From $100,000 of Debt to Co-Founding an 8-Figure Business

From $100,000 of Debt to Co-Founding an 8-Figure Business

Recently, on our 12th Sumo team retreat in Tulum, Mexico, I sat down with my co-founder and CTO, Chad Boyda. We reflected on his entrepreneurial journey and the lessons he’s learned along the way.

Growing up, Chad dreamed of being an entrepreneur. But it didn’t work out for him like you see in the movies or read on TechCrunch.

Chad has been building businesses since he was 16 and shared a ton of INCREDIBLE insights during our conversation, including:

  • His $100k mistake — and how he used credit cards to fund his company’s payroll
  • Why he left school early to pursue a different kind of education
  • The importance of embracing tough conversations

I’ve known Chad for a long time (we worked together for nearly 10 years). Even knowing him for years, I learned crazy new insights from our discussion.

Direct Download Link
Right-click and select ‘Save Link As…’

Subscribe in iTunesSubscribe on AndroidSubscribe on Stitcher

Chad's $100,000 Business Mistake

Before starting Sumo, Chad created a number of startups.

Chad’s biggest learning experience — and startup failure — was a company he built with his own money, plus money from friends. With the capital, Chad and his team spent a year building products.

The first problem: Chad and his team assumed people would need these products. They did no validation on the product before they started building.

After pushing the product to the public, Chad heard crickets. The product wasn’t solving anyone's pain point.

When the capital ran out (a year after launch), Chad was making payroll on his own personal credit cards to make sure people got paid. This led to over $100,000 of personal debt. It took Chad 10 years to pay off this debt.

10 years of paying off credit card debt from a failed startup is a lesson you don't forget. Chad learned many things from this experience, but had one major takeaway

“We built upright without caring about what people actually wanted.”

Customers should be central to product development. No matter what you’re working on, validate your idea with customers, get their feedback, and iterate.

Click to Tweet this quote

Customers don't always know what they want, but it's important to test your assumptions before you invest too much time or cash into something.

5 Lessons from Chad's Entrepreneurial Journey

  1. How to have uncomfortable conversations
  2. Use feedback as fuel
  3. Learn from others
  4. Take small steps
  5. Always be testing

BONUS: 5 ways to grow your business — with a $0 marketing budget

1. How to have uncomfortable conversations effectively

Growth happens when you step outside of your comfort zone. But most people don’t want to rock the boat:

  • You dream of starting a business, but you’re nervous telling your family you want to quit your 9-5 job
  • You think you deserve a raise, but you’re worried how to ask your boss
  • You’re struggling to connect with your partner, but you're afraid to be vulnerable

To be successful, you have to embrace difficult conversations.

One New Year's Eve, Chad challenged himself to have AS MANY uncomfortable conversations during the year as possible.

He wanted to talk about things that made him nervous, and share outside his comfort zone.

The “embrace difficult conversations” resolution was the best resolution Chad ever did. The skills he developed have turned out to be incredibly important throughout his life and career.

Without being able to embrace tough discussions — plus the mindset that comes with it — Sumo wouldn’t be the 8-figure company it is today.

If you tend to avoid uncomfortable situations, how do you get started? How do you learn to love discomfort?

Chad’s advice is to start small.

For example:

  • If you don’t like a meal at a restaurant, instead of saying “everything’s great, thank you,” politely mention the issue
  • Ask a close friend for honest feedback about yourself
  • If your significant other does something which really bothers you, talk to them about the problem

Having uncomfortable conversations doesn’t mean you have to act like a dick. It just means you’re truthful and honest with yourself.

These types of conversations can be awkward, but they’re great stepping stones to feeling confident embracing difficult situations.

Next time you feel nervous about asking a question or approaching a conversation, embrace the nerves and just do it.

Yesterday you said tomorrow. JUST DO IT! . #justdoit

A post shared by Noah Kagan (@noahkagan) on


2. Use feedback as fuel

Taking feedback and moving into action is an incredibly valuable set of traits.

It's tough for many of us. How often do we use feedback to better ourselves?

Many people hear feedback, get nervous, and repress it. “That’s not true” or “I don’t need to change,” we say.

If you think this way, you're missing out. If someone is willing to have a difficult conversation with you and share open, honest feedback it’s usually because they care and want to help you improve.

My friend Neville and I have had TONS of heated debates, but ultimately things get hot because we both want each other to grow.

Once you’ve received feedback, how do you use it to fuel personal growth and self-improvement?

  • Write it down: It’s easy to receive feedback and instantly forget it. Write it down...
  • Create a plan: Having the information isn’t the same thing as using information. Think about how you can actually use this feedback
  • Be deliberate: Some advice you hear won’t be helpful. It’s up to you to decide what you take to heart, and what you ignore. Carefully choose what changes you make from feedback

It may not seem like much, but staying aware of what you need to work on can make a huge difference in your personal and professional success.

