David Hauser, Founder, Grasshopper
‘Life is an Experiment’: How Grasshopper founder David Hauser evolved from a self-taught coder to a health guru.
David Hauser’s life changed forever the moment he taught himself how to code.
Like so many other nascent entrepreneurs, the power of computer programming set him on a lifelong path as a tinkerer, always fine-tuning and building in an effort to shape his and others’ futures.
In much the same way Hauser learned how to code, his entire entrepreneurial journey has been one of unrelenting trial and error, involving a mix of success, failure, and personal and professional evolution. With the creation of tech companies like Grasshopper and Chargify, Hauser used his talents and curiosity to shape his own destiny, and make a splash in the startup world.
Now, in his latest endeavor, he’s directed that very sense of experimentation to the field of health and fitness, with an upcoming book documenting his extensive adventures in improving his own physical well-being.
But it all started with a few lines of code that enabled him to pursue a nontraditional professional life.
“I always worked for myself since before high school,” Hauser says. “I never had a traditional job.”
In the late 1990s, the internet was gaining unstoppable momentum, and as websites started to become viable means of doing business, the demand for web designers and ad creators increased dramatically. This shift granted new opportunities to clever teens on the cutting edge of new technology who wanted to make a few bucks (and sometimes much, much more) from the comfort of their childhood bedrooms.
Hauser, who has no formal tech training, was one of these teens, swiftly making his way into the world of banner ad management and creating his own company WebAds360.
“From there, I started grabbing onto different things, learning different technologies, working with other people,” he says. “But it all started with web design.”
Before graduating college, he founded a second company, called ReturnPath, to help businesses that used permission-based email lists to keep their addresses up to date as subscribers graduated college or changed jobs.
Being a teenage entrepreneur in the late 1990s and early 2000s presented some major limitations, however. For one, what phone number were prospective clients supposed to call?
Cell phones of the time were still extremely basic and lacking features like putting a caller on hold or setting up a conference call. Meanwhile, home landlines might be answered by baffled family members. Neither option exactly screamed professionalism. It wasn’t just a problem for young people working at home, either, as lots of scrappy new entrepreneurs were lacking dedicated business phones.
So when the born and raised New Yorker headed off to Babson College in Massachusetts, and met Siamak Taghaddos, another entrepreneur with a similar problem, they put their heads together to pursue a solution.
Leaping Toward Success
“It started with a really simple idea,” Hauser says.
All they wanted was a way for tiny companies, startups, and solopreneurs to have the phone presence of a large, established company. And when neither he nor Taghaddos could find an existing solution to their problem, they did what so many successful entrepreneurs end up doing. They built their own solution.
Because they were only out to solve a problem for their existing businesses, Hauser admits they didn’t spend a lot of time on research or planning.
“It wasn’t well-researched necessarily, beyond the fact that we knew we had a problem, and we thought that we could solve it,” Hauser says.
During the process of creating the solution to their own problem, they realized that they were really onto something. That maybe this was going to be much bigger than a new tool for their own tool belts.
And because he and Taghaddos had their fingers in a lot of pies, and the money flowing in from their existing projects was enough to fund their new endeavor, they never needed to request outside funding.
In 2003, the pair officially launched Grasshopper, a service that enabled small businesses to present themselves like big businesses using just a cell phone, complete with extensions, customizable greetings, and simultaneous call handling.
Before long, Hauser shut down all of his other businesses, including WebAds360, and decided to focus entirely on the management and growth of Grasshopper.
And business boomed.
Small businesses and startups flocked to the service, delighted that it enabled them to operate with the professionalism of a well-established corporation. The company continued to grow for the next six years, when Hauser decided it was time to relinquish his role of CTO.
“I was always relatively technical,” he says. “But I am definitely not a top programmer, and as we really started to build out the company, it was clear that we needed to have better leadership from a technical perspective, and I could apply my talents better elsewhere.”
So, Hauser moved through another phase in his evolution as an entrepreneur and broadened his scope.
“Rather than being just focused on the technology side, I spent a lot more time in company culture, HR, hiring, process, goals and how we implemented those,” he says. “I shifted my focus.”
And as he stepped back, looking at Grasshopper from all angles, he saw possibility everywhere.
Trial and Error
Even though Grasshopper was a big success, Hauser’s head was bursting with new ideas and new problems to be solved.
In 2009, he developed Chargify for streamlined recurring billing. Then in 2010, he created PackageFox, a way to secure guaranteed refunds from late or lost packages shipped through FedEx or UPS. And in 2011, he launched PopSurvey, a graphical survey creator.
These are just a few of the self-funded side businesses born out of Grasshopper, and Hauser says there are many more that aren’t resume-worthy or that never saw the light of day.
“Those are probably just the ones that became something,” he says. “There are tons of others that failed and never really got very far, or failed horribly bad and we lost a lot of money.”
PopSurvey eventually fizzled out, overcome by competitors. PackageFox was an opportunity for Hauser to learn more about automation, but he eventually sold it off to someone in the space who could make better use of it. Hauser kept Chargify longer than either of the other two, but recently sold it, as well.
