🎧In this special episode, we uncover the inception of Appical, Gerrit’s brainchild, borne from his marine experience and onto the demanding tech landscape. We’ll explore how his unique approach to customer relationships and financing helped scale the company and navigate international expansion.
As the conversion unfold we discussed the following topics:
- Customer-Financed Growth: Master the art of using upfront payments to scale, especially vital for SaaS enterprises.
- Shareholder Dynamics: The critical role of share control in decision-making and company direction.
- Founder Well-being: Importance of recognizing burnout signs and strategically planning for an exit for personal and professional health.
As always – hosted by Peak’s very own co-founder and managing partner Johan van Mil and Anke Huiskes founder & managing partner of NP-Hard Ventures 🕺🏻🕺🏼
You can find the episode on your favourite podcast platform, linked below. And, if you are really interested in listening to the big exit of specific founders – reach out to us so we can invite them for the next episode!
You can find the transcribed version of the episode below:
Starting a company is easy. Keep on growing a company, that’s harder. But selling your company, that’s a completely different story. In the Big Exit Show that I host together with Johan van Mil from Peak, and my name is Anke Huiskes from NP Hard Venture, we lift the curtains of successful founders who exited their companies. And today we have in the hot seat, Gerrit Brouwer. Gerrit Brouwer is an accomplished tech leader with a professional background in banking and in tech sales.
The last 12 years, he spent his time building and leading tech companies. He wrote a post-personal book, when the rope snaps about his journey. And, not too long ago, he sold his company. So that’s why we’re here today, to dive into the story behind his big exit. So welcome to the show.
Gerrit Brouwer: Thank you so much Anke and Johan for having me this morning in the show. Looking forward to our conversation.
Anke: Yeah, when we started digging into your life, we saw that your life didn’t start in tech at all. You started in the corporate mariner, a completely different industry. And then via banking, you got into tech. Can you take us through your journey and how this started?
Gerrit Brouwer: Absolutely. Well, from my origin, I’m Frisian. I was born and raised in Bolsward and as a small boy, I always dreamt of being part of the Royal Marines had the English translation of the Dutch Corrupts Mayoneurs. So mainly my middle school, high school period has been about preparing. Playing soccer with my homies so to say and on the other hand making sure I was physically well prepared for the tests for the Royal Marines.
So when I was still 17 years old I was still committed and very focused on making that happen so I successfully completed the officers training program. Basically you start at the military academy in Den Helder, where I also met some people that Johan knows of. And basically, that was a fantastic period where you are introduced to the military system. You also have introduction periods where people are not so nice to you. You have to sleep in this big sleeping hole with all those bunk beds located close to each other. So you’re directly immersed in a specific culture.
At the end of the first year, we had to prepare for the officer’s training, which is basically a rather Spartan training program of nine months, where you start at a base level and are being developed as a platoon commander. You are 18, nearly 19 years old and you are in control and able to lead a platoon of 30 Marines, including staff.
Being very professional people, highly trained people where you are working with on a daily basis, which was for me a very transformative period. But on the other hand, while I was really young at that time, you also start to learn about your own values. I felt I was creative. There are more pathways to Rome, so to say. So that started to basically create a bit of tension and to give you a nice small story about it. When I was in the Commando Training Center in Exmouth in the UK, because we also had to follow a Commando Training Program in the UK because of the Dutch-UK collaboration, I always stole a Raiders, which is the Twix snack, the chocolate bars, right?
I stole them from the officer’s mess because there was rather a distance between the marines, the base-level marines who do all the hard work and the officers. So at some point, I handed the Twix bars over to my colleagues like, hey guys, the food you’re getting is not appropriate, but at least I can give you some energy because you’re working in a quite hilly area, it’s hard work.
A lot of exercise, so it’s spartan. And at that point, our Sergeant Major from our staff was like, Brouwer, get here. So I told him like, what did I do anything wrong? And with those big blue eyes, very tired, of course, of the little sleep during the week. Yeah, you shouldn’t be giving that. And because you gave that away to the staff and the boys in the field, you have to get a sanction. So at some point I had to fill my backpack with those big rocks. So it was at least 30, 35 kilograms in weight. So I had to run continuously up and down the hill, up and down the hill while I was dead tired. Like, and at some point I really kept smiling.
