Do you want more funding?

YES, I WANT MORE FUNDINGNO, I HAVE ENOUGH FUNDING
Neil Patel

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Christian Owens started coding at just 12 years old. His startup has now raised nearly $100M, and is bringing in billions in revenue as they empower software startups around the world to scale. His startup Paddle has recently raised investments from top-tier investors like Notion Capital, FTV Capital, Kindred Capital, and 83North

In this episode, you will learn:

  • Fundraising
  • Christian’s top advice for other entrepreneurs
  • Where to get more help building your own startup

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For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.

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The Ultimate Guide To Pitch Decks

    Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).

    Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.

    About Christian Owens:

    Christian Owens is a technology entrepreneur located in the United Kingdom. Christian has been involved with a number of startups but most notably his own two Branchr Advertising and Mac Bundle Box.

    Christian is currently the Founder and Director of Branchr Advertising. A company with a new approach on CPC-based internet advertising that allows fair ad distribution, without contracts or startup fees.

    Previously Christian was involved in the creation of various web-based technologies and applications that have since been sold. Christian also started The Dream Apps, a privately funded Macintosh software development company.

    Connect with Christian Owens:

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    FULL TRANSCRIPTION OF THE INTERVIEW:

    Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we have a founder that is pretty impressive. The story that he has, everything starting at 14 years old, is pretty mind-blowing. We’re going to be learning quite a bit, the ups, the downs, and exploring the whole thing of building, scaling, financing, you name it, and especially at a very, very early stage. So without further ado, I’d like to welcome our guest today. Christian Owens, welcome to the show.

    Christian Owens: Thank you for having me. I’m excited to be here.

    Alejandro: Originally from the UK. How was life growing up?

    Christian Owens: It was good. I grew up in a small town, pretty sleepy, and that probably is why I now spend most of my time online because I discovered it really early. It was a good life growing up.

    Alejandro: And, obviously, growing up very early into computers. How did you get your hands on computers and code for the very first time, Christian, because I know that you developed that love right away?

    Christian Owens: Absolutely. I forget exactly how I came to have my first computer, but I remember around 12, 13, the summer around there, we inherited a computer from somewhere, and I just became fixated on it from the moment that we got it in the house. Obviously, it was the dial-up internet back then. I think I used it for the first six months before I was getting the internet, and exploring every possible part of it. I think the revelation for me was I think we bought a book, or I took a book from the library or something, which was about HTML. I found it fascinating that you could type characters into this thing, and you could end up with something out of it that you could see, and you could use, and you could play with. That really sparked my fascination with computers and technology pretty early on. I think from about age 11 to 13, I started building websites for people. So I’d go door-to-door, almost, in the town that I grew up in, to local businesses or restaurants, and I’d be like, “I can make you a website.” I didn’t really charge them anything for doing it. It was kind of $100 or £100 or something like that. That’s how I started.

    Alejandro: Then, how did you get serious into this because, at age 14, you were already making a killing. At what point do you realize, “Hey, I can actually make good money out of this”?

    Christian Owens: I was building websites for people for the fun of it more than anything else. I was tinkering and really enjoyed making stuff. I can’t remember the exact moment it happened, but one of these businesses – I think it was an Italian restaurant that I was making a website for, we got to the end where they were supposed to pay me this small amount of money, and they were like, “Can I have an invoice?” My being 12 or 13, I was like, “What on earth is an invoice. I’ve never even heard of this before.” So I Googled it. There was a ton of different invoicing software that came up. I think one of them was QuickBooks. I clicked on it, and it was something like £10 a month for this piece of software. I was like, “I’m not paying £10 a month. I can build this.” At that point, I started teaching myself how to code and build software. The first thing that I built was to scratch my own itch around this invoicing thing. It was invoicing software for people who did freelancing or time billing, or project-based billing. It wasn’t super fancy. It didn’t have a ton of functionality, but it worked for the narrow purpose of what it was. So I started building that and initially using it myself. Then I became obsessed with building software as opposed to building these websites for people. As I started building software, I realized, “I’m not actually making websites for people anymore, so I’m not making any money. Maybe I can sell this invoicing software to people who need it. I started doing that when I was about 13-ish, and then from that point started making a couple of sales. I gradually made the product a little bit better, and then made a few more sales, and made the product a little bit better, and made a few more sales. Before I knew it, six months later we had done $3,000 – $4,000 in revenue, and I was a 14-year-old with a real business. Fast-forward 18 months from then, we were a $4 million to $5 million runway software company with a bunch of remote people who helped me with things like support and other things.

