Growth Stage by FastSpring

David Vogelpohl (00:04)
Hello everyone, and welcome to Growth Stage by FastSpring, where we discuss how digital product companies grow revenue, build meaningful products, and increase the value of their businesses. I'm your host, David Vogelpohl. I support the digital product community through my role at FastSpring, and I love to bring the best of the community to you here on Growth Stage. In today's episode, I'm super excited. What we're going to be talking about is what it takes to build an enduring business

Dan Engel (00:10)
Thank

David Vogelpohl (00:32)
We're going to do that through the lens of celebrating 20 years of FastSpring, the company that puts on Growth Stage and joining us for that conversation to celebrate FastSpring and talk about building an enduring business. I'd like to welcome first FastSpring's original CEO and one of the original cofounders, Mr. Dan Engel. Dan, welcome to Growth Stage.

Thank you very much. I'm excited to be here and I'm excited we made it to such a successful 20 year journey.

David Vogelpohl (01:00)
I can't imagine what it must be like to look back on your legacy and have this be something so enduring be part of that. And I know you've done a lot since then. And I'm kind of curious to learn a little bit more about that here in a bit. Also joining us for this conversation to kind of take a look at the past and where we are now. I'd like to welcome FastSpring's current CEO, Mr. David Nachman. David, welcome.

David Nachman (01:23)
Great. Well, thank you, David. I'm also super excited to be here and I definitely owe some gratitude to Dan. Wouldn't be in my role today if it weren't for what he did 20 years ago today.

Dan Engel (01:30)
Mm-hmm.

David Vogelpohl (01:33)
Now it's so interesting to think about those long-term effects our short-term decisions sometimes have. And so we're going to try to peel back as much as we can here on this episode, ⁓ to give folks a view into what it takes to build an enduring business, what mistakes to avoid along the way and how to build a business that stands the test of time.

So ⁓ we'll kick it off. David Nachman, I'd like to start with you. ⁓ For those, maybe this is their first time seeing the Growth Stage podcast or they're not familiar with FastSpring. Could you explain what FastSpring is and what you do here?

David Nachman (02:13)
Yeah.

Yeah, absolutely. What we do is pretty straightforward. We are an end to end e-commerce platform for companies that sell digital goods on a global basis. So it's often software companies, it may be gaming companies, maybe other forms of digital goods, but the commonality for everybody that's selling on our platform is they're trying to reach a global audience, which isn't really an easy thing to do.

in commerce and payments. There's a tremendous amount of complexity there. And they're all selling digital goods. So that's what we do. I am the CEO of the company. I joined the company about six years ago, just over about a month ago from six years ago.

David Vogelpohl (02:55)
Oh, wow. Congratulations on the six year mark there. A little over 25 % of FastSpring's history, it sounds like. And then Dan, tell us about your connection to FastSpring and what you're doing now.

David Nachman (03:01)
⁓ yeah.

Dan Engel (03:07)
Well, let's see. It was ⁓ 2005 that ⁓ I met our co-founder Jason Foodman. And I had an idea for something we wanted to do having to do with upselling into shopping carts. And Jason said, well, that is a really good idea, but we're not going to be able to do it unless we own the shopping cart. ⁓

And I said, well, what if we create our own shopping cart? And Jason said, well, it just so happens I'm working with a guy on that concept to compete with Digital River, which was the 800 pound gorilla at the time that had come out in 1994, went public, became worth a billion dollars. And so we decided that we would build that e-commerce infrastructure and shopping cart capability. We never ended up doing my idea

having to do with upsells, but obviously the foundational part that we needed is what became the business over time.

David Vogelpohl (04:05)
And this is you, right? Is this from around the time of the founding? These are the original founders, correct?

Dan Engel (04:11)
Yeah, that could be. I'd have to see exactly what year that was, but that's uh — Jason's all the way to the right hand side on the other opposite end of me. then Ken and Ryan. And what's interesting is I only knew Jason, but then he knew Ken and Ken knew Ryan. So through the, I don't know, transitive property or whatever it is, we all kind of knew each other. And that's how we started working together. And we were all in four different states from one another.