All the time I kept smiling. I was really dead tired. And that moment was for me a transformation like, hell yes, I’m going to complete this training. But it was also for me a mirror like, hey, if this doesn’t fit in the culture, I’m not the right guy to take this further into action. So I completed the training and you start off with a group of 30, 35 people.
Some of them with definite contracts and I had an indefinite contract. But at some point, after completing the training and the commando training course and stuff like that, I had something like, you know, I got to go. How old people had something like, what the hell are you doing? Because you just finished training and you, you’ve grown as a, as a leader. Everybody was happy. And of course, there’s still sufficient things to learn.
Anke: Yeah.
Gerrit Brouwer: However, I didn’t feel I was at the right place. So that was quite transformational, that sanction, that little sanction from our Sergeant Major, but it made me realize like, hey, I’m more a free spirit. I’m going to take on studies in business administration in Rotterdam and took my journey up from there. And mainly being very grateful for all the lessons that I am still able to apply in my daily life, where I am today.
Johan: And what was the reason, Gerrit, that you, so then you did your studies, then you did some investment banking. What was the reason for you at that time to start your own company?
Gerrit Brouwer: Yeah, good question. Basically, after my military period, yeah, you pick on you pick up your student life, you grow your hair. You drink a lot of beer and I still was able to complete my studies in the military pace. Where I basically had in my after my Shell period working with Rabobank, I was able to work with a lot of online entrepreneurs.
Basically, the Rabobank, where I was working, was able to give me a lot of freedom in my work. So I was able to build up my own client portfolio. And basically, those were clients where everybody had, you know, like, challenges or issues with like, how do we get collateral from an online company, a gaming company with 250,000 users per month, concurrent users per month.
Hell no, the bank didn’t know that. So I got the opportunity to pioneer. And that allowed me to meet a lot of different entrepreneurs in the online and media space, to work with them, to complete their finance requests in a rather traditional setting.
And at some point, making a jump also to mergers and acquisitions within Rabobank, previously called Rabo Securities, I was able to work a lot on M&A deals, where I was able to build up the same relationship with those entrepreneurs. Obviously, I had them in my portfolio before, so they gave me a call like, oh, shit, we want to do an acquisition or we want to prepare for an IPO.
That made me kind of like the spider in the web within the bank that had something like, wow, imagine what it would be like if I were on the other side of the table. So to me, it was essential to gain the experience to do deals, a lot of deals to learn from my experienced colleagues big time. But on the other side, I really felt the need to change from the seat and become an entrepreneur. That didn’t happen overnight because thanks to my boss, a former boss at Rabobank, my first job, he asked me to be part of a consulting practice focused on restructuring. I was able to complete a lot of work in a high-pressure environment, for instance, in Chapter 11 situations.
The Beginning of Appical
Whereas I still had something like, yeah, I want to start something new. However, this is important for me to understand working from strategy to operations and, all the financial challenges underneath it. So at some point I, I talked to the fund where I was working, who did the restructuring practice for, for companies, like, hey, I’m up for building something new. Where I was walking around already with the idea of creating something based on the military handbook. Because the military system, if you talk about the venture we started off with, Appical is heavily structured in terms of training. It’s impactful, it’s effective.
And people still remember it even 50, 60 years after training what has been taught. So the retention is big. So I came up with the idea like, hey, I have this military handbook. What if we make an application, a mobile application out of that?
In the meantime, I had the experience of working with game companies, also exploring the possibilities in online gaming. So I had something like, wow, what if we can create a PowerPoint deck interactive with some questions on the iPad? And that’s basically where I said, like, hey, this is really where I want to go. And thanks to the team I was working with, they already spoke with the number of, I would say, learning experience professionals, my future co-founders. They were already like, hey, we want to build something in mobile learning. So we basically got together, got energized, got hyped on starting Appical. Whilst I was standing with one leg in the investment hash restructuring business.
So we started off and that also delivered quite quickly a challenge that you are working with, are dealing with two interests. You’re working with, of course, the interest from the restructuring investment company at the one hand, whereas able to have a minority share of 10 percent. And at the other side, you’re dealing with, yeah, your passion.
Gerrit Brouwer: And that’s something that you really feel in your heart like, hey, the military handbook, those guys around me were up to something special. Onboarding did not exist the way we intended it to grow the business. So yeah, let’s start and let’s make it happen. And yeah, that brought us to, I would say, amazing destinations already in the first year of working with great blue-chip customers.
However, you’re still tied to this dependency in terms of minority share and also on the other side, the interest.
Johan: Can I double click on that? Because you started with that company, Boertien Group, a Dutch company, and you started a new company with some people who worked there and ended up with a minority share. What was the reason for you? Because you had some investment experience. What was the reason for you at that time to agree also with that minority share? Where you brought all the enthusiasm, power and belief to kick it off. What was the reason for that?
Gerrit Brouwer: Yeah, I think a rather personal reason. I tend to keep myself small, humble, and also like, from the perspective that I also was grateful for the opportunity that I had something like, okay, we’re going to do this together. I always have been a team player to keep people on board to get people on board. And that personal limitation, I had something like, okay, I’m still on board with the investment company. We obviously had some participation, a nice portfolio, that was clearly growing. But at some point, I learned that it’s not going to happen. You need to have a clear cut of interest right from the get-go, right from the start, you need to have that. Otherwise, sorry.
Anke: And if we double click on that, when did you learn like, this is not going to work long-term because owning 10% of the company that you’re basically leading and putting in your, your whole life, what happened exactly? Can you take us to that moment?
Johan: Yeah, so easy.
Gerrit Brouwer: Yeah, I can take you through that moment. Basically, I think during the first quarter, we were already working with some great brands like Albert Heijn, Ahold Europe, ABN Amro. And you realize that it takes quite a bit of work to get them up and running. But you also realize that you’re not thinking of anything else because you want to make the company successful.
And at some point, we also had our monthly board meetings, which were quite intense and in my point of view, highly based on micromanagement. And at some point, I got frustrated. Like, Oh my God, we signed a deal. We closed quite quickly, dealing with a high-profile American customer, which brought in a lot of money. We simply had something like, hey, shouldn’t we be rowing in the same direction altogether? It felt like we were in a boat, people rowing in different directions. And it brought up a lot of frustration that gets under your skin.
I realized that was the good thing about living in Friesland and having business in the Amsterdam region. You have some thinking time. And at some point, we talked a lot about these challenges and we immediately agreed with each other, like, hey, this is not the way forward. We should really discuss this and make sure we get more control. So quite quickly in the first six months, we had something like, wow, this has to change one way or the other.
Raising Seed Funding
Johan: And then you arrange a loan right for an external party, I think convertible loan, you bought the shares from the existing shareholders and then you, I think you owned roughly 100% right together with your co-founder. Because this was a spin-out of an existing company, how did you, and perhaps you can explain briefly, how did you convince your existing shareholders to sell your shares to you for probably a rather low amount, right, of a fast growing company?
Gerrit Brouwer: Yes and no. Going back to the amount, we were already able to give them a good return, a good premium. So we took care of that. No discount, a gentleman’s deal for the one year of putting their money on the table. So to say they got a solid return.
However, we convinced them and that was quite a nasty procedure because the situation has been that you start off rather befriended and then because of those two interests, entrepreneurial and investor perspective, the relationship got frustrated between my co-founder and I at that time.
Yeah, we really were in this pressure cooker of stress, like we need to make it happen. And at some point, I got back on Christmas Eve, I got back to my home in Sneek and there was a letter in the mailbox saying like, hey, we’re gonna organize a general shareholders meeting in January. And one of the topics of that shareholder meeting is your resignation. We had been in conversation with a ton of informal and more professional investors also internationally. But that really brought in this feeling that I also learned from my Royal Marines career. Like, yeah, we need to fix this.
And finally, quite early in January, we were able to speak to two informal investors who have made money selling their businesses in the past. And they had something like, wow, this is something we want to be part of. And then all these puzzle pieces fell together. You’re hyped, you’re stressed, of course, but at the same time you think that after the transaction, paying the premium, being a majority shareholder, I can honestly say that the amount of growth capital to finance the business was very minimal.
So I think we had around 20, 25k left. So that immediately forced us on the reality like, okay, now you have to do it. You made a transaction, you own the company fully, so you did the management buyout, so to say. But on the other hand, you really need to get moving and that brought a special dynamics. On the other side, I noticed on my end like, wow, yeah, I still sleep very well at that moment in time.