    Alejandro: That’s a lot of money for a 14 to 15-year-old. Was your family concerned that you were dealing drugs on the street or something like that? [Laughter] Maybe they were like, “Where is that money coming from?”

    Christian Owens: This was really interesting. There was this poignant, funny moment in my childhood that I remember, which was that my parents had zero idea that I was doing any of this stuff. They knew I was building websites for people, and, occasionally, I’d get a check. I had a kid’s bank account that didn’t accept checks. They would always write the checks out in my dad’s name. So whenever I made money doing websites, they would have to take me to the bank, and they would put the check in the account, and then they would take the cash out, and I’d put it in my own account. These were not big checks. They were like £50 or £100. I remember one day, we went and did that, and this was back when you’d go to the bank, certainly in the UK – I don’t know if it was the same in other countries as well. For the account I had, you had a little book that instead of getting bank statements, you’d have a book, and every time you’d go into the bank, you’d hand over this book. It was like a little passport. They would dot-matrix print in the next line of the statement with your balance in it. I remember one day going in with my mother to deposit around £100. I handed over the book, and they gave it back to me, and the balance went from £70, £120, £96. Then the most recent line was like £74,000. That led to the conversation with my parents, which was, “What on earth have you been doing on the internet that has led to you having £74,000 in a kid’s savings account?” That led us to going to a coffee shop around the corner, and I was like, “I’ve been building this invoice in software and selling it on PayPal.” From there, they were initially and incredibly skeptical of like, “What is he doing on the internet? Is he selling drugs? What is this?” Then once they understood, they were, obviously, super supportive of what I was trying to do and what I was trying to build.

    Alejandro: At 14, you were still developing, maturing, growing, shaping up the personality, the experiences. At that point, were you able to realize that was a lot of money?

    Christian Owens: I would like to say yes. I didn’t come from a family where we had tons of money. My dad worked in a factory. My mom was a company secretary for a local engineering company. We never wanted for anything. We were never hungry or anything like that, but we were by no means had a ton of money. We went on one holiday every other year. It’s not like we were rich. We were always very open about, “Oh, we can’t do that until the end of June because that’s when we’ll have saved up enough money to go on this trip. At that point, I was always curious. Like everything with business that I’ve done today, it happened slowly and then all at once. It was like nothing, nothing, nothing, for a really long time, and then something clicked, and then it really started working. I definitely understood that it was a lot of money, but I don’t think I understood that it was more money than the average person makes in two or three years.

    Alejandro: Absolutely. In this case, you built this up to $5 million in revenue in 18 months. Essentially, as this starts to grow, you also start to have exposure to all the admin, the taxes, and more like the boring part of it, which was the segue for you to understand that “There’s something else that could be much bigger than this.” What happened during that time?

