Ryan Shank, CEO & Founder of ShareWillow - The VentureFizz Podcast

Greeting, I'm Keith Klein, the host of the VentureFizz podcast, where I interview the most fascinating people in the tech scene. This is episode 322, and today's guest is Ryan Shank, CEO and founder of Sharewillow. Finding the right idea for building a company that will scale is hard. It's even harder when you get influenced by all the news that's out there about the trends in tech like AI, Web3, crypto, or whatever else is out there. Yet there are still some very large industries that are still operating with very old tech and are still ripe for disruption. Case in point is Ryan's latest company, Sharewillow, which is a modern platform that enables businesses to design, launch, and manage profit sharing plans. It makes me think of Gusto, which modernized payroll, or Stripe, that modernized payments with tech that just worked. As Ryan was looking under the hood of this industry, it became very obvious that there was a massive opportunity. Instead of stock options, lots of companies issue profit sharing plans. And come to find out, businesses that have a profit sharing plan tend to be more profitable over the long term and get even more output from employees. Yet there really isn't an easy way for creating a profit sharing plan on a modern tech stack that does everything from getting started to ongoing management of the plan. Bingo! Here is a massive opportunity to build a category-defining company which is in desperate need of a modern tech stack and an updated user experience. Investors have noticed too, as the company has raised $6.5 million from top-tier software investors in what ended up being an oversubscribed round of funding. In this episode of our podcast, we cover lots of great topics like the importance of learning sales as an entrepreneur, Ryan Shank's background story growing up in Ocean City, Maryland, and his early entrepreneurial roots, a rant, or what I'd like to call a business idea, about how the experience of college tours is broken, the story of mHelpDesk and its acquisition by HomeAdvisor, the details and lessons learned about his next startup, PhoneWagon, which was a Techstars company that went on to get acquired by CallRail, the state of the state with Sharewillow, things to think about during the acquisition process, including how an escrow factors in, and so much more. Okay, quick side note, it is hard to believe that we have over 300 episodes of the VentureFizz Podcast. We have built up an amazing catalog of inspirational stories, around building companies, and every episode includes lots of great advice to follow as well. So if you haven't checked out our past interviews, go to venturefizz.com/podcast for the complete list. Oh, and one ask: please share the VentureFizz Podcast with your friends and colleagues in the industry. I appreciate all of your support. All right, without further ado, here is my interview with Ryan Shank. Ryan, thanks so much for joining us.

Thank you so much, glad to be here.

Yes, we've got a lot to talk about. Uh, you've done a lot as far as building companies, and, uh, there's lots of nooks and crannies that when I do my research on a guest, I always find these things. And there's certain things that I'm super excited to talk to you about. But before we get into your background story and everything you're up to with Share Willow, one of the things that I got from your background is you learned how to sell. And I think that is a trait that everyone should learn, especially entrepreneurs. Especially entrepreneurs.

Yeah.

So talk about that. Experience of how you learn how to sell and its importance of how it's allowed you to be more successful as an entrepreneur?

Yeah. So it's funny because I didn't know— I didn't really learn about sales growing up and even throughout school. Like, I remember one time I was in middle school and my teacher was like, you're going to be a used car salesman. Like, you know, like sales was like this four-letter word. It wasn't noble. It wasn't really talked about that much. It was kind of like if you're a salesperson, like you're shy. So I didn't really like know or learn about sales or like have any like sales icons that I looked up to. So I think I found out that I was good at sales, really. My first job after, after college, I was at this company called Yext and, you know, I was on the phones. It was a sales job. Like I didn't even know in school that sales was a career or something that you could do. So doing that, I kind of learned that, you know, there's, there's an art to sales, right? You're like talking to people. There's a science to it. And kind of just seeing the results, you know, every single day. And I learned about, you know, like the sales funnels and all of that. And that's when I realized that I was, I was good at sales. And then, you know, it was, it was able to carry it through a bunch of different, you know, different roles that I've had in my career.

Well, so how did they— so you went to Yext after Clemson, and I'm kind of like going a different way than my normal journey of a person's background because I think this is part of what's important. Did they put you on a train, like training? Did they actually train you like how to cold call, to figure out if there's pain, like pain, no sale, like Sandler training? I don't know. Like, what did— how did they teach you how to how to sell?

Yeah, so it was a really formal process. Like there was a structured sales training. Like you come in, you go through like classroom, then you go through— you basically get put onto the floor, but you're sort of in a trial period and you have to make 5 sales in a week in order to graduate from the trial period and onto the floor. But there was a lot of like classroom sales training that like really, you know, opened my eyes to like what we were doing and this whole thing. And that's when I really like learned the game, especially, you know, being at like an early-stage startup like that, that was a little bit further along. They were at Series B when I joined, and I was able to sort of like see the machine as it was like already running.