From a Consultancy to a SaaS Company
But my co-founder was still stressed. It did something to him. Emotionally and as a human being. And at some point, and that’s also something I learned from my Royal Marines period. I was like, hey, come on, you know, I’m your buddy. If you’re in misery or if you’re stressed, I help you. I’m gonna take you on my back and let’s run. Let’s build this great company. And so after a while, I think mid 2013, yeah, we were able to work out also the financial situation to have customers, let them pay upfront and also transition to a real software as a service company from that moment and make decisions to skip exotic projects.
Because that was also the challenge of the first year that we were really revenue-driven. Also from the learning applications we developed quite a lot of different applications and we both realized my co-founder and myself like well this is not going to be fun to be a project leader, let’s build something scalable here and yeah that was special that was also something that the two convertible loan providers noticed.
Johan: Sorry to interrupt, Gerrit, but because I also have experienced myself as a founder of a company it’s easy to make your money with consultancy, right? Because it pays the bill and it’s a higher amount than the monthly revenue that you get for your subscription of your SaaS business, right? And switching a consulting company to a SaaS company is really hard, right? Because you have a deferred payment and you, so it’s really hard.
Gerrit Brouwer: Correct.
Johan: What did you, and in this case, you also had to finance it yourself, right? Because you had 25K of the bank as a leftover from the transaction of buying out your existing shareholders. How did you do that? Can you take us a little bit through that phase?
Gerrit Brouwer: Exactly.
Gerrit Brouwer: Yeah, basically, every single time until the end has been part of our strategy to develop a close relationship with the customers. And based on the relationship with the customers, we were able to finance a lot of our initiatives upfront. And indeed, if you have a SaaS company, you can definitely say like, okay, you can pay our invoice on a monthly basis, like DriveD MRR.
At the same time, because of the nature of our business, and because onboarding is really something big to set up and something to install with our customers, we were able to let our customers pay upfront, which meant that we were able to, based on the number of deals we closed on a monthly basis, to get the cash in upfront.
And at the same time, developed a relationship with our customers in such a way that we were able to execute a land and expand strategy. So once one division or one department from one of our customers Aeon knew it at that time was already happy with us, we’re able to scale it up the contract quite quickly to a different department, a different country, a different division and that helped us to generate quite a lot of cash.
And because of the relationship with our customers, we’re also able to ask the question. I still remember that I was also chasing the invoices because when your team is really small, and especially when you’re in 2013, you don’t have a big team around you to take on the various aspects of the business. So I really was calling the financial departments of our customers.
And that’s something I still have to smile about often. That I was not Gerrit. I wasn’t Gerrit Brouwer, but I was Hank, Hank Spilman, a bookkeeper guy with a pen in his pocket here. I was calling those financial departments and also building up a relationship with them like hey: can you get us on the roll for this Thursday? And what can we do to make that happen? And at that point, it was a bit of creative 2.0. These things fall together. The puzzle pieces fell together in terms of making sure the cashflow was in order. Because of my working past, I put in a lot of savings in the company. And yeah, we really believed in it like, hey, this is going to happen.
And the same structure was applied with one of our collateral loans, of convertible loan providers, a great informal investor, special human being, especially after one of the other loan providers had something like after a year, like, this is not my business, HR. I’m not so soft, I really prefer marketing, tech and other technologies.
So we also had to make sure he got his loan paid back within a year. But with the other informal investor, we started to develop a very special relationship and we were able to make it happen thanks to the relationship we have developed with the customer. So the point I’m trying to make is, of course, customer intimacy is very important for any SaaS company, for any company, whatever business it is.
However, go for customer intimacy 2.0. Also learn all the supportive departments around you. Not just go for the DMU, the decision-making unit. Of course, that’s important. You need to get the deal. You need to get the money in, but also understand how the processes work with your customers.
Camels Versus Unicorns
Because if you hear about that, something I really like, you have camels, you have unicorns. The camel approach is more about being very strict on your cash, making things happen, limit your burn rate. So if you want to go in that direction, you want to keep controls even more going forward, less dependency than customer intimacy 2.0 being that bookkeeper guy understanding what’s going on. I’m not saying that every founder has to create a nickname, however.
Get creative. There’s a lot of stuff going on. If you know people, if you know what they’re about, you can ask them the question and ask them the question.
Anke: Maybe to that point about knowing your customer, you’ve been growing very fast, I guess, now that the product is live in over 140 countries. At some point, you decided to go abroad, over the pond and launch in the U.S. where you’ve got different types of customers, and a different culture. I think you sent one of your colleagues to open up shop. How did you decide when it was ready to really expand the business?