And while Hauser learned much during this time of exploration and creation, he admits that it created a lot of tension within his team at Grasshopper.
“We thought maybe we couldn’t keep growing Grasshopper, and we started all these things, and wasted a tremendous amount of time and money, but more importantly distracted ourselves—and even worse, probably, distracted the team—from the thing that was growing well. We could have just doubled down,” he says. “The success would have been much better than if we had wasted all that time, but that was the blind spot we had, and luckily we realized it.”
Hauser says that internal blind spots are some of the most difficult challenges that founders face. While an entrepreneur is wrapped up in the excitement of a new creation, he says it can be nearly impossible to determine impartially whether or not that is the best possible use of time.
“We’re overly invested in something, and we have that blind spot to maybe this isn’t the right thing to be working on right now,” he says.
But whether by choice or by force, the decision to take the left fork instead of the right is eventually made.
“I think sometimes it happens naturally. That progression just happens and you kind of see it,” he says. The problem is that sometimes it takes too long, and we over-invest in something that’s not productive, taking time away from something that has a much brighter future.
And while he is thankful that the ultimate effect this period of distraction had on Grasshopper was minimal, he would have done things differently given the opportunity.
“Looking back on it, it was not the best choice,” he says. “We should have focused on Grasshopper and grown Grasshopper.”
But despite any amount of distraction, Grasshopper grew and grew until the company was raking in $30 million in annual revenue. Before long, the success of Grasshopper drew the attention of hungry eyes, and the acquisition calls started pouring in.
Sales and Farewells
“When we started the company, we had no exit plan,” Hauser says. “Our goal was to build a company we loved being at and loved doing what we were doing. That was it.”
So when the first of the interested buyers knocked, Hauser turned them away empty-handed.
But as Grasshopper was a privately funded company, without the limitations placed on it by investors and capital, interested buyers were not to be discouraged. Eventually, Citrix, a multinational software company, made them an offer that they couldn’t ignore.
Citrix said that Grasshopper could retain their brand name, keep the team together and continue growing the company.
Over the course of a year, Citrix worked with Hauser and Taghaddos until they recognized that this proposal was a great fit for everyone involved. So they decided to sign on the dotted line.
As soon as the sale was finalized in 2015, both Hauser and Taghaddos bid their greatest success farewell, something Hauser describes as being “very emotionally difficult” but “best for both the company and Citrix.”
He trusted the management team to keep steering the ship in the right direction, and with Citrix’s new ideas for growth and strategy, he knew the business was in good hands. Neither he nor his partner were interested in sticking around for “two more positions for highly paid executives with titles that are kind of meaningless in a big public company.”
While he knew he had made the right decision, Hauser was rocked by the impact of his choice.
“All of a sudden, your email address changes, your phone number, your identity,” he says. “For 12 years, I was the guy involved in Grasshopper, and I ran Grasshopper. That’s who I identified with and people identified me with, and that just changed overnight.”
For a year after stepping away from Grasshopper, he continued with Chargify, but in July 2016, he sold that business, too.
With a clean slate, Hauser stepped into his next phase of evolution.
He explains that the core purpose of Grasshopper was to empower entrepreneurs to succeed. Now, he’s just hopped into a larger field.
“After a year, I came back to and found my core purpose,” he says, “and that’s empowering others.”
The Pursuit of Health
It’s been two years since Hauser’s life changed with the sale of his two most successful brands, and he spent the latter half of that time on an exciting new project: himself.
“I really wanted to change my life, and that included changing my exercise and diet, and I went from doing extreme endurance sports to practicing yoga six days a week,” he says. “Like massive change.”
In pursuit of this change, he also took just about every test imaginable—blood tests, stool tests, sleep tests, DNA tests and more. All in the pursuit of a healthier life.
And now he is ready to share what he has learned.
Thirty pounds lighter, Hauser is releasing a book in 2019 called Unstoppable: 4 Steps to Transform Your Life. In it, he busts myths around fad dieting, trendy workouts, and quick fixes, sharing instead the methodology he used to transform his own life.
He also tackles many of the health sacrifices entrepreneurs make while chasing lofty goals. And despite all the changes he tried in his own life, he isn’t necessarily an advocate of massive life shifts or hours spent in the gym. He believes that often the little choices can make the most impact.
“It’s always easier to work an extra hour past midnight because no one is bothering you, right?” he says. “It’s easy to pick up the phone and call for pizza, because you know you get that instant boost and gratification and can continue working for an extra hour. But I think, at the end of the day, what I care about is output and productivity, and I don’t think there is very much value in that extra hour of work when it is low productivity and low value, and it is just work for work’s sake.”
Through his book, Hauser hopes to open the eyes of founders and non-founders alike to the power they have over their own lives and the small adjustments they can make that will bring huge impact.