It was like a sales floor, so you probably fed off of other people and learned from them.

Yeah, it was awesome. There was, uh, probably 70 people on the sales floor. It was all recent grads, all like a very similar profile. Like everyone came from kind of like bigger schools— Wisconsin, like, uh, I can't even think of other ones besides Wisconsin, but just like almost like not party schools, but everyone was in like Greek life. It was all like sales kids. We were all young living in New York City, so it was like super fun and like obviously competitive. There was a lot of athletes, you know, I think that they profile as they're hiring for those roles. So yeah, it was cool. It was like in a big office in Chelsea Market on the 7th and 8th floor. And it was really cool, like going in there, like the sales gong, like all the classic stuff. That was happening. And this was 2010.

And was this cold calling? Like, was it like a— like it was just you dialing or there was a computer software dialing?

Was it auto dial? There was no auto dialer. It was— we were dialing. I mean, they actually built a really cool, like, phone system, but it wasn't an auto dialer. But yeah, it was like 100 calls a day, 100 calls a day. I think you do like 14 pitches. I forget what the funnel was. Right. And then like maybe 1 to 2 sales. But yeah, it was outbound. We were calling into like SMBs throughout the country in different different industries— plumbing, flooring, auto repair, chiropractors.

Um, they sell internet advertising, right? Essentially.

Yeah. The product back then was a— it was leads, basically. So it was like, it was pay-per-call. So basically they were driving phone calls to these local businesses using, you know, like basically ads and directories and stuff. And then they would charge the business when the business would get an inbound phone call that was good. It was called like a pay for performance, kind of like lead gen product.

Got it. Okay. Yeah. So I think that really sets the stage for what we're going to talk about with your whole background story of companies you've been building. But to kind of rewind the clock a little bit, where did you grow up? What were you like as a child?

So I grew up on the Eastern Shore of Maryland in Ocean City. It is a— it's a beach town. It's a summer beach town. Not upscale, outside of Salisbury, Maryland, if you're familiar with that, which is where like Purdue— it's a big poultry area. It's like the biggest industry there. And I— my parents got divorced when I was 10. I have an older brother. He is 16 months, so he's about— he was one school year older than me. And yeah, I kind of normal went to, you know, very like lower middle class. Like, my mom was a schoolteacher, my dad worked at a poultry company, went to public school, you know, played sports and kind of normal-ish childhood. Wasn't— yeah, I think kind of like normal-ish, but entrepreneurial from what I gathered.

Like, you were like kind of had some side hustles.

Yeah, I, so yeah, I mean, I was doing stuff that, it's funny, like remembering back, it's like, so, so like I, I actually discovered eBay like super early and then I would, I would buy stuff. Some of the things that I would do, I would like buy juicy jumpsuits on like these like random marketplaces and then like try to resell them on eBay and things like that. Or I would buy stuff from from like China, like these like random women's jackets. Like I was just doing like almost like the TikTok hot side hustles now, but like back then without platforms and everything. So like I would do that and then I— and then me and my friend, we ended up buying— what are they called? Lacoste polos. And then we would like have sales at our school. We would like pass out flyers and then be like, we're having a sale. And then we would like sell them to people. I think they ended up being fake though. But, and then, and then some of the other things that like I would do. So again, we lived in a beach town in the summertime and a lot of senior weekers would go there to Ocean City and they would give the senior weekers these wristbands to ride the bus for free for like the whole senior week. But the thing is, people's high schools have different senior weeks. So like there was a senior week for like a month in Ocean City, right? And so what me and my— what I would do is we would basically get these senior week wristbands and then we would sell them to non-senior weekers. We would sell them. There's a lot of like people that come to Ocean City in the summertime and work there as like a summer seasonal and they ride the bus every single day. So we would like go and get these like senior week wristbands and then we would sell them for like $20 to, you know, people and say, hey, they're good for the whole month. The town caught on and ended up changing the color of the wristbands so that every week they would swap out. But like, that was one thing. That we would do. I mean, the things that we were doing or that I was doing are also kind of like— like, I look back and they're so like small, like simple, like running the beach, selling water, just like such little stuff that it's like unremarkable in my opinion.

Yeah, unremarkable. But it sets the stage of somebody's mentality and just, you know, the hustle, right? So you went on, you went to Clemson. Yep. And so what was the the business you were running there called CHiPS. What was that all about?