And ⁓ we did it despite not being in the same place. And we actually went for about four years, I believe, without ever even seeing each other. Everything was just email and ICQ, which is chat. And maybe every six months there'd be a phone call. But some of the guys weren't the type of people that were dying to get on the phone or meet in person that didn't have the same personality as maybe Jason and I did as kind of the more salesy front of the business.

David Nachman (04:50)
Thanks

David Vogelpohl (05:05)
Was that the balance between you four where you and Jason were more on the business side and the other two for Ken and what's the other person's name? Yeah, Ryan. ⁓ and they were more technically focused.

Dan Engel (05:15)
Ken and Ryan. Yeah, totally. Yeah,

Ryan just was an awesome coder. He was probably the best guy on the planet to build what we were building. I mean, that's what Ken said at the time, because he had built a company called RegNow, sold it to Digital River. By the way, all three of the other guys built and sold companies like FastSpring to Digital River. So we knew this space really well, and they knew it even better than I did. But yeah, Jason and I were on the business side, and Ken...

is amazing dealing with people through email. But he won't pick up the phone. But we had phenomenal customer service that he led. And Ryan just wanted to code and wanted to own it himself. Didn't want other coders. Didn't want to spend time managing other coders. He just wanted to build his dream, again, the next generation of what he had built before using Java technology and doing things in a way that would be much more beneficial over the long term.

David Nachman (05:46)
answer.

you

Dan Engel (06:08)
over the existing solutions like Digital River, which became kind of the technology dinosaur that was inflexible. So we wanted to build that next generation system.

David Vogelpohl (06:17)
It sounds like there was a lot of synergy there between you four and a good balance. And it seems like you and Jason were able to kind of team up, I guess, on the business side and then Ken and Ryan on the technical and customer success side. It's also interesting to hear about your virtual posture as co-founders back in that day and using ICQ and thriving in that kind of environment.

Um, of course, way pre pandemic, this was 2005 when the company was founded. Um, and then to hear about how much Digital River played a role in your company, in your lives back then, and to think of FastSpring's enduring nature, even going beyond, you know, Digital River, um, uh, offering in existence, I guess, uh, recently kind of winding down there. Um, and to think about how that's an interesting representation of FastSpring's enduring

Dan Engel (07:06)
Mm

David Vogelpohl (07:13)
⁓ but maybe that's one of the ways I might think about an enduring business. ⁓ I'll start with Nachman on this question. David, to you, what does it mean to build an enduring business? What is that? How do you define that?

David Nachman (07:29)
Yeah, I think, I mean, the first thing I would say for a business to be enduring is it's got to be adaptable. This business, like just about any business, there's ebbs and flows and there's times when everything is going great and there's times when it's a lot more challenging. And, you know, in my experience, like there's a lot of things that need to go into strategy and execution to succeed as an enduring business. But I think the foundation of all of it is the team and the culture.

If you look at the businesses that I think have endured over time, it's often the team and the culture that really, really stand out because the challenges are going to change over time. And you need a team that knows how to adapt to that. And if you've got the right team and people are passionate about what they're doing, know, in my experience, generally they're going to figure it out.

None of us have a perfect crystal ball. Certainly, I'm sure Dan, when you started this company 20 years ago, you had no idea what some of the challenges might look like today. But I think you built a great cultural foundation that I think still persists today. I think a lot of the elements of the culture that were there when you started it are still like a real, real strength for us. So to me, that's kind of the foundation of all of it to build an enduring business.

David Vogelpohl (08:47)
Yeah. I like that idea of flexibility. What's the saying — "Steady seas don't make skilled sailors," and like,

Dan Engel (08:48)
you

David Vogelpohl (08:53)
⁓ being able to roll with the punches and adapt and survive and thrive. I could see that being critical to building an enduring business. ⁓ Dan, what about you? What does it mean to build an enduring business?

