Martin Ringlein
If you’ve ever ventured off on your own to start a business, or even thought about it, then you should listen to this episode. There comes a time in every entrepreneur’s journey when they think about selling the company they’ve created. But how do you do that? And is what you’ve grown even worth selling?
Listen as Martin Ringlein shares his story of selling his first company to Twitter. Then leaving Twitter to join President Obama’s innovation council. All the while running a successful co-working space which he later sold. Oh, and creating a product to disrupt the event space which was also acquired. His insights, experience, and enthusiasm are more energizing, they can help you see the world of business in a new light.
Carl Smith:
Hey, everybody and welcome back to The Bureau Briefing. It's Carl, and with me today, I have a good friend, Marty Ringlein. Now, Marty is one of those people who, like a lot of us, had a digital agency in the 2000s. But unlike a lot of us he actually got out and seems to have been successful, although I'm not sure I truly trust it. How's it going Marty?
Martin Ringlein:
It's going pretty good man. I can't complain.
Carl Smith:
Yeah, I know you can't complain you piece of crap.
Martin Ringlein:
Right.
Carl Smith:
We're all tired of it. So, I want to start back in the nclud days. You and I both have an affinity for the letter N.
Martin Ringlein:
Yup.
Carl Smith:
Right? I had nGen, you had nclud. You went on to use nvite. I mean you kept using it. I eventually buried my past.
Martin Ringlein:
How would we come up with ideas these days? If we can find a five letter domain that starts with the letter N, that's based on a real word, we'd be real excited.
Carl Smith:
It's a big fight.
Martin Ringlein:
Yeah.
Carl Smith:
So I remember when we met in person, the first time was at [Southby 00:00:58]. And it was you and me and I think Garrett Diamond was there and Aaron [Mintly 00:01:03] was there. I remember we had a dinner and we were talking about the service side and how it was so shaky. Right? Do you remember this?
Martin Ringlein:
Yeah, yeah, no absolutely.
Carl Smith:
And we were talking about if we ever had to send up a flare, like if anybody ever got in trouble, right? Like send up a flare. So I think I was the only one that ever did that. Luckily I didn't end up needing it, but it wasn't that long after that it felt like, you were able to sell nclud to Twitter. How do you do that?
Martin Ringlein:
Yeah, so that's a good question right? 'Cause in those days, well one it was pretty rare to have a small boutique agency that was doing well, but they started popping up like around, I feel like 2002 to 2005 we started to see a lot of them. So, for us, I don't really think we ... well we never got into the agency to sell it. I don't think we knew that ... When we first started we were just babies, we were like 22 going on 23 and we just freelanced and we wanted to do that, more of that, and we wanted to do it kind of our way and we had this idealism back in the day when Jeffery was writing that orange book of like designing with web standards. And we saw him fighting the good fight, and we wanted to fight that fight, but like on the agency side, and we wanted to say, "Hey there's a way that you can do really great work. You can have really great environment, you can work with people that you really like, that inspire you. You can have these things that we weren't seeing in day jobs." We thought let's build something, and I think as we started to build that, we didn't know what it was going to become, but I think we found this spirit in us that really kind of defined who we were.
In the beginning we got lucky, we were always able to be a couple steps ahead and not that we were leading that, we just made ... We followed the right people. So, Jeffery, I think is a really good example. He's leading this web standards movement. So we by no means, start that or define that, but at some point you've got to pick what side of the fight you're on, and we decided to pick Jeffery's side. It turns out that he wins and web standards is, you know now, it's not even a word because it's just the way that we build websites, right? That's kinda ridiculous. So we ended up just on those fights, picking the right side more times than not and that put us in a position where we could start to be more of an R&D shop, more of a prototype shop.
So in the beginning, we're just two guys, two laptops, sitting on a floor trying to make enough to survive. That's the bare minimum for the business, but we get to a point where we've built a nice little agency. We've got a good team size and we start doing more of this R&D work, and we start getting more Silicon Valley clients. The big ones are Apple, and they're paying most of our bills at this point and they're just constantly pushing us. They're constantly having us think about things that aren't possible yet. What could a future version of CSS, where a spec hasn't been written yet, do in a future version of a future device, that had a future screen size, with a JavaScript processor and a CPU, right? And it's like, those are interesting things, 'cause it constantly, they were fun and it paid nicely, but it got us constantly thinking about things that put us in a position where we were a couple steps ahead.
The thing I really like thinking about now is, as a designer, a world in which there's no interface. I think that's really hard as a user interface designer. But like now even to say that, I think if I had said that like two years ago, they'd be like what's he talking about? But now it's like, everyone immediately knows what you're talking about. Or you're talking about like an Alexa app, or a Slackbot.
But back then, when we had to design for something that didn't exist, it had to be like theoretical. There was no browser to test it in. We could use versions of Google Canary or something to test upcoming support for certain CSS say three to HTML5. Things that we wanted to play with, but that put us in position where it helped us start to move a little bit quicker, faster on things that weren't ready yet. And that, I think, always put us in a position where we could be a little bit more innovative with our creativity and that just got us on the radar of a bunch of people out on the west coast, because we were an east coast agency. So, that got us attention with people like Oracle, Apple, and that gets us on the viewport of a Twitter, and so we're actually having two simultaneous conversations.
Apple approached us about buying the company and then Twitter came up at the same time and Twitter was really exciting to us because it was early, it was 2012 and they were pre-IPO. I still love Twitter to this day, but it's not, it's user growth isn't as hot as it once was, but it was the big up and comer, and so it was a really exciting time to go over there and just think about new things. What would you do in a world where Twitter isn't what it is today? They haven't evolved or adapted as quickly as I think we'd all hoped, but it's still a fun ... I mean even today we still, as a team, think about Twitter constantly. What it could be or what it should be.
Carl Smith:
So, I understand so much more about you right now, than I did before, and we've known each other for a while.