Oh yeah. So another thing I actually didn't talk about is I started this clothing company also called Koloko, and I did that towards, I guess, my senior year of high school. And then we were doing it as I was in, in college. And so the clothing company was called Koloko, means local in Hawaiian. And the whole idea is that everyone is local somewhere. So we were going to source basically everything about a brand. So nowadays what we— how I would describe it is you almost do like drops, like you would basically do drops in different cities. So like you'd have a Philly kind of drop and then the Philly drop would have Philly models and designers and it would all be local to Philly because fashion varies geographically. And that was like the whole idea behind it. And there was people coming to Ocean City, so we wanted to start there and then kind of like branch out. So then I go to college and basically like it kind of just like fails, like don't, don't really pursue it or anything. But then yeah, at Clemson started this club called SHIPS and, and basically, basically the whole idea is almost like an Airbnb but for colleges. So SHIPS stands for Students Hosting and Informing Prospective Students. And the whole idea is like when you go to college and you just do like a campus tour, like that's not an actual experience of that college, right? Like like you actually don't even really go to the buildings that you tour when you go to a campus tour. Like you don't hang out at that part of campus. Like it's not really the life of that campus. It's almost like you're being shown this like fabricated experience. So the whole idea is like, can I stay with a student and like go to game day with them? Or can I like actually like go to the cafeteria and like actually see a college? Where do like kids in dorms like hang out? Do they hang out you know, like off campus, that sort of thing. And then for the kids, they get to like host someone, show them around, and then make money as well. So it's almost like you would be staying at an Airbnb with someone like in their place. And that was the whole idea there. And I actually like still think it's a really great idea.

I got to stop you right there because this is one of the nuggets I found when I was doing some research on your background. And this idea I completely agree with. So I have two girls, one in college now, one that's a senior in high school. So I've done the campus tour visits. It is so absolutely broken. Yeah, I, I couldn't believe it. Like, so the admissions people, if you're listening, or some entrepreneur out there, there is an amazing opportunity to disrupt the whole college tour process because you have these people that are salespeople that are giving you— the people that are paying for the tuition and the student that wants to be there— this tour that was so uninspiring. Yeah, these amazing schools. And I'm like, are you serious? Like, someone would ask Where's the football stadium? And the person would point at the field hockey field, which if you're not a sports person, that's totally fine.

And by the way, a kid at that school is your biggest champion. They're going to sell the shit out of it. It's like, what are you doing?

They're salespeople. And then the inverse, the schools that had that person that lived that school, that bled that school. I mean, this— my daughter would be like, oh, this is such a great place. I really, really want to go here. All right, let's fast forward a little bit. We talked about coming out of school. I know, right? So we talked about Yext. What did you do after that? So you got your sales experience, you had that startup experience. So what did you do after Yext?