Gerrit Brouwer: Yeah, actually already in the first year that we noticed in 2012, so 12 years back, that the product was highly relevant for companies with a high intake of new hires. Thanks to a friend of mine living in Silicon Valley, he has been working with the first team within Facebook.
I was simply testing the water with him over a Zoom call at that time, a conference call by video where I showed him the demo, the very base demo we created for Albert Heijn. And he immediately had something like, wow, this is something really special. Because it was that simple, people understood it quickly. So we tested back in 2012.
Expanding To The US
And of course, my co founder and I had something like, okay, let’s go there. Let’s go to San Francisco. We prepared the presentation, we prepared the product and we eventually closed the biggest deal in our first year with them. However, in 2013, we noticed having a customer in the time zone difference of nine hours.
And leading a small team isn’t that good. You know, it was still intensive and our product wasn’t scalable at all. So there’s still a lot of tweaking and manual work behind it that was required. So going forward to the international expansion also to the US.
We really had to go through a number of phases to really claim that international position. The moment we realized that was possible was that at some point our blue chip customers with presence in different countries asked us questions like, hey, we want to roll this out further in Europe. We want to test drive this in the US. Companies like ASML, for instance, they’re also really big in terms of presence development in the United States.
And that way, it allowed us to piggyback right on the back of our customers to go international. And not just like, bomb, we have an office and big parties in the States, no, let’s piggyback right and collaborate with our customers. And that also taps into customer intimacy 2.0 that they are really able to help you grow internationally.
And once you have 50, 60, 70 customers around 2015, so three years, being three years in business, you can easily create 100, 125 customers out of those different divisions, different sponsors from the same company. So you grow your company more in a structured way. It’s easier then just being John Wayne like hey we’re here and let’s open the saloon cowboy.
Anke: Yeah, great learning.
Johan: And when did you, because you bought back the shares at that time, then you expanded, you went to the US, got customers on board, so that land and expand strategy worked really well. What was the reason to raise extra funding, right? Because you raised also an extra round, I think, after this, which you mentioned.
The Growth Phase
Gerrit Brouwer: Yeah, so basically the period until 2016 has been really about survival, growing customer intimacy 2.0 here and there, some personal investment in the company, also as a founder. And on the other hand, we’re closely together with our informal investor who was able to put his savings in the business.
But at some point we realized that we were able to expand our product portfolio towards pre-boarding, more functional onboarding. We really saw this MPW journey, which starts obviously at the first day in the office, but basically triggered the onboarding. Then we said like, hey, the business case is stronger if we expand our product portfolio towards pre-boarding. When they already start to learn about the company, get trained before day one, you can reach a further or quicker level of productivity.
And that business case catapulted our growth quite quickly. That gets them like, oh shoot, this is going to be big. And let’s also invest in that. And then you realize that this method in terms of customer intimacy 2.0, the survival mode. Yeah, we really have something, especially here we were at 15, 20 people, like, yeah, we really want to grab this market leadership in Europe, so to say. But we also want to make sure we grab the momentum because there were also customers from the US, of course.
Our Dutch customers like ASML were already customers of the company. And at some point, you also get interest from PepsiCo, Spotify, Southwest Airlines, very big blue-chip customers. Yeah, you can’t get away with this typical fruition approach. Like, okay, here we are and let’s make it happen. Then something needs to change. You need to invest in professionalism, you need to grow the team, you need to prepare for that.
And that’s why we spoke to quite a number of investors in 2015. At some point, we were nearly done with the deal with one of the biggest recruitment agencies in the Netherlands. And all of a sudden, I was on a winter sports trip with my family at that time in Austria. And I was reading the telegraph on my mobile phone at that time. So there was an announcement of their takeover by a Japanese powerhouse, a big recruitment company, that Indeed is part of.
Gerrit Brouwer: And yeah, so I called the strategy director from the recruitment company like, wow, this is yeah, what is this meaning for us? He was like, yeah, sorry about this, but we’re gonna take care of you. So I was calling my co-founder from the slopes. Meanwhile, my kids were freezing in this small ski train, their hands were fitted with gloves and so on, and crying a bit.