Martin Ringlein:
Man, you gotta stop me man, 'cause I can just like rattle off forever. [crosstalk 00:06:37]
Carl Smith:
Oh no, this is gold.
Martin Ringlein:
Awesome.
Carl Smith:
I'm over here getting hammered just [crosstalk 00:06:40]. It's all good. But I never understood the R&D side of nclud and I'm sure you had a lot of NDAs and a lot of stuff that you couldn't share and so because of that, I was always seeing what the public facing side of nclud was. I mean I also understand why nclud got that offer. We didn't even get a call from WhatsApp, right? I mean nGen didn't get any calls. It was because we were building websites. Right? We stayed with that kinda safe, what's coming in and that's one of the things I've always admired about you. It's hard for me to say that word with you listening, but whatever. You never really seemed worried and I know that there are times where you have been. There are times where I've seen you. I think we were in Greenville and you were like, hey if this didn't workout, whatever, I'll figure it out.
But it's one of those things that you always took what felt like risky chances, but I think you had it figured out somehow. Like you knew this wasn't that risky.
Martin Ringlein:
I'm always ready. I've always got a plan B and I like this saying, that's pretty popular now. I never lose, I either win or I learn. And so, I'm always thinking about everything that we do, it always is pretty risky, but it's a pretty calculated risk too. I'm trying to think okay, how will this fail and if it does, where will we go from there with what we did. I'd never want to be like set back to zero, so I wanna know okay, I'm trying to get to like point X, but if I can't get there, what are sort of my ... It's almost like responsive design. What are the break points along the way? What else would happen if I don't get to say full screen? Like if I can only ever get to 320 pixels wide, what would it look like? I think we look at business the same way we look at design. It's like a flexible, modular thing. It can always work, and sometimes it's better when it isn't the bigger thing and it's the smaller thing, but we know that no matter what, there's an out here.
We love the prototyping. We love the research and design part of it. So it's probably why we're more hip to want to be a part of an acquisition. Why we put more position ourselves that way because we kind of want to think about what's next. That was kind of what was exciting about Twitter is they brought us in and I remember a quote that one of the ladies in the [MNA side 00:08:55] said. She said, "We don't want to change you, we want you to change Twitter." I thought like oh, ultimately it doesn't play out that way, but it was like, it's always something that kinda stuck with me.
So, at Eventbrite ... We started nvite, nvite just recently got acquired by Eventbrite and here, they've tasked us with thinking about the future. I love this Gretzky quote of think about where the ... skate to where the puck's gonna be, not where it's at. When I always think about R&D, that's kind of what I'm thinking about is ... It's hard, right? It's a guess on where that puck's gonna be. None of us have any idea and it's a risk. You can skate one way or the other, but I feel like the more we do it, the better we get at it.
I love this, again not to hijack this too much, but there's this one story that I read on Business Insider. I think it was about Major League Baseball, and basically, long story short, they say that it's impossible for a human being to hit a Major League Baseball. It's just physically impossible. We know they do it all the time, right? We go to baseball games and we see it and it's impossible because the distance between the pitching mound and the batter and the speed of the ball, the brain can't ... the eye to the brain can't process it fast enough to tell you when to swing. No human being can do it, and the reason that Major League Baseball players can do it is they've spent most of their lives hitting Major League baseballs. So what they're doing, is they're predicting. They're starting the swing before the ball was released, which I think is insane and crazy, but like they're taking in the entire environment. They're taking in everything that's happening. They know subtle wind patterns, they know the mood, the attitude of the pitcher ...
Carl Smith:
Tendencies.
Martin Ringlein:
They know time of day. They know how tired they are. They can read all of that. Like from the distance and we can't do that because we don't do it every single day.
When I think about web and technology. I think like, okay, the more we do it, the better we get at it. We miss a lot and to your earlier point, there's been a lot of times where I've been terrified that it's not going to work, or it's totally going to fail. Like at the nclud days, there were times, even when we had Apple and they were more than 50% of our revenue, they take so long to write you that check. I'm sitting there and I know it's coming, and I believe that they won't screw me over, but I can't make payroll. So, I've got to take a line of credit out on my house, so that I can pay people. I think the thing that most upset me was on some level, I had to lie to my team. Not that I blatantly lied to them, but I withheld the truth.
I never told them that, "Hey, I'm taking out a line to pay for your payroll." Which means, if you can do the math, that if Apple still doesn't pay by next payroll, or the following payroll, I'm going to run out and you won't have a paycheck. So I feel super confident and strong that I'm going make this happen. And the reality is, for my team, I'll sell my car, I will go bankrupt for this thing, but they don't want to hear that, right?
Then I don't want them to start thinking, "Oh I don't trust this guy," or "I don't believe in what he's doing," or "I need to go start preparing, update my LinkedIn or something." So those times are like, they're terrifying, they're scary, but I think the hardest thing is if you ever feel like you have to leave somebody in the dark. Because a team, if it can't be about trust, then I don't even think that's a team, right? A group of people who trust each other, that's a team. If you don't do that, that's just semantics. If you're not a team, you're just a group of assholes trying to get something done.
Carl Smith:
I remember we had somebody that worked at nGen, who told me one day, she goes, "You know what? My goal this year is that you get a new car, because it doesn't feel good that you don't look successful."
Martin Ringlein:
Yeah.
Carl Smith:
You're the one in charge, so is that where we're heading? Where we all have a crappy old Honda? Because that's not what I want.
Martin Ringlein:
Yeah, yeah.
Carl Smith:
And I was like, "Whoa, okay." So I went out and got a new car. I didn't care about the car. It got me where I was going, you know? But to her, it mattered, right? So you get acquired by Twitter, you go there. Now I don't know the truth of this story, I only know what I observed and what I heard. I also ran into you in Vegas, when you couldn't tell me about Twitter, but I knew it was something huge, because you were out of control, you were having so much fun.
Martin Ringlein:
Yeah, yeah. I think we had just signed, but they hadn't released it yet. Which is like perfect time to have a Vegas trip planned up for that.