Yeah. So after— yeah, so I basically was at Yext for like less than a year. I was dating this girl. She was at Clemson and she was a year behind me. So I like went to New York. She was still in school. And then when she graduated, she moved back to Virginia where she's from. So then I was like, And to be honest, like, I loved my experience at UEx, but I didn't love cold calling for like a year. Like, it's a great— everyone should do it. But I was like, oh my God, I got to get like off the phones. So I was like, hey, I'm going to move down to Virginia. We'll like live, like be together, you know, because we've been dating for like a few years at the time. So I moved down to Virginia. I got— this is also where I'm like, I look back and I'm like, I was early on a lot of things. So I basically got a 2-bedroom apartment in Sterling, Virginia, or Herndon. And then I Airbnb'd the second bedroom. So then I got like a nightly rate and then my effective rent was super low. And this was in 2011. Like people weren't really Airbnb-ing places. Like I remember my girlfriend at the time's like parents came over and then there was like a family that was staying in this room and they're like, you're like renting out your other bedroom to like a family. Like that's so weird. You know, like now Airbnb is like normal. It's still not super normal to do like an in-unit rental. A lot of times people do like full, full place, but it was really early to do it then. But anyway, I got a place in Herndon, Virginia, Airbnb the second bedroom, and I was actually working at this girl's dad's company for like a few months and then we broke up and then I was like, I gotta, I gotta get out of here. But as right before we were breaking up and sort of like as we were breaking up, I met this guy, Vinny, who had a startup called mHelpDesk. And basically what he described it at the time was a help desk app, basically like a ticketing app or work orders, you know, for like IT people and everything. And, you know, I met with him and I was like, oh, this is super interesting. I was just in New York and I was selling to these small businesses. Right. And I would love to join you full-time. They had probably like less than 100 customers, maybe less than $10,000 a month in MRR. So it was like, you can't pay me or anything. So I was like, all right, I'll work for equity and commission, you know, and as I sell to people, I'll get commission, like recurring commission. So we ended up agreeing to a deal. I left the company I was at and then joined him full time. And it was just me, him, and one other guy, Kwa. And it was us three. We went full time on mHelpDesk. AOL had a massive campus in Dulles, Virginia, and AOL wasn't really a thing. So they had a lot of extra space in this campus that they were offering startups free office space. So we applied to this they called it an accelerator. There was no programming or anything. It was pretty much just free office space. But we applied to this program called Fishbowl Labs and we got in and we were able to use like the whole AOL campus. Like we would go up into like the executive offices and have like a call, you know, and be like sitting on the conference room tables. Like it was really cool. We like, it felt, it felt nice. Yeah. So, and then that started to work. It started to work and we started, you know, hiring people. Some of the like super early hires, this girl Jenny, she's a rock star. Melanie, like we started hiring like really great people and we were able to, to build it up. We didn't raise any money until we hit $1 million in ARR and then we raised just a $500K note. And then in August of 2014, we, we sold to HomeAdvisor, which is a large home services marketplace. And it was a really— it was a cool deal because they actually bought 51% of the company. So taken off the table, they invested money into the company and then there was a deal. There was a rev share deal that every HomeAdvisor Pro is what they called them, would, would get offered an mHelpDesk subscription. So they'd be able to like get the leads from HomeAdvisor and then manage the leads inside of mHelpDesk. And then, and then there was a put-call option for them to buy the rest of the company over the next few years. So it was like guaranteed liquidity. So it was crazy because like I basically, and I actually just found this old blog post I wrote, but I basically like went all in on mHelpDesk. I had like $50,000 in student loans. I rented out my bedroom to be able to join. So I decreased my burn and this was like at the end of 2012 and then went all in like for equity and then like commission if I like sold. And then by 2014 when we sold, I become a millionaire, like a liquid millionaire at 26. So I was like, that's fucking crazy, right?

But you took a risk on a segment of software that wasn't what it is today. Like looking back.

Exactly. Yeah.

Monday morning quarterback. Oh, field service software for electricians, plumbers.

That's kind of why I said that it wasn't even the category when I joined as field service. I remember like, like Vinny would describe it as it's like a help desk app and it's like, and then we kind of like. Started seeing all these businesses that were signing up. It'd be like an HVAC, a plumbing company. Yeah, an IT tech. And it was like this, like, kind of broad range. And we're like, well, what are they doing? Like, oh, they're managing jobs. And it's like, well, what's a job? It's like a ticket. It's a work order. Is this work order software? And then it's like, all right, anyone that sends anyone into the field, this is— and this is kind of like the emergence of field service software, like before ServiceTitan, right? And kind of before these big companies. It's like we were playing in that space and trying to like refine like what the product category was like we used to say our biggest competitor was a clipboard because everyone would manage these tickets and these work orders like with clipboards in the field.

All right. So you take this, you know, through a full lifecycle to an acquisition, stay on post-acquisition for a while. What led you down the path for your next company? Like, what was the next idea? What was that all about?

So I left there in 2016. Okay. So a few things were happening in 2016. First, like, big thing that was happening is Twilio IPO'd that summer. So there was like, I don't know, I was also like, and I still am just kind of like a tech and like venture start, like nerd. Like, I'm like, oh my God, you know, I'm like super into it. So I was like following, you know, a lot of these like companies and things like that. So Twilio IPO'd that summer. There was a lot of kind of like activity in like the phone space, like phones for SMBs, like Dialpad, I think, like was more for enterprise, but like Dialpad was popping up. And then the big thing, though, is we got acquired by HomeAdvisor, right? And HomeAdvisor sends leads to these small businesses because people go to their website, they fill out a form, and then HomeAdvisor basically like sends the leads to the business. So they would get a ton of complaints. They're like, oh, this is a bad lead. It's a bad lead. And it's because they responded to their leads so slowly because they're all in the field. They're like, we want phone calls, we want phone calls. So they like all wanted phone calls and valued phone calls as leads, but then they're like getting these web leads and like a lot of them, and I was at Yext in the past and like I knew that like Yext and other companies were driving phone calls to these businesses as like the best form of lead because they convert, they talk to them instantly, there's no delay. Like if you're a toilet or you have like an emergency fix, a lot of times you're like calling someone and you're like, You're not like checking out a ton of reviews, doing a ton of diligence. You're like, all right, if I— if it's from a trusted, you know, platform or something, I'm going to do it. Or there's a lot of industries where phone calls are actually like the first step. Like if a personal injury lawyer, like you need a phone call as a consultation, or if it's like a remodeling project, like you're going to get on the phone and be like, hey, I have this like kitchen, I'm in this apartment. You know, it's like a phone call is the consultation. So anyway, so I knew all of that was sort of like in my brain. And so I was like, well, I want to start a call analytics call tracking company, right? I can build it on top of Twilio and I'll basically sell to these same businesses that I've been selling to. Again, founder market fit. I had just seen my friend, you know, go from essentially like B2B SaaS to starting a dating app. And then it like not working and it's like, well, I think that's hard anyway, but it's like, you know, to go from like B2B to consumer is just like such a fundamental like difference. So I wanted to like stay in your lane. Yeah, I want to stay in my lane. It's like, dude, I have this like playbook that I know works. It's like rinse and repeat, baby, rinse and repeat. So, so that was kind of what I did is, is like I was like, all right, I'm just going to— and there was other products out there already. So it wasn't like I needed to necessarily find product market fit. I'm like, can I just carve out an angle and a differentiation enough to build. And I wasn't even trying to build that big of a business. I went into it like, I just want to like build it. I mean, I didn't do it, but I was like, I just want to build like a $50 million business, you know? I wasn't trying to build like a billion-dollar business. And by the way, I didn't build a $50 million business, but that would have been cool. But that's what I was trying to do.