“The idea with the book is allowing people to understand that their life is a self-experiment and doing little things like maybe just buying a new pillow for your bed…could have massive gains,” he says. “Each thing in your life is an experiment, because you’re different from everyone else.”
Once again, just as he did as a teenager learning to code, Hauser is relying on the power of trial and error—how the slightest adjustment, addition, or subtraction can make a big difference. He is, yet again, learning to crack the code, and yet again, hopes it can change lives.
David Hauser’s Tips For Living A Healthier Life
Since founding, building and selling Grasshopper, David Hauser has invested much of his time in pursuit of a healthier life. In 2019, he is releasing a book on the subject, “Unstoppable: 4 Steps to Transform Your Life,” and these are just a few of the tips held inside for entrepreneurs pursuing a healthier lifestyle. For more information on the upcoming book, and a free chapter on the impacts of coffee, visit www.unstoppablebook.com.
- Establish a Routine
“I am a huge believer in routine,” Hauser says. “If you talk to the most successful people in the world, most of them will tell you routine is very important.”
He is such a strong believer in routine that, even when he doesn’t plan to work out, he still goes to the gym because it’s on his schedule. By developing a routine that allows for more movement, more stability, and more sleep, he thinks entrepreneurs can improve their lives—as well as their businesses—in enormous ways.
- Sleep More
“As founders, understanding our sleep patterns—improving our sleep patterns—I think has tremendous effects and gains on our productivity the next day, the next week, the next year that we don’t realize,” Hauser says.
By making more time for sleep, and being unwilling to compromise that time for a little extra work at the end of the day, he believes that entrepreneurs will actually be far more productive. Entering into each new day refreshed improves mood, interaction, and problem solving—all areas that are vital for success.
“Life is a self-experiment and doing little things like maybe just buying a new pillow for your bed…could have massive gains,” Hauser says. “Each thing in your life is an experiment, because you’re different from everyone else.”
Even the smallest changes can make a massive impact, and what works for others may not necessarily be the best choice for you. By trying new ways to solving old, persistent problems, he believes people can make great impacts on their health, and what is more entrepreneurial than that?
- The first company he started (in high school!)
- The Grasshopper origin story
- Entrepreneurial blind spots and distractions
- Why Hauser stepped down as CTO at Grasshopper
- Chargify, PopSurvey, PackageFox, and the other companies he’s started
- The story behind Citrix acquiring Grasshopper
- What Hauser did after stepping away from Grasshopper, and the emotional side of selling the company
- Pooling customer service for different products you’re building
- Marketing strategies they used to grow Chargify faster
- Hauser’s new book and new projects
- How to keep yourself healthy while working hard
Full Transcript of Podcast with David Hauser
Nathan: The first question that I ask everyone that comes on is how did you get your job?
David: How did I get my job? I never had a job. I always worked for myself since before high school so I never had a traditional job. So, I guess I worked myself into having a job at whatever I was doing, I guess.
Nathan: And so, tell me, what was your first company? Was it Grasshopper?
David: No, my first company was way back in high school and this was the early days, I just started doing web design. That was the first thing I started with. Then I did some banner ad management of, in essence, this was very early days of the internet before 2000. And just from there started grabbing onto different things, learning new technologies, working with other people, but it all started with web design as my first technology business that I was working on.
Nathan: When was your first start up?
David: I think Grasshopper was definitely the most successful. But, before that I worked on Return Path, which was an email management company. Pretty simple concept at the time, people changed email addresses when they moved or changed ISPs or left school. We helped fix that for companies that had your old email address. That was before college and I went to college and then started Grasshopper. So, for sure, Grasshopper was the most successful and the one I was involved with the most and then from there I founded a number of other companies and made a lot of investments as well.
Nathan: So, tell me about, ’cause I’m just looking at your life resume as a founder on LinkedIn. What I find interesting that strikes out to me is you founded Grasshopper, you said it’s your most recognisable company, but you also have Chargify during that period, you also founded PopSurvey and also PackageFox. That’s a lot, can you talk me through that?
David: Yeah, so, those are probably just the ones that actually became somethings. There’s tonnes others that failed and just never really got very far or failed horribly bad and we lost a lot of money in it. So, those probably aren’t listed the same. But, I think a lot of founders and entrepreneurs, I just have this kind of tendency to wanna fix problems that exist for me. And I think that’s where some of the best companies come from is just fixing a real problem that I have in my business or in life. And that’s where Grasshopper came from and all the companies you mentioned, were very specific problems that I just tried to solve and my way of solving things is just building something.
Nathan: So, you started Grasshopper in 2003, how did that start?
David: So, it started with a really simple idea that me and my business partner, neither of us could find a technology solution or a phone that we could sound professional, be bigger than we were that was not our cell phones. And cell phones were still not all that great then. So, either the option was a cell phone or a house phone. Neither of which are very professional when you’re putting it on a website or a business card, hence some random person might pick up or the voicemail might be a personal voicemail compared to a business voicemail. And you definitely didn’t have any of the features that you would expect like being able to put someone on hold or set up a conference call, all that type of stuff. So, we looked around and there was just nothing available. We said, “Alright, why don’t we just create something?” And I wish that we had a better explanation of all this research that went into it, and we did a business plan but, as everyone knows, business plans never come to reality. It’s always different.
