Welcome to the first edition of Innovator’s Hangout, where we dive deep into the stories, insights, and lessons from some of the most inspiring entrepreneurs out there. Today, we’re kicking things off with a bang as we chat with David and Chris Sinkinson, the brother-dynamic duo behind AppArmor, a bootstrapped startup that went from an idea to a multi-million-dollar acquisition by industry giants. But here’s the twist: they didn’t follow the conventional startup playbook. In fact, they did quite the opposite.
In this candid conversation, David and Chris peel back the layers of startup myths, share the real challenges of building a business without external funding, and offer a fresh perspective on what it takes to succeed in the turbulent world of entrepreneurship. Whether you’re just starting out or you’re already on your journey, their story is packed with insights that could change the way you think about your own path. Ready to get inspired? Let’s dive in.
Thank you so much David and Chris for doing this with us! Before we dive into the deep end, our audience is eager to learn more about your personal journeys. Can you share a bit about how you came to be here?
Thanks for having us! It’s Dave here. We’ve decided that it might make more sense for one of us to write our answers today – but Chris is definitely weighing in.
Let’s get personal. First off, I started my company with my brother, Chris. He’s 10 years older than me and had been a serial entrepreneur for years before he teamed up with me. When we did start working together, he actually had a handful of products on the go all making between $5,000 and $50,000 a year.
In 2011 I was working at my alma mater and participated in a number of committee meetings regarding the institution’s public safety posture. During one of those meetings we learned that a significant percentage of the emergency assistance “blue light” poles were malfunctioning.
I was in the right place at the right time. Sitting across from me was the associate dean of student affairs. I pitched a mobile app that could both replace and innovate on the technology of blue light poles. I’m pretty sure I said “there’s an app for that” in a non-sarcastic way. The committee was excited about an app that would have the ability to call campus security and send the position of the user in real-time to dispatch.
Of course, I couldn’t code the app. Luckily, I had a brother who was not only into coding, but also specifically mobile apps. Because of his work on his other products, Chris had become a subject matter expert on mobile app development.
Still, developing the app was a slow process. It would take many months of work with our stakeholders at the institution to fine-tune our version one. While we added our second and third customers quickly, we were far from an established business. In the interim, I would go off and get my MBA, work at a major telecom, and make sales calls for our new platform, AppArmor, on my lunch breaks .
Chris sourced some “funding” by winning a $15,000 contest for new businesses. We used that money to hire an intern and help systematize the process of making feature and content changes for our customer’s apps. Chris had also recently completed his MBA at the same school, so we would soon have the same business training.
In 2014 we opted to go all in. I quit my job at the big telecom, Chris had the most epic yard sale of all time, and we rented office space in downtown Toronto to start working together on our startup dream. Over the following years we developed our product, gained more customers and continued to expand our business.
Eight years later in 2022 we would sell our business for $40 million.
I’m curious—what made you decide to take a different approach when you were building AppArmor? In an industry where so many companies seem to follow the same playbook, what inspired you to carve out your own path?
I think it was simply a healthy amount of critical thinking. Every business struggles early on, but Chris and I noticed that a lot of the ideas around startup pop-culture didn’t really work for our company or market. We’ll get into this later, but we looked to our staff and customers to make more informed decisions, as opposed to external input of what people thought our company ought to be. We always felt we knew more than any outsider or any potential investor; maybe it was a touch of arrogance, maybe it was just practical, but ultimately we ended up moving down a less traditional path.
We didn’t get funding. We didn’t hire a ton of people. We didn’t obsess over “getting big fast”. We did it differently.
Really, I suppose, we chose this path because it worked. It was the straightest line from where we were to meaningful profitability. We also felt that we were bringing the right skills to the business: Chris was the development side, and I was the sales and marketing side. We knew we could do it and we wanted to do it our way.
You both bootstrapped AppArmor from the ground up, which is no small feat. How did that decision shape the way you ran the company? Were there moments when you felt the pressure to seek external funding, or did bootstrapping give you a unique edge?
Bootstrapping is interesting because I think it offers founders exceptional freedom. If you can get your business going without the need for seed capital, you’ll absolutely be better off. Having full control over the business – specifically being able to avoid the “get big fast” pitfall – will give you the flexibility to wait for your market to mature and tackle it when the time comes.