Okay, so what were some of the lessons learned though? So you did start to build a product yet.

Yeah.

Ramped up sales quickly, right? Like that was like part of your go-to market was pretty aggressive.

Yeah. So basically I— so I like left them helpdesk in May of '16 and I ended up getting a first paying customer by December of that same year. So like I thought the idea started getting it built and everything and so like Some of the lessons. So basically I ended up like shipping fast, but in hindsight we ended up having to rebuild everything. I hired like some offshore contractors. Like I didn't know really anything. I still like was just not a technical founder. Like I'm not a technical founder. I didn't know that much. Like we built it, it was built in terribly, but I was able to like build something. You know, so one of the lessons was like, go slower. I mean, go slower in the beginning to just build the foundation, right? You know, or else you're going to have to go back and like rebuild and that wastes a lot of time and money later. The other thing, like, I think some of the things I did right was like I was just like talking with customers. I was like, I was doing whatever just to figure it out. I was like in a lot of these Facebook groups. I'm like kind of just flying to customers, flying to conferences. You know, I remember I met with this guy, Jeff Citron. He was founder of Vonage, and I was like really pitching him to invest and he didn't, but he ended up like making an intro. And then we did a partnership with Vonage, like an integration partnership. And like when it comes from like the chairman and founder and he bunts it down to like a VP, like they take you seriously. Whereas if I was trying to go up through the bottom, through like a normal channel, they would have been like, who's this like little startup? Like, you know, chirping at us from, from down below. But if it's like punted or bunted down from founder and chairman, like they take the call. So like that was one of the other things I found is like go high and get them to bunt you down instead of trying to go from like the bottom up, if that makes sense.

Totally makes sense.

Yeah.

You got to start from the top.

Yeah. So then, yeah, I mean, one of the other things that was, in my opinion, transformational, I was like, I'm just going to do this on my own, whatever. And then I was working out of my apartment and I saw Alex Iskold posted something like, hey, we have extra desks at their office in New York. And I was like, I need to get the heck out of my apartment and like work out of an office space. So I started working out of there. It gave me like accountability. I'm around other people who are doing interesting things. So like that's inspiring and also like kind of forces you to level up. I feel like I always level up when I'm around other people that are just like doing stuff. So yeah, so that was like, I guess one thing when I— and then they asked me to do Techstars and then doing it was like another thing because because again, you go through it in like a cohort or a class, which if you think about it, it's almost like you're like fraternity. Like Techstars is like the fraternity and then you have your pledge class and like you and your pledge class are like friends. You're like peers. You, you know, there's 12 of you, you're all going through this similar shared experience and like just having that peer group is awesome. You know, obviously like the accountability, you know, you have to show up, there's programming, there's structure. So there's like all of that. We vlog the whole thing. So like, again, having like camera and all of that sort of forced me to like also like level up, do interesting things, try to sound smart, all of, all of that. So like, I think Techstars was transformational. Yeah, I mean, just talking to customers, getting in the trenches early, I think I should have like paid more attention to product. And try to be a better like product leader. But yeah, in the early days I think, you know, I was like, hey, let's just like make as much noise in the public as much as possible and, and just like, you know, drum up business. And that's why I like also the videos and the content. I was like just trying to be loud, you know, and just try to like get eyeballs.