Carl Smith:
Remember we went to that fancy French restaurant? You had your big gold chain on holding your drink that was so huge, and the guy came over to explain what the appetizers were, and we had eaten all of them. That was awesome.
Martin Ringlein:
That was a good one man.
Carl Smith:
So you go to Twitter. I don't have any idea how long the deal was, but I got the sense that you left halfway through. Whatever the money was didn't feel as important as the time for you. Is that right?
Martin Ringlein:
So kind of works to it. With nclud, there were two founders, me and Alex, who still work together to this day, started and sold nvite together. He's two rooms over right here in Eventbrite with me. So we've been working together for 15 years now. So no investors in that company, so the deal was a little bit easier. But essentially in a deal like this, same thing with the Eventbrite deal, that there's kind of three components. There's upfront cash, there's stock in the company that's buying you, right? Which is, in their mind, the equivalent of cash.
A lot of pre-IPOed companies, they value cash more than they do the stocks, so they're more willing to give you stock. And then there's your employment agreement. So, on those three sides, at the Twitter side, we legally, well they call it the golden handcuffs, but we had to be there a year. If we leave before a year, we lose the first two. We lose the cash and the stock, but the only thing that keeps you after the first year, is the same thing of any employee. You vest over four years and you have your nice salary, especially in Silicon Valley, they're ridiculously inflated, so no complaints, and then you get more employee stock.
And so, you get that over four years. So any time you leave, that's really what you're giving up, and so for me personally, I left after the ... well I left like 11 months and 29 days in, but they didn't hold that against me. They were very nice. But when I leave after the one year, it's still scary because I'm going to go do something new. I'm giving up this ... For one, in hindsight, anyone that follows the Twitter stock, it would've been good just to leave and sell high. Now the Twitter stock is lower than we got in at. We got in $19.60, which when Twitter peaked over 40 a share, that was a really good spot to be in. Now I think Twitter's like at, I think it's just below 20.
16.29 as of right now. So lower than what even we got in back in 2012. I mean it's still worth something, it's just not as grandiose as it could've been. But back then, I'm walking away from this hot tech company that's going to IPO and it did well. I think as bad as it's doing now, in the first, I'd say six to nine months, it did really well. But I'm also walking away from the salary. I'm walking away from health benefits. I'm walking away from vesting even more stock. And so it's a terrifying thing to think about and go through, and just wonder should I play it safe? Should I put it all on the line again?
But I think, you know me enough that playing it safe it's too boring. I got to always put it on the line. Got to go for what we believe in and just when we see something that's interesting or exciting, and no one else is bringing it to life ... Because a lot of our big ideas, they usually sit, we let them marinate for a couple years, and we usually will ... We'll ideate prototypes, something like almost instantaneously, but we never really take that leap to turn it into a business or a product, and we just kind of assume somebody else will. Somebody will come along and they'll do it. When there's a good one and nobody has and it's been a couple years, it's like holy shit, it's still good and no one's still done it? And we have a prototype sitting on a shelf, like let's go!
I think we still kind of live in that. I mean we love it here at Eventbrite, but it is hard to get away from that feeling. The nice thing is they've put us in position where a lot of those ideas, they let us bring them to life internally, which is really nice.
Carl Smith:
So what was it at Twitter in that 11th month, that made you feel like "I've gotta go?"
Martin Ringlein:
Yeah, so now ... Then it was a really hard to explain. If you had asked me that then, I don't think I could articulate it to you, because I don't think that you or anybody else would have really understood. Because, again, in 2013 when I leave, Twitter's still hot. They're going to IPO in about 60 days and they're going to do well when it first IPOs. Most people are like why would you leave? And now, if anyone that truly follows Twitter, a lot of people have left, there's been a lot of turn over. I'd say the design team that I worked with, I believe 92% of them have turned over, so hardly anyone's there. None of the original nclud team are there anymore. A lot of leadership has turned over, so it wasn't a really healthy place. I feel more comfortable ... I didn't want it to sound like I was talking shit about Twitter, because I still love the product. I use it. I Tweet frantically every day, all the time, and I'm a constant consumer of it.
Carl Smith:
I remember some AIGA events you Tweeted out and were quite famous.
Martin Ringlein:
That's right. I'll tell you, that was a good one. But, yeah, so big fan, but now I think it's easier for me to be a little but more honest because I think the world has seen that there's a little bit of turmoil, it's not the healthiest place to work. I mean there's certainly more unhealthy places that are truly unhealthy like an Uber, but Twitter it was just unhealthy and it wasn't fun. There was just too much chaos and they were still too much in their infancy to try to figure out who they are. Like how they're going to grow, how they're going to make money. And there wasn't a lot of opportunity for the thing that they wanted us to do, which was kind of think bigger and innovate. They had to more ... I think once they got ready for the IPO, kind of grow up and get their shit together. Like we need to think about monthly active users, and we need to think about revenue. It's like "Oh shit, like gotta think about revenue, who knew?"
I wish they had figured that out two years earlier and I could just focus on the thing that I like to focus on.
Carl Smith:
So you leave Twitter, and I don't know the order that this happens, but you start Canvas, the coworking space, right? That becomes successful. I remember you got written up as a top five coworking space, I want to say in the nation, but I'm not sure if I'm right there. And then also, you go into Obama's White House to start, what later becomes, Digital Services, right?
Martin Ringlein:
That's right, that's right. When we left DC to go to Twitter, we had a beautiful office space. 6,000 square feet, right in downtown DC, about I'd say eight blocks from the White House, DuPont Circle. Pretty prime real estate, and we had put our heart and soul into designing this space. Again, this is another one where time dates us, because we build this space out in 2011. In 2011, it was different man. There weren't open space that was felt lofty, with exposed brick and like, you know your Crate and Barrel West Elm-esque furniture. Now when I'm saying that, everyone's just rolling their eyes and that's like every coffee shop you walk into, but in 2011, that wasn't the case.