    Christian Owens: We were – I say we. I hired a couple of people remotely that I had never met, one of which is a guy called Harrison, who ended up being the co-founder of my current business. Basically, what happened was we were scaling this business. For context, we were selling software to freelancers, so this was not a high-priced product. I think it was like 70 or 80 bucks a year, and we were selling it to everybody in every country that you can imagine. Very quickly, it went from, “Oh, this is fun. We got a few transactions here and there through PayPal, and that works,” to there was a transition point at some point where it went from “This is fun. I’m building this thing that I like,” to “Oh, this is a real business, and we have to act like one.” So I had to learn about a lot really quickly. A lot of this stuff were things like, how do you deal with cash? How do you pay people on time? How do you deal with taxes, sales taxes, and VAT? Then, multiply that to how do you do that in Germany? How do you do that in Japan and all these different places? How do you deal with foreign currencies, and how do you start taking credit cards, as well as PayPal, as well as bank transfers, and all of this stuff? At some point, probably like 18 to 24 months in – I was 16 or 17. I convinced my parents to let me drop out of school when I was 16 to do this full-time. Around that same point, I got this itch, which was like the reason that I started doing this in the first place was because I really like building software and solving a problem, and then marketing and selling and partnerships, and all of that stuff. At some point, I realized that I was spending far more of my day on all of this stuff that wasn’t doing any of that stuff. It wasn’t going and figuring out what the next marketing campaign was or building the next feature. It was like, “Oh, we’ve just hit this 1 million Yen a year sales tax threshold in Japan, and now we need to file for local sales taxes in Japan. We need to hire a Japanese local tax agent to file them for us, and we need to pay them in Yen. All of this was really painful and laborious to deal with. Through this process, one of the ways that we had grown the business is, we had been putting together these bundles of software. So we were invoicing software for freelancers. What are other tools that freelancers use? We found people that were building project management software or people who were building time-tracking tools, or CRMs, or whatever it was. One of the ways we had grown was, we’d partner with these people, and we’d put together a package where you’d get, for example, product management invoices, and you would pay. If the retail price of this stuff was $400 a year, you’d pay $99 a year, and we’d all acquire a bunch of customers from each other. Through doing that, and that being one of the ways that we had grown, even though I was 16, 17 at the time, we had amassed a reasonable network of other people who were running software companies as well. One day, I got frustrated with all this stuff I was doing in the background, like all of this admin and taxes, and I sent an email to everybody who I had worked with, and I said, “I am really at the end of my rope in terms of dealing with all this,” and I listed taxes and payment processing and we get chargebacks or fraud or whatever it is. “How do you guys deal with this?” I got a bunch of replies, and that was the moment that I learned that people are really passionate in two scenarios: when they really love something or when they really hate it. The group of people that came back universally really hated this problem. I grouped the responses in two ways: 1) One group of people were saying similar to me that software developers built a bunch of stuff that they had hacked together in the background to make their lives easier to deal with all this stuff. 2) The other group was like, “We’re using these outsourced eCommerce platforms.” At the time, products like Stripe didn’t exist. At the time, it was Digital River and Demandware and things like that. “We’re using those things, but they’re probably not fit for you because it costs a million bucks a year just to get started with these things, and you pay a bunch of money every time you change something in professional services fees.” To me, neither of those two options to solve the problem seemed like a great idea. It was like, “Continue doing the things you’re already doing, hacking some stuff together, and eventually, as the business gets big enough, maybe hire some people to deal with that stuff.” Or, it was, “Use one of these platforms that was built in the early ‘90s. It’s going to take away all of these headaches, but it’s going to be super expensive for you to run a deal with.” That was the initial aha moment for me when it came to what was next. I was having a conversation with Harrison, who is my co-founder at Paddle, but was one of the people I had hired in to work on my business development, the invoicing company. We were both rifting on this stuff, and we were like, “Wouldn’t it be great if the thing existed that would solve all these problems that was not built 20 years ago?” After a few discussions about that, we were like, “Let’s do it. Let’s go and build that.” Over the next three or four months, we got the business into shape where a lot of this stuff was automated. We had people who were doing things like customer support, and it didn’t require us day-to-day to go in and solve problems. It really transformed it into what was a fast-growing business and what looked more like a lifestyle business that ran mostly on autopilot. We hired somebody to run that invoicing software company, and then Harrison and I moved to London. We were from different parts of the country and moved to London to tackle this problem that we both had in running this other company, which was how do you deal with all of that other stuff that comes with building, growing, and running a software company? So, all of this administrative, back-office boring stuff, how do you deal with all that. That was the problem that we wanted to solve.

    Must Read: Anshul Ruparell On Raising Over $100 Million To Change How People Buy And Sell Homes

    Alejandro: How old were you at this point, Christian?