But, it wasn’t well researched, necessarily, beyond the fact that we knew we had a problem and we felt that we could solve it.
Nathan: I see. And did you guys get funding or what was the other company that you had at the time, was that Web Ads 360, and that’s how it came to life?
David: Yeah, so I was doing that, I was doing a few reseller things. I was messing with a bunch of different stuff. My business partner was doing his own things as well, he was doing pagers and a few other things. We had no external funding at all from, not only just day one but throughout the life of the company and ultimately grew it to 30,000,000 dollars a year in annual revenue with no funding. So, there were a lot of struggles along the way.
Nathan: Yeah, I see. So, I saw that you winded up, or did you stop Web Ads 360, why?
David: Yeah, for sure. It was a small banner or display ad network. And it was very clear that we were not gonna expand to be much larger. So, although there was revenue coming in, it wasn’t a tremendous amount, so we just decided to close it and focus on something that we could grow and scale. ‘Cause, at the time, there was just no way we were gonna expand to what the other players in the space were doing and we never started it with that expectation. It was super niche when we started and just over time, we just let it die off and then closed it.
Nathan: And I think, sometimes that’s the case where you might build, perhaps, a tool or a company for yourself to scratch your own itch and then sometimes there comes a crossroad. This seems to be a recurring theme for some founders that I’ve spoken to where they’ve started this other company because once you have this in you, it doesn’t go away, you just see problems everywhere you go. And there’s things that you wanna fix and there’s things you wanna create and sometimes you come to this fork in the road where you’re like, “Okay, I’ve got this one thing that perhaps I should be doubling down on,” because perhaps it’s a better business model, or it excites you more, better opportunity, getting more traction, it’s not a hard to grow as, perhaps, the other thing. And you just have to make that decision.
David: Yeah, I think sometimes it happens naturally, that progression just happens and you kind of see it. The unfortunate time is when I haven’t seen that and we over invested in something that was not being productive or wasn’t gonna have that future or took time away from something that could have had much more success. I think that’s one of the blind spots that, as founders, a lot of us have is we’re overly invested in something and we have that blind spot to like maybe this isn’t the right thing to be working on right now.
Nathan: Yeah because it’s an opportunity cost because you could spend your, instead of creating this new thing and it being a distraction, you could be working on your existing thing. And just doubling down on that and you could be taxing what could actually be the thing that’s already got traction, grow it faster, versus creating something else and trying to create that traction which is very, very difficult to get to.
David: For sure, we did this at Grasshopper. We got, not bored, but as founders we just always had ideas and we thought maybe we couldn’t keep growing grasshopper. And we started all these things, wasted a tremendous amount of time and money, but more importantly, even worse probably, distracted the team from the thing that was growing well. And we could have just doubled down on that, like you said, and the success would have been much better than if we had wasted all that time. So, but that was the blind spot we had and luckily we realised it a year in and got rid of all of that. But, still Chargify came out of that concept of starting things and it’s a very successful company that is continuing to grow today.
Nathan: So, Grasshopper was a acquired by Citrix in, when was that-
David: Two years ago.
Nathan: Okay, so two years ago. I see that you stepped down from CTO in 2009, is that when you kind of started to take a little bit of a step back and work on new projects, which that’s where PopSurvey, Chargify, PackageFox, kind of spun out of?
David: No, it was more like the shift in my responsibilities of the company. So, rather than being just focused on the technology side, I spent a lot more time in company culture, HR, hiring, process, goals and how we implemented those and internally process to meet those goals. So, I shifted my focus and around that is when we started to hire someone else to focus on the technology side of it that was better than me.
Nathan: So, I guess you were not as technical?
David: Yeah, I was always relatively technical, I can code. But, I have no formal training. So, I wouldn’t say that I’m the most technical but I can have a deep technical conversation down to database level, SQL statements or do a code review. But, I am definitely not a top programmer. And as we started to build, really were building out the company, it was clear that we needed to have better leadership from a technical perspective and I could apply my talents better elsewhere.
Nathan: Yeah, that makes sense. So, tell me about the other companies that spun out of PopSurvey, PackageFox, that are, I guess, on your LinkedIn but you said there’s a lot that didn’t make it to the, I guess, the founder resume. And then there’s Chargify, so tell me, what happened? How many companies, like you said like with Grasshopper, you kind of took a step back and you starting some other things. How many other companies did you start and that were all self funded. Tell me about that.
David: Yeah, they were all self funded. I’d say there was probably about five or six that came out of Grasshopper and that never really saw the light of day. So, we either developed something very minimal and decided it wasn’t a right fit. Or something like a company called Spreadable, which was this idea of referral marketing that went much further and then we closed it. But, the ones that you mentioned had relative success, Chargify being the best out of that group and still is around today. PackageFox was a really interesting one, this idea of being able to get guaranteed service refunds from FedEx and UPS. And really, I use that myself as a learning tool because I wanted to learn, at the time, Amazon Turk, and some other automation tools that could be used kind of like as fake automation. So, I was playing with things like that. And also wanted to learn some of these shipping APIs and such with FedEx and UPS.
