In February of last year, Appcues – the user activation and onboarding tool developed by Jonathan Kim – closed a seed round of $2.5 million, thanks to investors like Brian Halligan and Dharmesh Shah. That’s on top of the company’s initial seed round of $1.2 million in 2014, bringing Appcues’s total funding to $3.7 million.
That’s a huge accomplishment for any company, but for me, it’s not the whole story. I’m every bit as interested in what got Appcues to this point – in the hard work and hustle that led to the company’s eventual success.
That’s why, after an introduction from our mutual friend, Appcues cofounder Jackson Noel, I jumped on a call with Jonathan to learn how the moves he made early on helped him bring Appcues to life.
From Journalism Major to Startup Maker
Jonathan doesn’t come from an entrepreneurial background. In fact, he has a journalism degree from Boston University – the cost of which he describes as having led him to work in computer science.
“I had to get a job to pay for school, and the highest-paying job I could find was in the computer lab,” he says. “I started toying around with computer programming, and I started getting better and better at it. I started working at a dev shop through my junior and senior year; when I graduated, I was looking at the prospect of going into the journalism job market. I decided not to do that. I was either going to do a startup or join an early stage company, and that’s how I wound up at Performable.”
At Performable, Jonathan was employee #8 out of what would grow to 20 total before he left for Hubspot. Both experiences gave him exposure to the growing pains startups face – lessons he still takes to heart at Appcues.
“It was cool to see how the middle-stage culture starts to solidify and how processes start to break down,” he explains. “Then, going to Hubspot, it’s a totally different set of skills and people you need. We were 200-300 people when I joined, and I stayed with the company through about 700 people. It was neat to see what comes after that really early stage, and that perspective helps shape what’s really fundamental when you’re small.”
Leaving Hubspot to Launch Appcues
For Jonathan, entrepreneurship was always the goal. He explains, “I knew when I joined Performable that I was in that bridge between joining a startup or doing one on my own. It was always my plan to do that.”
And while he learned all he could working for Performable and Hubspot, Jonathan’s exposure to the challenges involved in onboarding and activating users within new tools and systems gave him the idea for the engagement processes that would drive Appcues. But before making the leap, Jonathan hustled hard to put himself in the best possible financial position.
“I paid off all my student loans and started saving money,” he shares. “By the time I left Hubspot, I had $20,000 saved up, and I invested all that into starting the company. I moved out of my expensive apartment in Central Square and into an attic with two roommates and my girlfriend, which took our rent down to like $500 each. I bought a bike on Craigslist for $100, and I biked everywhere because I was too cheap to buy a bus pass for $75 a month.
(As a side note, Jonathan recommends that anyone thinking of going the same cheapskate route he did not start their companies in East Coast towns during the winter, as the bike commuting he experienced was brutal.)
Jonathan cut his costs in other ways, explaining, “I was eating steel-cut oats everyday and a good amount of ramen. I spent probably $100 per month on non-rent, non-utility expenses. When you’ve got $20,000 to last indefinitely, you really have to figure out how to make it stretch. Until we actually started paying ourselves after our seed round, I had $500 left in my bank account.”
From 23 Customers to 23 Employees
Thanks in large part to Jonathan’s frugality and forward-thinking, Appcues took off quickly. One smart decision he made was to take on consulting opportunities shortly after leaving Hubspot that showed him exactly where his target consumers’ pain points lay with regards to user onboarding. Another early win was a listing on Product Hunt in 2014, which left him with 16 customers who’d promised to pay for his solution (once he finished developing it, of course).
A speaking gig led to a connection with Appcues’s cofounder Jackson, and the pair quickly brought on their first hire in John Sherer, Director of Sales. Jonathan noted that the move was unorthodox:
“The first person we hired was John, who was a salesperson. People are always surprised that we didn’t hire a developer first. But John was literally calling people asking why they weren’t buying and trying to get them to buy. The idea was that he’d learn so much more around the objections and the real must-haves for product that he actually became more effective for product than a developer would have.”
The team’s hard work, hustle and instincts paid off. Appcues, which started with three employees and 23 customers at the start of 2015 now boasts 23 employees and 530+ paying customers – none of which would have been possible without Jonathan grinding it out in the company’s early stages.
If you’re thinking about launching your own startup, Jonathan’s example is a great one to follow. Crazy valuations and flashy exits are fun to watch, but at the end of the day, it’s the kind of hard work and hustle he’s demonstrated that leads to real success.
To catch up with Jonathan, visit the Appcues website or follow him on LinkedIn. Or, for more info on our conversation, leave me a comment below with your follow-up questions: