Aaron Houghton

Scaling the Business, and Me

Aaron Houghton
Scaling the Business, and Me

Scaling the Business, and Me is the third post in a five-part series about my roots as an entrepreneur. The other parts are:

Email marketing started off as a side business within Preation. In fact, I typically offered it free for anyone who hosted a website with us. But one day, a client referred someone solely for email marketing. And the guy wanted to buy an annual subscription.

Still in college, I settled on a somewhat arbitrary price of $450 and he mailed a check to my dorm. It was the largest sum of money anyone had ever paid me simply for turning on access to something. I had this big “duh” moment. I had not just a service but a scalable product on my hands.

I met my eventual co-founder Ryan Allis a year later. He started selling my email marketing tool to Chapel Hill businesses and grew monthly revenue to $3,000 by the time I graduated from college. 45 days after I graduated from Carolina, we spun out iContact.

Several other firsts came around that time. I had to hire a lawyer to help figure out ownership terms with Ryan, which turned out to be easier than I thought and a lesson for future businesses. I’d found someone who loved my baby as much as I did and cared equally about its growth and success. I always loved being on a team, but an actual partner in business gave me this warm fuzzy feeling I’d pretty much require for future ventures.

We also started hiring actual employees instead of friends from my dorm, even recruiting some people from other cities. The third hire replaced me running the technology side of our business, which meant just 18 months after its start, I had to find a new role within my company. That was an odd and, at times, entertaining experience.

I eventually got busy building out a team and handling operations for the company. But somehow, my last task—building a “bounce handling” function—never got moved to my successor, which meant 80 technical hires later, it was still on a whiteboard assigned to me, serving as an homage to the days when I still wrote code for the application.

Another first came when a friend and fellow entrepreneur convinced us to raise venture capital. It seemed counter-intuitive at the time. We were raking in $150,000 in monthly revenue and didn’t really need the money to continue our growth. But he argued that outside capital, if raised at the right price, would be helpful to have when we needed it.

And so we raised $250,000 initially and later closed a $1 million round with the investor. I was 23 years old and Ryan was 20. At our first dinner with our new investors the senior partner turned to me and said: “There is no way in hell I’m giving you two guys $1 million. My son is older than you and I’d never give him $1 million.”

He was joking, but it was the first time I felt really, really young. And that theme continued.

We spent most of the investors’ dollars on marketing, causing growth to really accelerate. We went from 25 to 150 employees in a year, making finding and hiring people our biggest challenge. On one day the next summer, 17 people started on the same day.

At the same time, we had to bring on a professional management team. I went from tech lead to jack of all trades to operations to finding and developing leaders to do the jobs I had previously. And funny enough, most of the people I recruited were way more experienced than me. And I had to train and lead them while I learned from them.

A transformational book during that time was “Leading at the Speed of Growth.” But we also surrounded ourselves with a support network—our investors and board, as well as leadership programs and an executive coach.

And while that was certainly helpful, the business got bigger. I felt responsible for my team, investors, family and co-founder. I theoretically had a multi-million dollar net worth on paper, but was living in a 400 square foot apartment with a car payment I could barely afford. I was putting everything into the business. And along with that came stress that I wasn’t quite ready to handle.

The next story in this five-part series is From Standing on Peaks to Battling Cancer.