    Christian Owens: I think I was 17, just about to turn 18, and Harrison is three months older than me, so he was just 18, as well.

    Alejandro: Wow.

    Christian Owens: We moved to London in August or September of 2012. We rented a flat together and lived together for the first four years of the company. We just took the plunge. I think I had just turned 18 when we actually made the move, but we were planning it a little earlier than that. We moved out on Mother’s Day. Never do that is a tip for anybody listening. [Laughter] Never, ever move out on Mother’s Day because I have not heard the end of it even to this day, a decade later.

    Alejandro: Wow. In your case, you move to London. Obviously, here, you start the company, Paddle. You raise your seed round. You raised that from one single guy, which offered you some space in their office. As a result of this, things started to get some momentum. Just so the people that are listening and watching get an understanding of what ended up being the business model of Paddle, what is the business model? How do you guys make money, and how does it work?

    Christian Owens: We built a platform. We call it a Revenue Delivery Platform, which is doing all of that back-office stuff for a software company. A software company or a business that is selling software signs up to Paddle, and we manage everything from the point at which a customer clicks Buy through to that ongoing relationship. It’s everything to do with subscription billing to SaaS products, invoicing for sales-assisted products, and all of the recurring subscription billing, price optimization, payments, currencies, and all of the underlying taxes, etc. We’re not just a software product. We’re like a software services product where on the tax side of things, for example, yes, we deal with the subscription billing, but we’re also collecting all of the money for the taxes, filing the tax returns on behalf of the businesses, and remitting the money to the tax authorities. It’s all of the things that I hated when I was running the business are all of the things that we try and solve now with a single integration that we software companies do.

    Alejandro: Very cool. Up until now, how much capital have you guys raised for Paddle?

    Christian Owens: To date, we’ve raised about $100 million, just shy of that like $98.

    Alejandro: I know that for you, the fundraising journey has been pretty unique, with a unique experience from the guy that seeded you $150,000 just to go and spend some time at their office to even pitching a venture capital firm without a deck at 18 years old. How was that?

    Christian Owens: Yeah, even the seed round, that $150K initially, we met once. The way that we met was, I replied to a tweet that he did, and I can’t even remember what it was about, and he was like, “Come meet me.” We had one meeting, and at the end of the meeting, he was like, “You know what? You’re 18, and I have no idea if this is going to work.” He had built a technology business, but not a business that sold software. It was an advertising-driven kind of technology. He understood the problem but couldn’t 100% empathize with it. But at the end of the first meeting, he was like, “You know what? $150K – you guys see what you can do. There are some desks over there. If you want to move to London, move to London. When you have a question, I’ll point you in the right direction of the team internally who deals with HR or whatever it is, and you can bribe them with chocolates or something to get an answer.” That was how we got our start. We had built a product before, but we had never built a business. We had never properly hired people. We had freelancers. So, we moved to London. We started building the product, and nine months in, we were roughly ready to launch, but as a lot of businesses go through, we were confused about who we’re selling to. What types of software companies? Actually, we got a bit distracted. We were still trying to solve this problem, but then we also decided that in order to make it compelling, we also had to build a marketplace for the software. That made the whole pitch so much more confusing than like, “We’re just solving this pain” to also, “We can get all these new customers.” But around the time that we were going to launch, I was talking to Mark, the guy who wrote the initial check, and he was, “I don’t know if this initial version is going to work. I don’t know if you’ll hit product/market fit, but one of the things that would be useful for you to do is if you are going to scale this business, then you should probably start getting to know investors, so people who could lead a proper seed round or a Series A eventually. I forget exactly how we got introduced, but he definitely facilitated this initial introduction to a VC fund. It just so happened to be one of the largest VC funds in London, a fund called Baldwinson. He introduced me directly to a partner, and I had a couple of back-and-forths over email. I told him the story and what we had done. For some reason, they thought it would be a great idea for my first ever – I didn’t even know what a VC fund was before this email chain. For some reason, they thought it would be a great idea for my first experience in front of a VC fund would be to skip over the usual back-and-forth with one partner or an associate and literally dropped me straight into a Monday morning full-partnership meeting and between two other companies who were very polished in doing their pitches to make a final decision. They just booked me in for 45 minutes that one morning. I go in completely unprepared into this room, and there are 18 people – 12 people in the actual investment team and a bunch of assistants and associates around this big table. I go in, and they’re like, “Do you have a deck? Do you need this HDMI cable?” I’m like, “No. Was I supposed to bring a deck?” I ended up having a conversation with this group of 12 to 15 investors for about 30 to 45 minutes. As you can imagine, they fired questions at me. How are you going to scale? What does the pricing look like? Unit economics – how are you going to build a sales team? And I had zero answers to any of these questions, and that meeting went as well as you could have expected. It was a complete train wreck. Obviously, they weren’t going to write a check. Interestingly, the thing that happened after that was – we picked a number out of the air, which was about £1 million – $1.4 million that we wanted to raise, which was, quite honestly, it seemed like a ridiculous amount of money to me because we hadn’t launched a product yet. I went out of that meeting, and I was having a debrief with the partner who took me in, and also, coincidentally, a guy called Mark at the end of the meeting, and he kind of said, “That went terribly.” He was trying to be nice about it. He was like, “That went completely terribly; a complete train wreck. They are not going to give you any of their money, but I really like you. I like what you’re doing. I think you’ll figure it out.” And he ended up writing us a check for just over £1 million, like 1.2 to 1.4 million personally.

