Excellence in Action

Jesse Pujji

Tidemark Founder Dave Yuan interviews Jesse Pujji, co-Founder and former CEO of Ampush, and Founder/CEO of Gateway X.

Jesse Pujji co-founded growth agency Ampush, grew it to over half a billion in ad spend, and did it all without raising a dollar. He liked the journey so much that he decided to do it again, and again, and again, with his bootstrapped holding company Gateway X. It is the rare individual who enjoys the grind of 0 to 1, but Jesse is one of those unique individuals who doesn’t just enjoy the process—he’s good at it, too. 

In this conversation with Dave, he talks about why, for each of his companies, he hasn’t yet raised from traditional venture capital. Despite his team at Ampush debating the tradeoffs at least once a year, the company decided that it wasn’t right for them. In addition, Dave and Jesse discuss the importance of advisors, the value that investors do (and don’t) bring, and the role of culture in building companies. Additionally, he talks about the benefit of bringing guaranteed distribution for his companies through his ~174K followers on X (formerly known as Twitter).

We found ourselves reflecting over and over on his final words in the conversation, in which he talked about his goals for the future—his passion is infectious. “I [want to] feel as energized then as I feel at this moment, if not more so… The entrepreneurial process tends to wear people down over time. I want it to wear me up.”

We hope you find this interview as exciting and informative as we did!

If you’re interested in staying in the loop when new episodes of Bootstrapped Legends launch, you can subscribe here. If you're a Bootstrapped Legend who wants to tell your story or learn more about working with us, please reach out to us at knowledge@tidemarkcap.com.

Dave: Jesse, it’s so great to have you on Tidemark Bootstrapped Legends. Gosh, how long have we known each other? Fifteen, twenty years?

Jesse: Almost 15 years, Dave. Yeah. It’s awesome to be here. I’m loving that you have this podcast.

Dave: Yeah, we’re really excited to do this. I feel like the bootstrapped journey is so undercovered, and it’s great to get folks like yourself sharing their stories.

I think [when] we first met about 15 years ago, I was on the board of Merkle, ExactTarget, and AppNexus, and you were running Ampush.

Jesse: Yep, that’s right.

Dave: The whole social media channel was quite new, and you guys were doing some really interesting things.

You’ve been such a great, kind friend and advisor over the years, helping me figure out, most recently, Twitter and helping us build out our social presence. I’m really grateful to you and our friendship over the years.

Jesse: For sure.

Dave: Maybe we can get started with a little bit of your personal background. Tell us more about Jesse to start.

Jesse: Yeah, sure. I was born and raised in St. Louis. My parents were Indian immigrants; they came over in the late ’70s. My dad, since I was born, was a small business entrepreneur. He had travel agencies and real estate businesses. He’s pretty hardcore about that stuff, so we learned from a very young age, “Go make copies in my office,” or answer the phones and those kinds of things. That leaves a big mark, I think, a big impression. We grew up in that. 

I was a very enterprising kid. I was a kid who sold popcorn tins door to door and had a snow shoveling business. I got in trouble once in school… I held on to all my Halloween candies in second grade, waited until January, and then sold it in school. The school was like, “That’s not going to work.” I [also] had a deejaying business in high school.

I went to Penn because my English teacher, of all people, told me that that was the best place to go if you wanted to study business. I managed to get in. Penn was very pre-professional, and so [was connected to] these amazing companies, these amazing jobs. I ended up doing consulting for a couple of years and then worked on Wall Street for a couple of years.

I always told myself that I have to love these things and be in the top 5% of them if I’m going to do them forever. If not, then I think I know what I want already, which is [to be an] entrepreneur. My background looks pretty normal, but I always tell people those [experiences] were more of a detour away from what I thought I wanted.

Then 2010 came around. It was the middle of the financial crisis. We sort of were lucky — we said, “Hey, worst-case, we’ll go apply to business school. Let’s move out to San Francisco and figure it out.” That’s how we got started with Ampush. Ampush was the first two letters of the founders’ last names: Chris Amos, Jesse Pujji, Nick Shah. We had the name way before we had the business idea. 

We were, really early on, keen on bootstrapping. I’ll tell you why. When I was at Goldman, I had been to the Berkshire Hathaway conference, [where] they talk about generating cash flow and investing cash flow. That was exciting. Once you have cash flow, there’s a lot you can do with it. That just became the dream. The other thing was, we had done a bunch of businesses in college that didn’t go anywhere, and we had an awareness that if you make money, you can do it for a long time, and you give yourself the opportunity to learn and figure things out. If you take money from someone, you either burn through it then you’re done, or you can get yourself into weird situations. So we had these reasons. They were somewhat naïve but good enough to go, “Let’s go figure [this] out…” We want[ed] to bootstrap something. 

