Roger Dickey is the founder of Gigster, a venture-backed start-up that gives clients a way to systematically outsource software development to a large network of freelance coders. Gigster has raised over $32 Million from high profile investors including Redpoint Ventures, Andreessen Horowtiz, Salesforce CEO Marc Benioff, former basketball player Michael Jordan, actor Ashton Kutcher, and “Super Angel” Ron Conway. The company has quickly become a Silicon Valley darling. Most recently he left Gigster to launch Untitled Labs with the backing of many of the investors behind Gigster.
In this episode you will learn:
- How to decide on timing for an acquisition
- Leveraging relationships and extending your network
- Patterns of successful entrepreneurs
- How to convince top tier investors
- Expectations during financing rounds
- How to deal with a market downturn
About Roger Dickey:
Roger Dickey is an American entrepreneur. Dickey is best known for founding Gigster, a venture-backed start-up that gives clients a way to systematically outsource software development to a large network of freelance coders.
Gigster has raised over $32 Million from high profile investors including Redpoint Ventures, Andreessen Horowtiz, Salesforce CEO Marc Benioff, former basketball player Michael Jordan, actor Ashton Kutcher, and “Super Angel” Ron Conway. The company has quickly become a Silicon Valley darling.
Before starting Gigster in 2014, Dickey was an angel investor. Dickey is also known for founding Facebook game company Curiosoft and selling it to Zynga in 2008 (he left Zynga in 2011). Dickey created the Facebook game Dope Wars at Curiosoft which became the foundation for the Facebook hit game Mafia Wars for Zynga.
Dickey worked on the Mafia Wars team at Zynga before going on to lead the team that made the Facebook game FishVille.
He received a 2012 Distinguished Achievement award from the Computer Science Department of University of Illinois (given to alumni who have brought distinction to themselves and the university).
Connect with Roger Dickey:
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FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrighty. Hello, everyone, and welcome to the Dealmakers Show. So, today we have Roger Dickey, and he has been doing quite a lot here in the venture space right now with Gigster, so we’d love to hear more from Roger. Roger, welcome aboard.
Roger Dickey: Thank you. Good to be here.
Alejandro: So, your background is pretty much as an engineer. That’s how you got started with this entire entrepreneurial journey. You tried at one point to get a job in Facebook by literally showing up to their office. What was the story really behind this?
Roger Dickey: Yeah, that was interesting. So, my company sent me to Silicon Valley, the company I worked at in Austin, for a conference, and I had believed very strongly in Facebook for a while. I had been telling all my friends that they’re the next great company, and that the internet was going to be social, and that they’d kind of take over the whole thing. So, I wanted to be involved really in any way I could. The most obvious idea was a job. When I went down for a conference, I took a little time off and went down to Palo Alto to University Avenue where their office was, and I happened to get there on the train around 5:00 or 5:30 pm. So, it was convenient because that’s when some people were leaving. I actually saw Mark Zuckerberg going in. Then I saw various people coming out, and one of them stopped to talk to me. He was actually the same guy who writes the interview puzzles that they used to have for engineers. So, I got his card and sent him my resume, and never heard back. I didn’t really have the hustle at the time to bump the email again. I thought oh, they probably—I guess they don’t want to interview me. In reality, they were probably too busy. Who knows, but it ended up working itself out when I started the Facebook app company.
Alejandro: Right. Got it. When was this? Was it a year, or was this?
Roger Dickey: This was 2007.
Alejandro: 2007. Got it. It was the time where Facebook was starting—I mean, already exploded, but it obviously has a little bit more to go. At this time is when you met a friend that was making about 8,000 bucks a day, and perhaps this is a time where you realized that doing corporate America was maybe not the best for you. Is that right?