Starbucks still looked like shit, but now, what I just described, looks like the inside of a Taco Bell at some places, right? Everyone gets it now. Because there is this ... I don't know if you know, I don't know if you have it in Jacksonville, but there's a Taco Bell Cantina, which is like their upscale. They've got a few here in San Francisco. It's like you're walking into this old majestic thing that's still a Taco Bell.
But back then, that was super cool and trendy, and there was no ... WeWork only had one space in New York City, so this is also pre WeWork. No one, who's listening right now, that didn't live in New York knew what a WeWork was. So co-working isn't a big thing. There's only a handful of them in the country that even exist. When we knew we were leaving, we didn't want to totally, well we didn't want to abandon this space. We didn't want to necessarily sublet it out and we didn't wanna give it over to somebody else. We wanted to keep it going because it was just, we put our heart and soul into it, and we wanted to try this coworking thing.
The Twitter deal gave us enough sort of capital that it didn't have to be super profitable at first, but we just figured we'd create a place in DC that could be coworking. So it was DC's first coworking space, and it took off right away. We filled it up, and we got a bunch of ... it was mostly designers, developers in there working in technology, and it just became a really cool, creative spot. Then serendipitously, somebody came along and offered to buy that business from us and take over that space. It was good timing because now, I mean I'll fully admit that we can't compete with a WeWork. They come in like locusts and they take over.
Now in DC, when we started Canvas, there were zero WeWorks. Now I believe, you know, within a five mile radius, there are 12 WeWorks all with over 20,000 square feet and we had 6,000. In the time, we had the monopoly, and by the end of it, it's like no I don't want to deal with this shit. And like, yeah. In the beginning I used to shit on WeWork, they're like the Walmarts of coworking, but they figured out the culture thing. The spaces are pretty cool. I've got a lot of friends that have offices there. I like working in them, so they figured out the scale game and I hope they're super successful with it, but they certainly raised enough money to kill it.
And then yeah, the Obama thing. So we start the coworking right as we leave for California, so we're doing that remote. We had an awesome person named [Cali Senif 00:22:48] who ran that space for us.
Carl Smith:
Oh yeah, I met her when I was there. She was-
Martin Ringlein:
Yeah, yeah, so she was awesome. So she just kinda was Jack of all trades. She's basically remote CEO. She had a company of one, so she had to do everything from play janitor, to play business development, and partnerships and sales. She was amazing. Couldn't have done it without her, but she helped us keep that going remotely and then yeah, when I was looking to leave Twitter, I was just seeing what else was out there. Kind of wondering if I was going take a day job, start something new and just serendipitously there was this opportunity at the White House. I like who you were specific about the Obama White House, because now sometimes I wear some of my White House-
Carl Smith:
The White House got sold as well, only you didn't profit from that one.
Martin Ringlein:
That's right, that's right, but I'll have a White House baseball cap and I'll forget, because it's comfortable, and I'll got out in San Francisco and I think people look at me like I'm racist now and I hate humans and immigrants and all things equality. So it's like "oh shit, I need to preface Obama White House." But yeah, so there was an opportunity to work there, and it was really cool because it was a term position and it was only six months. I thought, "Oh this is perfect for someone like me," because there's no way that I can really ... I don't usually survive in corporate culture, but there's no way I can survive in government culture. But six months I can do and I can do some good.
I can help contribute to making government a little bit better. I can do, what they call, your civic duty. Then it gives me six months to figure out what else I want to do and it brought me back to DC, which was, at that time, really home base. I got to work back at Canvas and focus on that business and get it to a point where it sold.
Carl Smith:
So when you're in the White House, when you're working on the digital services for the government, did that impact the next move at all or what you did next? Or was that just an experience that you had and you learned from it?
Martin Ringlein:
I mean it impacts my life. I always refer to it as the most fascinating and frustrating experience of my life. Fascinating, just the work that we're doing, the people I'm working with, but frustrating because, you know, it's government. It moves a little slow and so that's hard for somebody that has been trained their whole life to move fast and break things. They don't break anything, and take your time, right? So that's tough. And it's hard because they want you to make an impact, but they'll freak out over every little dent. That's hard to be in a place where all they talk about is impact, but all they see are dents. It's like, I don't think they realize that one is just a bigger version of the other, but they'll say things like "Hey, let's be innovative," but they'll also say, "Well, don't do anything new that's never been tested." I was like, "Well, then you just contradicted yourself," but I get the spirit of what you want.
So I loved it and it's changed me a lot. I think it's helped make me become more patient. I don't think I was as patient when I was there. When I tried to change them, that's not super healthy, but I think it ultimately, they changed me. I slowed down a little bit. I think I figured out how to become a little bit more political, a little bit more, I mean obviously, but you know, play the game. Understand behavioral economics, incentives, like how people work. How to get things done, and how to move fast but without freaking everybody out. Then from my side, I'd already known that I was going to ... I knew it was a six month term. So I already knew what I was going to do. I knew what was next.
We knew we were going to build nvite and I say we because I basically brought back the old team. I had Alex who was still working at Twitter, but I told him what we were going to do. He's like "Hey, I'm going to stick it out here for a bit." But I got the rest of the gang and said, put them on slowly. First one was a guy named Michael Dick, who was actually our very first intern at nclud when he was only 19, but now he's a grown adult. I said, "Hey we've got this crazy idea. Here's how much money I'll put into it. I'll pay you a modest salary and why don't you come down to DC. I've got this big house. Why don't you live there for a year for free? That'll be part of your salary and we'll call it an extended vacation and we're just gonna build this thing."
He brings with him a guy that we had worked with as a contractor at nclud named Evan, and Evan and another guy that we had worked with at nclud, Brandon Vaughn. Then we just get started going to work. I told them basically I had done initial designs, wire frames, and I had a basic business model laid out. I basically told them, "Hey, make me a productized MVP. Something that people are going to jaw drop over. You've got six months to do it."