We quickly triaged, I’d say. We talked to friends: how does this work, how does that work? We slowly got to [realize that] digital marketing was a really fast-growing space. We call it the spinal cord of the internet. If you’re Facebook or TikTok, it’s how you generate all your revenue. If you’re Netflix or Uber, it’s how you get all your customers. We said, “There’s got to be something here that’s going to be a great way to start our careers as entrepreneurs.” 

We started doing performance marketing. You may remember from the early, early days, it was an EDU lead gen.

Dave: Yeah, that’s right.

Jesse: University of Phoenix and Kaplan were generating these leads, and we were like, all right. We’re going to figure our way into this business. It’s already a big industry; we just need a few customers, and we need to be a little bit better than the 9th or 10th decile—which we were. We started making a little bit of money doing it [but] it was a challenging start, honestly. 

Then, maybe within a year of starting – not even a year, about nine months of starting – Facebook launched the right-rail self-serve ads. What was like a 10% gross margin for us on Google was a 75% margin for us on Facebook. I literally made the first ads. It was 41,000 substitute teachers, and it said, “Sick of being a sub? Go back and get your master’s in teaching online,” or whatever. 

We said, “Oh my god, we’ve figured something out.” We just doubled and tripled down as aggressively as we could on it. Within a year we were one of Facebook’s largest ad spenders. They invited us in to be one of their most favored nation companies. At that time, Uber, Dollar Shave Club, and Peloton were all looking for help, so we became the go-to choice.

For a few years, it was a very rare thing to be able to do Facebook really well. The company [Ampush] scaled about half a billion a year in ad spend, 200 employees. I ran it for 10 years as founder and CEO. I stepped back, and then recently we sold it to private equity. 

That’s the quick version of the journey. I can talk about Gateway X separately, but that’s me.

Dave: That’s a hell of a journey. For people who have lived during these periods, when Google opened up with their performance marketing, search marching, and then Facebook both with the right-hand rail and then customized in-feed ads… Massive things happen when distribution opens up in that way. In many ways it’s a gold rush.

Now, some companies viewed that gold rush as a land grab, and you had the emergence of both brands but also advisers—maybe comps to Ampush in some ways—that raised a ton of money. Right? Land grab, go hard, go big. I remember Buddy Media was the darling for a period of time before people realized they were way overcharging for what they did. [Laughs] They had very little software associated with it.

Was there ever a temptation to… going big is not the right way of describing venture money, but taking outside capital to accelerate?

Jesse: Yeah, I mean, look. I think we’d be lying if I didn’t say once a year, or maybe every six months, we’d get together and go, are there things we could be doing differently if we had money? Are there things we would change in the business? I think what we did well was, we were pretty honest with ourselves about our ability. 

Some of it’s just a mindset. I’m sure we could have come up with reasons to spend more money to grow faster [but] at some point, we would always be like, well, even if we had more money, we don’t have more time. We don’t have more bandwidth. It took me four years to hire one good executive in the early days. I didn’t know what the hell I was doing. It wasn’t like I had a bunch of executives who knew how to do that, who could double down on things. 

I do think our business savvy and business school/Wall Street experience was valuable. I’ll give you an example. Buddy Media, Spruce Media – you may remember some of these names who had raised money. Some of them even had debt. There was a time on Facebook where you were actually arbitraging the CPMs of Facebook. Facebook would charge a dollar, and you could charge two dollars, and you could go to the big agencies and say, “I’ll place media for you.” You would make tons of money. I mean, we were printing money, right? And Spruce was. Everybody was. I looked at that, and luckily I had been to business school, and I had worked on Wall Street, and I said, “This is not sustainable.” 

Then I looked at Google, and I looked at Efficient Frontier, and iCrossing – these are all names people may or may not know, but these were the old-school search guys. They were getting 10% of spend. And I go, “That’s going to be my business one day, too. I know it.” We built around where we thought that was going to go. I think Spruce in particular – I’m not trying to pick on anyone, but they did not. They staffed around this crazy high-margin model, and then eventually that went away, and they literally went out of business because of it, because they also had debt. You combine those two things, and they were in big trouble.

So, yeah. I think we thought about it every year. We were growing fast. We just couldn’t think of ways that we would grow faster where we didn’t have the money to do what we wanted. 