So, that was very much learning and we ultimately sold the company to someone in that space who has much more expertise there and we built out a system for them. It’s been successful with them because they understood the industry and had the connections. But, for me, it was great for learning.
Nathan: And PopSurvey?
David: PopSurvey we started, again, to fix a problem we had. There was no easy way to have easy, graphical surveys online and now there’s great things like Typeform and other stuff that do this really well. But, initially, we just wanted to be able to collect feedback smiley faces. Now, there’s a lot of apps that do that and it’s built into some support tools and whatever else. But, that was what we were trying to fix and then we expanded on that concept and said, “You know, how can we make surveys and online questionnaires more intuitive, easy to use and graphical?” So, we played with that for a little while. I don’t think it was tremendously successful. And then there were other companies like Deck Founder, for example, that’s probably not listed. Where I built this service where we would both review and build either investor decks or company decks for other people. And that was always fun and interesting. I got to apply things I’ve learned and help someone else with their business. So, that was fun. But, again, it was not something that we ever expected to scale but we were playing with different ideas.
Nathan: And you were using all internal resources, I guess you would say cash and team to build these products, right?
David: Yeah, the idea was we really wanted to not distract the team, but over time, that happened. So, it was cash and distraction of me, so my time. But, as something grew, for example, Chargify and it started to get traction, that’s unfortunately when we started to get that internal team pull where we’re saying, “Let’s work on SEO. Okay, we have Grasshopper SEO and we have Chargify SEO, how do we split that time?” And just even that conversation was a waste, where we should have just focused on the Grasshopper SEO and, of course, we both had the conversation and diverted resources, which looking back on, was not the best choice.
Nathan: So, essentially, ’cause what you were doing at that time, I think there is a lot of merit and it is actually quite smart because you’re finding a problem internally within your company. And you’re trying to fix it to help you scale faster with your company that has traction, but instead of spending all this money to develop whatever this, it could be just, if you wanted to, you could just keep it as an internal tool. Not all of these, from the sounds of it, but you’re essentially turning a cost centre into a profit centre because instead of just keeping it as an internal tool, you’re going off and white labelling it and selling it and making a product. Is that a good breakdown?
David: Yeah. I think Chargify’s the best example of that, we built the billing system times so we were experts at it, we could do it very well and very flexibly so we built something from that. I think the problem is it’s great to solve your own problems but we were marketing to SNBs, so one to 10 employee companies, micro SNBs, very, very small companies. And we were solving problems for a 40 or 50 person company of a high growth scaling company. So, none of the things we developed we could sell into our customer base. And we didn’t understand that until probably a year in that we’d made that mistake. And the things we were developing, even though they were good, had a different sales process, a different way of selling more enterprise than what we were used to. Things that we weren’t experts at because we solved the problem of a fast growth, mid sized company.
Nathan: So, you said Grasshopper was for the mid growth and then Chargify was for the very, very early stage, for charging, yeah?
David: So, the other way around. So, Grasshopper, our customer was tiny companies, one to 10 employee companies. Chargify, although we had early stage companies, they were definitely more mature, different sales cycle, they’re making it a very deep buy in decision with APIs and how integrated did they get compared to a phone system, you get a phone number, you turn it on and you set it up. That’s a very different buying question and scenario and the way you sell. So, Grasshopper, we had no sales people. It was all buy online and call us if you have questions, we’re always here. But, we didn’t have sales people or anything like that. Chargify needed the opposite, we needed someone to respond to RFQs and we needed someone to hold hands and build relationships with larger customers, things we were not experts at.
Nathan: So, this is interesting because from a point of reflection, it’s kind of what we’re discussing, ’cause I know Chargify, I’ve looked into Chargify. Grasshopper is a very well known company as well. So, these are both T1 brands in what they do. But, from a point of reflection, you haven’t said it but you’re kind of saying maybe it wasn’t the best choice. So, just looking back, I just wanna come back to that, do you think that you should have done some of these internal based projects, turn a cost centre into a profit centre, or do you think you think.
David: I think Chargify is the only one that made the most sense ’cause it was clear we had an expertise there. But, to answer your question is no, I don’t think we should have. I think we should have focused on Grasshopper and grown grasshopper and just exclusively focused on it.
Nathan: And you said you got it to 30 mil in annualised revenue, do you do think, just from a guess, I’m just curious, you ended up selling it to Citrix and it sounds like it was a great exit. But, do you think if you hadn’t have had these internal tools and things that you were building, do you think you could have got it to much higher, like how much more? I’m curious.
