Opinion
Harris: The Venture Capital Model Is Effectively a Ponzi Scheme
“Because that VC model is, if you were, if you're being a little bit mean about it, you'd call it a Ponzi scheme. Because people have to lose.”
Insight
Founders should exploit venture capitalists for upfront capital, not seek friendship
“And they're not your friends. You know, what they're doing is they're making money from your decision to go into business as an entrepreneur and make money. And that's a different thing, and you, my view would, oh sorry, my view would be, you know, exploit the…”
Opinion
Harris: Benchmarking remote global pay to San Francisco rates is anti-competitive
“I think it is anti-competitive, frankly, to say to people in Romania and Morocco and South Africa, you have to compete with people working on the west coast who need to pay a whole lot of stuff in, in terms of rent the one bit of leverage you have, which is yo…”
Opinion
Engineering is now the easiest core startup function to outsource
“Now I would say, actually, nowadays it's probably easiest to buy in tech Ironically, engineering, because there's so many fantastic agencies that do it. As long as you've got a very good, strong product desire, you can basically hire people to do that for you.”
Insight
Top startup performers grow internally from modest salaries, not expensive hires
“I've never experienced the idea that by going out and paying, you know, a huge salary, I'm gonna get a 10 X person to come in. All my 10 X, if you like, people who work for me now, who are on good salaries, they all started joining the company at fairly modest…”
Insight
VCs push founders to take excess capital just to deploy their funds
“VCs try to give you too much money because they're basically trying to run down the fund. They're trying to write big checks. If they tell you they're going to give you a million, they're going to try to make you take five million because they're just basicall…”
Insight
Harris: Hire at moderate base pay and reward high performance with raises
“Reward performance with high wages, i.e. Hire somebody on a moderate, conservative salary rate. If they do really well for you, by all means double their salary if you want to. Don't do it the other way around. A six figure salary does not necessarily bring in…”
Assertion Not checkable as stated
Harris: YouCanBookMe was profitable at $5M ARR before acquisition
“We've got You Can Book Me running at a really nice five million dollars a year profitable”
Insight
In-person due diligence accelerates M&A timelines and is highly recommended
“So to try to reduce the amount of time for DD, we did a face-to-face, which I'd never done before, but I a hundred percent recommend it.”
Disclosure
Harris: Capacity acquired YouCanBookMe in a 50/50 cash and equity split
“So it was fifty-fifty, 50 cash, 50 equity.”
Insight
Harris: Bootstrapped founders can accept hybrid M&A deals much more easily
“So for me and Keith as founders, we could take a hybrid offer much more easily than so many people who, as David says, Take on far too much complicated cap table nonsense at the very beginning. And I highly recommend it because as founders, as bootstrap founde…”
Insight
Founders without a five-year runway should seek venture capital
“If you can't afford a potential five year runway to get up to speed where you're hiring people, you're paying yourself, and you're feeling good about it, then that's the point to take on a financial partner who's gonna give you some of that upfront cash.”
Insight
Bootstrapping commits founders to a 10-20 year grind requiring strict boundaries
“And I just think it's gonna take you longer to bootstrap a company. So you're signing up for 1015, 20 years of your life. If you don't put in boundaries soon enough you know, it could, you'll burn out like anybody else.”
Assertion Contradicted
Harris: Tech Venture Bets Caused Over 168,000 Layoffs
“So over a 168,000 people have lost their jobs in the last couple of years from this spread bet.”
Insight
Harris: Bootstrapped SaaS companies should target 25% to 30% net profit
“If you're a SaaS bootstrapped team a company around our sort of size, you should be expecting to make 25, 30% profit, which sounds like a lot, but as I said, nobody's giving this money to you, so you need to make it yourself.”
Assertion Not checkable as stated
Harris: YouCanBookMe maintains a 4.3x pay ratio vs 201x public US average
“Some incredible ratios coming out of public, publicly listed companies in America, but 201 times Is, is, is essentially the average. You can book me as 4.3”
Insight
Harris: Stock options are efficient domestically but impractical for multinational teams
“And actually, I mean, share options are quite good and tax efficient for people in one country, but for us, we had to look at a scheme that was going to apply in multiple countries.”
Disclosure
Harris: YouCanBookMe was not for sale when Capacity approached
“We didn't go through a process. We weren't for sale. We didn't put up some big estate sign, you know, up in our lot capacity approached us.”
Assertion Not checkable as stated
Harris initially rejected Capacity's acquisition outreach
“The first time they contacted me, I said no.”
Assertion Not checkable as stated
YouCanBookMe employs 22 full-time staff and 35 total workers
“We're about 22 people full-time. And we have, we actually have an overall head count of around 35 people, if you include all of our contractors and things.”
Assertion Not checkable as stated
Harris: YouCanBookMe received multiple acquisition offers prior to Capacity deal
“We got offers. In fact, we got offers over the last couple of years. We've had quite a few offers, but I never wanted to do it because I didn't want that feeling.”
Assertion Not checkable as stated
YouCanBook.me reached $5 million ARR with over 20,000 customers
“Now for context, to get that five million, we have over 20,000 customers.”
Assertion Supported
Gumroad operates entirely with freelancers instead of direct employees
“There's some incredible models out there now of people who've just decided to not employ anybody directly, and they just go straight to the freelance market and only get freelancers, and they put a you know, Gumroad is based, based on that model.”
Assertion Not checkable as stated
Harris: YouCanBook.me has never missed payroll in 12 years
“I've never ever not made payroll for the 12 years we've been running the company, and there's only one way to do that, which is financial literacy.”