He Went From $125K In Debt To Raising $75 Million By Boosting E-Commerce Conversion Rates

Embarking on the entrepreneurial journey is like setting sail on an unpredictable sea, facing calm waters and tumultuous storms. In this exclusive interview with Brian Anderson, a seasoned founder with a track record of triumphs and lessons learned, we delve into the depths of his entrepreneurial ventures, from the quaint harbors of the Hamptons to the bustling tech scene of San Francisco.

Listen to the full podcast episode and review the transcript here.

From Hardware Stores to High Stakes

Growing up in the Hamptons, Brian’s life was a blend of summer glamour and winter solitude. Amidst the contrasts, he learned the value of hard work, manning the local harbor store to make ends meet.

This middle-class upbringing, a far cry from the perceived opulence of the Hamptons, laid the groundwork for his future endeavors. It taught him how to use his brain power to succeed and achieve his goals.

Brian’s journey took a pivotal turn when he was inspired by a sixth-grade math teacher’s special class. He learned how to build a website and track stocks in an Excel sheet. This learning, combined with the ebb and flow of seasonal lifestyles, was when he discovered the power of his intellect.

Babson College became his gateway to entrepreneurship, where the unique opportunity to start a business in the first year ignited the spark. During the first year at Babson, students have the opportunity to start a business with 30 of their classmates.

Keen Interest in Computers and Coding

Brian wanted to start something that was computer- and internet-related since he had always been interested in computers and how they worked.

He quickly saw that if he wanted to start a company, he would have to work hard to overcome the challenges. However, he would also have to be smart about how he built the company. He also learned to program.

In middle school, Brian and a group of his friends started building and selling computers to all their parents. In his sophomore year, Brian ended up living in a dorm closer to Olin Engineering.

He found that the cafeteria card could be swiped in the sophomore dorm and the Olin Engineering cafeterias.

Since Olin was much closer than the college cafeteria, Brian would visit the cafeteria and interact with the folks who went to Olin Engineering. Spending time with smart, talented individuals inspired him to take some classes and get some credits at Olin.

That’s where he started writing code and learning engineering. However, Brian states that most of his skills were mostly self-taught as after-school work.

The Birth of PipeStack: Lessons from the First Venture

Armed with a self-taught engineering skill set and a passion for computer technology, Brian founded PipeStack, a content management system. The idea for PipeStack started with Brian’s fascination with WordPress. At the time, he was writing a lot of PHP code, which was the foundation of WP.

Around 2011-2012, when the first apps started to appear on mobile phones, Brian started to think about how to integrate content into the apps. He also started to think about how the web would look like on mobile phones over the next 10 years.

PipeStack worked with an API on the front end, and engineering skills were needed to use that API to build into the app or mobile web experience. They didn’t have the proper terminology back then, and in retrospect, Brian calls it one of the most “headless CMSs that was conceived.”

The venture faced financial hurdles, leading him into significant debt, a predicament he overcame through relentless consulting work in San Francisco’s thriving tech ecosystem.

The Genesis of Nacelle

The transition from entrepreneurial setbacks to launching NaCelle, a software infrastructure company, was marked by strategic decisions and leveraging personal networks. Brian’s journey underscores the importance of resilience and adaptability in the face of entrepreneurial challenges.

Brian looks back at his interest in putting together a software development agency. A few of his friends from college reached out to him with their concept of running Shopify, an eCommerce company. He loved the concept and ended up getting embedded in the Shopify ecosystem. They also worked with Magento and Big Commerce.

At the time, merchants started to display a keen interest in strategies for ramping up website speeds since high speeds could translate into higher conversion rates, which was a really important business metric. This customer pain point prompted them to develop new technology for the front end.

However, Brian and the team realized that they needed to apply an incredible amount of logic to build a significant amount of infrastructure for their clients to keep the new things up and running. Building the infrastructure meant investing a lot of money and cutting back on their profits.

That’s when Brian came up with the idea to build the infrastructure and sell it to other agencies so that they could build on top of it. This way, they could deliver great experiences to their clients on the front end.

Nacelle’s Initial Business Model

As Brian explains, Nacell is a SaaS company charging a SaaS subscription fee. However, Brian and his co-founders wanted to get into payments, which they thought was a big innovation.

They realized that Shopify had worked out a deal with Stripe and was able to negotiate using their economies of scale to get the price of Stripe low for Shopify.