David: Yeah, good question. I don’t know. I think that it would have continues on that pace just quicker. So, we probably would have been at maybe 35,000,000 instead of 30,000,000. Which, when you look at multiples, A, becomes meaningful, so I think it just would have changed the speed of growth, the trajectory a little bit. And moved us up on the time cycle of that happening. But, no, it’s gonna say that we would have been at 60,000,000. I don’t think that’s a expectation.
Nathan: …a thought. So, what happened next, you guys sold to Citrix, how did that come about?
David: So, Citrix came to us, kind of out of the blue via someone I knew that worked there and they said they were interested in talking. That progressed over time and we’d always been contacted by people from VC firms to PE firms to companies that wanted to buy us. I think always a privately funded company is an interesting target because maybe they have different expectations or return because they haven’t raised capital, a little more flexibility. So, we always just said no because when we started the company we had no exit plan. Our goal was to build a company we loved being at and loved doing what we were doing. That was it. So, when Citrix came to us, it kind of developed over a year period. And found that it was a really clear, good fit for everyone where we could keep the brand name, keep the team intact, continue to grow the company, which is something we really cared about. As well as, from a founder perspective, diversify risk a little bit, take some money off the table, those types of things. So, it would all fit together at the right time, I think.
Nathan: So, you had a period where you were still there and now you’re just on Chargify or what happened?
David: So, great question. As soon as we sold the company, both me and my co founder left which was very emotionally difficult. But, it was best for both the company and Citrix. We had a management team in place, so clearly the company could continue running without us. Citrix had ideas for what they wanted to do, strategically, and they didn’t really wanna find two more positions for highly paid executives with titles that are kind of meaningless in a big, public company. They’ve made over 30 acquisitions as a company. So, us leaving, I think, was the best. But, it was very difficult. Sale closes, yeah, that’s great, it’s exciting, nothing changes in life, it’s a thing that happens.
But, the emotional side of it is very difficult where all of a sudden your email address changes, your phone number, your identity. Like for 12 years, I was the guy involved in Grasshopper and I ran Grasshopper. That’s who I identified with and people identified me with. And that just changes over night.
Nathan: And how long did it take, or have you felt comfortable with that?
David: I think it took about a year. It’s been two years. I’d say it took about a year to find what I was gonna do next, testing out a bunch of different things, finding the identity when someone said, “What do you do?” You have to kind of adjust and say, “I used to run this.” And not necessarily have an answer of what I’m doing right now, today, that’s as interesting and impactful as Grasshopper was. So, about a year, I’d say.
Nathan: But, you did have Chargify at the time, right?
Nathan: So, you’re still running that, yeah?
David: I jumped back in, I invested more time and it’s an easy out, like oh look, I’ll just go do this. And then we sold Chargify and a very different type of sale, not a strategic buyer to a fund that I’m an investor in anyway. But, again, that took away the next piece. So, I struggled again, which was probably about six or eight months after the sale of Grasshopper.
Nathan: And how did that work like with Chargify, did people work in the same office or were you guys fully remote and the team was, eventually, a portion Chargify and then the rest Grasshopper and then when the acquisition for Grasshopper came, they obviously, the team split, you still got to hang out with some of the people on your team? Or how did that work?
David: Yeah, so the teams were always separate. I used Chargify as a testing ground for a lot of things. So, if I wanted to test technology, it was very easy to do so when it was a team of two people building a small product, we could make decisions very quickly compared to a product that had to support millions of users in a real time basis. Same was true for team structure. So, we built Chargify separate from Grasshopper and 100% remote, so those employees were never in the Grasshopper office. And I interacted with them 100% remotely, built the systems and processes around that. So we had quarterly meet ups together, yearly meet ups that were longer that we all worked together, met at conferences, that type of stuff. Developed and played with a lot of the tools for remote work. Zoom, which is amazing now, was not around then. So, we even played with PlayStation ’cause, at the time, you could have this virtual chat room with video. We got PlayStations for everyone and we played with that.
We tried all sorts of things to work that remote work environment. And Chargify is still remote today even though it’s been sold. Very different than Grasshopper where we were not.
Nathan: I’m just curious around, it’s funny because I’m actually, personally in this, not the exact same similar situation as you, but where we’re building an internal tool for our company and we wanna, similar situation, turning a cost centre into a profit centre. Fortunately, we’re serving the same market as we’re serving with our core company and brand. And the sale cycle will be very, very similar because it’s the same kind of customer base and audience base. But, I’m curious just around resourcing with Chargify did you pull the internal resources for Grasshopper from a customer success and help desk? ‘Cause you can get economies of scale there, did you do that?
David: Yeah, those are some of the best areas. Especially customer service and customer support where people have idle time and picking up an additional ticket is marginal time and cost, but has a lot of value. And training is relatively low. So, I think that’s good. Some of the areas I have more concern is, so development was always separate, design was always separate. We started pulling marketing resources and that gets very convoluted, even just the idea of how much time should I dedicate, we asked people to start tracking time. Which was just a disaster because we didn’t come from a world where, we weren’t an agency where people expect to track time and we started trying to get people to do that. So, it was more overhead for no reason. But, I think you make a really good point about customer service and customer attention, those things are awesome overlap.