Roger Dickey: Yeah, actually. So, mostly right. I think he was making about $1,000 a day with this app that took him something like eight hours to build. Something he finished really quickly. I think it was called like My Happy Zoo. Basically, a web page with some divs on it, and essentially like a grid. And you could put an animal in a spot on the grid. When your friends visited your zoo, they could see where your animals were. I think he had some ads on it, or he was charging a dollar per animal, something like that. But the project was making an insane amount of money. So, I actually sat down with him at a Happy Donuts in Palo Alto, and I said, “Hey, I’m really interested in Facebook. How did you get this to work?” What was great about that was he kind of demystified it for me. He broke it down and said, “Hey, here are all the things I did. I started from zero like I’m here. He curated the steps that I went through. It’s pretty easy to learn. You use this API, etc. That was a pretty inspiring moment because, yeah, at that point I did realize how easy it would be to try something different than corporate America. And I had kind of always been entrepreneurial. I had always worked on little side projects, but my concern was as an engineer, I didn’t understand marketing. So, Facebook obviated that because if you build something that people like, it sort of is shared virally, and can be very successful with no effort from the developer on marketing. So, that was compelling to me. I thought, well, if I build something cool, it will kind of just be able to take off. It turned out that that eventually managed to happen.
Alejandro: Got it. And this led to giving birth to Curiosoft. Right? Would you mind telling us more about this initiative, Roger?
Roger Dickey: Not at all. I started Curiosoft with this friend of mine who showed me the Facebook app that he built. He had this philosophy that Facebook was a great marketing engine for a virtual world for kids that he was building, similar to Hobbo Hotel which I think sold to Disney for around 600 million dollars. He knew he could build something better, and I believed that he could. So, our philosophy was we’ll partner up. Roger will focus on the Facebook side. He’ll focus on building this Hobbo Hotel competitor, and the Facebook apps will cross more traffic into this kid’s virtual world. I sort of fell in love with the marketing that I was doing. I liked the apps more than the idea of this virtual world. I started to believe there was a real business in the apps. So, at that point, we actually fractured. I focused just on the apps, and he went back to focusing on this virtual world. It’s sort of an interesting story because it’s allegorical to how Mark Zuckerberg founded Facebook. If I understand it right, the original Facebook, FaceMash, was a marketing hack for this other project that he was working on which became more successful than the other project.
Alejandro: Got it. Got it. And so, Curiosoft basically like very much into the gaming space, and there’s a lot of really good stuff happening, and especially like with Zynga as well there in the picture. I’ve heard that you were going into the FBI website to just grab names of drugs that you would just like plaster all over your game. Is that right?
Roger Dickey: Yeah. I don’t know where you heard that, but that is true. I didn’t really do any drugs, and I didn’t know where to find the names of drugs. So, I literally went to the FBI website. There are a lot more types of drugs than I realized. I think at the time I could maybe name three like LSD, Marijuana, like Coc, stuff like that. Apparently, there was something called Mexican brown heroin, and the list goes on and on. So, I added these to the game. We had a game at the time that was like a virtual drug dealing simulation called Dope Wars where you play a drug dealer, and you basically go in, and you try to buy drugs low and sell them high. You use the profits to buy weapons. You join a drug cartel, and then you and everybody else—your weapons add together, and you fight other drug cartels, and you’re fighting for control, the turf which is where the drugs are dealt. So, there’s kind of a cyclical nature to it. You know, yeah. There’s essentially—you want to get more territory because you can deal better. So, anyway, yeah. We had at some point a lot of different types of drugs on there. It was a funny game. I remember when the Zynga people first met me, I think I showed up in like a suit or something, and how like, “Is this Roger?” Because they imagined that I’d look completely different when they met me.
Alejandro: Oh, I can imagine. Oh, my gosh. I can’t even imagine if your parents would get a hold of your history on the internet, or perhaps your girlfriend at the time, might think that you had a second type of life that they were not familiar with. But anyhow, how much revenue were you doing? Let’s say at the point where you said you met with the Zynga guys. How much revenue were you doing?
Roger Dickey: We were doing about $7,000 or $8,000 a day all from ads, which is one of the things that I think Zynga found so compelling about the acquisition. Zynga had really cracked virtual goods on Facebook which, of course, had been around in Japan and other markets for a while, but it was just coming to the United States. So, I think their M&A Department which was one guy, named Andrew. I think when Andrew saw Dope Wars he thought, “Wow! Roger’s doing 8K a day now. If we add virtual goods to this thing, it’s going to TEDx, and that will be a really nice property for us to have.” So, for them, it felt because you can have a very symbiotic partnership. They came after me pretty hard. At first, I didn’t really even know what they were asking because I had never built a company and never sold a company, and I was very mistrustful, and I thought they were trying to steal my secrets or something like that. I had various conspiracy theories about what they were doing. Then after, as I mentioned, my partner and I fractured. After that happened, I didn’t really want to go it alone, and the prospect of moving to San Francisco and getting a little payday out of it and working with other really smart people was compelling. I pretty much felt like I knew that Zynga would win the space. I had another acquisition offer from. And I think it was higher, but I took Zynga’s acquisition offer anyways because I knew they went, and I asked for as much stock as I could in the deal. That ended up being the right decision because they went on to be very successful after that.
Alejandro: Got it. And how many people did you have involved with the business at this point?
Roger Dickey: A grand total of zero full-time employees outside of myself.
Roger Dickey: I was managing a variety of contractors. I think I had a couple of design contractors, and I had a couple of development contractors that I met online that were helping with various parts of the business. I was trying to recruit from the University of Texas in Austin, and I was trying to get kids to drop out of school and work on Facebook apps. People were like, “No, I’m going to get a job at Microsoft after I graduate.” Like, “That’s the promise land for me.”
Microsoft sounds more compelling than Facebook. Like, who knows where that’s going to go? Obviously, they were all very wrong, and I tried my to no avail on the full-time side, but I did manage to work with a couple of them as contractors. I found an amazing contractor—essentially was sort of an angel that saved the business at a really difficult time on the DevOps side because our servers were scaling so quickly that it was kind of out of control. You know, there were a couple of people who were pivotal to the success of the business, none of them full-time employees.
Alejandro: Got it. And what was the process like because you end up doing the acquisition with Zynga. What was that, any process like if you could give us like the inside—what did that look like?
Roger Dickey: Well, they were very early at the time. They had about 30 employees, maybe not all of them full-time. Something like 20 to 30 employees. At the time, Mark Pincus, the CEO, I believe had a strategy to grow the team using acquisitions. So, essentially, he was doing a roll-up of the space. There were a ton of Indie developers who were making apps. One of the interesting things about the, you could see the daily active users of everybody else’s apps. So, it created almost like this kind of if somebody was growing faster than me, I’d go to their app, and then try to figure out what they were doing. And I think Zynga was able to use that same directory, that same index to identify developers who met certain characteristics. So, for example, they had an app, let’s say, that had 50,000 or 100,000 daily active users. It looked like they were well-developed and scalable, but they hadn’t yet hit like the million active user mark.
Roger Dickey: So, they’d try to find apps that had the potential to grow a lot and buy them before they got big, and then bring in those developers. So, around the time they bought my company, I think they bought four other companies that were app developers. Much like me, these guys just working out of their garage who’d built various apps that had happened to take off.
Alejandro: Got it.
Roger Dickey: They put all of us together, and we were their early product team. So, very entrepreneurial people which I think was good because that was the DNA that we needed at that time.
Alejandro: When you did this transaction if I understand right, this was a stock-for-stock type of deal. Is that right?
Roger Dickey: Yeah, it was. Yes, you asked what the acquisition process itself. It started off as kind of a dance. As I said, they would message me, and it really wouldn’t respond. Then I did a couple of phone calls with them and sort of rebuffed most of the offers. The offers kept going up. I think it ended somewhere around 4X, the initial offer they made just because I was so—I wasn’t trying to negotiate with them or play my games. I earnestly didn’t want to sell. I wanted to stay independent. I was a very inexperienced negotiator at the time, but I just ended up accidentally making some of the right moves, I think in rejecting early offers.
Roger Dickey: At the end of the day, we agreed on a number and they gave me the choice of taking it in stock or cash. Actually, with stock, the number was higher because they wanted to preserve their cash flow, their acquisitions.
Roger Dickey: So, that was fine with me because that was what I wanted to do as well. There were a lot of terms in the deal that were really odd, really nonstandard because Pincus had this idea at the time of creating sort of this set of silos within the company, almost like companies within a company. So, I had terms like a revenue share in which you don’t usually see for executives. So, I signed that deal, but then after a while, they had to go renegotiate all the deals because they didn’t want their executives to have revenue shares. It created odd incentives in the company. So, there were a few mistakes like that, that they made, but other than that, fairly—they were really scrappy, but the process mostly worked right.