And that, I mean, lots of people do videos, but this is 2017 videos where that wasn't very common at all. Like maybe Gary Vee was out there, but not a lot of, you know, entrepreneurial influencers.

Yeah. And that's why, you know, I really wish— I wish I had stuck with it. And now I'm back, back on the content grind again, thank God. But like, yeah, I was like, oh, I think we can carve out like a really interesting angle because like, I think of myself as like the masses, you know, I don't think I have this like super like niche lens. I'm like, I would want to follow someone that's doing that. GaryVee is a little too, too far removed, you know, he's like, Like, I can't do that, but it's like, if this guy's doing this, like, I can probably be like him. He's like pretty normal and like, it's not, he's not that smart, you know? It's like, it's like, ah, I could do that. And then, so it's like, if you can lay a foundation that's like relatable to like the masses, I was like, that's super interesting in my opinion. And that was kind of going to be the angle. I think I went a little, I tried to like go a little too like entertainmenty. Like I look back at the videos and they're like so bad. Like I can't even watch them. I wish I did. I wish it was more. And also I think they're too long nowadays, especially like short form and everything. But yeah, I think like, you know, I think it was, I think it was like a really cool angle. And, and the other thing that happened then is I think it didn't help us for discovery, like super top of funnel. But once we got to someone, once they started like searching us, they would discover the videos and then it would actually help convert middle to bottom of funnel because they're like, oh, This is a real company. I can see that they're building, you know, they're just like, they're out. These guys are, you know, they're really trying, you know, it's like almost like they can see humanizes it. Yeah, humanizes it. And they, they, they're like, okay, I get it now. So it would actually help like middle to bottom of funnel, not top of funnel.

All right. So you eventually found product market fit, you know, built a team, built the platform sales. So it all came together. So let's talk about what you're up to now.

I basically spent the next like 2 years, just to kind of like fast forward. I mean, I went down the crypto rabbit hole for a little bit. I was living in Florida, like just— I would just like wasn't inspired. I would go down like paths where I was like interested in stuff, but then like for one reason or another, like I wouldn't pursue it full time. Like I was looking at doing like rooftop, basically like cell tower, like small cell towers, like on rooftops and doing like things like that. I looked at doing like a pickleball brand, you know, I was just like doing like all this other stuff. And then I was like, all right, you know, I've been in SMBs for like my whole career. I was like, what's interesting? What's interesting in that world? And a lot of people were actually buying small businesses. So like they would put together like a little fund, they would buy the business. So I was like, okay, maybe, maybe I'll either do that, maybe I'll create a platform where people can like buy businesses on top of the platform. And, you know, there's something called Juniper Square that's out there. So I was kind of looking at that and I was like, all right, you know, how are people doing distributions from these cash flowing businesses? And, and then I realized that like before the actual distributions to shareholders happen, a lot of these businesses were doing profit sharing plans and also they had profit sharing plans instead of stock options because these are, you know, LLCs, these are like cash flowing businesses. It doesn't make sense to to give stock options. So I was like, all right, well, how are they managing the profit sharing plans? And there's no platform. There's no like Carta for profit sharing. There's not even like really standardized like profit sharing plans. Everyone's guessing their way through it. And I was like, this seems crazy because like all these people are doing profit sharing or they want to do profit sharing. There's no platform or easy way for them to actually roll something out. The data is like crazy clear that like companies that do profit sharing are more profitable in the long term. Employees have like higher output by like 44%. They actually start like self-policing each other because like if there's a slack, you think like a slacker in a group project, it's like you're going to be like, yo, like, what are you doing? Because that affects all of us, you know? So like there's been like all these case studies on it. I'm like, how is like no one doing this? There's no easy way for a company that like wants to do profit sharing to easily sign up for a platform and sort of design the plan, roll it out, and manage the plan. So that's exactly what we're doing at Share Willow and sort of started building it in like February, March. And yeah, I mean, it's, it's going great. Like we haven't announced the raise, but like we raised $6.5 million. It was like way oversubscribed. I kept having to like take on more. Like I only wanted to raise like a million and I was like, all right, I'll raise 3. And then it was like the 3 turned into 6.5 and I was like, this is crazy. And usually I'm used to getting nos. So I was like, you actually want to do this? This is great.

Well, when we met and you told me what you're doing, I'm like, that's an underserved category. It just immediately I'm like, yeah, yeah, I'm pretty sure no one's tackled that yet. So it was, you know, brilliant idea that I love these pockets where it's just like no one's touching that because it's not a dating app, it's not consumer, it's, it's, it's— yeah, but it's a very scalable industry to build a company around now. But raising capital is really hard this year especially. So how did you get that momentum? Was it because you had past experiences of building companies with exits? Like, what— why was that, you know, call for, uh, venture capital so well received?