Seed funding is also complicated for a bunch of reasons. Here are a couple of biggies:
You’re new to the market: you don’t know what you don’t know, but you’re going to tie your business (and livelihood) to a “pitch” for VCs that is likely misinformed. You’ll need at least a few years in the market to understand its unique complexities and how to attack it.
Finding funding shouldn’t be a core competency: Putting the time into finding capital has a material nonfinancial cost to your startup. When founders focus on funding, they develop skills for getting funding, rather than skills for acquiring and retaining customers. A founder’s time is incredibly valuable: the opportunity cost is real.
Your “pitch” is also a moment in time: Tying back to the first point, you’ll be stuck with your pitch to your investor. Say you promised an average sales price of $10,000 per customer, only to have competitive pressures force you to drop that price to $5,000? Now those investor sales targets are going to be very difficult to hit. You have to own a promise you made when you didn’t understand the market.
For what it’s worth, yes, we felt the pressure to try to pursue funding and even seriously considered it more than a few times. Why? Social pressure mostly; were we really a legitimate business if we didn’t have funding? It would take us some time to be confident in ourselves and our business. It’s also worth noting that some businesses need capital to get off the ground; if you’re a hardware business for example, you’ll need money to make your product. We were a SaaS business – we really didn’t need the capital.
All-in-all, bootstrapping absolutely gave us an edge. There were many benefits, but ironically, the biggest one was our ability to be competitive. We talk about this in our upcoming book, Startup Different,
“Lastly, there’s a competitive risk. Chris and I always loved going up against VC-backed startups. Based on the market information and competitive intelligence, we could work out roughly what the competitor promised as an average sale price. We would then go into competitive situations against them, knowing their floor, and simply offer our product for less. We could literally undercut them on every deal and win. It actually felt pretty great.”
Let’s talk about some of the startup myths out there. You’ve both seen firsthand how some of these misconceptions can mislead entrepreneurs. What are some of the most dangerous myths you’ve encountered, and how do you suggest other founders avoid falling into those traps?
Yeah, there are a ton of startup myths that folks simply accept as helpful, when in fact those same “insights” may be hurting their business. In our upcoming book we address 33 startup myths, but here are a couple of my personal favorites:
Myth 1 – You Want to Get Big Fast
We’ve alluded to this a bit already, but the “get big fast” strategy is not a good one. Often you need to give the market time to develop so you can determine how to best serve your customers and extract the most revenue (and ideally, profit). Getting “big” – by getting funding, more staff, and spending major dollars on growth – all when your market isn’t necessarily ready is a recipe for disaster.
Yes, you do want to get “big” from a revenue perspective. But do you know doing it quickly is even possible?
Myth 2 – Company Cultures Form Naturally
I used to think company culture was something that just “happened”. You and your staff will definitely contribute to workplace “vibe”, but culture is something you need to consciously drive every single day. We screwed this up badly the first time (we’ll get into that in a second) and paid a significant price.
You need to sit down and think about the kind of company you want to be and then lay the foundation for that culture with guiding principles and policies. A foosball table or free beer are not going to shape the way your people work (but hey, they might be nice to have anyway).
Myth 3 – Bootstrapping can’t get you to the business big leagues.
We’ve covered this a bit, but I want to be specific. This isn’t about funding – it’s about how bootstrapping can work. Consider that brands such as Nike, Shopify, GoPro, Basecamp, Vuori, GitHub, and literally hundreds more all bootstrapped their way to multi-billion dollar valuations.
Bootstrapping can get your company to billions of dollars. Take yourself seriously. You are a startup even if you don’t have funding.
Myth 4 – Customer Support is a Cost Center
Startups have a bunch of secret weapons against established market players, and one of them is customer support. We’ll get into this a bit later, but customer support is something your company needs to do extremely well. Counterintuitively, customer support can actually become a significant revenue and profit generator for your firm.
Myth 5 – The things that made you successful before will make you successful today
This is a bit more nuanced, but one major challenge for founders after they’ve achieved a bit of traction is being able to modify business strategies. After all, you got to this level by doing what you’ve been doing, so why change?
