Story
42 Floors hired for culture fit and it broke the business side
42 Floors grew from 8 to 80 people in 12 months on $20M of funding, hiring mostly on the 'airport test' culture fit. The engineering org thrived, but entry-level sales and support were staffed with fun people who weren't right for the roles.
“We went from a team of 8 people to 80 people in like 12 months. We were like, you know, using all this money to go hire great people. Um, and then after about, I think, probably like 60, 70, 80 people, we noticed that, um, we, we started to have problems. You know, every startup has problems, but I think our problem was that, um, we really just were hiring mostly on culture fit. Uh, and so we had hired all of these like people that we just wanted to hang out with.”
Steal thisDon't hire entry-level sales and support purely on the airport test; use work-sample tests.
Number
Interviewed founders sold first $2M ARR themselves before hiring salespeople
The three Interviewed co-founders personally closed the first $2 million in ARR through founder-led sales to big companies like Fidelity and IBM before bringing on any salespeople.
$2M
ARR sold via founder-led sales · USD ARR
“The 3 of us sold the first $2 million in ARR at that company.”
Number
Interviewed founders sold first $2M ARR themselves before hiring salespeople
The three Interviewed co-founders personally closed the first $2 million in ARR through founder-led sales to big companies like Fidelity and IBM before bringing on any salespeople.
$2M
ARR sold via founder-led sales · USD ARR
“The 3 of us sold the first $2 million in ARR at that company.”
Number
Interviewed founders sold first $2M ARR themselves before hiring salespeople
The three Interviewed co-founders personally closed the first $2 million in ARR through founder-led sales to big companies like Fidelity and IBM before bringing on any salespeople.
$2M
ARR sold via founder-led sales · USD ARR
“The 3 of us sold the first $2 million in ARR at that company.”
Take
Raise a 'sane' amount of venture to skip the consulting years
Bakke's hybrid approach: rather than raising tens of millions or pure bootstrapping, raise $1-2M so you can skip the years of doing agency/consulting work for big customers just to fund the business, and reach a $10-50M exit in 3-4 years instead of a 10-year slog.
“And so there's this like, you know, raise a sane amount of venture capital. I don't think there's very few businesses that need to be going off and raising tens of millions of dollars. And so I like those types of businesses that say, hey, if I can raise a million bucks, if I can raise $2 million, it helps me skip over those years of having to go, you know, be a consultant and kind of do that agency-style work for big customers to put money in the bank.”
Steal thisRaise just enough capital to skip the consulting-for-cash phase, not so much you lose optionality.
Number
Cabinet designer built a $1M/year niche CRM for high-end cabinet makers
While doing customer research in Minnesota, Bakke met Ryan, who kept his full-time job designing cabinets for multimillion-dollar lake homes while he and friends built a CRM for high-end cabinet makers into a $1M/year SaaS business over six years.
$1M
Annual revenue of niche cabinet-maker CRM · USD/year
“And he and a couple friends have created a $1 million a year SaaS company that is like a CRM for high-end cabinet makers.”
Number
Cabinet designer built a $1M/year niche CRM for high-end cabinet makers
While doing customer research in Minnesota, Bakke met Ryan, who kept his full-time job designing cabinets for multimillion-dollar lake homes while he and friends built a CRM for high-end cabinet makers into a $1M/year SaaS business over six years.
$1M
Annual revenue of niche cabinet-maker CRM · USD/year
“And he and a couple friends have created a $1 million a year SaaS company that is like a CRM for high-end cabinet makers.”
Idea
Asynchronous golf coaching: $99/mo to mark up swing videos on your own time
A pro charges $99/month to review uploaded driving-range videos, recording audio markup on a customer's swing. It's far cheaper than in-person lessons and async, so the instructor monetizes a passion without a fixed schedule.