Nathan: Did you find overlap anywhere else?
David: Yeah, for sure in back end systems. So, operations and support and dev ops, things like that. So, supporting an additional three servers was marginal time and cost. But, had tremendous value compared to having to set up separately.
Nathan: And then, of course, you can do payments, you can do CRM, you can do your email, you can do it all under the same house, even servers, everything, you can host it all the same, everything. I’m curious how come, then, when you launched Chargify, you did not code brand it with Grasshopper, so then it felt like it was under the same brand? Still separate companies, strategically, and if you think of two different pies, but, how come you did not do that?
David: That’s a great question. So, we tried doing that and we did it under this Grasshopper labs concept where we kind of created this brand and identity and we had a bunch of different things and we kind of all linked from there. I think the reason we didn’t dig into that deeper is because we were serving different customer bases. So, it helped build trust and respect that we could say, “From the founders of Grasshopper,” when we did Chargify. But, having the brand there because there wasn’t that direct overlap, there wasn’t as much value. I think if there was more overlap, we would have done that. It would have been, “Chargify by Grasshopper.” Or something like that.
Nathan: So, I guess the bit of sticking point was different markets?
Nathan: And talk to me around, I’m sorry, David, I’m just getting a little bit selfish now, I’m just curious for myself.
David: Yeah, of course.
Nathan: And sometimes these are good interviews. So, obviously, there must have been some overlap, I know both of your products that you’ve created. And like our company founder, could actually use both, Grasshopper and Chargify. So, obviously you build up Chargify at that point for six, seven years before you started Chargify. So, you’ve got a lot of great SEO, you’ve got a great domain authority, probably, I know Grasshopper were great at content marketing. I’ve seen some of your stuff even from our perspective, from an entrepreneurial content perspective. I’ve seen some of your stuff around. So, you did have strong domain authority, obviously you would have been foolish when you launched Chargify to not wanna be out and push as much traffic, as much link juice and leverage that you have with that brand equity to Chargify. Talk to me, did you do anything strategically from a marketing perspective to grow Chargify and just get legs faster or use that leverage?
David: Yeah, for sure, we definitely did some organic links and things like that to get that going. We used a newsletter a little bit more, where people were actively engaging, so we announced that we were launching this. We did some promos where we said, “If you’re a customer of both things, we’ll give you a discount.” As both a way to promote but also a thank you if you’re using both products. We probably should have done a little bit more segmenting the customer base and understand who might be good users. But, we didn’t, quite honestly.
Nathan: You just blast them all. That’s just what it is, you’ve got so many things going on. And what about the two sites? Obviously, you would have set up two separate sites, do you think it would have been possible to carve out a spot on the Grasshopper site, if they were both going for the same audiences, it would have been possible to carve out a part of your site instead of having a whole separate site and having to build from the ground up? And create content for two separate sites, et cetera?
David: Yeah, I think, yes, if there was more overlap, we would have done that much better. And I think, looking at examples of people doing that today, startups.co, I think does that very well, where they have a number of things under their platform of their brand that are all relatively similar in type and audience but are individually branded and are quite different in brand.
Nathan: Yeah, me and Will, one of the co founders of startups.co, we go way back and we’ve interviewed him for the podcast as well. Very smart guy.
David: Yeah, I love Will, I invested in the company and I love what they’re doing.
Nathan: Oh, amazing. So, well, look, we have to work towards wrapping up, David. But, so you ended up selling Chargify to P&E. And what are you working on now, what’s next, what’s exciting for you?
David: So, I think I made a real big shift. So, what I’m working on now is really this book that I’m releasing in 2019 called, “Evolve: Optimise your life, body, and mind.” And really taking two things that I’ve found in business. One, I built a framework for optimising health, mind, body, soul, whatever you wanna optimise in your life, even productivity. It’s really a simple framework, it’s just an agile testing framework but applied to these different areas. And then, two, applying all of this content and things, I’ve spent far too much time reading and going to conferences and educating myself on everything from diet to exercise to supplementation to sleep. And sharing that with others. And we talked about after the sale of Grasshopper, how did I find or was it difficult, after a year, I really came back to and found my core purpose in life and that’s empowering others.
At Grasshopper, our core purpose as a company was empowering entrepreneurs to succeed. So, I’m working on other companies from technology to food and everything else. But, really, my core purpose is empowering others and hopefully the book will help do that.
Nathan: Amazing and talk to me, you said you’re working on some other companies. Can you share about those or are you just investing in other companies now?
David: Right now, the focus has been on investing. But, I’ve shifted that more recently and I’m working on a few things that we haven’t yet announced. One in the health space, kind of data analytics that’s interesting, doing things like that. I really wanted to change my life and that included changing my exercise and diet and I went from doing extreme endurance sports to practising yoga six days a week. Like massive change. Losing 30 pounds, feeling way better than I’ve ever felt, doing those types of things and my goal is to be able to integrate that into the companies that I start working on now, is to help people make those changes.
