SaaS Interviews with CEOs, Startups, Founders
How Wil Schroter Made Money at 22 years Old to Eventually Launch Startups.com
19 Aug 2020
Chapter 1: How did Wil Schroter make his first million at 22?
will schroeder was born in 1975 and launched his first company in 1994. that company was an agency which he grew to 1.6 million dollars in sales by 1995 and ultimately two years later in 1997 sold 51 of the company for north of a million dollars he was 22 years old and this was his first cash event in life that gave him a little cushion
Ultimately, that new company grew to about $150 million in top line sales and $25 million of net income. That company then was bought by Dan Snyder in 2002, the current owner of the Washington football team. That was a $300 million deal and was a second cash event for Will as he looked at what to do next.
That next thing ended up becoming startups.com, a full encompassing suite of tools to help entrepreneurs launch their business. But it wasn't always easy. Will went through many different ideas like swap a lease or afford it, an early version of a firm which is about to go public. Many of these companies he raised for, but ultimately shut down or failed, or they kind of just hum and hoed along.
But ultimately, startups.com pursued a strategy of buying companies and growing ones internally like Fundable. Today, the platform does over $10 million in revenue. It's an eight-figure business. has over 100 employees, and Will continues to scale it.
In this interview, we dive into how we acquired all these assets, like Zirtual.com, which back in August of 2015 was doing $11 million in top line revenue and $5 million in costs, helping brands get freelancing teams up and running, essentially virtual assistants.
But ultimately what happened was that company two or three days later was in a lot of trouble, according to the CEO, and Will ended up taking it over in a 24-hour all-stock deal. We dive into Will's entire backstory, all of these deals, and how Startups.com came to be today in this wide-ranging interview. Let's jump in. Hello, everyone. My guest today is Will Schroeder.
And if the name rings a bell, it's because he's building an empire, an empire focused on startups at startups.com. He's built this thing starting with his own incubator. Now, multiple brands under that one company really focus on helping that early stage entrepreneur do a variety of things, which we'll dive into today.
But it all started back in 1994, which we're going to dive into here at the top of the episode. Will, are you ready to rock and roll?
Yeah.
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Chapter 2: What challenges did Wil face while building startups.com?
Not knocking people who do, just saying for me, it just didn't seem like maybe the hardest thing to do. And I was just coasting through college at best because at the time I had two full-time jobs, so coasting being relative, and college just wasn't important to me.
How old were you at this point? You were born in 1975, I believe, so you were how old?
So let's see, I would have been, yeah, roughly 19, give or take. And, you know, it's important to know because a lot of times when you hear about entrepreneurs building something and kind of hear their backstory, how they built something, you really don't understand where their head was at even going into it.
You know, a lot of what you'll hear is, because I've talked to a million founders, I had this crappy job or I had this opportunity and I saw somebody else and it inspired me, etc., I came into it just backward.
The only reason I understood anything about technology was because when I was, I'm trying to think back, probably nine or 10 years old, I had one of the first computers, a Commodore 64 computer, and I'm a huge video gamer. So I loved, loved, loved trading video games.
What was your go-to video game back then? The one you traded that you made the most off of?
Well, the one that changed my life was a game called Fourth and Inches, which was a football game. It was around the tech mobile era. And it was on the Commodore 64. And I go over to Jeff Zapatka's house. And Jeff has a copy of Fourth and Inches. But back then, you couldn't just get games. You couldn't download them, or so I thought. You just had these five and a quarter inch floppy disks.
And if a buddy had one, you had access to it. You could copy it. It was the most beautiful thing in the world. But that was our go-to kind of currency. And so Jeff Zipaka somehow has fourth and inches out of the blue. And so I'm like, dude, how did you get this? And he says, well, I downloaded it. Like, whoa, what's a download, right? Now, mind you, this is like circa 85, 86.
So this is a very long time ago. And this is way, way, way, way prior to the internet as we know it.
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Chapter 3: How did Wil transition from agency work to startup incubators?
I got two full-time jobs. During the day, I was a telemarketer selling mainframe computers. This is circa 92. At night, I made delicious sandwiches at this place called D'Angelo's, which was like a subway at the time. And so I worked from eight to five and then five to one every day. And I had so much energy back then. Like people now are like, oh my God, two full-time jobs.
Well, it's like, who cares? I got all this extra time, right? I'm otherwise sleeping. But at the end of my senior year, I had this other kind of bizarre moment. And all these things are going to tie together. At the end of my senior year in high school, all my friends at the lunch table are sitting around talking about where they're going to go to college. And this is such a loser moment.
It occurs to me at that time that I haven't even applied for college. Like I didn't even know that was an option. And so it gets around to me and like, hey, where are you going to college? I'm like, I'm going to UConn because everybody else was going to University of Connecticut. And so played it off like nothing happened.
Then it ends up getting back to my family, most specifically my grandmother, that I was getting into college. Mind you, my family didn't really understand college real well. So all of a sudden, I'm like the golden child. Oh, Will is finally going off to college. And I'm like, oh, come on, man.