This is a big one for me with entrepreneurs who are bootstrapping: first, think about your own time. If you think you have more bandwidth to take something on that you’re not because you don’t have money, great. Take it on. But that almost never happens.

Dave: That makes a lot of sense. There’s more to raising money than just the capital itself. Some of it’s negative, and we should talk through those. And there are some aspects that are positive, right? You join certain cohorts. You have access to certain resources. That once-a-year time that you considered outside financing, how did you think about some of the non-financial aspects of raising money, both positively and negatively, and how would you think about it now that you’ve sold the business?

Jesse: I think positively, I mean, there were rooms we didn’t get into, or guidance we didn’t have, or exposure we didn’t have. I think this is a Marc Andreessen quote, there’s some quote where he says your biggest risk as a first-time entrepreneur is not knowing what great looks like. If you don’t know what great looks like, then you have to make it up or find it out. VCs do know what great looks like, and they can show you. He says, “Go meet the best VP of marketing or VP of engineering. You’re not going to be able to hire them. [Laughs] But at least you’ve now set your bar.” I think that was a thing we really missed out on early on.

The other big one is – we learned this way later in the game, and it’s something I do at Gateway X now with all the companies – the rigor of planning and having to put forth a perspective, and someone pressure testing what you’re doing. We would sort of do it, but not really. I mean, we would put together a financial model, but we didn’t challenge each other and go, “Well, are you sure?” There’s a famous quote, I think from Eisenhower, that plans are useless, but planning is invaluable. I think that’s a big thing we missed out on early on, that hurt our ability to think critically or push the accelerator in certain ways. Your head is down all the time, and you miss out on certain things. 

So I think access, knowing what great looks like, and that rigor—those are a lot of positive things about taking money. It’s funny, because even at Gateway X, we bootstrapped one business pretty successfully already. We have a few, but GrowthAssistant is at a certain scale. Now my mindset around that business is that I think in a few years, it would actually make sense to bring in private equity. In that business, I would almost want to pursue a roll-up strategy. I don’t know how to do a roll-up strategy. I’m aware enough to know what I don’t know and that there’s other people who do, and you could partner well with them.

If you can be smart enough to think about those things, I think it makes a ton of sense. Uber is a business that should have taken venture money. Again, you put your business-school hat on, and you go, the winner takes all in that market. It’s a network effect. Absolutely, you should buy market share. Then there are all of these other businesses, like Ampush and a lot of SaaS businesses, in my opinion, where there are going to be five to fifty players. They’re going to have 20% of the market, 15% of the market, and then 2%... Money may or may not be that helpful in those situations. I think asking the strategic question, “Why capital?” makes it different. There are instances where the answer is absolutely, money matters. It will change the strategic nature of the market. Those are good things.

Dave: Can I ask a couple questions on the good things, and we’ll shift to the considerations? In terms of knowing what great looks like, do you think greatness has anything to do with capitalization? Is there a venture great and a bootstrap great? Were your heroes category heroes, or were they bootstrapped entrepreneurs?

Jesse: My category heroes are definitely bootstrap founders. I mean, I write on Twitter these stories. Iit’s turned into a bit of an institution, but in the beginning it was just stories I love, [stories] you and I would talk about over coffee. “Have you heard about this company? It’s doing 50 million EBITDA. How cool is that?” Those are my heroes. 

When I say, “What great looks like,” what I really mean is talent. Especially executive talent, but talent in general. Like, man, if you don’t know what an amazing full-stack engineer looks like, you’re just going to go hire some random person. Or even metrics. How do you run a great SDR function? I think as a bootstrap, you can be somewhat in a silo. No one else cares about your business. Nobody else has skin in the game. I think functionally they’re generally the same, is the answer. 

We have a guy helping us right now as kind of a VP of Sales who used to work at Lattice and HubSpot. He’s amazing. He’s very, very good. But he’s used to the venture model. He, luckily, is buying into the bootstrapped giants mantra. Yesterday we were having a meeting – this is a great example – and he’s like, content marketing takes 12 months to mature, so we should hire the person this quarter. He’s got a couple other initiatives that are in process [as well]. 

I said, “Well, no. I want to see some R on your I first. Then I’ll let you hire for content marketing.” 

Then he goes, “Oh, this is different. You care about making the money, and you’re not someone who’s just spending on everything.” My reasoning for him was, dude, you don’t have all the time in the world. I want you to do three things in a high-quality way, not five things in a medium-quality way.