    Alejandro: Wow. It’s interesting how all these unique experiences that only happen to one person and all of them have happened to you, even the Series B. Talking about sitting next to the right person at the right time on an airplane, so what happened there?

    Christian Owens: The initial business that I started, the invoicing software was for Mac. It was desktop software for Mac. That was what most web designers and graphic designers were using, it being native software they liked. I became obsessed with Apple products. The first set of customers for Paddle and all this infrastructure that we went after were people who were building software products for the Mac or for iOS or things that sync between them. Around 2017, we’d go to the Apple developers conference every year, WWDC, in San Jose. I think that year was in San Francisco, and since moved to San Jose. We had a reasonable amount of money. We’d raised a Series A, a small Series A in 2016, about $3 million, but we were still incredibly frugal, as hopefully, most businesses are at that point. Harrison and I were flying to San Francisco to go to this conference to meet our customers. I think it was the first time we had ever been. We bought the cheapest possible flights that we could. It was London to New York, New York to Chicago, Chicago to San Francisco. It was a grueling 23 hours on a plane for what could be a 10-hour flight. On the leg of the flight after the layover from Chicago to San Francisco, I sat on a terrible middle seat. It was awful. The guy next to me on the plane had a MacBook, and it had a bunch of stickers on the front. The stickers on the front were companies. There were a couple that I recognized like, Typeform. I was like, “Do you work at Typeform (or whatever company it was)?” “No, actually, I’m an investor in Typeform.” It’s like a four-hour flight. We spent the whole four hours talking about him investing in these B2B software companies, me running a B2B software company going to San Francisco to get new business. It turns out that despite this being a flight from Chicago to San Francisco, he was Greek but lived in London, and it was a London-based B2B SaaS investor. I was based in London, as well. I don’t know why I remember this, but very distinctly, we were walking to the baggage area to collect our bags. He walked off in front of me, and I recognized the guy’s name, Chris. I thought he’ll probably never remember me again. He waited for me by the exit, and he handed me a card. I emailed him probably six or seven hours later, and as soon as we got back to London, we immediately went to lunch and continued the conversation from where we left off. Probably four months later, they led our Series B.

    Alejandro: Wow. That’s remarkable. Christian, it seems that all the good things happen for a reason, and at the end of the day, you guys have been able to develop and build a really fantastic company. Just for the people that are listening to get an idea of how big Paddle is, is there anything you can share in terms of the number of employees or anything else?