The rub is that you need to continuously iterate and improve your strategies as your company gets bigger. This often feels unnatural to founders, but you’ll have to revise what made you successful yesterday so that you can keep growing and improving your business today. This was certainly true for Chris and I – we would continuously have to push to improve existing systems and processes which we thought were perfect in order to get to the next level.
Building a startup is never smooth sailing. Can you share some of the toughest challenges you faced in AppArmor’s early days? How did you navigate those obstacles without the cushion of external funding?
Let’s take the second part first. What cushion is funding really giving you? The data shows that yes, non-backed firms are more likely to fail. However, after the fourth year of existence, capital tends to dry up for businesses not meeting their financial goals, and the failure rate jumps for backed firms. They spend that capital, skid off their runway, and their business crashes and burns trying to get big fast.
It seems like the “cushion” is quite often just runway foam; you’ll simply be working for longer on a business that may not work out. And this doesn’t include the opportunity costs of actively pursuing funding, the psychological pressure of your dwindling funds, the effect on your company culture…., the list goes on.
Still, you’re right. It’s a rollercoaster of emotions. An early story I often tell is that of our culture failure.
Back in 2014 we thought that startup culture was more or less the same and we were looking for a shortcut. We tried to copy the Netflix culture and make it our own. But it was a disaster and put our company back at least a few years.
The issue was that we were not Netflix. Not even close. Not the same market, customers, nothing. Chris and I didn’t even work like Netflix would have intended—we came in at 9:00, worked our butts off, limited our time off, and wore a certain level of attire. While there were some Netflix ideas we enjoyed and kept as we grew AppArmor, the fact of the matter was that we didn’t understand, and frankly didn’t entirely like, the Netflix culture.
The cost? All our staff. They didn’t get it either and weren’t bought into our company’s mission. Honestly, I’m sure Chris and I weren’t even certain what our company was about. We had to rehire our entire team and determine what culture meant to us, all because we believed in a single startup myth.
I recall wondering at the time if it was all over. For what it’s worth, it’s a good thing we didn’t have funding then or our investors would have probably shut the lights off.
Innovation is a buzzword that gets thrown around a lot. How did you balance the need for sustainable innovation with the push for disruptive innovation at AppArmor? And why do you think disruptive innovation is so critical for long-term success?
Let’s start with why disruption is important. Sustaining innovations can be copied by competitors and only lead to short-term advantage. You’re going to have to be disruptive if you want to move the market in your direction; you won’t be the business you want to be if you’re sustainably innovating in a crowded market.
It might sound cliché, but innovation was in our company’s DNA. We understood that we had to be innovative if we were going to move up-market and capture meaningful revenues. Our product – a personal safety mobile app white labeled to the customer with 50+ safety features – fundamentally disrupted the physical “blue light” pole infrastructure on campuses. Why put a bunch of poles around campus if you could have an improved function – real time location sharing in an emergency situation – from the smartphone in the user’s pocket?
Innovation isn’t always a never-before-thought-of feature either. One thing we did was aggregate a series of market offerings into one “all-in” product that was difficult for competitors to replicate. The category of emergency notification systems – the platforms that send SMS messages, emails, phone calls, and more to end users during an emergency – did exist previously but was fragmented among several firms who were better at certain notification options. Some of those same platforms were also running on very old coding languages and had legacy-looking interfaces.
We saw opportunity in this fragmented market. We opted to build all the major functions of these various platforms in-house, combine them into a modern and intuitive interface and bundle them with our native mobile app functionality to make a very compelling offer to our prospective customers. The gamble was hugely successful; in 2020 we became one of the 500 fastest growing companies across the country.
One thing that stands out about your approach is your focus on sales across the entire organization. How did you cultivate a sales-driven culture at AppArmor? Was it difficult to get everyone on board with that vision, and why is it so crucial for startups?
Let’s start with the myth that your company is about making your product or delivering your service. Wrong – your company is about selling your product or service. Put differently, it’s not the best product that wins – it’s the best marketed product.
