Canadian Brothers Bootstrapping to $40M Exit: Chris Sinkinson, Co-Founder AppArmor (Part 6)

Sramana Mitra: Now, between when you started with your first client and as you went along, how long did it take you to get to $1 million ARR?

Chris Sinkinson: As I’d mentioned, we charged a one time setup fee at the beginning. That hurt us a little bit. I would say it was around late 2015-2016 when we hit that $1 million ARR. The first million is the toughest.

Sramana Mitra: Was that still mostly inbound leads or did you put together a proper go-to-market engine by this time?

Chris Sinkinson: Most of it was still inbound at that point.

One tough lesson that we learned was that you have to sell to your customer the way they want to be sold to. We wanted to do blog posts and social media and have them come to us, but we were selling to emergency managers who weren’t in that demographic.

Sramana Mitra: They’re not on social media.

Chris Sinkinson: Yes, they’re not on social media and not really reading blogs. They’re much more hands on. So, we had to do things a bit differently. One of the things that we did that was incredibly successful was, we sent them a physical piece of mail or snail mail. They would get it on their desk, open it, and read it. None of our competitors were doing anything like that.

There were a couple of such things that we didn’t want to do.

The first one was, they bought by meeting vendors at trade shows, and we hated going to trade shows because you have to set up the booth and the like. We just didn’t understand why it’s needed for an app.

The other one was that they have purchasing departments that prepare tenders and RFPs. They have vendors respond to them. They review them, and then they pick a winner. We were just ignoring those. We didn’t want to do all that work.

Sramana Mitra: When did you figure those pieces out?

Chris Sinkinson: That was probably around 2016-2017. We decided that we’ve to sell to them the way they want to be sold to, which means we must get excellent at trade shows and at responding to RFPs. So, we really went deep into that. That’s when the real sales explosion sort of happened. We started doubling our revenue almost every year. We were named one of the top 200 fastest growing companies in Canada in 2020. We were winning awards and growing really fast. It was tremendous.

Sramana Mitra: Where are we in the progression of your journey in 2020?

Chris Sinkinson: So, I remember it was March 12th of 2020, a day before Dave’s birthday when everybody shut everything down and went home. We said to our staff, “Take your laptops. We’re going to work from home for the next two weeks.” Little did we know, it was going to be a lot more.

Sramana Mitra: It was two years, more or less.

Chris Sinkinson: Yes, exactly. Think about our product. We were selling a product that was for physical safety.

Sramana Mitra: That’s why I asked you the question. You were at what revenue level at this point?

Chris Sinkinson: We were at probably about $4.5 million at that point. So yes, it was a little bit scary. We, all of a sudden, don’t have the phone ringing off the hooks with people looking to do this anymore. People are very focused on other things.

Sramana Mitra: But you’re a bootstrapped company, you don’t have investors bothering you. You’re managing your own situation.

Chris Sinkinson: Exactly, but you can imagine it’s a little bit scary.

Sramana Mitra: Very scary. Absolutely.

Chris Sinkinson: So, it was kind of weird at the beginning. Everybody just sort of stood still. We didn’t have any anybody quit or leave our platform because everybody was kind of trying to figure out.

Sramana Mitra: How many people were you?

Chris Sinkinson: We had a staff of 20 at that point. At that point though, a lot of our apps are branded with the word safe in them. NYU is a client of ours, and their app was called NYU safe. The app for University of Florida was called Gator safe. A lot of them were like that. So I said to Dave, “I think it’s time for a pivot.”

This was back at the time when breweries were making hand sanitizer. Everybody was pitching in and trying to help get through the pandemic. A lot of our schools wanted to start to reopen. So one thing we developed was a self-assessment tool.

In the app, if somebody wanted to come on campus, they would fill out a questionnaire, submit it, and we give them a QR code that would let them gain access to the campus. We even did some integrations with entry systems. So, there was a database of people that had completed the self-assessment and had the green checkmark that they could come. The door would open for them when they use their key fob because that data had been shoved into the right database. It was interesting.

We did that initially. A lot of our clients that suddenly were a little bit less focused on the physical safety, but really interested in the self-assessments and kind of managing the return to campus.

Then fast forward, as the vaccines were coming out, we didn’t realize this was going to be a political time. Just to put that out there about vaccines because I know it’s kind of a hot button issue for some people, but a lot of the jurisdictions that we operated in had told the schools to verify that people are vaccinated before they can come back to campus.

We built a tool which was integrated with the QR codes containing vaccine records. We were building a vaccine passport. A lot of people didn’t name it that we named it that because that seemed to be the term that people were using for it at the time, but it pivoted to be a vaccine verification. So, it was a vaccine verification tool that was then built into it.

As you can imagine thinking back to the return to school timeframe, this was the hottest selling item ever, and there were no discounts at that point; because we were so busy implementing this for different clients and helping them configure it properly.

So, we had taken a bit of a gamble. When we first built it, we thought everybody’s going to want this. Then we showed it to a few clients, and there was not too much interest. Then the government came out and told the schools that they all need to do this. Then the phones were ringing off the hooks. We were working as fast as we could.

I remember one school was opening the day after Labor Day. They called my brother Dave on his cell phone and said, “We are in huge trouble. We have nothing and we’re opening tomorrow. Is there any way I can convince you to turn on the vaccine verification feature in our safety app.” The app was already in place. Dave said, “Yes, I can have it on in two hours.” He went into their system, set it all up for them and said, “I’ll be sending the bill right now.” So, no discounts at that point. but it worked incredibly well to help them get through it.

Then as we got through the pandemic, the normal original sales cycle that we were seeing sort of started returning.

This segment is part 6 in the series : Canadian Brothers Bootstrapping to $40M Exit: Chris Sinkinson, Co-Founder AppArmor
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