Dan Engel (09:06)
Well, it's kind of the same things because what he's talking about there about adaptability and flexibility, that's exactly what I was saying earlier. We specifically built a system from the ground up ⁓ that had the adaptability component that was missing from the competition.

That's why Digital River doesn't exist anymore. That's why we were able to ultimately leave them some degree in the dust because they weren't able to change with the times. And we knew, because we all had been customers of Digital River. mean, everybody was back then. It's a long time ago. And we knew that they couldn't deliver when we needed new functionality and features. They were stuck. Right. So that was a really big part of it. But I think culturally, you know, the biggest advantage FastSpring ever had

was based on culture and how we treated our people, meaning like the employees, the partners we had, and then how that trickled down to how they treated the customers. And we had a theory, which is not too novel, but isn't practiced as much as it should be, that customers should be treated like gold. And we had happened to be in an industry where the competition felt very much the opposite. ⁓ They just

A lot of these companies were led by kind of arrogant folks that didn't think too much about the customers. And, you know, you'd write into PayPal, nobody had ever sent you anything back or Digital River couldn't get your account manager to respond. So we came up with rules like you're going to hear a response within, I think it was 24 hours, even on weekends, even on holidays, ⁓ guarantees like that. And we absolutely delivered on it. We strive to wow.

every single customer, both the end user and our merchants, you know, the software companies. And the kind of things that they were saying were, and I don't know if it's still on the website anymore, but the old testimonials that I used to throw up on the website were like, I feel like I just left the spa, or I've never had this kind of experience in a services business before. We were blowing people away. And how were we able to do that when we had like four support reps and our competition had like 250?

because we're just normal people that cared. That's all. And those were the kind of people that hired and people like themselves who gave a damn. And we had been in the shoes of the customers who were frustrated working with Digital River. So we tried to build a business that would be the opposite. And it totally worked. And also it's an advantage that we had, which didn't really cost money, that nobody could beat. No competitor could beat. They could try to match it.

you know, blowing away your customers and wowing them with the experience, but they couldn't ever beat it. And so part of what made the company so enduring is we had low prices and couldn't really beat us on pricing. We had next generation technology instead of kind of the inflexible dinosaur tech of our competitors. And we blew you away with customer service. So how do you, how do you get anyone to switch away from FastSpring? They didn't. We had retained

think 98.7 % of our customers year after year after year in an SMB business with thousands of customers. I'm a venture capitalist now, I invest in software companies. I'm yet to find a company in all these years that matches what FastSpring obtained in its metrics.

David Vogelpohl (12:16)
I can attest that nature has lived on and we see similar levels of success in ⁓ our business today, including winning awards like a ⁓ gold Globee and silver Stevie for that customer success. I think that foundation you laid and the seeds you planted are still bearing fruit.

Dan Engel (12:37)
Good. That's great to hear.

David Vogelpohl (12:39)
Excellent. Yeah. Super cool to see that, ⁓ endure the test of time. Cause I know service can be one of those areas that definitely erodes over time, especially over like a 20 year history. ⁓ it was also interesting to hear you talk about how, if you have a team, if you hire a team and develop a team who cares, that's like so critical to building that differentiation in that enduring nature.

And I thought that connected well to what David had shared a little earlier around flexibility and developing teams in that same way to address challenges that you have no idea what's coming around the corner. ⁓ and I thought that was an interesting connection there. ⁓ speaking of like how, speaking of missions by sake of example, what was FastSpring's mission in the beginning, you talked about like being better than Digital River, but like, was it more than that? Like, how did you view the mission of the company at that time?

Dan Engel (13:33)
I think we wanted to build a business that treated its customers the way we thought we should have been treated as software vendors. Everything that was wrong with the experience of working with Digital River and its competitors and non-software specific platforms like PayPal, we wanted to correct that because we felt wronged ourselves.