There’s another cool example. I’m shocked no one’s written an article about this—maybe I should do it. If you look now in e-commerce and D2C, the guys crushing it are all bootstrapped. The guys who are not crushing it were all venture funded, to the tune of nine figures. How is that possible? The only reason is because those are all capital allocation businesses. The rigor around putting money to work, and looking at the R before you put more I in – you have to do it when you’re bootstrapped. You just don’t have a choice. Now they just build bigger and better businesses over the long haul. That’s, of course, my bias.

Dave: Yeah. We are trying to dissect the hero landscape. How much do you look up to the category winner? How much do you look at the capitalization path? I think those two things are interrelated. If you’re in a low-margin business, you have to be super scrappy and capital efficient, and of course, that leans to more than a financial path.

The other piece that’s really interesting to me is from a planning standpoint. Planning is very different in the context of finite cash. It’s very different in the context of control. Finite cash, you have to be a lot tighter in terms of your planning, a lot more accurate. Total control, yes, you don’t need to plan it all, as long as you’re profitable. I understand in a venture and private equity mindset what the right level of rigor and planning is. You described the value of the process and the outcomes in planning. On those two bases, how do you think about what the right level of planning for a bootstrapped company is?

Jesse: I mean, look. If you’re a bootstrapped founder/CEO doing it for the first time… 

Here’s a weird idea that you and I should do, Dave. I’ve been thinking a lot about this. Create a platform or network for bad-ass former founders, founders, VCs even, whatever—just really astute business people—so that bootstrapped founders can build boards for themselves without giving up any control. They just have three people around the table, and maybe they compensate them or whatever. There’s some version of it.

I’m a big believer in planning and rigor. One of my entrepreneurial heroes and mentors, who you know and know of, is Ric Elias. One of the things I observed from him was, he played the role of internal VC, or whatever you want to call it. The guy who had to decide where the money went. Or girl. They invested in Ampush—I think you know that. We’d go to meetings with him, and we’d have this 20-page deck to update him on what happened in the quarter. The last page was just our monthly P&L. He ripped off all 19 pages, and he just stared at the monthly P&L. [Laughs] And he’d go, “Why’d your margins go down in February?” And he’d dig in with us.

At Gateway X, that’s the role I play now with all the companies. We plan, we look at our rigor, we look at the financials, and we make sure we understand it. We make sure we think we’re doing the best we can around the business. Somebody has to play that role of capital allocator or capital decider.

Now, the funny thing about the venture world is, it’s sort of this weird shared model, if you think about it. I have to do certain things as the entrepreneur to get more capital, right? It’s the same equation, internally—I also have to do some things to try to get more capital. I should, at least. I should hold myself to that. I think that’s where bootstrapped founders can go a little wrong, because they’re not paying attention to those things. For me, the bootstrapped giants or legends, the best ones, are doing both of those things. 

To take it even further, another lesson I learned from Rick that was really interesting: I came in with my plan, and it was like 25% EBITDA margins. He was like, “Why 25%, Jesse? Why not 30%? Why not 15%?” And I was like, I don’t know. It’s a good number to plan around. He’s like, “Well, your managers are going to take that, and they’re going to plan to it. Do they need to spend that? You have to go deeper than that.” 

He was really big on this inputs orientation, the fact that margin is actually an arbitrary number. I tell this a lot when people think about bootstrapping. You’ve probably seen this a million times. You could do negative 10% margins or positive 10% margins – [it’s] the difference of hiring a few people and which initiatives you want. If you truly get rigorous around your initiatives, you can do the exact same amount of revenue with a 10% margin as a negative 10% margin. It’s just about how well you run the business. [Ric] was huge on that, and that left a huge, lasting impression on me. You have to pressure test every head count. You have to ask those questions.

Dave: Yeah. There’s a lot to unpack there. A couple things came out for me. First is, what you describe in terms of your interactions with Ric Elias is a first-principle interaction. It’s not like, “I grew up in the venture industry, and there is a certain ratio that people told me is right.”

Jesse: Totally.

Dave: It’s not this arm wrestle against the Rule of 40 versus the Rule of X or whatever, right? These heuristics that are kind of shortcuts for what a financial profile should be. That’s why I love talking to bootstrapped founders. They’ve deconstructed the world and figured out what makes sense from their own core fundamental understanding of the mechanics of a business and the mechanics of financials.

Jesse: The heuristic…yeah.

Dave: The heuristics of the voting machine. The Rule of 40 correlated to Red Rule [Inaudible 21:21] is just the voting machine of today. But you need to look at it over time and understand how it maps to the long-term margin.

There is something about performance marketing in incrementality that leads to ROI-driven businesses, right? [Laughs] All of the companies that you describe today, which may be just correlation, are performance marketing, where you do think about incrementality really in a detailed way.