This is a tough one for many companies, particularly in deeply scientific or technical fields. From the outside looking in, the work some companies are doing is akin to magic. But people need to purchase the product to see its benefit and consequently for those companies to realize their missions. All companies can learn from the lesson that marketing your product is as important as the product itself.
Some non-marketing founders aren’t great at making this distinction. They’re both absorbed by the technology and they’ve likely had some traction without needing to deeply invest in marketing. Many businesses gain traction, but as Eric Ries suggests in The Lean Startup, without concerted marketing effort, your company can easily get trapped in the “land of the living dead”.
In our case, it surprisingly wasn’t so hard. The tech leadership – my co-founder Chris – was committed to us being a sales organization first. See, Chris’ number one focus for any software product he creates is to have people use the software. To achieve that, he understood we needed to not just make the product, but to sell the product to realize that vision.
We can actually attribute some of this to our dad – he started a photocopier dealership in the ‘80s and is a born salesperson. Yes, the tech was impressive for its time, but the real key was product distribution.
Once Chris and I were aligned, getting the rest of the staff on board was reasonably easy. Yes, there would be moments of rebellion, but consistently reinforcing the notion that without sales we would have no product (or company!) tended to bring everyone back on side.
Many entrepreneurs struggle with credibility, especially when their business is just starting out, like mine ahaha. How did you manage the “crisis of credibility” in AppArmor’s early days, and what advice do you have for other founders dealing with similar doubts?
First off, your feelings are real and valid. All founders feel this credibility crisis. People will tell you you’re “funemployed”, a “lifestyle business” or some other trash. Ignore the haters and the pressure to be something stereotypical. Don’t seek validation among your peers, seek validation in the market.
Managing these feelings and expectations is not a trivial task. Chris had at least one occasion where someone told him that we “weren’t a startup” because we didn’t have any seed funding. Can you imagine that? The outsiders looking in frankly don’t know your business like you do. It doesn’t mean you can’t take some of their feedback, but throwaway comments centered on startup myths are not worth your time.
It’s hard, but you need to push through and ignore the noise. How? Focus on metrics that actually matter – What is your customer engagement and satisfaction? Are you making a difference out there? How about your revenues? Critically challenge any idea but particularly those that are rooted in the success of other startups. It’s a must for any entrepreneur.
Hiring the right people is often a make-or-break for a startup. How did you go about building your team at AppArmor? What qualities were you looking for to ensure that everyone was aligned with your unique vision?
Like we mentioned earlier, we blew it the first time around There are no small bets in HR – it’s incredibly difficult. And it’s not just for startups – even the big market players with all their capital chronically struggle with hiring the best people.
We had two concepts we leaned on when hiring folks. In the first case, we would use Jim Collins’ framework in Good to Great to assess an applicant based on 3 principles: skills, passion, and fit. Did they have the skills (or did we believe they could learn them), were they passionate about the work they’d be doing or our industry, and would they fit with the “vibe” of the rest of the team?
Some of these principles were trickier than others. For example, finding someone with passion in public safety was rare, but on occasion we could find “related” passion: they wanted to work in a tech company, for a startup, or they were deeply excited about their area of expertise (e.g. software engineering, project management, etc). Over time, many staff would develop their passion for public safety as they witnessed their work help save lives.
The second concept was after the employee had joined the firm. For this we borrowed from Drive by Daniel Pink, who suggests hires need to be given increasing autonomy, mastery and purpose in order to drive the best results for the company. As a small company, we could easily give staff material autonomy, time to master their area of the business, and see the purpose of their work firsthand.
We are also biased to hiring younger, less experienced folks. We believed we had to grow our own talent, akin to a baseball farm team building up prospects so that one day they could get to the big leagues. It’s not that more experienced hires don’t bring a lot to the table, and we certainly didn’t actively exclude more senior applicants, but we worried that their potential baggage would change our culture in ways that we’d have trouble controlling. They also came at a higher cost than younger hires because of their experience.
Regardless, we also always hired the best person, regardless of background, ethnicity, creed, or any other variables. Conveniently, this led to an extremely diverse team which drove better decision making and in-market results. Diversity is sometimes overlooked for small firms, but I can confidently say it gave us a material in-market advantage. Diversity of experience and opinion made us more potent against our competitors. The data on team diversity supports this as well.
