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From Freelancer to Founder: Ep. 2

<div class="blog-headline"> <p><i><span style="font-weight: 400;">If you have not read the <a href="https://momenteo.com/blog/from-freelancer-to-founder-episode-1">first part</a> yet, I strongly suggest you do so. It will only take 5 minutes of your time and will set you in the right context to follow the story.&nbsp;</span></i></p> </div> <p><span style="font-weight: 400;">As the sun started to fade away on Quebec City’s not last and certainly not least cold winter day, I stood up in a room in front of a small group of angel investors.</span></p> <p><span style="font-weight: 400;">As I started to explain the core of my company, the inception of the product and the next milestones, a couple of heads were nodding in approbation. A little more than halfway through my pitch, I was interrupted by one of the potential investors (whose head wasn’t nodding): </span></p> <blockquote><p><span style="font-weight: 400;">“Young man, what’s a SaaS?” </span></p></blockquote> <p><span style="font-weight: 400;">I do all I can to come prepared, but this one really caught me off-guard. I must have forgotten to say something. Was it that third tooth in the back that made me mispronounce the word “SaaS”? I was pretty sure I properly articulated “Software as a Service”, but the whole sentence must have been clouded by the noise of those taxis outside rushing to pick up the last non-Uber client. As investors, they were supposed to be the ones in position of knowledge and authority. </span></p> <p><span style="font-weight: 400;">Back in my freelancing days, I was afflicted by what I will call the “falsetrepreneur” syndrome. You don’t feel like an entrepreneur because you are the </span><i><span style="font-weight: 400;">only</span></i><span style="font-weight: 400;"> human in your company. You don’t feel like an entrepreneur because you </span><i><span style="font-weight: 400;">only</span></i><span style="font-weight: 400;"> sell your craft and skills. You don’t feel like an entrepreneur because you </span><i><span style="font-weight: 400;">only</span></i><span style="font-weight: 400;"> report to yourself. You don’t feel like an entrepreneur because you </span><i><span style="font-weight: 400;">only</span></i><span style="font-weight: 400;"> manage your finances.</span></p> <blockquote><p><i><span style="font-weight: 400;">Only</span></i><span style="font-weight: 400;">?</span></p></blockquote> <p><span style="font-weight: 400;">How wrong was I. Being a freelancer taught me much more about entrepreneurship that I could ever be grateful for. As a freelancer, I learned about business development trying to market my craft. It taught me to have the confidence that I can do anything by myself, how to manage finances, do forecasts and planning, how to do a proper budget, how to segment my time on various activities. Also, I learned the hard way how easily a cash flow can be annihilated by late and non-paying clients.</span></p> <p><span style="font-weight: 400;">I wasn’t </span><i><span style="font-weight: 400;">only</span></i><span style="font-weight: 400;"> a freelancer, I was a complete corporation contained within a one-man army.</span></p> <p><span style="font-weight: 400;">When I launched Momenteo last year, I still didn’t feel like I deserved the entrepreneur title, I was just a freelancer with a side project. An entrepreneur is someone who successfully launches and manages a business of multiple employees, right?</span></p> <p><span style="font-weight: 400;">I used to believe that you either launched a wildly successful business in your 20’s or you skipped your turn and sold your soul to a corporation. I naively felt like success was something that happened randomly to the luckiest entrepreneurs. Facebook, Twitter, LinkedIn, AirBnb and those other so-called unicorns; I thought they all bloomed overnight. It all seemed so simple: have a cool California house, invite your friends and jump in your pool from the roof, then have a billion dollars valuation.&nbsp;</span></p> <p><span style="font-weight: 400;">Media glamorization of success stories makes it look so easy. Facing the challenges and obstacles of the real startup life, the one they rarely talk about, I realized how ignorant I was. It was one big lesson:</span></p> <blockquote><p><b>Overnight success exists – the sun just has to go MIA for a few years.</b></p></blockquote> <p><span style="font-weight: 400;">Last summer, I finally accepted the title “entrepreneur”.</span><span style="font-weight: 400;"> People came to me for advice on how to start a business, I started mentoring in multiple startup events, became “one of the boys” at our local tech drinks and met famous entrepreneurs from my city who knew who I was.</span></p> <p><span style="font-weight: 400;">This impostor syndrome actually ended up having a positive impact in my life. In the end, what mattered the most was proving to myself that I was able to achieve great results – not showing off to the rest of the world. Ironically, they all knew I had what it takes to be an entrepreneur; I was the only one unaware of the situation.</span></p> <blockquote><p><span style="font-weight: 400;">“A SaaS is a centrally hosted software based on a subscription model” </span></p></blockquote> <p><span style="font-weight: 400;">I started to explain. “Okay, I get it. Then your valuation is wrong. I ran a massage therapist network for a couple of years and a recurring business is worth no more than 20 times its monthly revenues.” he replied. </span></p> <p><span style="font-weight: 400;">I admire how this man went from “I don’t know what a SaaS is” to “your valuation is wrong”. He was acting as the obnoxious leader of the investors. </span></p> <p><span style="font-weight: 400;">He continued with a series of advice on how to run a recurring revenue business. “What you want, son, is to create a model where your customers are locked into the system and can’t get out. That way, your churn will be reduced to deaths and other tragedies you can’t control”.</span></p> <p><span style="font-weight: 400;">I was almost sure – or maybe hoped – he was joking. Locking clients into the system seemed the best way to create a negative vibe around your business and explode your support costs. Being confident he was sarcastic, I replied with a joke of mine which I learned from being a customer of Rogers for a couple of years: “Absolutely! After locking them in, it’s only a matter of raising the monthly subscription fee and your business will grow exponentially”. He seemed pretty satisfied with my answer, he was not joking.</span></p> <p><span style="font-weight: 400;">“You’re not the kind of investor I am looking for” is all I could think of. I packed my things and started to think about how wrong it is to seek money to build a business if it’s not smart money. I don’t want investors who might hurt my customers. I want investment from people who deeply understand the problem I’m trying to fix, those who can help me deliver the best there is to my clients. In the end. I am aware that what investors want is to multiply their money, but I won’t sacrifice my customers happiness&nbsp;</span><span class="s1">for short term cashflow improvement.</span></p> <p class="p1"><span class="s1">Finding money is quite easy; finding smart money is not. I will either find the investors that will empower me into improving the experience of my customers, or I will keep bootstrapping. I believe value can be created for multiple parties when we are all transparent about our expectations and requirements.</span></p> <p class="p3"><span class="s2">Their expectations failed to meet my requirements.</span></p> <p><span style="font-weight: 400;">Stay tuned, I’ll make sure to let you know what happens next.</span></p>

Father, entrepreneur, fast learner, good guy, programmer. Mostly in that order. Former senior software engineer at IBM, then became freelancer before launching Momenteo.

Dominic Goulet Founder & CEO