Jesse: At one point, I was like, every business is just another campaign. Is it getting you the ROI you want? Not to be callous – of course, I care a lot about people and culture – but every person is a campaign. Do they get the R? What’s the I, and do they get the R attached to that I? If not, you’ve got to shut the campaign down. If they’re going well, you’ve got to figure out how to expand the campaign.

I mean, it couldn’t be more pure from a capital allocation perspective. That’s my school of [thought]. I think there are other ones. There’s, like, Atlassian. There are really great product businesses that have found a way to get viral demand. I think those cultures are quite different. They are also bootstrapped, but they’re bootstrapped because they’re really good at the product thing, which is, “what’s that really specific problem? Oh my god, I’ve got the perfect solution for it.” So good that it just goes viral. [Laughs]

Dave: Yeah. But even Atlassian is a great example where, early days, why hire a hundred salespeople when you can incrementally put more capital into product, which drove growth more than a BDR or a sales rep or marketer? It’s really this first-principles thinking and ROIC that drive the answer.

I love your idea around a board network.

Jesse: Yeah. I think it’s a shame, right? It’s a classic problem/solution issue, which is, hey, I think I would want a board [but] I don’t want to give up control. It’s my call at the end of the day, but man, can you imagine… Again, I had the benefit of Ric, pressing me and pushing me. Can you imagine, you and I know hundreds of people whom the entrepreneur would listen to and respect, [still] knowing it’s their call at the end of the day.

My relationship with Ric was good in that sense, in that they were a minority investor. They never overstepped. He would say, “It’s always your call.” The second he says that, man, I listened to him a lot more, because I’m like, okay, he doesn’t really care what happens here, but he’s really pushing me on this thing. Let me think more about that.

I think there’s a big opportunity there.

Dave: Totally. When we started working with David Williams, the founder of Merkle, he had bootstrapped for 25 years. It was a $250 million business, and early in the relationship, he treaded lightly, because what they were doing was working. He’s an amazing entrepreneur. He’s a proud CEO and founder. And he basically asked me to put a board together. His board [had been] him talking to himself on his drive home. The way we approached it was, we essentially created a series of interviews and project work. We had two amazing board members, Bob Frerichs and Jim Warner. Each of them brought really specific functional expertise, and they did it project-first. That allowed David to work with them, and for them to understand the business so they could jump in and add value right away and be a contributor.

Jesse: Let’s write it down. Maybe we should partner on it, if we could find a good CEO for it – it’s something I could get really passionate about. It’s what I wish I had when I was 28 and Ampush was doing whatever it was doing. I think Ampush would have been a much bigger business if I had it than it was, because I think there were just things that needed a second [opinion].

You know, I have financial advisers, a family office today. I joke with everyone, the best thing they do is, when I send them an email I’m really excited about or I want to do something, they create friction: “Do you really want to put a hundred grand into that thing, Jesse? You don’t know anything about that.” 

And I’m like, “Yeah, you know what? You’re right. I’ll sleep on it.” They’ve honestly saved me a lot of money just playing a slight friction role to my enthusiasm and excitement. I think, in some sense, every entrepreneur would benefit from that.

Dave: That’s great. You’ve been highly successful with Ampush. You’ve learned a lot about the journey. You’ve studied the journey in various different capacities. I think that’s a great segue to Gateway X. 

My understanding is in some ways you’re building Gateway X to address some of the challenges of the bootstrapped journey and augment the journey. Tell us more about Gateway X.

Jesse: I’ll start with the why and the spiritual reasons behind it. I was probably seven or eight years into Ampush, and I started really burning out hard. We’d had some success, and we’d had enough money to take off the table and were growing the business. I just ran into this thing where I was like, “Why am I doing this?” I think the answers for a long time were wanting to prove myself, success, money. Then those kind of came off the table. 

I hired an awesome coach, Dave Kashen. Ric encouraged me to hire a coach, because he was like, “Dude, you’re one of the luckiest guys I’ve ever met. You have beautiful, healthy children. You’ve made money. You’re successful. You’re 32.” I was young, right? He’s like, “What’s going on? Go talk to someone.” 

Long, long journey short, I started to synthesize what really matters to me beyond money. What I realized is, I love the entrepreneurial journey. Especially the process, what I would describe as the negative-six months to plus-twelve months of starting a business. Kind of like this thing you and I are talking about: “Ooh, this is a good idea. Oh my god, hey, I just posted this thing on Twitter. There’s 10 people who want this. Oh my god, it’s going to work!” Right? Then, okay, it’s up and running, and then every business becomes more like going to the gym and doing your reps. I think I can be valuable there strategically, and helpful, but that’s just not the part that lights me up as much as that negative six. I love that. If I could do that every day, I would work till I was 90.

