Oisin O’Connor built a formidable eCommerce company by bootstrapping it for years before taking outside investor money. Now they’ve raised almost $300M to empower even more businesses to go online. ReCharge has raised funding from top-tier investors like ICONIQ Growth, Bain Capital Ventures, and Summit Partners.
In this episode, you will learn:
- The future of e-commerce
- Oisin O’Connor’s top advice before launching your own company
- How they launched a hit product as a lean startup
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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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 Oisin O’Connor:
Oisin O’Connor currently works as the co-founder and CEO for ReCharge. He previously worked at Bootstrap Heroes as the co-founder.
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Connect with Oisin O’Connor:
Read the Full Transcription of the Interview:
Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. I’m very excited about our guest today. It’s a unique story and very inspiring talking about building something, bootstrapping it, and then doing a massive Series B once product/market fit is flying off the shelves. I think that you’re all going to very much enjoy this, and I don’t want to make you wait any longer, so let’s welcome our guest today. Oisin O’Connor, welcome to the show.
Oisin O’Connor: Thanks for having me.
Alejandro: Oisin, born and raised there in Los Angeles, so how was life growing up in a family of creative people?
Oisin O’Connor: Both of my parents were immigrants from Ireland, and they were both architects. Definitely, from an early age, I was taught about design-thinking, building, and creating things.
Alejandro: And both architects here; you were thinking about going into art with a combination of economics. Then all of a sudden, you were teaching yourself programming. How did you come across computers and the idea of doing developing?
Oisin O’Connor: Yeah, originally, I went to school for art, and then architecture, and then economics. I always have a desire to build and create things in my life. What I realized in school was that the modern builders would be programmers in our times and entrepreneurs, so that was the natural revolution.
Alejandro: Got it. In your case, you did a little bit of corporate America, working at places like Deloitte, just like checking it out for a few years, but then, you went at it as an entrepreneur, and your first rodeo was basically touching the crowdfunding space. What were you guys doing there?
Oisin O’Connor: I graduated in 2008 during the economic downturn. I promised my parents, as immigrant parents, that I would go and get a real job at a corporation. I got right in there, and it was like, “This is not what I want to do. I’ve got to get out of this as quick as possible.” I was looking at what were the interesting areas. I had been involved with an organization called Global Brigades in college that did medical relief and microfinancing in Central America, and I was really impassioned with how technology can start to help these communities and individuals around the world. This was in the early days of 2008. The first entrepreneurial endeavor I did was a company called Empowered.org that would help crowdfunding for these communities and these projects.
Alejandro: Then whatever happened with empowered.org?
Oisin O’Connor: It was one of those funny things. It was the right idea, the right space, but the wrong market in the sense that all the crowdfunding platforms at that time started to take off except the ones in the nonprofit space because nonprofits are slow. I definitely learned that you can be in the right space, but tangentially, and you need to move over and figure out where the bigger opportunity is.
Alejandro: After this, you were wondering what was going to be next, and you did a couple of things here and there, but mainly what you did was you landed into starting your web development like a gig so that you could support what would be next. Why did you end up starting a web development firm, and how did you land into the world of eCommerce?
Oisin O’Connor: About seven and a half years ago, I was fully broke. I was turning 30 years old, and I was like, “I’ve got to get a job at some point. This is not working out. Maybe being an entrepreneur is just not for me.” It was a very humbling point in my life. I did a retrospect of what I was good at, what I wasn’t, and I realized that I was good a building and starting products, but I wasn’t great at taking things from 90% to 100%. That was one big lesson, and from that, it led me to start working with my current co-founder, Mike Flynn. The other big lesson I had is, you can have the right product and the right team, but if you don’t have the right market, nothing else matters. At that point, we went through a period of talking to all the smartest people that we could get ahold of. We hit them on LinkedIn, Claria, and cold-called them just to understand who were smart, passionate people thinking about at that time of interest and problem sets. That led us to commerce, and we realized that commerce was this area that was underfunded, inadequate software, really old-school, and it was going to become a huge market in 10-20 years out. It felt like that was a great place to build and explore ideas. Because we had no money, we had to start generating money from day one, so we started a web development agency, but we then also started to build out SaaS products. Every month, we would build out a new SaaS product in commerce, and then we would try to market it and sell it. We thought of ourselves almost like Texas oil miners back in the day, just trying to explore interesting areas and see where the opportunities are in the rich problem sets.
Alejandro: How did you mean your co-founder? How did you guys come across each other?