    Christian Owens: Yes. We’re about 150 people right now. We’ll hire about another 100 people this year. Our main office is in London. We have other offices in China, Australia, Ireland, and the U.S. in New York. It’s a really interesting business to run because we power all of the building for a lot of SaaS companies. This year will be the first year that we measure that volume going through us in billions of dollars as opposed to hundreds of millions, so that’s an exciting milestone for us.

    Alejandro: Absolutely. In terms of talking about the future and thinking about what’s coming, imagine if you go to sleep tonight, and you wake up in a world where that vision is fully realized. What does that world look like for Paddle?

    Christian Owens: Wow. I think, for me, when I really boil this down, one of the fundamental things that gets me out of bed in the morning and gets me excited about what it is that we’re building is I think back to when I was building that software company. It wasn’t easy. It was definitely hard, but the individual components – building a product was pretty easy. There wasn’t anyone else building this native invoicing software for freelancers on Mac, so it was pretty uncrowded. There were a bunch of uncompetitive acquisition channels for me to go, and these partnerships and bundles and email marketing were great. The thing that was really holding us back was this infrastructure piece. I fast-forward to now, and I think, how much of that is still true today? It’s still easy to build a good product, or at least it’s probably easier to build a product in terms of the infrastructure available and things like AWS and all the open source frameworks, but it’s far more competitive than it’s ever been. If I were to look at it right now, there are probably 150 companies doing that invoicing software that we were trying to build back then. You have to differentiate on providing the best possible product to people and the best possible service and experience to people at the same time. The thing that gets me up in the morning is thinking if we were trying to build that invoicing product today, and we were trying to do it without Paddle, we would have been spending even less time on building a really great product and serving our customers because we would still be dealing with all of these other headaches that existed. For me, it comes down to if two people were starting the same business at the same time, like you and I are both going to start a project management SaaS business. You build a product that is infinitely better than mine. It’s a great product and great customer experience. I build an inferior product with inferior customer experience, but the thing that I do is really nail all of this infrastructure. My conversion rate in every country is perfect. I’ve expanded into every G.O., and I’ve really nailed this down. I end up being more successful than you simply because I had the resources and the bandwidth to optimize all this other boring stuff in the background. I just don’t think that should be the way that this goes. I think the best product and best experience should win. Just like AWS has democratized how we build software. Like, it’s given everybody the same set of infrastructures to start with. It’s not about who can spend a million dollars in service upfront. Like, I want to do the same thing for this infrastructure. I think this problem is solved when the best product and the best experience and you can go to market in the best way wins as opposed to the person who can spend the most amount of money on business structure in the background to make all of that stuff work.

    Alejandro: I love it. One of the questions that I typically ask the guests that come on the show is, imagine if I put you into a time machine, and you go back in time and have the opportunity of having a chat with that younger Christian that is 14 years old and thinking about doing something. If you had the opportunity of giving that younger Christian just one piece of business advice before launching a business, what would that be and why, given what you know now?

    Christian Owens: It’s a good question. I think, honestly, it would be: do one thing at a time. Focus on one thing at a time. It doesn’t mean you can’t change your mind or you can’t do something different, but focus on doing one thing at a time. We did this accidentally when we started Paddle. It was like hiring somebody to run the other thing and then starting something new. But there were definitely a ton of times both in the first business and within Paddle where we’ve tried to do too many things all at the same time and done none of them particularly well, whether that expands to lots of different verticals or segments, or whatever it is, I think it would be: you can do all the things you want to do, and you can do them successively. You don’t have to do everything all at once and next month, have all of these things ready for the world to see. I think that would be my #1 piece of advice is: do one thing at a time.

    Alejandro: Very profound. Christian, for the people that are listening and watching, what is the best way for them to reach out and say hi?

    Christian Owens: I’m pretty active on Twitter. It’s @ChristianBOwens. I couldn’t get the one without my middle initial. I’m still very annoyed about it. DM me, tweet me, and for anything Paddle-related, you can head to Paddle.com.

    Alejandro: Amazing. Christian, thank you so much for being on the DealMakers show today.

    Christian Owens: Thank you so much for having me.

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