⁓ So I think that was a big part of the mission. And we thought if we were just normal, nice people that cared, we could accomplish that. ⁓ And we did, took a while, but we did. And we did displace a lot of those alternatives. ⁓ mission-wise, I think that's really what our driving force was, ⁓ is to put some good into an industry that had a lot of bad experiences.

David Vogelpohl (14:21)
David, 20 years later, how do you define FastSpring's mission now?

David Nachman (14:26)
Yeah, so I think a lot of what Dan just shared is still very true and very important in what we're doing. ⁓ What gets me excited is kind of the bigger trend we're playing into in enabling. And for me, it's about democratizing the software development industry. And what I mean by that is if you look over the last 20 years, since the company was founded, barrier after barrier has come down that allows people

to build software anywhere in the world at any scale and compete with much bigger, much better capitalized players in highly developed markets. going way back, open source, developer tools, cloud computing, online marketing, now we've got the AI boom. So it's gotten dramatically easier to build software anywhere and do it in a really, really competitive way. What hasn't gotten easier?

is selling it globally. It's actually kind of gone in some respects in the opposite direction. Tax complexity around the world has gone up a ton. Enforcement has gone up a ton. The regulatory environment around data has gone up. Payments has gotten a lot more complex. The proliferation of payment methods around the world uh is pretty incredible, and the adoption of a lot of these payment methods is really high. Fraud

⁓ is going up. I don't know if it's exponentially, but it's certainly going up at a high rate and the complexity of that fraud is going up. So you've got this paradox of, you can develop software now at any scale anywhere in the world, but it's not easy to bring it to market successfully without a solution like ours. And that's what we do. ⁓ and if you look around the world, there's, know, no monopoly on development talent in places like Silicon Valley. And there's talented developers everywhere in the world now.

but there were barriers to them competing. So By democratizing software development and commercialization of it, ultimately, we're playing into a trend of unleashing more innovation around the world. That's kind of the big lofty mission that excites me. And I think it does excite a lot of people here.

Dan Engel (16:18)
you

David Vogelpohl (16:39)
Excellent. Love hearing that. ⁓ Dan, so we've talked about like it's a 20 year episode, right? So we're doing like the worm and fuzzy stuff, but I want to go to like the stuff that made you lose sleep at night in the early days of FastSpring. Tell me about a big mistake you made that like almost tank the company or just like took you in a really bad direction. I mean, we are publishing this, so like take that into heart there, but

Dan Engel (16:53)
So.

David Vogelpohl (17:08)
Was it, was it deprecating this website? mean, this is a fire of a 2025 website, but like, me about the mistakes you

Dan Engel (17:11)
Ha ha!

looks a little pruney to me. ⁓ Well, obviously we made lots of mistakes. think, you know, one key decision was we kept coding really just within Ryan's domain and didn't hire a bunch of developers. And I think there were benefits to that and costs. And sometimes we were frustrated we weren't going faster. ⁓ Because when we came out, a company also came out around the same time. unlike us who did everything

by the way, with $30,000, I put ten grand in, that's all I ever put into FastSpring. We had a competitor, the head also sold their company to Digital River and they put like 35 or 50 million into their company and they started eating our lunch. So that made us kind of frustrated and concerned because they were getting a lot of clients we had hoped to get. So that was one decision. And also I think using

Java, think, had a lot of benefits, but also I think it slowed us down as well. Now, in the long term, it was beneficial and a great decision because it kept us flexible and extensible. But let's see. So one of the scarier things that happen is, so when you're processing payments, there's risks that you might process in payments that are violations of, say, your relationship.