Next, the company charged merchants the full rate transaction fee and made money on the spread. Every merchant paid a transaction fee to make money on the transaction fee. This strategy allowed them to avoid charging an excess amount to actually use the software.

Nacell recently released a checkout and charges an annual subscription to the service. Brian advises founders to identify a really big addressable market and then build something that’s 10 times better than what’s already out there.

Fundraising and Networking: A Symbiotic Approach

Brian’s experience sheds light on the symbiotic relationship between fundraising and networking. Recognizing the role of secondary transactions and leveraging his connections in the industry, he successfully secured angel investments.

The key takeaway is the importance of building relationships with fellow entrepreneurs, both early and later-stage, creating a ripple effect that attracts institutional investors.

Brian talks about bringing in investors like Andrew Bialecki, the founder and CEO of Klaviyo, Brian Long, the co-founder and CEO of Attentive, Steve Weiss, and Oisin O’Connor, CEO and Co-Founder of Recharge. Eventually, Nacell raised $75M in funding from investors.

Storytelling is everything, which is something that Brian Anderson was able to master. Being able to capture the essence of what you are doing in 15 to 20 slides is the key. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend Peter Thiel (see it here), where the most critical slides are highlighted.

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Visionary Leadership and Staying Ahead

NaCelle’s vision sets it apart in a competitive landscape, focused on transforming e-commerce for venture-backed merchants and large retailers. Brian emphasizes the significance of pitching a bold vision to venture capitalists and staying ahead of the curve technologically.

VCs are essentially looking for a number 1 company in their portfolio that’s going to go public, knock it out of the park, and return the whole value of the fund.

Founders with a really big idea should use it to their advantage. The other thing that’s really important in the world of raising from institutional is you need momentum.

Another lesson Brian learned was to take advantage of other entrepreneurs’ experiences and the Qualified Small Business Stock (QSBS) tax break in the US. He reached out to some of his founder friends who were doing later-stage funding rounds for funding in Nacell in a pre-seed angel round.

In this way, Brian was able to fuel his venture with secondary transactions. He advises founders to build a network with entrepreneurs, not just early-stage but also later-stage folks. These small checks can potentially spark momentum with other institutional VCs when they hear about it.

Brian underscores the importance of not getting discouraged if even prominent angels or institutional firms say no. They could be rejecting the pitch for the wrong reasons, so hanging on to the big vision is crucial. Disregarding perceived conceptions of barriers to entry is also important.

The key to success, as Brian explains, is to invest in new technology and be innovative consistently. He also advises continuously talking to customers, keeping the product-market fit, and staying six months ahead.

Work-Life Harmony: Fueling the Entrepreneurial Spirit

Brian challenges the conventional notion of work-life balance and introduces the concept of work-life harmony. Drawing inspiration from Jeff Bezos, he advocates for understanding the natural ebb and flow of work and personal life.

By nurturing meaningful relationships and embracing life’s challenges, entrepreneurs can find the energy and resilience needed to navigate the entrepreneurial rollercoaster.

In the riveting narrative of Brian Anderson’s entrepreneurial journey, we find a tale of passion, resilience, and the pursuit of a harmonious life amidst the chaos of building and scaling businesses.

His insights serve as a compass for aspiring founders, guiding them through the uncharted waters of entrepreneurship with wisdom, determination, and a relentless pursuit of their vision.

Listen to the full podcast episode to know more, including:

• Brian Anderson’s journey from a Hamptons harbor store to tech entrepreneurship reveals the unexpected origins of successful founders.
• PipeStack’s financial struggles taught Anderson the invaluable lesson that engineering skills can be a lifeline in challenging times.
• Leveraging secondary transactions and networking with entrepreneurs can create a ripple effect, attracting angel investments and institutional support.
• Pitching a bold vision to venture capitalists and staying ahead technologically are crucial for carving out a unique space in a competitive market.
• Rather than relying on artificial barriers to entry, prioritizing continuous innovation and staying six months ahead of competitors is the key to sustained success.
• Jeff Bezos’s concept of work-life harmony, embracing life’s challenges, and maintaining meaningful relationships fuel the energy needed for entrepreneurial resilience.
• Brian’s story serves as a compass for aspiring founders, offering wisdom and determination for navigating the unpredictable journey of entrepreneurship.

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For a winning deck, see the commentary on a pitch deck from an Uber competitor that has raised over $400M (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.