Oisin O’Connor: We actually met at a Bar BQ. It was in Los Angeles, and I was having a Bar BQ, and he was a friend of a friend. At the time, there wasn’t a big tech startup community in Los Angeles. We were both trying to do software products. We were commensurated together in how our startups were not working, and we became good friends on that. Then we realized that we balanced each other out from a temperament perspective.
Alejandro: And I know that the first days when doing the web development firm, it was tough. I know that your co-founder, any day, was packing up the bags and going and leaving to live with his parents and perhaps looking at a job. But in the end, you guys kept launching new stuff, and on the sixth time that you threw something out there, it seemed that was something that would stick and would end up becoming ReCharge. So tell us about that.
Oisin O’Connor: That was probably the most painful period of my life. They always say you have to hit rock bottom before you come back up. There was a period early on where we were both running out of money, and we literally had two months of runway just to pay for rent. I think my co-founder was thinking about becoming an Uber driver as a software engineer just to get by. Every pay rate, I could tell how well the startup was going based on how many bags he had packed to move back from Los Angeles to San Francisco to live with his parents. At a certain point, the bags were getting unpacked, and the books were being put back on the bookshelves, which was a sign that things were getting better. In that period, we launched six different products. The products before generated some cash, but with ReCharge and connecting with the idea of subscription payments for commerce, it was like hitting lightning. Right away, it worked. You just knew it was the big thing, and it was going to work. At that point, we put the other products on autopilot, and we actually ended up selling those other products, and that became our seed money. I think we sold them for $250K, and that helped fund ReCharge early on.
Alejandro: That’s amazing. About ReCharge, just so the people listening get it, what ended up becoming the business model?
Oisin O’Connor: We launched the product six and a half years ago. It is a subscription management platform for eCommerce companies that want to sell physical products on subscription. We give people the tools to launch their subscription program to customize it based on their business needs. Then we give them a series of toolsets to help them grow their subscriptions. In that period of the last six and a half years, for at least five years of that, we were completely self-funded, so we were bootstrapped. Every year as a bootstrapped company, we were doubling and tripling in size.
Alejandro: I guess in bootstrapping, what you guys have done is amazing. But the problem with bootstrapping, too, is that one step in the wrong direction could be lethal, and you don’t have that oxygen.
Oisin O’Connor: I think there are two sides to the coin here. As an art major, there was a famous saying that there’s no art without constraints. I think bootstrapping and not having funding, oftentimes, creates this constraint in the business and in your mindset that forces you to really think objectively about the opportunity about what you should be building and creating into the world. At the same time, the other side of it is that you’ve got to be batting 100%. There is no messing up. Through those first five-plus years of the business, we were batting 100% in the sense that every decision was perfect because we just didn’t have that leeway in the business to mess things up.
Alejandro: When thinking about raising money, how did you guys think about that because, obviously, your situation was different? Typically, at a Series A, companies are at about one million or so in revenue in valuation, clear valuation of product/market fit. But in this case, you guys were off the roof, which could be potentially labeled more as a Series B type of company from an expectation perspective on the investor side. So how was the fundraising journey for you guys? How did you go about that?
Oisin O’Connor: I think overall, my co-founder and I are very humble individuals, and we know that we don’t know. We had never done fundraising. Just like when we started the business, we went out and talked to all the smartest people we could get ahold of for the dynamics of fundraising, what makes sense, and what doesn’t. I think we were very lucky in the perspective that we were later in the stage of the journey. When we did do fundraising, we were able to create the terms that we wanted, and we were able to own a majority of the company in the process. Also, the other thing I feel very lucky about it, that the culture of the team and the organization was created without the pressures of outside investors or influences. We built those in those early days, and I think that goes forward.
Alejandro: How much capital have you guys raised to date?
Oisin O’Connor: We’ve raised a total of $277 million to date. We went from zero, not raising money for a long time, to $277 million.
Alejandro: It’s unbelievable. I guess the first round, as you were saying, was triggered by being able to have more oxygen and not being on a thin line walking. But going from $50 million, which was your Series A, to $270 million, how were you thinking about those next trenches of money in terms of why you wanted to take more money on?
Oisin O’Connor: I think the first round is always the hardest. It’s like this type of logical thing. I’ve not done it before, not having the right structure in place. That was January of last year that we did that. Then the business accelerated more. We realized that the capital gave us the ability to be more aggressive and drive a better product for our customers and experience, and also a better infrastructure for the overall business to grow. Then with our most recent round of fundraising, again, I think commerce has turned out to be a way bigger category than everyone thought. It’s funny; when we first talked to investors, everyone thought eCommerce wasn’t a big category. Everyone would always ask me about TAM, Total Market Opportunity. I always had weird luck. I didn’t know how to answer them because people buy stuff all day long. Why are you asking me how big that opportunity is? I think now, everyone realizes how big the opportunity is, and the funding is now coming into a big state.