in your agreement with say a Visa or MasterCard. And we got really good at policing and avoiding any transactions going through the system that would violate any of those agreements. like with hackers, you figure out a solution to avoid the hacking and then the hackers find a way around it and then you find a solution to solve that and then they find a way. So it wasn't perfect, you know, it's life. And we had a particular incident where some

content got through that we did processing for is a tiny amount, but it still was very problematic. And that was very costly to us. We had to deal with MasterCard and you know, to have an angry MasterCard is a real problem because you can't stop working with MasterCard if you're accepting credit cards, right? That kind of got this duopoly or whatever you want to call it. So that was an example of a really scary experience when we had to deal with, you know, people like Visa MasterCard and

some of the risks around processing that could have really hurt our business and changed things. ⁓ And I would say, in terms of the team that we had, we got along incredibly well. It probably didn't hurt that we weren't in the same office and hardly ever saw each other. That can really have a lot of benefits. The biggest fight we ever had, and when we had it, I thought, my God, this is gonna be such a battle for years, was picking the name.

⁓ After we had that, that was like a real battle and I didn't know what the future would bring. And we went years and years with really not having any fights, maybe until the end when we were selling the business and not everyone wanted to necessarily sell at the same price and money gets people to fight. But ⁓ other than that, ⁓ we really made a great call with the kind of team that we had as founders because we had a team of four former CEOs.

which meant we were all able to kind of do our own stuff without anybody needing to help us. Right. And so we, we, we, we, we split up the business into silos, Ken handled support, Ryan development, me on the sales side and also all the CEO role and Jason on the sales side and some other stuff too. And that worked really well. but, ⁓ anyway, so those are some thoughts on some of the things that were challenges over the years. and,

not, raising capital, going slower, sticking with Java, sticking with one developer. All those things made us go slower. And for me, made me anxious. ⁓ but some of the other partners, they were okay with waiting and having the business take a long time. And it sure did. My wife, ⁓ nicknamed it "SlowSpring," ⁓ because, ⁓ you know, it was like year three and a half or something and we still weren't getting anywhere. And I kept telling her, it's right around the corner.

David Nachman (21:15)
it.

Dan Engel (21:22)
Finally, things picked up. They picked up because we became popular in the Mac software community. We found a niche, right? ⁓ I don't know what would have happened to FastSpring if we hadn't found that niche. ⁓ But eventually we took over for Digital River and others as kind of the leading provider for Mac developers. But until then, it was a very slow moving train and we didn't know what was around the corner.

David Vogelpohl (21:44)
think that's a bold lesson for people watching and listening who are just starting out and thinking about how to get traction about how you were able to kind of niche down in your core ICP and find that, you know, kind of handhold foothold to start moving further up the mountain. I also thought you had tension in some of the mistakes where you talked about the desire to go faster and invest more, but then you talked about growing pains around things like dealing with hackers and

maybe processing transactions you shouldn't have and how that affected and put risk into your business. And so like with FastSpring, you know, we're offering payments and subscriptions and tax compliance and a lot of startups are like compliance. What are you talking about? I'm blowing and growing. I'm, ready to go. Do you think that like maybe moving slow and being more purposeful did have value other than just being, you know, "SlowSpring" and making you a little frustrated with the growth?

Dan Engel (22:41)
Probably. Two of my partners would say definitely yes. They would be, yes, they are more patient people than I am.

David Vogelpohl (22:44)
Would those be Ken and Ryan?

Nice. I like that. ⁓ But yeah, I think about that a lot, you know, in this day, I don't know how much you've kept up with the merchant of record space, but there's a decent number of startups getting into it. And so I just imagine what it must be like to start from near zero and develop these rules, and this experience, and this understanding, and a platform that reacts to it all. ⁓ Certainly a grand adventure, but definitely no easy task.

Dan Engel (23:15)
Yeah.

It

was, and I think one error was that we didn't really have expertise in the whole merchant account payment processing business. I mean, yes, software and what used to be called shareware, and the Digital River side of things. But the actual — like all the intricacies of working with like, Visa, Mastercard, Discover, AmEx, PayPal, and doing global payments and different currencies and different really didn't know that stuff.

