah, sometimes you have to let it go and watch and see what happens and then think, okay, so that's what's going to happen if I do that. How do I make sure that that's not what's going to happen? I can't fix the one. I don't ever want to fix one issue. I want to fix the system around it. I want to fix the processes around it so that everybody makes sure that that doesn't happen again, not just me. I think that's been key is making sure that it's not all on me. That's one learning. I think if I was early, early on, you know, in most of my meetings I'm talking a lot, I'm asking a lot of questions. And I think later in Rewind's life, or in the past few years, I've been more silent, letting other people ask questions, letting them step in and take the lead, and not having the CEO be the one that's always having to step in and getting that reputation of like, well, Michael handle it, or Michael ask that question, or whatever. It's a, it's a team effort. And so often in meetings I'm just sitting there, you know, sort of biting my tongue, waiting for other people to talk now. And I think that's definitely been one, one learning has been to, yeah, surround yourself with great people and eventually hopefully you get to a place where you don't really have to, you don't have to step in. And then in doing so, that just frees you up to work on, you know, other activities. In, you know, for my case, it's evangelism and started talking about the problems, speaking more often at customer conferences, going into user groups and talking to them. Allows me to free up my time so I don't have to work, you know, the quote unquote work in the business, but you can work sort of on the business.

Man, I love that. There's been so many great lessons here and this is another one because people listening, like hearing you say building a business where I could step away and it's fine, like sounds like a luxury. Most CEOs, they don't own a company, they have an impossible job. In fact, they have multiple jobs. Whereas what's implied in what you said is like true ownership. I have this asset that will just keep growing. It's, it doesn't, it operates independent of me. Yes, I add value, but it, it's its own thing. And so like, that's a, a powerful message. And then at the risk of getting too woo-woo on you, when I was hearing you describe this approach and like, like I was thinking about how you were showing up energetically. And like the CEO who's trying to do everything, the CEO who rushes in as a hero to respond to that, you know, poor customer service response, their energy is tight, right? They're just, it's from a place of fear and, and you just get tighter and tighter and eventually you explode. Whereas what I was hearing from you is more allowing, more openness. More curiosity. Like, let's see, let's just play this out and then let's fix it once at the system level. Right? So you're tolerant, you're allowing, you're open to little micro mistakes so that you can learn enough and fix once at the system level. So I truly love that.

Yeah.

Well, Mike, this has been great. I, you know, lots of great lessons here and I thank you for bringing up my favorite passions and illustrating them so people are not hearing them just from me. And, uh, it's really amazing to see what you've built. So yeah, thanks for coming on the show.

Thanks for having me, Mark. This was super fun. I really enjoyed it too. Awesome.

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 @TheMarkMacLeod or Twitter @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.