This doesn’t mean we didn’t have our misses. Some folks didn’t work out – that’s on us as much as it is on them.
You’ve both spoken about the importance of empathetic leadership. Can you tell me more about how empathy played a role in your leadership style? How did it impact your company’s culture and success in the market?
Chris and I are fortunate to have both received business school training. It absolutely helped us grow our business, but I think there were some effects on how we initially led our team.
We understood that we had to lead by example – a core tenant of any business school leadership training – but we failed to see the importance of investing in people. A big change we made a few years after our culture failure was going from “manager of resources” to “coach of people”. What did we find? The more we invested in people, the more they invested in our business.
We address this in our book Startup Different as well,
“We started to have more one-on-ones with folks, learned more about their weekends and everyday lives, and genuinely cared about them. We wanted them to reach their career goals, even if it meant leaving AppArmor. We understood that we were maybe just a step for them to head to something else, and that was OK. We wanted to facilitate their success, like any reasonable friend would want for another friend.”
It was a great call. We started growing exponentially year over year, we deployed better code faster and we got more compliments on our customer service than ever. Like our experience, there’s a ton of data out there that confirms that empathy drives right to the bottom line.
You clearly didn’t follow the traditional startup model, which is refreshing. Can you walk us through some of the specific steps you took to break away from startup pop-culture norms? How did these decisions contribute to AppArmor’s growth?
We didn’t start the business thinking “we’re just going to do the opposite of whatever people think we should be.” But after taking the bait on a few startup myths, we learned our lesson pretty quickly: we needed to be deeply skeptical of any business “truth-isms”.
I believe a lot of this came down to focus. There’s a tendency for founders to accidentally concentrate on vanity metrics – for example, social media was unimportant to our customers but generally pushed as essential to just about any business. If I had focused on how many people were following us on LinkedIn or Twitter, or otherwise spending time on how to grow our “thought leadership” presence, I would have been wasting my time. This didn’t matter to our customers, it simply wasn’t how they bought our kind of software.
Instead, we focused on our market, what our customers were saying, and the comments of our team. We would make small bets trying out various marketing, product development, and sales strategies, see what worked and then doubled down.
The startup myths that are “out there” or that (mostly) good-intentioned outsiders would suggest to us, were just noise. Our customers would give us the insight we needed to make better business decisions. We had enough humility to know that the answers weren’t in pop-culture, they were in the market.
It seems like customer service was a big part of what set AppArmor apart from the competition. How did you prioritize this from the beginning, and what role did it play in helping your startup stand out in such a competitive market?
Let me put it to you this way: customer service is a product line, requiring the full investment and respect of any other product your company delivers. It can be an avenue for cross selling and subsequently drastically improve profitability.
I get it though – like us, most founders probably start their business hoping they don’t need customer service. But that’s the wrong take: you will have customer service anyway so make those lemons into lemonade. Use customer service like the potent secret weapon it is and crush your competitors.
Truth be told, our exceptional focus on customer service is all Chris’ idea. He knew from personal experience with some of his other products that stellar customer service is one of a small company’s best weapons against established market players. It’s insanely important. Small companies must deliver outstanding service if they want to take over a market.
We also borrowed from another couple of great entrepreneurs: Jason Fried and David Heinemeier Hansson and specifically their work “It Doesn’t Have to Be Crazy at Work”. In that book Fried and DHH refer to the “customer support token”; one side is “it’s the end of the world” and the other is “it’s no big deal”. Whatever side of the token you choose, the customer takes the other. This gives you an idea of the intensity with which we attempted to resolve customer service issues.
Ensuring your first response is disproportionally understanding and helpful is essential to customer service success. Effective first responses had the twin benefit of satisfying the customer quickly while keeping costs down, thereby improving profitability. We also started to see customers asking for more of our “stuff” after successful support experiences, setting the table for additional revenue opportunities.
As a smaller company, going up against industry giants can be intimidating. How did you position AppArmor to not just survive but thrive against larger competitors?
The two things that big companies have going for them are capital and (in some cases) market credibility. The former is obvious, but the latter is more complex: they may be accepted in the market, but the reputation likely has taken a few hits from some growing pains.