So I don't know, because it's not like I've So yes, I am a second-time founder, so I definitely have that experience, but it's not like I have like huge wins where people are like, oh my God, everything this guy touches is 100x. Like, I'll do whatever just to get in. So I think there's some element of like second-time founder. I also think like these VCs are so used to like all deals they're seeing right now are like AI this, AI that, like they don't even understand them, you know, like everyone's getting beat up and it's like this is like a very like Makes sense. And also there's a lot of things happening kind of like market-wise, like there's a lot of people going after these cash-flowing businesses, like the market change, you know, interest rates are like a million percent right now. So like everyone's looking for cash-flowing, you know, companies and buying up like yield type stuff. Like companies have to have a higher focus on profitability. So like there's a lot of— there's some market things that go and support this product-wise. I do, you know, I did nail the pitch where like I speak about it with such a high level of conviction and enthusiasm that I think like you either have to say like, yes, I'm going to back it because this guy is going to die before it fails, or you have to be like, I don't believe you. And I think people weren't saying they don't believe me, you know? So they're like, yeah, like I'm in, like I get it. The market's huge. It's like first mover advantage, second time founder. And it's something I understand. It's not crypto this, AI that, rapper this, you know, it's like, get it. Yup. Profit sharing, SMBs, boom.

And again, I think this goes back to the theme of this conversation is that there's the hustle. So I saw one of your investors is My First Million that lots of people know about, especially people who listen to this podcast. Sean Puri, like, like is one of your investors because you sent him a Twitter DM. So you're reaching out cold. To people that you think should be investors. So that's a hustle.

Yeah. So yes, but I also think like I'm going to make a video about this, but like he actually spoke about this idea in like 2020, like, and it was like not exactly this, but it was like directionally this. I have a text with my friend where I'm like, this is awesome. I want to do this. Nathan Barry posted a blog post about how they do profit sharing at ConvertKit. I commented on it in 2020, like timestamped. It's still up, which is awesome. Saying like, I'm going to build this. And like, I was still doing PhoneWagon at the time, so I want to make a video about that. But yeah, I mean, I did go to Sean in like January of last year, so almost a year ago, and I was like, hey, you said this, I'm just checking in, I'm going to do this. And he's like, cool. Then I checked in. I'm like, yep, hey, here I have it built. And then it was like, and then he's like, all right, email me weekly with your progress. Emailing him, emailing him. Then I was like, hey, I'm raising. And he's like, nothing. Hey, hey, it's oversubscribed. And he's like, all right, I'm in. You know, so it was like a really cool, like, sequence. I want to really, like, make a video showing, like, the timeline and stuff. But yeah, I mean, it was like, it was outreach, it was pinging, and it was like, just to even get him in the round though, like, I could have given up because he wasn't responding to these emails at first. And I just kept being like, dude, I would like highlight in the email, like, Sean, like, you're on my list. You know how, like, in dating, like, sometimes you have to, like, say what you want or like, you know, sometimes people are, like, secretive, but like, I think it's better to be, like, super upfront. It's like, I want you in. Like, sometimes people try to be like too hard to get, you know, it's like, if you want something, say it.

Exactly. Exactly. So where— like you talked about your raise, where is the business now? Like, is— you have a platform, you have customers. Like, what's the kind of the current state of the business?

Yeah, so we have like a closed beta right now. We have a handful of customers. We have a lot of leads and we have, you know, so we're trying to refine sort of like product. I hired a CTO about a month and a half ago. He was the CTO at Underdog Fantasy, this guy Trevor. He's a rock star. And so, yeah, so I mean, we're building the team, building product again. We have like a light version of it in closed beta right now if anyone wants to sign up. And but yeah, we do have paying customers, but we're, we're kind of like heads down right now, like we're actually not focused on sales or revenue. I think that's a little too short term. Like, we want to build the best product to ultimately be able to like really scale this thing. And like in the past, I've always been like, let's get sales and show like early sales and product market fit. And it's like, that's, that's actually a little too short-sighted because it's like even at PhoneWagon, I was able to like get out of the gate fast, but we ended up not winning the marathon, you know, whereas other people at Techstars in my class who I was like, in my flawed thinking, I was like, I'm running circles around this guy. And now they're absolutely crushing. Like, they were slower out of the gate, built a great product, you know, and were able to like win the marathon instead of just getting, you know, getting off the start line, starting line really quickly.

What's the plans for building out more of the team now that you have funding?