The second thing I really love is coaching and teaching people. I love, particularly – and you’ve seen this a million times – my own journey of personal growth. I think when you run a marathon or you raise children, anything really hard makes you grow as a human a lot. Entrepreneurship is no different. I loved that aspect of it and wanted to have that. That’s a thing that energizes me endlessly. 

Those are the two things I want to do all day every day. I’m going to build a structure, I’m going to build a company, around those two things. That’s actually the requirement of the business. So, pretty quickly, this venture studio-ish model kind of made sense. It’s just an obvious model for that.

My spins on it are a few-fold. I’d say one is, of course, we’re going to build bootstrap businesses. That’s what I know how to build. That’s what I like building. I think there’s actually a big white space there, because I think there’s a lot of venture funding or lifestyle businesses, but there are not enough in the middle, which are what I call “bootstrapped giants.” I want to build more of those. That’s the format I want to perfect, if that makes sense. The second thing is, yeah, I have this unfair advantage of growth marketing knowledge, know-how, and distribution, right? I can get in front of people. Then I started doing the Twitter stuff, which scaled that distribution advantage. It’s like, use Jesse’s expertise and his unfair advantages to build bootstrapped giants.

The third aspect of all of them is the culture that has been influenced heavily by my coach. There are two aspects to it. One is the conscious leadership stuff – so you’re really aware of yourself, you’re really candid, you’re sharing a lot, you’re very vulnerable. The other is what I call entrepreneurial rigor. I always observe that the best people are both rigorous and entrepreneurial at the same time. Good people were one or the other; the best people were both. Sure, we’re going to be bold, resourceful, move fast, all that stuff. That’s only half the equation. The other half is analytical and reflective, [with] strong logical reasoning. Make sure the culture is infused with those two prongs.

That’s what Gateway X is. That’s sort of the thing we want to build. We’ve sort of stumbled our way into where we are today, in terms of the meta-company. The companies themselves are doing great, but the platform we’ve sort of figured out as it’s gone. We’ve come to a place where we’re going to probably only launch one company a year. I really play the cofounder role the first year, which is what I love to do. And I think the businesses really benefit from it.

Then, as it starts to get to that place, I go, “Great, let’s meet once a week. I’m not a board member. I’m a partner.” Actually, the week-to-week model is surprisingly value-creating, I think. I’m close enough to the business to know what’s going on, but I’m far enough that I don’t have any operating responsibilities, and I can cultivate a relationship of trust with the CEO where it’s their call, kind of like with Ric – here’s what I see, and here’s what I think.

That’s the goal. Hopefully over time it becomes more like a hold co with a bunch of different businesses inside of it, and we have the ability to launch new ones when we see the opportunities, and it really becomes a platform for learning and growth for people, including myself. That’s the dream. I hope it’s doing hundreds of millions in EBITDA, like, it’s an ambitious dream. I want it to be big. I want it to be scaled.

I think you probably agree with this. Red Ventures and all these great businesses like Merkle, the best businesses have been built so much around the founders that nobody else could build a business like that. I think, I believe, that’s what also drives me, or how I want to orient.

Dave: What an awesome vision. What a great way to spend your time.

Jesse: It’s fun. I mean, I come home to my wife, and she’s like… There were good days at Ampush and bad days, and there were challenging times, and she’s like, “Man, you’re just happy every day now. And energized every day.” And I’m like, “Yeah, this is so fun!” [Laughter]

Dave: Like, knock it off, it’s kind of annoying. [Laughs]

Jesse: Yeah! And I tell people, you know what? The EBITDA, the thing could not grow at all. It could grow zero from here – I don’t think it will, but it could just never grow from where we are, and I could still do this every day because it’s such a blast.

Dave: Yeah. It’s been what, about a year, two years, that you’ve been in Gateway X?

Jesse: It’s like two and a half years.

Dave: Two and a half years, oh wow. Okay. That’s great. What has been surprising to you? What have you learned that you didn’t expect?

Jesse: Oh man. This is a whole other podcast. I’m not sure if this is surprising, but I think it’s important that the CEO is not me. If there’s no CEO, I’m the CEO. If I’m the CEO, then somebody else can’t be the CEO. If somebody else can’t be the CEO, then they’re never going to have the ownership and shared vision to go build a business. I think that took us 18 months to figure out. [Laughs] Because I’m a former CEO. I would go, “Let’s go build!” I can get something up and running so fast it would make your head spin. But then I couldn’t hire someone [to take on the CEO role]. They’d either treat me like a boss [or] they wouldn’t share the vision. The co-created businesses where we were acting as partners from the first minute of the conversation have been the really successful ones. I think that’s a really, really important learning.