Alejandro: Then I just want to say at the end of the day, I mean, you’ve become a prolific angel investor and we’ll get into that in a little bit. But this was so to speak your first angel investment. Is that right?
Roger Dickey: Yeah, that’s how I used to term it. As some kid from Texas, you don’t really have the chance to angel invest out in companies in Silicon Valley, especially if you’ve never been there before and know one person who lives there. So, this to me was a golden opportunity to make an investment, and I felt like at that age, I didn’t need a couple million dollars in cash or whatever the offer was because some of that comes out in taxes. Then you’re not really retired on that number necessarily. So, I figured I should buy a lottery ticket with it instead. I would recommend that to other founders. If you’re selling a company, the ideal scenario is to sell to another startup that has very high potential. If you’re able to do that, then you can see a very outsized level of growth from the level, from [16:04], the exit dollar value.
Alejandro: Got it. And obviously, you closed this when there were 30 employees about—that’s the time that you joined.
Roger Dickey: Yes.
Alejandro: So, I would assume that the multiple on the return that you got was pretty high. I think I’ve heard you say around 100X. Is that right?
Roger Dickey: Well, at one point, the stock was worth 100X, the acquisition value. It didn’t end that way because as you can see online, the stock didn’t do as well as they thought it would. It could open at $10. It went to 15, and then it fell to 7 I think when the 180-day lockup period for shareholders opened. Of course, when something’s been at 15, and you see it at 7, you’re not excited to sell it at the 7-level. So, a lot of us waited. Then it came down from 7 to 6, and 6 to 5. At 5, I actually thought, you know what? I should probably sell this because it was around that level for months. But I was traveling, and I was going to call my broker to put an order in to sell all of it. Then I got distracted, and I woke up one morning, and it was at 3. Then over the remaining months—so that’s when I’m definitely not going to sell it. Over the next couple of months, it went down to 2, and I started checking it like multiple times a day. It just became a sickness. So, I said, “Look. Whenever it gets up to whatever level like 4 or something, just sell all of it.” And eventually, it did, so they dumped it. But it was definitely not at the level that all of us were hoping it would be.
Alejandro: Yeah, got it. And basically, I’m sure that this was as well one of your most fulfilling experiences from a learning perspective. So, what were some of the learnings that you got from joining Zynga, during the early days and being part of this rocket ship?
Roger Dickey: Yeah, that’s absolutely correct. I think I learned more in that three-year period than I ever have any other three-year period of my life. So, I’d say I learned a couple of things from that overall period. One is the power of a secret, what Peter Thiel calls A Secret. So, something you know about the world or a market in the business sense that other people don’t know. I was one of the only people that I knew that was excited about Facebook or that believed in Facebook. So, that’s kind of what got me there in the first place was that I had a secret that other people had too, but maybe only a few thousand people in the world. So, that was I think, what opened the door. Let’s see what else. At Zynga, I think you can learn a lot about being a founder if you have the right startup. Some of the other people that sold companies to Zynga around the same time, because as I mentioned, there were around four or five of us. They took all cash and left within three to six months. They saw it as an opportunity to just cash out, and then they got right back into the game and started making Facebook apps. Then they tried to sell those Facebook apps again. That was their approach was that they wanted to kind of be the same kind of founder and just flip apps that they built. A lot of those people didn’t end up being as successful as I was because I stayed at Zynga and learned a lot from that experience as it grew and was able to come out of it and start some other companies. So, I think you can definitely learn a lot if you’re at the right company. For some people who are starting companies, I always tell them, “You should consider working at a high-growth startup with a great founder, instead, as a learning experience. Something else. Maybe two other things. One is that at Zynga, and this is maybe a little lower level entrepreneurship, but for the entrepreneurs that are listening who consider those products people, at Zynga distribution and monetization were part of the product, not some bolted on department. I remember it being interesting that one day we hired a CMO, and I think they lasted two or three months before they left because we realized that marketing just wasn’t a function we needed at the company. Marketing was built right into the product. I think for good consumer products that’s the case. They market themselves, and also monetization’s built right into the product. That is something I think we did extremely well. We had a great product management group. I’d say it was the best in the world at the time for consumer. I think there’s a few lessons there from how we built product. And at the same time, a few additional lessons on where to look for good product people. Product people that were at Zynga 2009, 2010, kept some really good DNA. Last there, I would say being kind of a founding team or a key executive at a hot startup like that, can really massively propel your career. Most of the benefit I got from the Zynga experience, it wasn’t any amount that my stock was worth or anything like that, it was the people that I was able to meet through that. While we were going through an IPO, everybody wanted to meet Zynga executives. If you were from Zynga, you could get coffee, basically anybody in the Valley. I took full advantage of that opportunity. I did something like 30 or 40 coffee meetings a week for six months. That was valuable. I might have met like 1/3 of the smart people in Silicon Valley in that time period, and I retain that network to this day. So, I think when you can take the opportunity to leverage a key point in your career to meet a lot of smart people, I would absolutely recommend doing that.