Startups, by contrast, have a ton going for them: a meaningful market innovation, the ability to move extremely quickly in the market, the ability to work closely with customers, and a team profoundly focused on the company mission. This is among many other benefits.
Often seed funding is meant to eliminate the capital advantage of established market players. While we know that funding sometimes hurts more than it helps, it’s easy to see why investors and founders think that would help. But I believe that it all comes down to market credibility; even if you’re on level footing financially, it’s worthless without having material market acceptance.
So how do you build credibility? Like building a wall, it’s one brick at a time. As a small company, every engagement becomes an opportunity to delight your customers in such a spectacular way that they’ll tell their friends. As a B2B enterprise, we needed to spend facetime with our prospective and current customers. And most importantly, the product had to deliver on our marketing promises – beware oversells.
Yeah, we didn’t have their capital, but we were willing to do anything to attract, impress and retain our customers. We didn’t know it then, but I think you could call it “Unreasonable Hospitality” as defined by Will Guidara in his same titled work.
To be honest, I feared other small companies the most. They’re the ones who will disrupt you.
There’s a lot of talk about the need to take big risks in startups. What’s your perspective on this? How did you balance taking calculated risks with avoiding unnecessary gambles, especially in the early stages?
It’s garbage. It’s a startup myth that you need to routinely take big gambles to be successful. Yes, some scenarios will require big decisions, but they shouldn’t be a regular occurrence.
Good founders take calculated risks that appear crazy from the outside. This usually involved some borderline unhealthy debates between Chris and I but led to some of our biggest wins. When we didn’t have conflict was often when we’d have big losses; we hadn’t validated the decision well enough.
We routinely placed “small bets” to validate our ideas and actively avoided situations where we were betting the house. This philosophy ran the gamut from corporate strategy to software deployment.
In short, you don’t want to gamble. But if you must, consider a strategy of risk mitigation. In Vegas, you go into the casino with your “bank” – the amount that if you lose it, you walk from the casino so that you don’t end up throwing your wedding ring in the pile – you can do this in business as well. Don’t bring yourself into a situation where if the gamble fails, you’re shutting the lights off. Think ahead to these potential pitfalls and find ways to incrementally reduce their risk.
When AppArmor was acquired by Rave Mobile Safety, and later by Motorola Solutions, what do you think were the key factors that made your company so attractive? Was there a particular moment when you knew you had something special?
A couple of metrics were very important to Rave Mobile Safety and their investor group at TCV: our year-over-year (YoY) growth rate, lack of corporate debt, hilariously simple cap table and powerful technology that was winning regularly in the market.
In the first case, Rave had been looking to boost their financials which had slowed down during the pandemic. TCV also cared about this because they were beginning to consider selling Rave Mobile Safety and saw AppArmor as an opportunity to fill the growth gap that they had targeted for Rave.
I believe they also felt that we were an affordable “buy”. We had no corporate debt and only Chris and I were on the cap table. I knew we had something different when they were shocked we had been profitable for years and had absolutely no debt. It was actually a pretty hilarious conversation.
Finally, our tech was really good. Kudos to Chris on this one. I know – I’m just a little bit biased. But we had managed to scale something previously thought to be unscalable – we had created an assembly line of mobile apps, all branded to our customers and deployed in their App Store accounts. This was something our competitors didn’t know how and weren’t willing to do.
For all the entrepreneurs out there who are just getting started or trying to grow their businesses, what are the top three pieces of advice you’d give? If you could go back and give your younger selves some advice, what would it be?
I love this question because this is really the reason we wrote the book – to pay it forward to our entrepreneurial peers. The book is loaded with advice that I would have loved to have had when Chris and I were starting out.
Here’s my advice:
- I mentioned one earlier, but ignore the haters. Don’t pursue validation among your peers, pursue validation in the market.
- Do what your customers need but you hate: For us, that RFP responses, tradeshows and custom code from time to time. It’s not about you, it’s about them.
- Enjoy the journey. You’ll miss it desperately when it’s gone.
Thank you for these fantastic insights. We greatly appreciate the time you spent on this.
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