3. Learn from others

As entrepreneurs, we like to think we blaze our own paths. But, that's ignorant. There’s so much we can learn from others.

Learning is one of the driving factors behind my podcast:

As a 16-year-old, Chad graduated high school early and decided against going to college.

Chad’s a strong believer in education, but he was bored of what he was learning. He wanted to pursue his own education on his terms.

So, Chad set out to build his own companies. He experienced some small successes, and was feeling good about his decision to go from high school to full-time work...

But then the dotcom crash happened and shit hit the fan.

When the future looked bleak, Chad shifted his strategy:

“I had been working for myself and building businesses all these years with no idea what I was doing. I thought I should learn how other people do it.”

Chad started working for other entrepreneurs who taught him a TON about building products, A/B testing, marketing, pricing strategies, and more.

By becoming an employee and opening himself up to learning, Chad elevated himself into a better position to succeed as an entrepreneur.

Don’t let your ego get in the way of learning.

You might want to be an entrepreneur and have “founder” in your Twitter bio, but there’s nothing wrong with taking a step to the side in order to learn and improve your skillset first.

4. Take small steps

Most of my readers want three things:

It doesn’t happen overnight. All success starts with baby steps.

Becoming successful starts with creating a vision for success.

BONUS: 5 marketing tips which cost $0

Once the vision is clear, you can take small, calculated steps.

For example:

  • Dedicate time each weekend to research customers and cold call
  • Spend an hour a day learning to code (or whatever skill you’re trying to pick up)
  • Read a book about sales each month

Over time, each of these small steps will add up to make a huge difference in your life.

At Sumo, we have the concept of “1% ideas.” Every week we aim to get 1% better at something. Over a year, these changes compound to massive improvement.

Imagine in your own business:

  • 1% better at sales each week means you could quit your day job and sell your own product or service
  • 1% better at coding each week, and you could could build the app you’ve been dreaming about for years
  • 1% better at writing each week = publishing your own book

Don’t be blinded by the big picture. Think about how you can break down the journey into small, manageable steps.

Most importantly, start moving towards your goal. Don’t sit still.

5. Always be testing

“You don’t always have the right answer.”

I thought I wanted a fast, sexy-AF sports car. I was wrong.

I thought people would pay to remove Sumo branding from their site. I was wrong.

I thought I would work at Facebook forever. I was wrong.

The lesson here? It’s okay to not always have the right answer. The important thing is to constantly test and experiment with your assumptions.

At Sumo, we’ve changed our pricing seven times in the past two years (!!!). We’re going to keep experimenting to find our sweet spot.

Without testing, you’re leaving a whole bunch of opportunity on the table:

  • Could your customers pay you more?
  • Does content marketing work for your company?
  • Which messaging resonates most with your target customer?

You can’t answer questions like these without testing.

This approach also translates well into like outside of business. I’ve been using my “Test Shit Out Strategy” to optimize my happiness and figure out what’s really important to me before I commit.

For example:

  • I’m toying with spontaneity in my personal life and instead of committing to plans I make decisions more sporadically on the day depending on how I feel
  • I rented a condo I was thinking about purchasing to see if I liked it (I didn’t like it, so I didn’t buy it). This could’ve been an expensive mistake

Always be testing.

For more about failing in a business until you eventually succeed — and lessons learned along the way — listen to my full conversation with Chad.

Direct Download Link
Right-click and select ‘Save Link As…’

Subscribe in iTunesSubscribe on AndroidSubscribe on Stitcher

Leave a Reply

Your email address will not be published. Required fields are marked *

3 responses to “From $100,000 of Debt to Co-Founding an 8-Figure Business”

Nicole Holland
July 24, 2017 at 6:53 pm

I really enjoyed this interview!! Thanks Noah and Chad.

Reply
Dave
June 6, 2017 at 3:19 pm

Very cool episode! I've always wondered who the mysterious Mr. Boyda was. Loved the bit about having tough conversations.

Would be interesting to hear more about his early business experiments, especially how/where he got the idea to repackage software from Chinese devs.

Reply
James Ash
June 6, 2017 at 12:43 pm

The blog post is better than the interview. A good interview unlocks *specific detail*, which was largely missing in the conversation with Chad. I left the interview with the following questions:
1) What company did Chad work with out of high school that repackaged software? Are they still around today?
2) What was the product that Chad was building that ended up not having product-market fit? Completely in the dark about this.
3) Chad said he was disappointed on meeting his heroes. Well, who were they? We don't find out.
I'm left not knowing Chad much better than when the interview started, beyond a few things like:
- he doesn't write things down
- he wants to live to 400
- The resolution to have uncomfortable conversations (this was good)

Two things would have made this better. 1) Could have used a lot more persistence and curiosity on the top points, above. 2) Alternatively, and this tends to be Noah's strength, more of a deep dive on life, where you want to be in a few years, or some other topic where you both get to be vulnerable. The Neville conversation, for example, was great for this.
The result was that the podcast was meh.

Reply