Senior product designer and, and another engineer, Ruby engineer. Right now we're going to keep the team small, but we want incredible people, right? So we want incredible product people and then we want to just talk to a lot of customers and put out a lot of content and then kind of like just stay almost like a build in these little pods where we're not getting like fluff, like no office. I mean, we, we work out of one of our investors' office and like, so we're staying kind of like burn conscious even though we have, you know, funding. And it's like we're not just going to increase burn arbitrarily because we have the money.

What are some of the things that entrepreneurs should know if they're going to go down the path of an acquisition? Like, there's some basics and then there's some lessons learned that, you know, like something that I learned from listening to another one of your interviews was, you know, there's an escrow of funds that are withheld, which makes sense that that would happen. But I'm like, oh, I never even knew that. So that was interesting. So what are some of the lessons learned or things that entrepreneurs should know before they head down that path?

Yeah. So I mean, like, obviously just all the, like, normal corporate docs, like formation docs and everything should be, like, organized. And that's pretty obvious. So, like, but basically how the process works is you essentially come to, like, a verbal with the other side, right? Almost like, hey, you know, you sort of come to a verbal and then once that verbal happens, there's like an LOI that gets sent and then the LOI will get signed. There's a lot of other terms besides price, right? Like, like some of the terms that really matter, like what's the net working capital? Because you have to like— and then like what's included in net working capital? Because there's ways for them to ding you. Like they could say like the price is $10 million, but then they could say like, all right, well, you need to have like this amount of money. And if like you're burning money, you need, you know, so then there could be like an extra amount of money that needs to be had in this net working capital that is like required when you deliver the company. So there's, you know, you could have this headline price of a lot, but then you could get dinged there. Basically, once you come to a signed LOI, there's going to be then like at least 60 days of back and forth with like at least 4 lawyers on both sides. And they're going through all these like reps and warranties and there's like all these things that you're going to like, you're going to mark up in your agreement and their agreement, you know, again, kind of to what you just said, there's going to be an escrow. So typical escrow, I think, is like 10 to 15% for 12 months. Ours was 20% for 18 months. So it was like a longer escrow and it was 20% of total deal size. Right. So that's like large, you know, and again, that's, that's a negotiation, a negotiating point. There's like all these like things that you can choose that, you know, you're going to like negotiate on. But the biggest thing is like obviously like have great lawyers. Have all of your, like, documents buttoned up and then decide what you care about. Like, if you don't care that much about the escrow. And then also, by the way, then if things come in, there's also what's called like a tipping basket. So like typically it'll be like $60K. So like if there's random invoices that are outstanding, like they'll go into from this like tipping basket and it's like if it doesn't exceed $60K, it doesn't come out. But like once it exceeds a certain amount, then they start dinging the escrow for it. So like if a vendor that you like forgot to pay like a tour, like a Twilio invoice outstanding that's like $20K and it comes in, you know, 8 months later, shit. Or if you have some like lawyer for some like agreement that you did in the past and like, you know, lawyers don't like send regular invoices and you get hit with that invoice that'll come out of the escrow. So there's a lot of things like that. Like my biggest thing is like escrow and then it's like for the cash, you know, like cash versus stock, because there could be like, you know, a portion that's stock. So things like that. And then also like you want to make sure it's a stock purchase agreement versus an asset, because if it's an asset, then your QSBS is disqualified. So like, again, you want to— if you care about that. So it's like you want to make sure that, you know, sort of like the structure of the acquisition aligns with your tax goals and like money goals.

Well, I was going to say, so if you're not familiar with those terms, that's related to the proceeds are would be taxable if it was an asset purchase versus the alternative.

Yeah, right.

Yeah. Okay. All right. Some lightning round questions here. All right. So 3 apps you can't live without.

3 apps I can't. So recently, Frame.io, doing a lot of like video content and like pushing things back and forth there. Webflow, I do a lot of like landing page stuff. And then I want to— actually, I'm not going to say that one. And then Instagram. I really like Instagram. All right.

How about a good podcast book recommendation?

I love My First Million. Also, book-wise, Atomic Habits is like anytime I fall off, I go back to that book.

All right. Outside of work, what do you like to do for fun?

I like to play pickleball. I like in the wintertime, I like to go snowboarding. And I like doing Barry's Bootcamp workouts.

Very cool. All right, Ryan. Well, thanks so much for taking the time to walk us through your background story, all the companies that you've been a part of, the journey, the lessons learned, and of course, everything that you're building with Share Willow.

Thank you so much. I'm super glad we met at the Lair holiday party, and I can't wait to see the episode when it comes out. But thank you so much.