Alejandro: I hear you. I’m sure that COVID, too, has probably accelerated things for you guys.
Oisin O’Connor: Yeah. It really accelerated the business. We were already going at a very fast clip, but I think it changed the mindset of the consumers is that consumers now are being educated more about how buying stuff online or in a digital form they have a better selection, and they can have this richer experience between them and the producer. Then, from the merchant side of things is that they are starting off now thinking, “How do I have a direct relationship with the consumer?” One thing that made this point to me during COVID is that two months after the pandemic started, there was a local bakery that opened up down the street from my house. It was probably the worst time ever to start a bakery. When I went to their website, I realized that they were using ReCharge, and what they were doing was they would have a fresh bread delivery every Saturday. They would do a subscription payment, and people would manage their ongoing bread delivery on a Saturday morning and have it delivered to their house while they were still in the pandemic. What was interesting is traditionally, a bakery starting would probably never have a digital presence, but COVID changed their mindset of “Oh, wow. We have to have this relationship wherever the consumer is, and not just that they walk into our bakery.” I think that’s a fundamental change that we’re seeing in commerce right now.
Alejandro: Really cool. Now, as we’re thinking about customers and expanding and ramping up, one thing that was very unique about the approach that you guys took is that instead of having sales and marketing people, you relied on the product itself to do the talking. It took you four years to bring in anyone on the marketing or sales side, so tell us about this approach because it is quite unique.
Oisin O’Connor: First, we had no money; we were bootstrapped, so we had to be very cognitive of how we spent money, how do we get growth, and I think we thought about the business holistically, we didn’t just think about product/market fit like what’s the product that people want, but we also thought about product distribution fit. We thought, “How does this product fit into the distribution channels that we have in front of ourselves. When we first started off, we started off on the Shopify app market. Everything we built was around how does this product capitalize on the Shopify app market? Someone can go to Recharge, install it, and then right away go live as quickly as possible. I think those product investments really accelerate our go-to-market more than anything that we could have done on it, accel the market perspective at the time. Then, after that, we started to build out our whole APIs and our developer tools, and that, as well, from a product perspective, started to push growth. We then layered on marketing and sales. Marketing and sales are amazing, but they layer onto the underlying value of the business and what we offer.
Alejandro: In your case, it was also interesting the way you had the people working remotely at a very early stage. COVID didn’t really impact much your Facetime-type of environment. How was building this remote culture also where you have trust and meritocracy present? How do you define meritocracy for the people that are listening and watching?
Oisin O’Connor: When we started the business seven and a half years ago, starting with the development agency and then ReCharge a year after that, we weren’t able to afford a lot of people in Los Angeles. There, you’re competing with Google and Apple, and such not, so we had to go remote right from the beginning. It also helped that both my co-founder and I didn’t want to go into an office every day and have a certain set schedule. That helped as well. What I love about remote is that you get the types of people that you can have is way more rich. You have way more diversity; you have way more selection of quality. But also, there’s this fundamental trust that gets built into it, at least when people do it right where you’re hiring someone, and you’re not really looking over their shoulder. At a traditional office, Jimmy would come into the office. He would sit down. He gets there at 9:00 am; he leaves at 6:00 pm. I was in that office in my first job, and it always drove me crazy because you don’t really know if the guy is actually working hard. You’re just judging him based on his time in the office. When you go remote, you don’t know how many hours someone puts in. You don’t know what hours they work. All you see is the byproduct of their work. You judge them on the results. I think that’s a very powerful thing because it becomes an equalizer, so it really does become a meritocracy where the best people and ideas move to the top because you can see the results, and you judge on that, and you have that trust. It’s also something great because great people also aren’t linear in their work habits. They might want to take an hour or two off during the day and go to the beach because they need to digest and have their subconscious catch up to the conscious on a lot of things. The remote also allowed a great work/life balance for our team and creating what’s the best style that works for them? When COVID did hit, it was great and helpful that we were remote. That said, I think there’s a lot of value to in-person, and I think we definitely missed the in-person attributes because when you’re in-person, you build a familiarity with somebody, and you build trust. It’s very hard to build trust in a pure digital manner, so you need to marry the remote with an end person, in my experience, as well.