Another really, really important learning is in this model. Generally for bootstrapped giants, finding product market fit is a very big challenge. It’s really a challenge we don’t want to underwrite, and it’s a good reason to go raise venture money. [Laughs] You need a certain type of personality and person to go spend their time running into door one and door four… Whereas the businesses we’ve started that have been really successful, demand is there. It’s very clear; it’s not being met. You can stand something up to meet it. It kind of makes money from the first time you do it. It’s a very different equation. The business, then, will not likely have any exponential growth. It will likely have long-term linear growth at a high rate, [which] is the goal, ultimately.

Then a third one – rule of threes – is from yesterday, honestly, real time. I think, considering a CEO’s vantage point, and some of the feedback I’ve gotten as a young CEO with my VPs, [if] I had a belief or a story, then I had to really tread lightly around the CEOs. I couldn’t bring my full energy and perspective to the table, because it would undermine them. I’ve waffled a lot there. What I’ve learned that surprised me is, if I’ve built a lot of trust with [a CEO] and the roles and responsibilities are clear inside the organization, I can be ferociously aggressive around my perspective and culture, and they love it. They don’t feel threatened by it, and it actually really enhances the businesses. Again, Ric is like that too. If you can get that balance… 

I usually make it an either/or: you can either have Jesse’s gifts and all the special things he brings, or you can have a CEO who feels empowered. But that’s not actually true if you get the equation right. I think that’s going to be the unlock that drives us for the next decade, honestly.

Dave: Yeah. You’re an adviser. You’re not a board member. You’re a cofounder. 

I think [that balance is] true of every board member. Are you going to be Nice Dave or Tough Dave? Ideally, you’re the engaged Dave, the whole self, but yeah.

The ideation process is really interesting to me. If you think about those three concepts that you described: it’s got to be co-creation, product market fit has to be day-one, and you’re full-force Jesse. How does this work? [Laughs] How does the kernel idea form? Because it’s got to be co-created, and it’s got to land.

Jesse: You know, the types of personalities that come into the business naturally are ones who feel like they want help doing this, and guidance, and coaching. The second someone says to me, “Why would you have a majority of the business, Jesse? I could do this myself,” I go, “God bless you. Of course you can.” I mean, if you believe that, then great. And if you feel like you want to de-risk business, and you still want to be a founder and CEO, then this value prop is more appealing to you as a person, obviously.

Typically, I have a huge list of ideas. I’m in the market, I’m having conversations all the time, I have lots of people like you, or CMOs, who are pinging me going, “Do you have this?” “Can you get this for me?” “Does this exist?” A good example of one that I’m really excited about this year is some version of Lambda School for Growth Marketing. I get pinged, “Do you have marketers?” I know and you know that they don’t grow on trees. It's not a real function that exists; you’ve got to go create them. You’ve got to train them. They need to know. And it is trainable. I know that from my experience at Ampush. Some go, “Oh, hey, would you pay me $20,000 if I took X investment banker and trained him how to do growth marketing? You would? Okay, that’s interesting.”

There’s a natural amount of ideas that are coming to the table. I think the validation and the finer points have to be co-created with that person. They get in, they’re having the conversation, “Hey, I think we should do it this way, Jesse.” Okay, yeah, I agree with you. That makes sense. Or, “We originally thought we were going to do this; now, let’s do it this way instead.”

There are also big parts of the business’s operation, like in GrowthAssistant with Adriane, [where] I brought the customers. I brought the knowledge, but she’s created the entire recruiting and operations machine. That’s her. Without her, that doesn’t exist. She knew how to do it because of her background. There are big parts of building any successful business that the other person feels a lot of authorship around. I think that’s kind of the idea side and the co-creation side. 

I think with Full Force Jesse, there are a couple interesting aspects to it that I’m still learning, honestly. One is integrity. I don’t mean that in the “be honest Abe” sense. I mean it in the sense of, do what you say you’ll do when you say you’ll do it. If I go to the CEO and I say, “I’m going to bring you 10 customers,” and I don’t bring them 10 customers, they’re like, “Why the hell is this guy around?” In general, just showing up and adding a lot of value, to the point where they’re like, “Wow, Jesse, when he gets involved, it adds value. I want him involved.” Most of the businesses relate to things I know pretty well. So it’s like, “Yeah, it’s good. Jesse’s helpful. For the brand we launch, we look at the marketing P&L, and he can show me five things to look at that I didn’t know. That’s helpful for me.” I think that’s a really important number one. 