So, okay, we have to believe in it, you know, and keep believing even though this is such a big shake, this is going to happen and rely on the relationships that we have been developing for months in a row with the recruitment company. And yeah, basically in early 2016. They were able to keep their promise, to make an introduction to the investment company that was set up, founded by the original founder of the recruitment company, and sit together, do our talks, and make sure we got in sync with them as well.
And quite quickly, that funding round got executed, where we were able to execute also the main pillars of our growth plan and make sure we were able to spread our wings into Europe, grow the team, to make our dreams come true in a short time frame. And that’s basically how we approached from survival customer intimacy 2.0 to more a phase of, yeah, we’re a new epochal.
And that was also the phase that I realized, wow, this is now finally, the best job in the world.
Anke: So that was because you started the company in 2011. So this was, we’re now talking about 2016. So it’s five years of hard grind. And then you got bigger money to make that acceleration. And I do want to get to the exit. What were the key highlights until that moment came?
Gerrit Brouwer: You mean of my exit, right? Yeah. Well, obviously, I was having a conversation with one of my Apple Corps colleagues at that time yesterday about it. Basically, the pinball game, that’s the way how I experienced it.
Preparing For The Exit
From my point of view, it started already in 2017. I was laying the foundation for my exit at that time. Well, let me tell you this, in 2017, there was a year that, in my view, had too many developments.
Looking back is always easy, but being very close to the way how I experienced it, it was a bridge too far. My co-founder left the company in early March 2017. And despite the tension sometimes in the relationship, we were able to make things happen together the right way.
After the big funding rounds we achieved in 2016. Yeah, it also did something with him. He wasn’t able to function in the right way. So you need to have the conversation together. And that exit process took me a lot of time. I was still being loyal, but at the same time, you see what is needed to grow the company.
So you have this human relationship, this friendship you have built over the past few years, the survival mode stories. But at the same time, you see like, hey, this way of managing isn’t the what the company needs. That’s not the leadership that our employees need to grow and to flourish and to be on the phone with our customers every day and to grow the business in the right way.
The chain of events, starting with the exit of my co-founder, really triggered a whole new dynamic, which I still see as a rather hostile environment. Once we also made several acquisitions, and integrations with other companies in Appical, I was really struggling with getting the culture in the right way.
Gerrit Brouwer: One of my colleagues said it was a Game of Thrones situation that I was politically involved, and a lot of discussions that took a lot of energy.
Anke: And how many people? For my understanding, how big was the company during that time? In terms of people? Yeah.
Gerrit Brouwer: Around 100 in terms of headcounts. So also as a founder, you’ve grown quite quickly in terms of headcounts, you’re leading a big team. At the same time, you also notice you’re not able to be in the trenches daily with your customers. And that transition was in the beginning, I would say the first five, six months of 2017, I really felt like, hey, it’s the best job there is. I can help people grow, set the right example, being around at the forefront of our growth. But at the same time, I was still pulled back into these conversations.
I was a co-founder of a lot of politics that started to develop between me and my investor, whereas the previous situation was that you’re working with two co-founders and being in a relationship with your investor. Then at some point, I had the feeling like, wow, perhaps I shouldn’t take things that personal. But at some point it became really personal and I really noticed like, wow, this is something we need to solve. There’s something we need to discuss.
And at some point you have those conversations together that you feel like in your system, like, well, this is not going in the right direction. So what can we do to change that, to gain back control? Yeah, it’s to have this conversation together with your investor and to address that.
Johan: And Gerrit, sorry to interrupt Gerrit, but also for our listeners, is at that time, because you bought back the company with an informal, you had that new round with the recruitment company, their investment company, right? Investing in your company. At that time, if I recall right, they had a minority share, but that grew into a majority share, right? Because you did some acquisitions, you probably needed extra funding. So at that time, when the tensions arose, and when your co-founder was away, you felt the politics in the organization, the 100 people roughly organization. At that time you were a minority shareholder again, right? And running the company with a lot of stress, right? That was a little bit the situation.
Gerrit Brouwer: Yeah, yeah. Correct. A lot of things, and that’s also a point I want to address here, is that I still relied on words, and you have to arrange your paperwork at some point together. So when my co-founder left, the whole voting process was also changed immediately. I had the agreement with the investor that I was able to buy back the shares from my co-founder who left.