And so instead of just letting everybody down gracefully, I instead started going to college for almost an entire year without actually being a student. So I had my two full-time jobs when I graduated. And then on the weekends, I went to school full-time as an actor. It was this bizarre kind of chain of events.
A year later, I transferred to Ohio State University where I've had kind of a business and a home ever since.
And the Ohio State transfer, was that a legitimate, like there was, you got in, there was something you wanted to study?
I was still an actor because the funny thing is I still didn't care about college. Although I'll say this, when you're making $5 an hour and that's what you're using to pay tuition, you kind of have to start to care about college a little or you really shouldn't be there. By the way, I was more in the camp of, I probably shouldn't be there. I hated college.
So how much do you, I mean, do you remember how much did you, had you saved up working at D'Angelo's and as a telemarketer before you applied to OSU? I mean, how much was in your bank at that point? You remember? Zero. I mean, I was making a few hundred dollars a week.
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Chapter 4: What lessons did Wil learn from his early startup failures?
It was a company called Seacom. Definitely not around anymore. And we were selling essentially mainframe computers.
Okay. But when did you stop Seacom then? When you launched NGDA?
I did. I did. And at the time, I remember thinking, like, I have no idea what it means to start a business. It didn't feel like a business the way we think about it now because we see a Mark Zuckerberg and we think of what a business can be. Mine was just a means to an end. I wanted to build web pages just more than I wanted to sell mainframe computers.
There wasn't a lot of passion in it yet because there was no way to know what you could get out of it, right? It just seemed like just another scheme, if you will.
So take us forward to the next year, 1995. What happened in 95? Did you build the team at all? Were you on the same spot? How much in bookings did you hit?
Not much. We're still doing ones of thousands, maybe tens of thousands at most. But we're starting to get access to bigger clients. Some of our bigger clients around that time were like Chase Bank, MasterCard, Intel. And when people hear those names, like, wow, those must be huge contracts. Nope. Still selling projects for ones of thousands of dollars. I had no idea how pricing works, right?
I just didn't understand. I wasn't an agency guy. I didn't have access to an agency guy. So I'm selling this stuff so I could get these guys on my resume, my portfolio, but no idea what I should be charging. At the same time, I don't really know what I should be paying my staff. And they're all students, so they don't kind of have to work for anything.
But there was no big upside back then of, hey, maybe I'll work for equity and make money. Back then, people didn't understand equity. They were just like, you're either going to pay me or you're not. And so anyway, so we start growing by virtue of getting more portfolio clients, but not really making a lot of money. A year later, we get connected with a small ad agency called GSW.
GSW had been a Columbus-based agency, traditional agency, for 20 plus years at that point. And they brought in a new executive, a guy named Blaine Walter, great guy. His dad had started Cardinal Health, which is one of the largest companies in the world. And Blaine was really fired up about growing the agency. And I remember he and I sat down at a restaurant. I was 22 at the time, he was 26.
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Chapter 5: How did acquisitions shape the growth of startups.com?
I see. Okay. So just to summarize, because then we're about to get into a new part of your life, right? So between sort of 1997 and 1998, sort of 2000, you guys grow the business to $700 million in top line bookings as an agency of which there's about $150 million of gross revenue.
And then after you pay your expenses, you have about 25 million net hitting the bottom line, which you're reinvesting to drive growth. How long did you stay active in this company? When did it end?
Well, it sold in 2001, 2002. It sold to a guy named Dan Snyder who owned the Washington Redskins and had made an ungodly amount of money, which is why he owns the Redskins, in a pharmaceutical outsourced sales organization or something. I can't even remember anymore. This is a public record. It sold for a little over $300 million in cash. In 2002.
Yeah, which is about 2x our top line of real bookings. Real bookings being like the project-based bookings. So it was a great outcome.
And so, I mean, paint this picture a bit for me and you have to just, I have to apologize for prying. But again, I think these early moments where founders generate some cash is what allows them to go take like the second and third swing at that. And that's where they really start to go for and swing for fences, hit home runs.
So you had a bit of a cash event, you know, event back in 1997, when obviously Blaine came in and bought for a million bucks. I assume you took some out off the table, but it sounds like this potentially the sale to Stan Snyder was also a cash event for you. Can you explain how that worked to the extent you can?
I can't, unfortunately. That's all sealed. But let me give you the insight that I can give you. Number one, What gave me incentive from that point on wasn't having some cash. I know a lot of people believe that. But I think there's a lot missing that a lot of folks don't understand. There's two versions of having cash. One version is having enough that you feel safe.
If shit hits the fan, you can absorb that. And I think that's not nearly as much money as people think it is, but it's helpful to have. The second is the kind of money where you can just place bets. and be okay if you lose. Very few people ever have that kind of cash. My incentives weren't coming from having some money that I could place bets and lose from.
My incentive was coming in a totally different place. I felt like this was an awesome outcome. I was really proud of what we built. And I felt like unless I could do it again, that I was a one-time hit, that I was a fraud, that I just happened to be lucky. I was in the right place at the right time. And I have to do it again.
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Chapter 6: What strategies did Wil employ to raise capital for his startups?