I think psychological safety with the partners, the CEOs, is so, so, so, so important. It’s something I have had to work with my coach on developing the capacity for, because I think I was a hard-charging CEO entrepreneur for a long time. If your numbers were wrong, I would lambast you, you know. I wasn’t a pleasant person in that regard. 

The most recent company we launched is like a due-diligence business meets Ampush. We do marketing-related due diligence for private equity firms. The CEO, she’s my age. She’s very experienced. She was a CEO, [but] she’s never been a founder. She told me, “You know, for the first seven or eight months, I was waiting for you… I thought this act was bullshit, Jesse.” The act of “You’re all nice, and you’re fine.” She didn’t realize it [was real] until there were things that went wrong, and my response was not to try to fix the problem for her. I was like, how are you doing? How do you feel about this? Just asking her questions and playing the role of coach. It’s a small nuance but an important one. My goal was to help her, not fix the business problem. That framing is really, really important. Once that happens, they go, “Oh, okay. I can actually be honest with him, and I can share, and he knows how to deal with that.” 

That’s also something I learned from Ric, by the way. The first month we closed the deal, he had the entire executive team of Ampush over to Charlotte for dinner and everything. He started, as he does, asking open-ended questions that get people to really be vulnerable. And my team basically said, “Every employee is pissed off, and this deal took way longer than we expected, and they don’t know what the hell you are, and the founders haven’t done a good job of ex[plaining]…” They just railed. I mean, they really let it out.

I’m expecting this guy to be like, “Dude, I just gave you 15 million bucks, what the hell?” Right? [Laughter] [But] he’s not a VC. He’s a business builder. That’s not how he reacted at all. It sort of shocked me. He was like, “I’m your partner. I’m here to help you with this. I understand people, dude, running a business is hard. Don’t worry about your glass door. Focus on this.” I was like, wow. 

So, I’ve been on the other side of that. It’s value-add and that psychological safety, I think, lets Jesse unleash a little bit. I’m thinking out loud as I talk through it, but that’s what it feels like.

Dave: Yeah. Man, you have such a thoughtful perspective of the venture studio business down to the microtactics that work, and also your own self-expression and self-actualization. I have no doubt it will be successful. You’re two and a half years in. What’s success at five years? What’s success at 10 years? Maybe this gets back to the planning idea. Maybe the process is worth more than the actual plan. How do you think about it?

Jesse: Yeah, look. I think success at 10 years, let’s call it, is some number, [maybe] 7-13 companies operating. I would love to be at 100 million in EBITDA. A real scaled number of cash coming in that allows us to do things we can’t do today. Maybe that’s M&A. 

I’d want to have my own academy—build out a Gateway X academy as a thing people want to go to. 

I think another version of success I talk a lot about is, we’ve hired someone right out of school who is with us for six to eight years, and when you make partner at Gateway X, what you’re actually doing is you’re getting this co-founded business as a CEO. Once that full cycle takes place, I’ll be like, hell yeah. This was a really successful thing. 

I think, maybe we’ve sold one or two businesses along the way, and that just made sense for whatever reason. I don’t have tons of religion around that, necessarily. 

And there [will be] a platform. A real platform that feels like it can last a really long time. 

And I think, let’s not forget, I [want to] feel as energized then as I feel at this moment, if not more so. I think that’s a really important part of this. The entrepreneurial process tends to wear people down over time, as you know. I want it to wear me up. I want to have more energy from it as I go.

Dave: This is awesome. Jesse, thanks so much for spending time with us today. Great perspective on the bootstrapped journey. I really appreciate you sharing your vision for how you’re going to contribute to this journey and this form of entrepreneurship. It’s always great to chat with you. Thanks so much.

Jesse: Yes, sir. Thanks for having me on. Let’s do it again soon.


Dave Yuan

Founder and Partner, Tidemark

February 2024

The information presented in this post is for illustrative purposes only and is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by Tidemark or any of the securities of any company discussed. Tidemark portfolio companies identified above are not necessarily representative of all Tidemark investments, and no assumption should be made that the investments identified were or will be profitable. For additional important disclaimers regarding this post, please see “ Purpose of the Site; Not Investment Advice; No Recommendations” and “Regulatory Disclosures” in the Terms of Use for Tidemark’s website, available at Terms of Use (tidemarkcap.com).

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