In those six months, when I'm done with the White House ... Because the White House was like a 100 hour a week job. They only pay you for 40, but everyone there just puts their heart and soul into it, so I can't juggle two things, which is another reason why we kind of wanted to sell the coworking space. There's just too much on the plate, but the ... Yeah, so six months goes by, we got this awesome prototype. People are jaw dropping and then we go out and we raise some money. We get a million bucks and then we start building it as a real thing and we've got a real company all of a sudden. And we're back risking it all over again.
Carl Smith:
That's sounded like the Steve Martin book, How to be a Millionaire. First get a million dollars, so we went out, we got a million dollars. But was that based on connections you made at Silicon Valley beforehand or was that, like how did you go out? How did you learn that game because you hadn't done that before?
Martin Ringlein:
Yeah, never had to do that before. We'd never had investors in anything we'd ever done. We'd always just self funded, well because the original thing was just the agency, so all you really needed then was two people with a pulse and you needed to afford the cheapest laptop that had internet connection, right? That's it. So really easy to get into the agency game. Talent is the most valuable thing there, so you've got to bring that with you. And then yeah, Canvas, that was built on the back of the agency. All that Apple money, we just put it into Canvas and then with this, I used some of my Twitter money to kick it off, but ... sorry what was the question again? I'm rambling.
Carl Smith:
Yeah, so how did you approach, how did you approach-
Martin Ringlein:
Oh yeah, how did I raise the money? Yeah, so yeah, never done it before, didn't have experience there. Just talked to a handful of people that were really good about giving us advice. To be perfectly candid, we had a lot of unique things going for us. One being that we raised all the money in Washington DC, which is a rare thing for a small consumer based startup to raise that. I mean, and again, 2013, a million dollars was a much ... and it's going to sound ... some people are going to roll their eyes when I say a million dollars is not a lot of money, but ...
Carl Smith:
I'm already rolling my eyes, you haven't even finished.
Martin Ringlein:
In 2013, raising a million dollars was like, that's a big freaking deal. Now I feel like it feels like people are raising a million dollars for a farting app [crosstalk 00:29:22]
Carl Smith:
Now it's a let down, right? I got a million, I don't know.
Martin Ringlein:
Yeah, yeah, it almost seems like you didn't do very well in your race to only raise a million. But in DC, to raise a million dollars from someone who's never raised before for a consumer based startup in the event space, which is like super crowded, there's a million of them and they've been going on since 1999, like the Evites and Eventbrites of the world. It was pretty good, but it was luck. One is that I got a cool story that I was able to just kinda tell. So a lot of it, they're investing in the person, but you gotta big fish, small pond scenario. Where there isn't a lot of Silicon Valley people in DC, I just came back from there at Twitter, which at that time is super hot. I had just sold my last business to Twitter, which again, kind of adds to a story. So there's this you know, maybe this guy has something. You and I both know I got nothing, but they didn't know that. So that helps, but a lot of it was connections that I'd built over the years.
There's this guy Paul Sing. I had known him from DC days, long time ago and he went on to help start 500 Startups. He leaves 500, and he's thinking about his next thing. I was in Silicon Valley at the time, and he knew we had sold to Twitter, so he hit me up and he asked me for money for his startup. I was like huh. I'll do some investing, so I gave him 25K and I was like "Okay, I'm going to invest in this thing. I think your super smart. I don't really understand what you're doing, but I'm curious to see where this goes." It's kind of one of my, probably my third startup investment. I was just kind of excited to see where that road goes. I'm down with losing a little bit of money to learn something here. Again I know that 25,000 is not a little bit of money, but it was a big deal for me at the time. Still is big deal. But long story short, he ends up coming to DC himself and starting a 10 million dollar venture fund to back DC based startups. So I go to him and say, "Hey man, I heard ..." [crosstalk 00:31:26]
Carl Smith:
Remember when you asked me?
Martin Ringlein:
Any chance you want to invest in me? He says, "Yeah, come down to my office." I come, we go get cheeseburgers, and he's like "I love it, I love everything you're doing, I'm in." He's like my only question is I don't know if I should give you $100,000 or $250,000. And I was just like "Paul, I think you should give me $250,000." It's not his money, right? He has this fund, so he gives us $250,000 and that's a game changer. When you're raising money, they hardest thing to do is get your lead investor.
And once he had a lead investor, and we had one fourth of the funds setup, that really made it easy. We actually had ... Our first investor was a guy name Steve Gans who was early at LinkedIn. Actually, he's based in DC now, and he's a fucking awesome guy, but he's the first one that gives us money and that kicks it all off. It just kind of trickles in after that. And then after that, we go to this group that I'm actually a venture partner at now, called NextGen, and there's this guy there that runs it, Dan Mindus. He was fantastic, because he handheld us through the whole thing. He's like, he's basically like "Here's what you say, here's what you don't say." He, in a very positive way, talked to us like we were four years old and really like said, "Here's how you'll fuck this up and here's how you won't. So here's what I suggest." I was so appreciative of him, because you know the ability to treat us like children and help us though that path.
Carl Smith:
And you've, I mean, the time that we've spent together, whenever I asked you a question that I felt like, you were going to do something that felt off or whatever, you always had this, it wasn't condescending, it's wasn't cocky, it was this level of confidence where you would just look at me and go, "Hey, you know? It's what I'm gonna do." It's one of those things that I can imagine you in some of those meetings, not when you're being talked to like a four year old by somebody who's super experienced and is educating you, but in some of those other fundraising meetings where you've got the other investors coming in. Where you're just like, "Hey, if you don't want to me a part of it, that's totally cool." Right? And it's not dismissive-
Martin Ringlein:
Oh yeah.
Carl Smith:
It's just like "Hey, it's up to you. I'm not here to sell you, I'm just telling you what's happening."