We did afford it. We did unsubscribe.com, which is a really cool company. Um, And then after that was startups.com. I think there were some in the middle that kind of, you know, never got out of the nest. But those were ones that started to get some level of traction and had, you know, dedicated staff.
And subscribe. I think you guys raised 2.1 million there. Was that sort of a soft landing or was that a good cash event?
We didn't really make much off that. That was just, that was interesting learning. That was me and Jamie Siminoff who started Ring. And it was an idea I had for a long time. Jamie and another guy, Josh, wanted to go in and start it. But I was busy doing too many other things. And we raised some money. Jamie was leading it, doing as much as he could. Obviously, he's a great CEO.
Look what he did with Ring. But it just couldn't really get escape velocity. And then we ended up selling it to a company called Trusted Idea.
And I don't even know if they're around anymore. Yep. Okay. So let's keep sort of moving forward here. It's 2000, again, 2002, you start getting these ideas going. You have some success, 2004, 2005. Where does Virtucon Ventures come into play and what's that do?
Virtucon Ventures was essentially what I renamed NGDA. uh, back from 95 to be my holding company. Um, in all of these things. So BirchCon is really just been, uh, my holding company entity for everything that I own.
I see. Interesting. Okay. And then, and then, so walk us through, let's sort of fast forward today. Cause there's a lot of stuff you're testing a ton during these next 10 years, testing new ideas, throwing stuff against the wall. Let's, let's fast forward now to like what stuck. So what, what are the brands under startups.com today?
Um,
Okay, so startups.com, as I mentioned, just to kind of give it context, carries people from the idea stage all the way through launch. So there's a lot of points people get stuck. So right now we've got startups.com, but within that we've got bizplan.com, which is a business planning tool, as you might imagine. We've got fundable.com, which allows people to raise capital.
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Chapter 7: How does clarity.fm support entrepreneurs and experts?
Surprises you, your customer. You immediately do the Will Schroeder playbook. Get on the phone, 20 deals, you try and work out a deal. What the hell was going on with Zirtual?
That was one of the most unusual deals I've ever seen. I mean, I've seen a lot of stuff. I've met someone for almost 30 years. I work with thousands and thousands of founders. And I mentor an ungodly number of companies. I've never seen something like what happened to them.
And whenever the question comes up, the first thing I always kind of think in my head and want to make sure I reflect is that Marin, who started the company, who you referenced in the interview, started a rocket ship. Um, it hit just a weird hard right turn that no one saw coming and it just had to do with a, with a broken financing.
It was a financing that was supposed to go through at the last, last, last, last minute. It didn't go through. and they were stuck holding the bag.
But it wasn't just, hold on, Will, I want to dive deeper here because I think this is a bigger problem with VC. It wasn't just that. At the same time, she moved about 400 contractors from contract labor to fixed expenses on her personal, I believe, balance sheet, which juices up your headcount costs by about 30%.
VCs at a board meeting would say, you should make these moves, especially if it's going to increase your valuation on the round. And if the round falls through, you're cooked. Would Marin have made the decision to jack up her fixed expenses so much if she felt that next VC round wasn't actually going to happen?
Just in all due respect, none of that's true. But by the way, it was the popular narrative that was kind of like pushed out there that it was all about the hard costs, etc., Let me give that a little more detail because it's one of those things where when Zirtual kind of went under overnight, they were killing it last week and they went under the next week. Nobody knew what the hell happened.
So people just started guessing at what some of the problems were. At the end of the day, the problem was... The money didn't get wired to their account. I would say there was a separate issue that had nothing to do with them shutting down that was their economics were broken. Incidentally, it didn't have to do with W2 versus 1099. That's actually a super easy problem to solve.
the reason their economics were broken was because there was nobody at the wheel paying attention to utilization. And I'll give you a really, really simple calculation. Remember, I came from professional services, so I understood this very well.
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Chapter 8: What is the future vision for startups.com and its brands?
A lot of people just don't want to pay the monthly fee. Yep. So they pay for a lifetime access.
Okay. So there's only two pricing options, lifetime access or $29 a month.
We did it. Uh, sometimes we'll run a one 99 a month or one 99 for the year for access. So we're basically just taking the 29 and combining into the one 99, um, for, for a one year, uh, annual access plan.
Okay. Very cool. And, um, are you comfortable sharing? I mean, do you disclose how many customers you have on the platform today?
Uh, how many paying customers? Well, it's an eight figure business, but I can't run backward on all the numbers.
Uh,
So eight figures, we'll leave it at that. But just to clarify, I mean, that basically means the company's doing north of 10 across all the platforms, north of 10 million bucks a year in revenue. Correct. Correct. And how many, how many employees? Debt free, 200. 200 debt free. We love debt free too. 200 folks. And there's been a lot of this that you've opened.
I think you moved a hundred ZAs into a kind of a startup facility in Columbus, Ohio, I believe. Is that accurate?
We were going to. Thank God we didn't. We were also going to move all of our staff into a Columbus facility. But we decided a few years back to just do mostly virtual. We have about 30 people in Columbus. And up until a couple months ago, we had our office in Columbus as well. And we just got rid of our office. But we've been mostly a remote company since inception for about eight years.
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