Alejandro: Got it. So, after this experience, you closed the chapter with Zynga, and basically, what you do is something that is really interesting. Now, you go and become an angel investor. How was the transition from first you are a founder, then you go and join this rocket ship, and then you say, “Okay, let’s take a look a betting on others.” How was that transition for you?
Roger Dickey: It was a fairly smooth one. I didn’t get into angel investing full time. I think there’s two right ways to be an angel investor. One is active, and one is passive. The active angel investors that I know do it full time. They’re constantly going to events, meeting people, going to incubator demo days, maintaining relationships with the best founders they know, doing diligence on deals. You have to really spend a lot of time to be a successful investor because there’s so much competition at Silicon Valley. That was never really my bias. My objective with angel investing was to meet a lot of smart people, to learn about the markets they were going after. To potentially go after some of those markets myself after I left Zynga, not in a competitive way, but just hey, maybe there’s an angle that somebody alerted me to that they’re not going to pursue. Then it was also a way to earn some extra money, you know, potentially. But you don’t really see a lot of early angel portfolios with high returns. I think it was mainly the first two. It was just an enjoyable learning experience. So, I transitioned into it fairly slowly, and I stayed relatively passive. If somebody who I’d met and had a relationship with and knew and believed in was starting a company, I would write them a check. I didn’t really find myself going outbound. I didn’t find myself playing the role of an active investor.
Alejandro: Got it. And how many companies, let’s say up until now have you invested so far as an angel?
Roger Dickey: Around 80 in the last 8 years.
Alejandro: Wow! That’s saying a fairly large number I would say for being a passive angel. Let me ask you this: when you invest in these companies as an angel, it seems that for you, timing, market, team, and product are critical factors, at least from some of this stuff that I’ve read and heard. Can you explain a bit and go a little bit into detail about each one of those, why they are so important to you?
Roger Dickey: Yeah, certainly. I would say market is maybe the most important. There are a lot of things investors look for that I think fall under the same umbrella. Market, problem, customer need, all of those are sides of the same coin. Essentially, that’s the idea that a founder’s going after. And I think most ideas can be expressed in around ten words, most good ideas. So, something like Instacart is: order groceries on your phone, delivered by freelancers. Uber is an unlicensed, basically unlicensed taxi so that you can order from your phone. So, things like that. If you handed somebody that idea, I think I would argue there are in the tens of founders who if you handed them that idea in 2008, 2009 when Travis started Uber, they could have had roughly the same level of success. I actually argue that the idea is a very, very large component of how well a company does. You hear ideas are a dime a dozen. I think ideas are at least half of the value that goes into a company because you can have a highly capable executor going after the wrong idea and you’re essentially going 100 miles an hour in the wrong direction. I’ve seen that a lot, and I’ve had friends do that. I’ve seen companies that I’ve invested in go down that road. So, the idea means a lot to me. That’s kind of the first thing that I look at. And again, I can see that encompasses market. So, if Uber’s unlicensed taxis, well how big is that market? Taxis was a large market even before Uber got to it, not have grown it. I think it was something like 40 billion or 60 billion dollars in the U.S.