Martin Ringlein:
Yeah, [crosstalk 00:33:24]. I mean I got to cheat a lot because we'd done the Twitter thing, which gives me a little bit of money in the bank, so a lot of them knew that I can do it without them. I'd rather have them to help and push us forward, I like having the accountability of having an investor. I like knowing ... And again, I'm thinking down the road. Could I have funded some of this on my own? Certainly, but eventually this thing is going to grow and I'm going to need a series A. My understanding was the order of operations, raise a seed round first, show that you can do something with that investment, and then raise a series A. I have to do the series A anyway, I might as well just follow the normal order of operations and do the seed round.
But yeah, I have a good friend ... Oh you know her, Jenna Marino or Jenna [crosstalk 00:34:08] now.
Carl Smith:
Oh yeah, absolutely.
Martin Ringlein:
Her and I were drunk ranting, as we always do, one day in DC about a decade ago. It was probably like the second time we'd ever met each other, so it was friendship-love at first sight, and we're talking about design and what it takes to be a good designer. We came to the drunken conclusion that design is 50% selling, and I think when we say that, what we're really talking about is confidence. Being able to articulate your work and explain why you made the decisions you did. That always stuck with me as a designer, so I just pull that into everything.
You're totally right that it's the confidence. I strongly believe in why this'll work and why we made the decisions that we did. Why we're doing what we're doing. I had an answer for everything. When I'd show a design and someone asked me why is it purple? Not just why is it purple, why is it that hue of purple, why not a little lighter, a little darker? I can articulate that. I can defend it and I can bring it back to a business objective, or something that's more than just a subjective aesthetic decision, so I do the same thing with the business.
I'll say, this is why we're going down this path, why this market. I'm not steadfast in any of that, I'm just saying here's why I'm confident on it and if you can disagree with why we make the decision that we did, then let's change the decision. But if you understand the logic that we did, then let's go forward. I think that the investors appreciate that, whereas I'm not as stubborn as I am confident. I'm confident in that we'd put a lot of time and effort and thought into this decision. But if you can refute it, yeah, that's actually what I would prefer you to do. I hate when people ask for advice, because what they're really asking for is validation, they just want me to agree with them. Well, you're just wasting my time.
The best thing I can do is to have put a lot of time and thought into something, feel really strongly about it, with strong conviction that this is the right path and for you to undo all of that. Because if I can't take that, all I'm going to do is figure out what you already know. I'm going to spend a lot of money and time doing it. I'd rather you just tell me that I'm wrong right now.
Carl Smith:
Yeah. With Twitter, Twitter came to you. Apple and Twitter came to you. But with nvite, you're going to go on the road and try to sell it, is that right?
Martin Ringlein:
-ish, I guess. We didn't really say, "Go on the road and try to sell it." I'll kind of tell it in two ways. I'll tell one part of it and then I'll go back in time.
So you raise the seed round and the idea is that you spend that money, right? You raise a million dollars and the investors ... A lot of people, they haven't been through it, you think, "Hey, you put that in the bank and you save it for a rainy day if you need it. You be very responsible with how you spend it." That is not what they'd like you to do. They want you to spend that million dollars, and they want you to do it quickly, in like 18 to 24 months because they want you to spend it building the business so that the business becomes more valuable so you can raise more money so you can do it all over again.
For a lot of people, it doesn't make a lot of sense. You're just constantly in the business of raising money. But they want you to get to a hundred million dollar business. You've got to build a quick sales team. You've got to have a really strong product to sell. So, you've got to put money behind that. That's what they want the investment to go to.
So, we're on this path. We spend our million bucks, and as we get towards the end of running out of it, the order of operations, we've got to raise more money. In Series A, you can do one of two things. You can raise more money or it's also, you have an interesting thing at this point. You have a business that is making money. It has a product that is unique in this space. It's also an interesting time to have acquisition conversations.
Just to do our fair due diligence, we start having those conversations. I reach out to a few people that I know in the events industry. Say, "Hey, we're raising this Series A. I think it's a good time just to at least have the conversation." We have our conversation with a lot of different groups: in the ticketing space, outside the ticketing space, some in the music space, just people who have thought about the kind of problems that we've solved. We start having these conversations and the one that ends up coming to fruition is the Eventbrite one.
It ultimately makes more sense for us to sell the business to Eventbrite and partner with them than it does to go out and try to raise that Series A. Even if we could be successful with it and take the business to the next level. So we make that decision as a team. But the Eventbrite conversation specifically, we actually started our conversation with them like three months into nvite. We didn't even really have a product yet.
Our second intern at nclud, the agency ... Again, it always comes back to nclud. It always comes back to team. It always comes back to relationships. I'm big on like ... I piss a lot of people off, but I really try not to because they come back into my life many times over. But this intern, Lauren Moon, one of my favorite interns, definitely one of our most talented, just because she's fun and she's crazy, but she's a very talented designer. She worked at Eventbrite. After she interned with us, she went back to California and she got a job at Eventbrite, and we were getting into the event space, so I just told her, "Hey, I'm starting this thing. I'd like to pick your brain about it because you work at Eventbrite. You might have some good insights." She tells me, "I think what you're doing is really interesting. I'm going to connect you with our VP of strategy." I was like, "Oh, that's cool."
He thought it was interesting enough that he said, "Hey, why don't I fly you and your founders out here? Just to show us what you've been working on." I'm kind of nervous because we hadn't worked on much. This is three months in. But I'm like, "Yeah, a free flight to San Francisco." If anything, that's one step to taking Eventbrite down is the $200 flight. That will hurt their bottom line. So they fly us out here, and we demo for them. I think they thought what we're doing is interesting. I think they probably thought it was more like cute than ground breaking, but they didn't dislike any of it. We just stayed in contact. It wasn't like, "Hey, we want to buy this thing that doesn't exist yet." It was like, "Okay."
They said a few things that I don't think they realized were very important to us. The VP of Strategy at the time, he says just by happenstance that fraud detection is a big deal for them. They have an entire team, I think it was like 30 people, who do nothing but look at fraud and write algorithms for fraud. I just took note and I said, "Oh, didn't even consider that." We're getting into this transaction business and people would use that for evil.