And so sometimes we learned some hard lessons because of our ignorance. ⁓ It would have, if I were to do it again, I would bring someone involved in the early days who really had spent, I don't know, 20 years in that payment we didn't have to figure out what we didn't know. I think that was costly to us. And I think that was something missing, a missing ingredient that fortunately, we were successful despite it.

David Vogelpohl (24:07)
Did you underestimate the complexity of payments?

Dan Engel (24:10)
I think so. Yeah, I think so. ⁓ And the deep understanding that was needed to really know what we were working with and what we were doing and how it was viewed by others playing all different roles in the industry, the ISOs, IPSPs, the Visas and Mastercards, the acquiring banks, the gateways, we just didn't really have a great understanding of how all of those different parties were seeing us in their world.

And so we didn't necessarily navigate it the best way that we could have if we had known more.

David Vogelpohl (24:45)
Sage advice. ⁓ As you look back at your time with FastSpring, founding it, bringing it up, eventually selling it, and the roles and companies you've led since then, what lessons did you learn in your FastSpring days that you took forward into your future adventures?

Dan Engel (25:03)
Well, you know, we built FastSpring to not be able to fail because we had all been serial entrepreneurs and had built businesses. Some worked, some didn't. And one thing that I figured out is if you don't have a clock tied to money and burn, it's really hard to go out of business. so...

We built the business from scratch with almost no money. Like I said, I put in 10 grand and the co-founders contributed their time for no cash, just for equity, right? Significant equity, founders equity. ⁓ And so the only way the business could fail is if we lost interest. Nothing external could really make us fail. It really was in our control. So it's a question of, we lose interest before we get enough customers that this business is big enough that we care about it? And it's making a difference for us. So with that,

⁓ It gave us quite a runway to be able to figure things out, which took really four years to really start taking off. And believe me, the first three years wasn't just fun. And of course, while you're building it, you don't know if you're ever going to make it, so you might be wasting your time. So it's not always the most motivating every day. But I've built every business since like that, ⁓ where it's either profitable for day one or it just doesn't have that burn and that pressure.

Because what's the number one reason businesses go out of business? They run out of cash. So if you can get rid of that risk, you've got a really good chance of making it. So I've had a lot of successes in my career. FastSpring is one of them. There's a whole bunch of other things I've done and all that. And the thing that they all have in common is they all failed before they succeeded. I mean, people don't see that. They just see the news headlines and great exit for FastSpring, or Picasa, or what I did at Google, or

GoTo Meeting in Santa Barbara. But all those things failed first. So the only reason I've been able to figure out how to build these businesses successfully now, including my venture capital firm, is because of all the things I did that failed in the past. And so I think that's the biggest lesson that I bring forward to every business I do and hope to pass on to other entrepreneurs and to my children and whatnot, that it's really the failures where you learn how to succeed.

David Vogelpohl (27:12)
I imagine what that must be like. So these are the years and the number of employees from back in those days. And you were saying like, it really took you better part of this time period to get it ramped up. And then you can start to see the business grow over time. It's very efficient business still during that time.

Dan Engel (27:29)
Well, keep in mind, so in 2013, that was 23. They weren't really employees, 12 full-time. The rest were part-time contractors. We made them employees later after we sold the business. But that was at a time we were doing over $100 million in revenue. We had 12 full-timers. So it was very efficient and we did not in any way measure ourselves by number of people. It was by revenue and profit.

David Vogelpohl (27:51)
That's great to hear. ⁓ so Dan has founded the business with his co-founders and they've gone on this grand adventure, eventually selling the business. ⁓ Nachman, tell me the backstory between about when you joined the business and what you were kind of doing right before that.

David Nachman (28:11)
Yeah,

I've been in B2B tech just about my whole career. Immediately before joining FastSpring, I was running a business that had a very highly tailored content management platform for local government.

So it was cities and counties, they would host a website on it, but also we would power a lot of the constituent facing functionality. you we sort of powered the digital city hall strategy that, you know, a lot of local governments are moving towards. We had sold that business to someone who was really consolidating all of the gov tech industry.

Dan Engel (28:32)
.