And distribute those shares also to members of our key team. So the chief product, chief sales, to make sure we got a more balanced set up in terms of ownership. Because the role of sparing partner as co-founder was already taken on by the commercial leader and by the product leader. So we already had these three musketeer set up together. Like, hey, we need to know what’s going to happen.
We know what needs to happen to make this company better and become a global leader. So to have business in Asia, business in the US and have a strong footprint in Europe. But at some point, you know, this playbook started to change at the end of 2017, that we were in the process of organizing a new round with the existing investor and executing our Go Big Play in the United States.
We already felt like this is something, if you talk about fit for face, if you talk about not just about you as a founder, if you are fit for face, but also for an investor, that’s the same situation. If you go international, yeah, that’s something. And if you go to the United States, yeah, that’s a whole different world, a different business culture.
Gerrit Brouwer: If you don’t have the experience with that, you should also have a look at the team who does have that experience. And our mistake that we made as founders is to rely on the relationship for too long. Of course, there were a bit of frustrations and some tensions in the relationship. And I’m not saying that tension is a bad thing. Tension can also be very good, can be stimulating. You need to have debates, you need to have discussions because everything is working towards the same interest to make the company successful.
But at some point you need to have the toolkit, you need to have the experience of what’s going to happen if you are setting up a business and expanding in America. And that’s where I felt at the end of 2017, like, hey, my exit is coming. And then to also wrap this up in the right way. I really felt at that time, you know, I’m already losing a bit of control.
So what you see in the cap table, I had a minority share. That’s also something that I felt for the first time during my tenure as a co-founder, that I was also losing daily control. A lot of politics being involved, a lot of stress. And it basically burned me out from the inside. It ate me up completely that I was working in a phase where I needed to be a different person, that I’m completely not. So I’m a guy who wants to keep the pack together.
I want to feel the energy and when these things, these elements for me to, in order to flourish as a co-founder disappear. I wasn’t happy anymore at that phase. And then you basically have the discussions like, yeah, I need to step back. We prepared a cost reorganization program internally, like, okay, the US is not going to happen. My colleague already was looking for apartments in Brooklyn with his family because he was about to lead the US business. So we basically stepped on the brake pedal like, hey, we need to go back to this customer intimacy period to restructure, be that camel, we limit our burn rates and make sure we take back control.
And then I realized that if you have it, if you talk about the fit for face as a founder, to be honest, I already felt that, of course, what I just explained in 2017, that during my birthday in 2018, at the end of March, we just were present with our team at South by South West. I had something like, I’m done, I can’t take it anymore, this is so heavy. The conversations got more hostile by the day.
Reaching The Limit
So I made a call to have our investor part in our board and also have a conversation like, hey, I need help. I already spoke with a number of coaches and people specialists and they told me like, you’re too far gone. You need to have that conversation and you need to save yourself. And to be frank, I also had something I also wrote in my book. I remember a situation on the Afsluitdijk that at some point I was driving there. It was completely black. I felt like I was going to die or something like that. I’m not someone who is saying that quite quickly or easily to people.
Then I realized there’s this big stop sign for me, like this is not worth it. You know, I had four children, I had a wife, I wanted to make something out of it, but this is for me a bridge too far. So I really reached my limit as an entrepreneur, but also a limit as a human being. So I had the conversation, and that immediately felt really good in terms of, okay, let’s talk about your new role, but quite quickly the dynamics changed.
And I realized like, hey, they have a different narrative, they have a different view on the future, a different view of my role. And then basically this pinball game started to come by once again, that you feel like you don’t have control anymore.
Gerrit Brouwer: And in the midsummer of 2018. You have this principal agent relationship where I was basically standing with my back against the wall. No energy anymore and that is expected from you also because of your own financial interests. You have raised the company, you have developed the company in a successful scale-up company with the team. It all comes down to this very big exit. What are you going to do? And then all these contracts, of course, that you sign along the way, most of them are universal.
Then something I can really stress here, really point out to any founder is you have to sort out paperwork and already think of your exit whilst you’re building the business. Think of it. What would it be like if you end up in a situation that is not favorable for you as a founder? Because other interests can be of importance, especially if you’re working with an investor who has other HR related companies in portfolio, those things can happen.