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Alejandro: Imagine if you go to sleep tonight, and you wake up in a world five years later. Imagine—a tremendous snooze. And in that world, the vision of ReCharge is fully realized. What does that world look like?
Oisin O’Connor: I always imagine these questions because I always think about myself as an 18-year-old talking to my career counselor. [Laughter] I think my answer to my career counselor back then was like, “Here are the interesting problem sets and things I want to work on in my life. What that tangibly is, I don’t know.” [Laughter] It’s funny. As human beings, oftentimes, we connect our ego to tangible things like, “I want to be this when I grow up,” or “This is my product.” And we don’t think enough about what are the interesting problem sets that we’re going after and then really be open to what would solve those things. I think commerce is going through a fundamental shift. I think it is completely omnichannel; it’s everywhere in a digital manner. I think the merchants want to have a rich ongoing experience with the end consumers, and the consumers also want to have that relationship. Consumers are moving away from boxed retailers or Amazon-style services and want more of that one-to-one connection, which is funny; it’s actually kind of going back to where it probably was for thousands of years as human beings. The people that produce something, we would buy directly and have that relationship. I think there’s a fundamental human nature to belong and connect with things. Subscriptions, a lot of times, are at the core of these relationships. How do you have an ongoing consumption? When I think about ReCharge and where we’re going, it’s really how do we build richer ways for merchants to have that ongoing relationship with the consumer. Where that goes, I don’t know, but that’s an interesting problem set that we’re tackling.
Alejandro: I hear you in terms of scope and size of ReCharge today, so that the people listening get an idea on how big you guys are, is there anything you can share in terms of maybe number of employees or anything else that you feel comfortable sharing?
Oisin O’Connor: I think we have over 15,000 merchants processing billions of dollars a year.
Alejandro: That’s amazing. Imagine you’re still in the career counseling department. Let’s keep on that segment for just one second. Imagine I put you in a time machine, and I’m able to bring you back in time, and I’m able to put you right at that moment where you were struggling. You had that web development firm where you were going month to month and hoping to make the rent. If you had the opportunity to go back in time right then and give your younger self one piece of advice before launching a company, in this case, what would become ReCharge, based on what you know now, what would be that one piece of advice that you would give to your younger self?
Oisin O’Connor: I think, at that time, going through so much challenge and being humbled by the world, like failure at a deep level, I think what that pushed me to was to really be opinionated about what I’m creating, what I’m building, what I believe in and take everything else with a grain of salt, what anyone else says or advises, and try to—Elon Musk always talks about first principles, but to really do that, think about fundamentally, what’s the thing I’m tackling and then build upwards and be opinionated about that and not let other things sway me around. I think earlier in our career, and I see this from a lot of entrepreneurs, is, you try to do everything, and you try to please everybody, or you try to follow a certain playbook or hearing things, and the reality is, every situation is different. There’s a certain opinionating intellectual awareness that you need to make a proper decision, and no one else is going to tell you. So, I think, trust your gut and all those things.
Alejandro: In terms of the world of eCommerce, where do you think it’s heading as a whole?
Oisin O’Connor: COVID has definitely accelerated eCommerce. As a category, it’s just going to be all-encompassing from the perspective of the things that we buy and consume in our daily lives is eCommerce. It’s commerce; it’s all digital in manner or should be. I think that’s going to be a big transformation is how does the whole stack gets digitized over the period? This is not just a U.S. trend, but I think it’s an international trend, so we see our merchants that want to sell in 2030 to countries, and they’re very global in the nature of their thought process. Those are big trends. I would say we also see the modernization of the commerce stack. For the longest time, the category was underinvested in, and I think it was underappreciated. Bessemer has a great blog post on Shopify, their investor in Shopify, and in that blog post, in their investment thesis, they said they thought Shopify would never be worth more than $700 million because they didn’t think that category was big enough. I think Shopify is now worth $140 billion. People are realizing how big the category is, but they haven’t invested in that category for the last ten years, so now the investments have to come in to really bring up the category as a whole. I think that’s going to be a huge trend over the next ten years too.
Alejandro: Amazing. Oisin, for our listeners, what is the best way for them to reach out and say hi?
Oisin O’Connor: Just hit me up on LinkedIn. I pretty much do not look at emails, and I don’t look at social media, so LinkedIn is the only place I actually do look because I have to recruit and hire people. I know, it’s funny.
Alejandro: Good stuff. Oisin, thank you so much for being on the DealMakers show today.
Oisin O’Connor: Cool. Awesome. Take care.
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