David Nachman (28:53)
And I found my way indirectly to FastSpring, was drawn to it for a whole host of reasons. But that's ultimately, you know, what brought me here or the backstory in terms of what I was doing before I got here.

David Vogelpohl (29:08)
And then as you entered the business, what were your perceptions at that time? ⁓ How did you think about FastSpring's mission then versus now? ⁓ We had this great meeting the other day where we were like, where did you get wrong about FastSpring when you first joined the company? What about for you, David? What did you get wrong about FastSpring when you first joined?

Dan Engel (29:24)
Okay.

David Nachman (29:29)
Yes, I think some of

the same things that Dan mentioned. I'm not sure that I necessarily underestimated the complexity of payments, but I'm not a payments guy by trade and experience. We had a lot of generalists even at that point in the company. We had a lot of really passionate, a lot of really talented people. And I've kind of always been one of those people who believes, OK, if you get the

know, get smart people that are driven, they're going to figure out problems. And yes, but they're not going to figure them out as quickly. In many cases, it's someone who's got the pattern recognition of having seen that same problem 15 times before. ⁓ And I think I waited a little too long ⁓ to really bolster a lot of our domain expertise in the business. And as I started to do that, ⁓ just

Dan Engel (30:05)
you ⁓

David Nachman (30:23)
What it did in terms of accelerating the business was pretty profound. And it was one of those where I sort of stepped back and said, wow, I should have done that a long time ago. I'd say the other thing is when I came into the business, my perceptions were very positive of the business. Great solution, great customers, business growing at a very healthy clip. So it was a very healthy business. wasn't a turnaround of any sort. It was how do we take it to the next level?

Dan Engel (30:30)
Okay.

David Nachman (30:52)
So what was missing in my mind was that it really wasn't built to scale

to anywhere, you the size we are today or, where we think we'll be over the coming few years. And like a lot of small businesses, a lot of single points of failure, you know, some of that was people, some of that was vendors, some of that was technology. The business sort of survived and thrived on individual heroics. So, you know.

not a lot of ⁓ systems in place, processes, et cetera. And we didn't really have a leadership team that had scaled to where we wanted to go. So I felt like we did need to bring in people that were more experienced and kind of knew the journey that we were embarking on. And I think a little bit of what I got wrong there.

⁓ in some of these initial hires was I was very focused on getting people that, you know, kind of knew how to operate at scale. And culturally I missed on some of them in terms of abandoning a lot of what's made the company so special and so effective, which is kind of the entrepreneurial scrappiness. And it's a, you know, it's a rare breed of person that has that hands on entrepreneurial scrappiness and can also scale. ⁓ you know,

Dan Engel (32:08)
you

David Nachman (32:14)
Often those are great founder type people that could do magic that a lot of more experienced company people can't do, but they don't scale as well. ⁓ So initially I did bring some of those people in and it just, they weren't the right fit. ⁓ And over my first few years here, I started to really realize what's the culture that really correlates with

success in our particular business. And part of it is this is the most dynamic, most complex business I've ever been at for its scale. I mean, we've got a very global footprint. We're operating in highly regulated industries. We're dealing with payments. We're dealing with software. We're dealing with complexity around tax. We're dealing with a lot of regulation around data. It's kind of infinitely complex. And this goes back to this notion of adaptability. ⁓

Dan Engel (32:47)
Okay.

David Nachman (33:11)
You have to have some level of scrappy entrepreneurialism to thrive in this business. But it also has to be paired with, you know how to scale a business and it's not all about, hey, I'm just going to do the heroics to get us to the next challenge. It's no, I'm going to build a foundation where if I'm not here, this business will still run quite well. So.

Dan Engel (33:25)
you

David Nachman (33:37)
So I think, you know, there are definitely things I got right, but there were some things I got wrong in trying to make that transition from more of a startup company to a really scalable company.

David Vogelpohl (33:48)
Yeah, that's kind of like an awkward teenager-y zone a little bit. that's a whole, sorry, go ahead.