Roger Dickey: A great market, a real need, and a simple solution to that need are things I look for. I think that comes first. After that, of course, it’s the team. I think past experience is the best predictor of future performance. I look pretty carefully at what the team has done before. Whether or not they have former exits or startups they’ve done isn’t as important, although obviously, that’s a clear indicator, but I look for like, has this person spent their life trying to be the best at something? Have they done 100 projects in some area? So, even if it’s—let’s say it’s an Olympic athlete. They’re, obviously, very competitive and the projects that they’ve done have been competing in various, let’s say competing in various races or whatever. I think if you have somebody who just has a consistent pattern of setting goals and achieving those goals, and they’re very competitive and have had a lot of success, then they can be a successful founder. I definitely look for that. If they’re not the best in the world at something, or close to best in the world, then it doesn’t make sense to invest because you might as well find a better person who’s working on the same idea, which you often can. After that, you know, I do look at some of the more traditional things like how much traction do they have? What have they launched? I might interview some customers. But the more work you do along that line, you’re becoming more of an active investor and running a proper diligence process. And I often don’t have time for that. So, I filter very hard up front on market and team. And then I kind of put a smaller amount of work into everything else.
Alejandro: Got it. Marketing and team, definitely. And just besides that, because I think that the founder really, it’s a critical piece. Are there any patterns that you typically—I mean, you’ve invested in a ton of companies. You’ve been an operator yourself, and I think that that really gives you an advantage over the other angels that perhaps are like senior executives or stuff like that in corporate America. So, my question here is: in the founders that you meet with, are there certain patterns that you’ve been able to recognize that are repeated on those ones that really get you excited about making an investment because you see there’s real future potential?
Roger Dickey: That’s a tough question. I don’t know if anybody has a good answer to that. I can tell you—most of my patterns are around kind of the thing I said about 100 projects. So, somebody who has the history of working really hard and winning at something, whatever it is. Again, it doesn’t even have to be technology. I think they’re elements of somebody’s personality, the level of charisma, leadership ability that somebody has, how good they are at expressing themselves. I think a fundraising pitch, it’s not unlike all the other pitches that a founder has to do. When you’re pitching candidates, when you’re pitching other investors, when you’re pitching customers, founders are always selling. So, I think when you’re being pitched by a founder, a big thing you’re looking for is just their ability to sell. I think somebody had a great quote, maybe Paul Graham about how every job, when you get to the top of the career ladder, it just becomes sales. The president is a salesperson. CEOs are salespeople. Everybody essentially becomes a salesperson the higher up they get. That’s something I definitely look for like can this person capture the imagination of customers? Can they get customers to switch from whatever product they’re using? Can they poach a key employee from Google or Facebook? If they can’t convince me that they’re company’s interesting, they probably can’t do that.
Alejandro: Got it. So, shifting gears a little bit here, Roger. You, in 2013, built your most recent company. So, that’s Gigster. So, you want to be the world’s engineering department if I understand it right. Can you tell us a bit more about this?
Roger Dickey: Certainly. So, I’ll preface this by saying I’ve left Gigster in June. I don’t know if you were aware of that. It’s something I’m actually announcing pretty soon, and we’ll announce the new CEO as well. But I can kind of get into kind of how we started the company if that’s helpful.
Alejandro: Yeah, that would be great.
Roger Dickey: We had a thesis around the future of work back in 2013, myself and the early founding members. And future of work is amorphously-defined, but the way we defined it was we thought work would be changed by marketplaces and artificial intelligence, and perfectly the intersection of those two things. So, rather than hiring massive full-time teams of employees and having them do work at a human pace, people would be highly leveraging contractors with new forms of employment, maybe even new forms of management, and then augmenting those contractors with artificial intelligence and data to make them more efficient at doing their jobs, more efficient and more reliable. So, those were—I say efficiency and reliability were kind of these two end posts that we found really interesting for a workforce. So, we tried a lot of ideas. I mean, as with the Facebook app company we tried 20 ideas. It was 19 to be exact. Before Gigster, we tried something like 23 or 24. I would say they were around four or five themes. So, you can think of each theme as kind of a hub and spoke. The theme was the hub, and then we tried various spokes around each hub. One of them was this application through a lot of developers to get real-time help from other developers for a dollar a minute, and we must have tried three or four different versions of that. It failed for a lot of reasons. We tried something else that was around angel investors and how they network and interface together. We even tried something in personal finance which was getting a bit far-field. But the personal finance direction, oddly enough at the end of the day, helped us get to Gigster. We asked the question like what’s the best personal finance app you could imagine? It’s a website or an app where you push a button, and you just get money. Okay, well how do we practically achieve that since we’re not a mint. We allow people to do work to get money in a way that they want to do it. We had this philosophy, too, of designing products that we would be a user of ourselves, which I think is a great way to approach things as an entrepreneur because if you wouldn’t be a user yourself, it’s very hard to tell if you’ve built the right product. You know, the feedback loop that goes from you to customers and back to you can often be a very, very lossy cycle, and you’re just not going to do as good of a job as someone else who would truly be a user. So, we thought, okay, let’s say we wanted to earn money and we wanted to do freelance work for somebody, what kind of work would that be? Well, we’re developers, so we made a marketplace for developers. But there were a lot of those that existed already, so we found a couple of twists that were very important, and I’d say pivotal to the success. We put together a landing page that encapsulated that vision. We built it in about three days, put it online on Hacker News and Product Hunt. I think we got around three million dollars of business submitted in the first 24 hours.