Nathan: Amazing and can we touch on this new book around the health, the mind, the body stuff because I can see that you’ve done some talks at EO, were you a member or still are?
David: Yeah, I was a member for 12 years.
Nathan: Well, there you go. So, I’m a member, too. One thing that came up in my forum was, which I’m sure it would be a recurring theme throughout your former experience as well is just as founders, we sometimes discount the price of success for our health. And I’ve even actually had a really close friend of mine pass away recently and one thing I’ve learned is health is only valued when sickness occurs. And it’s easy to forget and it puts things into perspective and I think a lot of the time, as founders, we do tend to make a lot of sacrifices, not just in our time, where we could be doing other things because it has to be an obsession if you wanna build anything of true worth and significance. But, also, it’s easier to just work that extra half an hour or get just all consumed around doing so many different things because there’s so many different ways you can grow this business or do this and do that. And then if you’re like me or you, then you got another company you’re thinking about or working on.
And it’s just so much and where do you find time to eat well and have an active lifestyle where you’re doing gym, sports or any sort of exercise. So, it is difficult, sometimes, for founders, I’d love to hear your thoughts. I’m definitely no kinda massively ripped guy that’s in the best shape. But, I’ve always been a very big fan of going to the gym and using it as a form of meditation and I believe that if you wanna be able to perform at the level of a really high calibre founder, it is actually part of what is required, especially for your mind. But, I’d love to hear your take and your thoughts and what you’d love to share with our audience on this particular topic.
David: Yeah, for sure. You make a great point, it’s always easier to work an extra hour, past midnight, because no one’s bother you. It’s easy to pick up the phone and call for pizza because you know that you get that instant boost and gratification and you can continue working for an extra hour.
Nathan: Uber eats now, man.
David: Yeah, exactly. But, I think it’s always easier, but at the end of the day, what I care about is output and productivity. And I don’t think there’s very much value in that extra hour of work when it is low productivity and low value. And it’s just work for works sake. And I’m actually not the biggest proponent of lots of exercise. I don’t think that that’s all that important. I think moving to some extent is important. And maybe that’s getting up from your desk and walking for five or 10 minutes and, to me, that touches a little bit more on what you said about meditation and mindfulness where maybe it’s better to have that five or 10 minute break from work and move. It doesn’t mean you need to go for a bike ride or run or even go to the gym. So, I think that’s the important take away. And then, for me, I use the gym 100% as routine. I am a huge believer in routine, if you talk to the most successful people in the world, most of them will tell you routine is very important.
And routine doesn’t necessarily mean anything specific other than it’s the same thing you do everyday. Each person’s routine is different. My routine is I get up, I do a little bit of work, I take my supplements, I take the kids to school, I go to the gym, that’s my routine. I do it day in, day out. Even if I’m not gonna work out at the gym, I still go there and it’s part of my routine. It sets me up for success for the day. So, I think things like that are interesting to think about as founders. And then there’s also a bunch of categories that don’t necessarily take time but do take effort. So, as founders, understanding our sleep patterns, improving our sleep patters, I think, has tremendous effects and gains on our productivity the next day, the next week, the next year, that we don’t realise.
And that’s not like you need to go to the gym, it means you need to go to bed earlier is the easy answer. Go to bed between 9:00 and 10:00 at night and wake up around 6:00 A.M. That improvement will far outweigh going to the gym for two hours everyday.
Nathan: How did you work that out? ‘Cause you said you were doing a lot of experiments?
David: Yeah, I was experimenting on myself and consuming in massive amounts of content and testing. I’ve done every possible test from blood tests every quarter to stool tests to DNA and whatever else that I could possibly find. Sleep tests where they put the 52 things on you and you go to a lab and sleep. So-
Nathan: Bio hacking, you’ve gone bio hacking hardcore.
David: Yeah, I’ve gone to an extreme, but I think the idea with the book is allowing people to understand that their life is a self experiment. And doing little things like, maybe it’s just buying a new pillow for your bed and it reduces back pain, you sleep better, it’s a 30 or 40 dollar investment but it could have massive gains because each thing in your life is an experiment because you’re different than everyone else.
Nathan: I love it. Well, look, we have to work towards wrapping up, David, super mindful of your time as well, mate. But, with respect to your book and your work and everything you’re working on, where’s the best place people can find out more about yourself and if they wanna get a copy of your book when it comes out?
David: Yeah, for sure, evolvebook.com or davidhauser.com, either of those. You can sign up for the mailing list and get early access, an exclusive chapter all about coffee, which is, I think, super interesting for entrepreneurs that may use caffeine as a tool in their tool kit. And I think it’s actually a great tool when used the right way. So, either of those locations.
Nathan: Awesome, well we’ll wrap there, mate, but thank you so much for your time.
David: Thank you so much.
Key Resources From Our Interview With David Hauser
- Visit UnstoppableBook.com to be notified when Hauser’s new book is available