“And so what he tells you is for $99 a month, You can upload— there's some parameters. I think it's like a 2 or 5 minute video of you at the driving range. And I think you take like 2 minutes of footage, you know, driving a couple of balls at one angle, and then you move the camera behind you and you do another 2 minutes of it. And so I love this business because all he's doing is he's taking video content and he's talking about something that he loves.”
Steal thisTurn a coaching passion into an async video-feedback subscription at $99/mo.
Idea
Asset-light franchises: a franchised, remote Geek Squad for work-from-home IT
Bakke argues classic franchises are asset-heavy (rent, equipment), so the opportunity is asset-light franchises for the remote-work era, e.g. a franchised Geek Squad selling regional territories that companies pay a monthly fee to make their IT problems go away.
“And I think that somebody will build like a multibillion-dollar company basically doing like a franchised version of Geek Squad. I think that that's one super interesting example.”
Steal thisTake a 70-year-old franchise model and strip out the real estate and equipment for the remote era.
Number
Manhattan dog day camp: 12 dogs at $80 each = $1,000/day off existing land
Two women drive a Suburban around Manhattan, load ~12 dogs at a time, and take them to a 5-acre upstate plot one of them already owns, charging ~$80 per dog and netting roughly $1,000 per day on real estate they already have.
$1K
Daily revenue from Manhattan dog day camp · USD/day
“And we just let them go, like, dig holes and play with each other and just, like, run around. And it's, I think, in one of the women's backyard in, you know, northern, northern New York. And they get, like, an insane amount of money. I think, like, one day of doing this, there's, like, 12 dogs. It's like $80 per dog. So every day they do this, they're, like, printing $1,000 for real estate they already have, you know, on this, like, 5-acre plot of land that one of the women lives on.”
Idea
Fractionalized executives for the 2-to-200-person company
Bakke loves fractional executives, a shared CFO, head of HR, IT or office manager, for companies too small to justify full-time hires but that still need compliance and expertise. He notes these roles require huge trust since you hand over financials or HR files.
“I mean, there's any sort of, you know, fractionalized executive is another idea that I love, right? And so I think this is another business where when we were starting Interviewed 5 years ago, you know, day one, if you have 2 people, You don't want or need to hire a CFO. You don't need a head of HR, but you want like somebody to keep you compliant in these areas.”
Steal thisOffer fractional C-suite/ops roles to companies of 2-200 that can't justify full-time hires.
Idea
Teamcation: a travel agent for remote-company offsites
Bakke's side project Teamcation targets the new market created by remote work: a specialized travel agent who knows niche spots that fit 20-60 people, handles travel coordination, expense and per-diem logistics from simple parameters like headcount and budget.
“the, the idea of having like a travel agent that knows these niche spots where you can get 20 or 40 or 60 people into a house, uh, they're actually kind of hard to find. And I think, you know, then you have like all the travel coordination. Okay, maybe for the first time ever, these companies are having to set up, you know, expense policies for, you know, how much per diem you get if you're on the road, if you're driving in versus flying in.”
Steal thisBuild a done-for-you offsite booking service: give it headcount and budget, it handles venue, travel and expenses.
Framework
Want 50% to not get it, 25% to hate it, 25% to love it
Bakke cites a Keith Rabois-style rule for a good startup idea: aim for 50% of people to not understand it, 25% to hate it, and 25% to love it, polarization signals a non-obvious, defensible idea.
“I think it's like a Keith Rabois quote. You always want, you know, like 50% of people to not understand the idea. You want like 25% of people to hate it and you want 25% to love it. And I think we're like pretty equal on that ratio.”
Steal thisTreat polarized reactions to your idea as a feature: seek the 50/25/25 split, not consensus.
Number
Ferrari Market Letter: $2M revenue from 5,000 subscribers
The Ferrari Market Letter does $2 million in revenue from only 5,000 email subscribers with a team of just two people, illustrating the economics of a passionate niche audience.
$2M
Annual revenue · USD/year
“the Ferrari Market Letter has 5,000 email subscribers and does $2 million in revenue with a team of 2.”