Carl Smith:
Yeah, to scam. Yeah.
Martin Ringlein:
It's like, "Okay, maybe we should think about fraud." It saved our ass, because he had let known that most of the small startups he sees go out of business because they can't handle fraud. That was just top of mind for us. I was like, "Oh, shit, I guess we're in the fraud business now." If he'd not said that, we'd totally would've fallen into that trap because there definitely were times that we caught it early and fast. People trying to use the system for evil.
Yeah, so we always stayed in contact with them. I'd say every six to nine months, I'd sync with the particular VP of Strategy to show him what we'd been working on. The last time he and I met in DC when he was on the east coast, it clicked for him, this new thing that we were working on which is called our Community Platform. He saw that we started to think about Eventbrite not as a competitor but as something that we could complement. In the beginning, all we did was want to take Eventbrite customers, so we'd find the ones that wanted the thing that we did better and we would take them. To them, every little customer that we took wasn't a big deal to them, but to us it was a monumental moment because it was a lot of revenue.
We started to look at the customers that we couldn't take and why we couldn't take them, but they still wanted what we offered. We started to figure out is there a way that we could treat Eventbrite not like a product that we compete with but like a platform that we build on top of. Just that thinking was kind of revolutionary at the time for Eventbrite. Hey, what if Eventbrite is not a product, what if it's a platform? What if other people could build on it? And that's what we did. We became partners with them. They started sending us business. We were like, "Whoa, this is kind of cool." Now they're sending us revenue? This is awesome. For us, big deals.
And then, that relationship just became more clear. That's why when we were having those Series A conversations, we were just clear with them, we said, "Hey, we're going to go out and raise this money, but we are talking about other companies about potential acquisitions." They said, "Yeah, let's have that conversation." So it was a little of us going to them, a little of them coming to us. Yeah, we were more proactive with them.
Carl Smith:
What I realize as I listen to you tell these stories is that you were always reaching out to other people. Like you said, it's about the relationships from the beginning. Right? Even if you did piss people off ... And I'm confident that you did.
Martin Ringlein:
Yeah.
Carl Smith: You're so lovable, right? I can imagine that you were able to smooth out most of the ruffled feathers, right?
Martin Ringlein:
I think everyone knows ... If you don't know this, you're most likely somebody I don't care that I pissed off. I think everyone knows that at the end of it, I want to do more good than bad. I'm only after doing what's best, I believe, for ... I'll always think about my team first, selfishly. So, my team first, the product and then in relation to the user, thinking about the bigger business. I always take that order of operations. I know that isn't true for everybody. A lot of people will say the user first, customer first. I'm a big believer that I will always pick the team over the user. Because what's the point of servicing the user without a team to build a product? Right? You need a really great team to build a really great product to service a really great customer. I can only see it in that order of operations. I can't do the inverse. I can't have a really great customer, then build a really great product for them and then have a really great team that can build that product. I need to start with the team.
They're the ones that have ... you know, been, like Alex and I a decade and a half now. That's crazy. Most of my adult life, working with one guy on like four different ventures. Then, the nvite team, we've all been working together for about five years, even before nvite started. We know each other really well. We know how to work really well together. I hope to continue working with a lot of them. I hope to work with people from the White House, people from Eventbrite in the future, people from Twitter. Yeah, those relationships are like everything to me.
I have this tattoo now. I only have two. A lot people don't like it because it sounds so negative. It says, "May the bridges I burn light the way." A lot of people are like, "Don't burn bridges, Marty. You shouldn't burn bridges." My point is, I think I get frustrated with people who are so focused on not burning the bridge that they don't do the right thing. They don't do right by their team, they don't do right by their product and they don't do right by their customer. Because they're so focused on, "If I burn the relationship, I won't get the promotion or I won't get the salary increase." I'm like, yeah, I'm coming from a total point of privilege now. We just spent an hour and 47 minutes talking about all these successes, so I totally get this. But I want to come from the position of, like I want to be able to say, "No. I will take the position of I would rather get fired than do the wrong thing."
Again, that sounds ... I had a little healthy Twitter fight with somebody who's like, hey, I understand the spirit of what you're saying, but you're totally speaking from a point of privilege. Not everyone can just say, hey fuck it, I'm going to quit my job because I want to do what's right. But I'm talking about what's doing right like something stupid like a user interface item for making the customer have the right experience and just not believing [crosstalk 00:45:28].
Carl Smith:
Right, right.
Martin Ringlein:
If you look at it in another way, if you work in an environment where someone's being physically or emotionally abusive or tearing down other groups within your company, I'm going to say that you shouldn't stand for that. We should do all we can to get the abusive person out. If you work in an environment that won't change and puts up with that, I'm a believer that I want to leave that place. Right? I've never worked at a place ... Maybe I'm at a point of privilege where I've never experience it, so I've never seen it first hand, but I want to believe that that's true of everything.
If I've got to fight and I've got to put my own reputation on the line to do what's right, in any capacity, that's what I want to do. If I've got to burn a bridge, that sucks, but I've found I have the benefit of time now. Almost two decades in the working here, that anyone who's ever disliked working with me at some point in the past, now they've come around. Certainly, I've gotten a little more mature and I'm a little bit easier to work with, but when I've talked with them in the future, it's like, "Hey, you were right back then. This was what we should have done." It makes me feel good, but it also adds fuel to the fire because it encourages me to burn more bridges.
I just don't want people to be scared to burn them. Have confidence to do what's right and push forward. Especially if it's for your team, your product and your customer.
Carl Smith:
So you say, you're 20 years in. I'm 30 years in. It's like, you don't get that time back and if you spent that time staring at something instead of doing something, you're going to lose. You know? Depending on your definition of winning, but to me, if you're not moving forward in a direction that makes you feel like you are growing as a person, not necessarily financially or whatever else. Those things are nice. But if you're just stagnant and ugh ... I couldn't handle it.