Roger: Dickey Three million dollars of development contracts that people needed filled. What we had essentially created was a build-anything button. A button that you push and you get a high-quality development team in ten minutes is what the site used to say because we were sitting there in the backend with a chat system just responding to chats and matching people with developers. Those were really fun days. Everything moved really fast. We had a lot of early growth. We learned a lot. After about six months of that, we raised an A round from Andreessen, and we had this idea of getting into enterprise because we knew that’s where the real money was. We didn’t want to compete in SMB. Andreessen helped us get into Enterprise and the rest is history. The company’s doing very well now around something like 80 employees. We’re well into double-digit millions in revenue. Very high in P/S. Our competitors have an average in P/S of zero. I think we’re like 70.
Roger Dickey: So, that’s great. The network of freelance developers that we built is extraordinary. We have a thousand people including Apple Design Award winners, Stanford, Computer Science lecturers, we have Cybersecurity researchers, MIT dropouts, rocket scientists, you name it. Like a roster of fascinating people that are very, very hard to hire for our customers. It ended up being a very compelling value proposition I think for all sides of the marketplace.
Alejandro: Really cool. How much capital has been raised to date that is known publicly for Gigster?
Roger Dickey: 32.5 million including Series A and B.
Alejandro: I was very impressed when I saw the capital. Let me just read some of those so the listeners can really be as impressed as I was when reading it. On the VC side:
- Felicis Ventures
- Bloomberg Beta and [37:07] which you were pointing to or Redpoint
Then on the angel’s side:
- Justin Waldron who was one of the co-founders of Zynga
- Ron Conway from SV Angel
- Ashton Kutcher
- Michael Jordan
- Mike Daniel
- Adam D’Angelo, co-founder of Quora, the guy that was the CTO of Facebook.
How did you pull this all, Roger? I mean, this is like the red carpet of investors.
Roger Dickey: Well, I would say part of it is that networking period that I spent after Zynga. I had a lot of these relationships already going into the business. I already knew the guys at Felicis. I intentionally knew some of the guys at Andreessen. I already knew the guy at Redpoint. Marc Benioff, we met through our Andreessen investors. Aston Kutcher, I think we met him through—I think I got an enter to him through somebody that I knew well. Michael Jordan was another story. I haven’t revealed the secret for how I ended up meeting him. I think he appreciates his privacy, but I spent something like four or five months trying to get him in as an angel for a couple of reasons. One is, at Gigster we don’t intend to just serve the Silicon Valley Echo Chamber. Like, I don’t want to build software for a startup that’s four blocks down the street for the rest of my life. Right? We wanted to really break into the broader enterprise market in the United States. We wanted to get press in Chicago, Dallas, Atlanta, New York City, LA. We wanted to really break out because a lot of the media that we’d been getting was like a TechCrunch article, something like that. And those are great, and we worked with some incredible journalists there, but we wanted to break out of Silicon Valley. So, I asked myself, who’s a financial backer we could get onboard who’s well recognized, who’s somebody that I personally like and look up to, and who would command some attention from potential customers outside of Silicon Valley. And J was at the top of the list. I did what I could. I tried all these different paths to get to him, and finally, we managed to meet some of his people and got the deal done.