Dan Engel (33:48)
Hm.

David Nachman (33:51)
That's right. ⁓

We definitely went through our awkward teenage phase. I hope we're out of that now.

David Vogelpohl (33:57)
Yeah.

Knock on wood on that one for sure. I still got to build the enduring business of the future, right? ⁓ We're kind of getting towards the end here, so I want to make sure to hit on a couple of things here in the last little bit. Nachman, since I'm on you, I'll stick with you for this one. But if somebody's out there and they have a startup and they're listening to all these points of view,

David Nachman (34:03)
That's right.

David Vogelpohl (34:22)
maybe taking some notes along the way, but what's the one thing that that person should ⁓ get from listening to you about building an enduring business? What's your number one piece of advice?

David Nachman (34:33)
It's embrace change and change before you have to. ⁓ You can't build an enduring business doing the same thing for any period of time. period of time is shrinking with every given year. mean, given what's going on with AI right now, ⁓ know, the timeframes over which things evolve is just collapsing. it's, you know, constantly think about how your business is going to be.

reimagined and go do that. ⁓ Don't let somebody else do that to you. You've got to get out in front of it.

David Vogelpohl (35:08)
Great one, embrace change and change before you have to. ⁓ Dan, what about you?

Dan Engel (35:14)
⁓ I would say treating your own people extremely well and having that then trickle down to how they treat your customers and the concept of treating your customers like gold and bending over backwards to ensure that they are just wowed by the experience of working with you compared to what they're used to from alternatives. And then I think in terms of building a business, removing the obstacles as much as possible that

lead companies to fail, including dealing with things like burn upfront.

David Vogelpohl (35:46)
I it. I love the people first thing. I think this is like the Dan Golden Rule. Treat others as you want them to treat your customers. I love it. ⁓ All right. ⁓ Last question. Sorry about that little mic pop there. Dan, um we're going to show this recording to the FastSpring team and they're pretty much all going to listen to it and watch it. Do you have a special message for them to celebrate the 20 year FastSpring anniversary?

David Nachman (35:53)
Thank

Dan Engel (36:16)
A special message. Well, you know, I guess, you know, it's I'm glad that everybody's part of something with the humble roots and mission that we originally started on to try to offer a better alternative in an industry that was plagued with some negativity. But I think, ⁓ you know, I challenge everybody to really think about how to make the next 20 years of FastSpring successful, dealing with all the change. Change has been a big ⁓

theme here in our conversation. So we have all the different things happening around, say, AI, or how people purchase software, or what Apple's Store looks like, and what they can and can't do. All different facets are going to continuously change. And so I hope folks are thinking about how they can continuously adapt to ensure that FastSpring survives and thrives through all the shifts ahead. Some will be good and some will be bad for the company so that we can have this kind of a conversation again after another 20 years.

David Vogelpohl (37:12)
Nice, I like it. Dan, thank you so much for joining us for this conversation. It was super interesting to hear about your backstory and some of the things that went into building such an enduring business. But thank you so much for joining us today.

Dan Engel (37:27)
You betcha. Thanks for having me and congratulations on the 20 years and thanks everyone for doing such a great job at the business.

David Vogelpohl (37:33)
Thank you, of course. then David, thank you for joining and picking up the torch and then sharing your backstory here at the helm.

David Nachman (37:41)
Well, thank you for having me. I've enjoyed the discussion. I've learned some things about the business. I don't think I knew Dan, so it's fantastic to get the time to interact and learn a little bit about our roots and history.

Dan Engel (37:50)
Okay.

David Vogelpohl (37:52)
Excellent. And for those watching and listening, if you'd like to learn more about FastSpring, you can visit FastSpring.com. Thanks for joining us for the Growth Stage podcast. I've been your host, David Vogelpol. I support the digital product community as part of my role here at FastSpring. And I love to bring the best of the community to you here on Growth Stage. Thanks everybody.