I realized when I was talking about smoothing ruffled feathers, we didn't even talk about Macaw. What was Macaw? I remember I saw you at South by Southwest. I saw your t-shirt and I acted like I knew what it was. It was a CMS, right?
Martin Ringlein:
It was a design tool. Again, this is going to be one of those things where we have to remember the context of time. Now I talk about a web-based design tool that outputs really good code and everyone rolls their eyes and is like, "There's a million of those." But when Macaw first dropped, this was an inconceivable notion that you could have something like a photo ... This is even before Sketch is a prominent thing. Like now it's [inaudible 00:48:00]. People are rolling their eyes, like what's Photoshop? Photoshop for website design? If you could have something like a Photoshop that could output, instead of a PSD, HTML CSS, but that was actually good HTML CSS, that would be groundbreaking. And just to have it be smart, to know that inside your design file that you started using Helvetica more than Trebuchet, the CSS that write out should treat that font as the dominant font. Add it to the body instead of a very specific thing. That would be really intelligent if a code editor could understand your intentions in design and that's what they built. It was super awesome.
Tom, who starts the company, he worked with us at nclud. Again, it all comes back to nclud. An amazing 12 human beings, probably the most amazing 12 human being on the planet that I've ever worked with. He goes to Twitter with us. He's the first to leave. He goes to MIT, works there and then he's always had this idea for Macaw. He tells Alex and I about it. He's like 5 minutes into describing it and we're like, "Stop. Your level of passion for whatever the hell you're about to describe is off the charts. We're in. Whatever capacity we can be in, we're in. Like, you let us know right now. If it's writing a check, if it's being on a board, if it's doing sales, if it's making phone calls. You put us to work. We are in on this thing. Don't even finish describing it."
He ends up telling us what it is and we're like, "Yeah, this is super cool." It sounds like an impossible task. I can't imagine that ... He had a guy that he'd worked with in the past that he's going to bring on and they're going to start it together. It doesn't sound like what I just described, that two human beings could make it. They ended up having a team of four and they built it. It's awesome. It ends up getting acquired by Envision. The whole team's there now. I can't say too much about what Envision is working on, but from what I understand, I can only imagine big, enormous things are coming out of that team that are going to leave us all pretty jaw dropped.
Carl Smith:
Before Adobe swipes them up.
Martin Ringlein:
Yeah, yeah. That would be nice. It's interesting, there are just so many of these cool design tools out there, which is an awesome time to be a designer on the web.
Carl Smith:
I know, where were they in 2003, man?
Martin Ringlein:
I know, I know, right?
Carl Smith:
So Macaw was kind of a little bit of a side swipe for you, then? It wasn't necessarily a ... I mean, it wasn't nvite. I wasn't your passion, it was you saw the passion of someone else that you knew well and jumped in.
Martin Ringlein:
That's right. Yeah, we were never W2 employees, Alex and I. We were first, I think only, investor? I don't know if anyone else ... because he took a little friends and family. I think it was just Alex and I and then they got acquired right before they ... They did a Kickstarter, that's right and they raised $350,000.
Carl Smith:
I remember that now.
Martin Ringlein:
$350,000 plus our initial investment. That was enough to build the first version of Macaw. I think they were going to he jump right to A. They didn't really need the seed route because they had the Kickstarter. They kind of went down the same path as us, like when you have the Series A conversations, start talking to people who are interested in acquiring you. Envision was like ... He had a relationship. Tom is very the same way. He had a lot of long term relationships. He'd known Clark from Envision for a long time. He'd always kept Clark in the loop and Clark was like, "No, what you guys have built and the aspirations of where Envision is going, this is a match made in heaven."
So, Alex and I, we kind of helped. Alex more on the design development side wherever he could and me on the sales, business development just kind of thinking through problems, getting on calls if I could. Any relationships I had with educational institutions to see if they could buy licenses of Macaw in the beginning. Then, sitting on their board and just being an investor. That one was cool because yeah, it was a time where something was awesome and big and had a good story, but we didn't start it. Somebody else did and we could just be a part of their ride.
Carl Smith:
Now your day to day, is it Eventbrite?
Martin Ringlein:
Yup, every day, 9 to 5, here right now. I'm under their active service. They're pretty cool. They let nvite still runs pretty autonomously. nvite, the product, is still out there. We're building a version of it that's going to launch pretty soon here, that will be more integrated with the Eventbrite product line. It basically gives big brands more control over their brand on the Eventbrite product.
Spotify is a really good example. A lot of Spotify events are on Eventbrite, but they don't have to look like your typical Eventbrite event. They can look more like a Spotify event. We can put a custom TLD there, so you can really start to remove Eventbrite the brand from the experience, which is a point of contention here sometimes. You know, is that a good thing? Is it a bad thing? If you just talk about branding in general, should there be a level of consistency? If people know how to use Eventbrite, how to check out, should we ever get in the way of that? Is the Spotify brand the parent brand or is the Eventbrite brand the parent brand? Should we make the experience more like what you're used to in Spotify? Or should we make it more like what you're used to on Eventbrite. It's something that we talk about a lot. We brainstorm a lot, but that's pretty fun and exciting.
Eventbrite is constantly growing, so they just acquired TicketFly which is pretty exciting because now on the nvite side, we're doing a lot of thinking around what can we do with what we built for the music industry, for the festivals. That's always exciting stuff for us. Hopefully, we've got some big, exciting events down ... More of then at South By Southwest again.
Carl Smith:
Well, Marty, it was great catching up.
Martin Ringlein:
Yeah, man. I love it.
Carl Smith:
Could tell you ...
Martin Ringlein: When am I going to see you next?
Carl Smith:
I'm exhausted just hearing about everything that you've done.
Martin Ringlein:
Sorry, I could talk forever, man.
Carl Smith:
You know what? I think you might see me next February at Owner Summit because I've got to find a way to get you there. Seriously, it was so good catching up with you. Everybody listening, thank you and we'll be back soon. I'll talk to you later.
Martin Ringlein: Bye then. Thank you, Bye.