Alejandro: That’s amazing! That’s really amazing! I definitely, after hearing this, I need to up my game with the coffees, which is something that—2019 is the coffee year. So, anyway—let me ask you this because I have a lot of respect for obviously, you’re a very knowledgeable guy. You’ve been around the block a few times, and I want to get your two cents on this. So, there’s a lot of people that are talking now about a market correction. Right? They are saying the high volatility that we’re seeing on the markets and obviously, when that happens on the market, then cash becomes a little bit more expensive. When one goes out to raise money, and obviously ones who are in the hypergrowth path, you know, you’ve just got to keep going and raising money. So, how do you think this is going to affect the venture landscape when this actual correction happens, and then how do you think founders should really prepare for this?
Roger Dickey: It’s funny you asked because I was having this conversation with a friend yesterday who’s raising money. I actually am in the process of raising money as well for my new business that’s coming after Gigster. So, it’s been on my mind. You know, the thing with VC is it’s certainly a lagging indicator to the rest of the markets. It’s funny because it’s kind of lagging, but it’s also leading in a more literal sense because they’re funding the companies that will be the next great kind of NASDAQ like, you know, entries. The thing is, the kind of firms that we’re talking to have raised massive funds, some of them recently, some of them in the last six months to a year, and they have to deploy those funds over some quantity of time. So, I have the sense that there’s probably a six-month to one-year lag in the VC industry because they’re investing out of a fund that they raised before the correction happened. So, I really don’t think we’ve felt it yet here in Silicon Valley in a big way. People are talking about it, and there may be some founders who are prioritizing rounds early this year. I think that there’s just a lot of Geopolitical uncertainty right now due to certain situations that will go unnamed on this podcast. And I think that’s going to be a boon for things like Bitcoin that’s going to be difficult for a lot of other markets. But to answer your question, we haven’t really seen it yet. I don’t feel a squeeze. I don’t feel like it’s harder to raise money. I don’t feel like evaluations are suffering. They may mid-year to the end of the year, though.
Alejandro: Got it. And in terms of like the next chapter, Roger, I know that obviously, this is still new and recent, but any hints that you could give us as to what the next chapter for Roger is going to be?
Roger Dickey: It’s not going to be unlike the previous two businesses that we talked about. Curiosoft and Gigster. We’re going to employ the same idea lab approach for early days to experiment with ideas. This time, in the consumer space. So, I’m very excited to be getting back to my roots in consumer. I haven’t spoken about this publicly yet, so you’re the first person who’s hearing this, but very, very excited to get back to those roots. I really miss some of the work I did at Zynga, before Zynga. A lot of the consumer angel investments that I got involved with and even tried to help in small ways. I’ve always had an eye toward consumer even as Gigster grew and became more of an enterprise company. So, very, very excited to throw my hat back in the ring there and see what we can come up with.
Alejandro: Got it. We’re definitely excited as well to hear what that’s going to be, more in detail whenever you make the proper announcements. I want to ask you this, Roger, I mean, as I mentioned, you’ve done this for quite a while. So, if you could go to the past and be able to sit down with your younger self and give yourself one piece of advice before you were, let’s say, launching your first business, what would that be and why?
Roger Dickey: Let’s see. I feel like it would be more personal than professional, to be honest. I think life can pass us by quickly, and there’s a lot to do in the professional realm that’s fun and competitive and rewarding, and it’s great to wake up every day and cram as much knowledge into your head as you can. I love learning, and a lot of what I do in my personal, professional life optimizes for as much learning as possible. But on the other hand, I think it’s good to stop and smell the flowers a little bit and focus on kind of the personal side of life as well, at least in tandem. That’s actually something I spent last year focusing on. I took about a six-month break after Gigster, and I was glad that I did that for myself. I think it’s very easy to burn out, and as people say, it’s a marathon, not a sprint. So, I actually, looking back on college and post-college and even high school, I definitely wish I worked a little bit less.
Alejandro: Got it. Makes sense. So, Roger, what is the best way for folks that are listening to reach out and say hi?
Roger Dickey: I think my email would be good. You can reach me at email@example.com. So, rogerdickey and the number 2.
Alejandro: Fantastic. Well, Roger, it has been a pleasure and an honor to have you today here on the Dealmakers Show. Thank you so, so much.
Roger Dickey: Certainly. Thank you, Alejandro.