And not about pointing with the finger like, those are bad guys or I was a bad boy, but more or less like, hey, be objective, figure out these things, especially when you’re moving towards a new funding round. And of course, I was explaining the situation about customer intimacy 2.0, being in the trenches, being the bookkeeper, sorting out growing people at the same time. Take this time for yourself to slow down and also keep a distance at some point to really force yourself to do that.
Johan: Gerrit, how did it end up? I remember from the book that indeed the talks were getting very hostile. I think at certain points, I think it was so hostile that you were thinking about ending it for yourself. It was pretty intense. I think you bought a house at that time. I recall you had to pay the mortgage and there was a new loan party coming on. I think everybody can read it in the book. We will share the book also in the story. I think it’s fascinating to hear.
That book opened on a story from a founder like yourself who really experienced that kind of magnitude and that kind of stress also. How did it end up for you also? Because at a certain point, the company was sold, right? I mean, this is the big exit show, but how was the exit for you personally? How did it end for you personally?
Gerrit Brouwer: Yeah, it was an exit. Of course, I’m here in a big exit show today, but it was an exit from hell, so to say. It was a very short, intense legal fight. And also during the legal process, I fortunately made the decision to simply say, okay, I’m going to move on with my life. I made the decision to not push any longer and be part of this whole legal dogfight. And that meant that I had to swallow, of course, the consequences financially. That meant that I had to give away, that’s how it felt at that time, give away your child. And then I had to step over a few personal boundaries that my system said, yeah, what the hell are you doing?
But thankfully, even though I’m not proud of how things developed afterwards, because I also divorced quite quickly after my big exit. I really felt like, hey, if I make this call to finish this deal, there’s light for me at the end of the tunnel. This is for me a major learning experience. To some extent, I accepted that. And basically, if you talk about the aftermath of the exit, it took me a year or so to really put things in perspective and the decision I made even though the exit process hasn’t been favorable at all to me as a founder, was that I kept a distance directly after the exit and I allowed myself to feel things because I was in those years building and growing a company.
And I was a bit less sensitive to what I was feeling as a founder, as a human being myself. And that process was able to capture also for my own transformation and to come back stronger as some people say in Formula One when they crashed their car. It felt to me also as a big car crash.
However, with the experience as a human and as a founder that something is not totally expressible in terms of money. You can’t put an X million tag on it whilst I understand like, okay, yeah, I missed a lot of money there that had made me independent. But I’m not angry about it because I’m now living the life that I want to live.
Gerrit Brouwer: I’m now doing the things that I wanted to do. And one of the things that I wanted to do after a big exit with Appical was writing a book and to give back. So at some point within a year I realized I can still do that. I’m still a starter.
Anke: Yeah, it seems like a very intense period, like a year of recovery, but also that you chose to save yourself almost instead of like giving it all again back to the situation that you wanted to run away from if I can express that correctly.
Yeah, and it was definitely being in the cold, butt naked, running through a freezing countryside experience. Confrontational, but at the same time, I am picking the fruits of it as well. So it feels like, It’s a gift. It’s awkward to say, but it feels like a gift. Yeah, it happened for a reason for my own life and also for me to be here with the two of you in this big exit show, also to share the experience from this point of view. Of course, everybody wants to go for this big exit, but be aware of it, also where you are at as a founder. That you’re still able to deliver impact and listen to your gut. Also, not about getting deals or raising money, but also for yourself, your inner transactions that you’re going through because you’re developing through all these phases.
Johan: Yeah, yeah. And teaching and helping entrepreneurs and also building your own company again. I think you also consult founders on learnings. If you could digest one, two, max three, the biggest learning what you can share with founders in building a company, because I think that everybody can recognize the stress that they have in building a great company and the discussion that they have with investors and another alignment on that end. I think everybody can relate. What are, let’s say, the one, two, perhaps three biggest tips that you can give, suggestions that you can give to founders?
Gerrit Brouwer: I would say tip number one is about keep adding value and make sure that you’re able to keep adding value to the company and to also be critical towards your own impact.
Make sure you hire the right people also in your team. In terms of my background, my mistake was like, I can do it because I have a finance background. So at some point, you know, at the beginning of your journey, you have 25, 30 different jobs including taking out the garbage every week. So be able to frame your work as a founder in stages in terms of the seed phase, the start phase, then growing more mature that you make. That’s tip number two.
Create your own personal roadmap because you’re going to pitch to customers, you’re going to pitch to investors where they are asking you, hey, what’s going on? What are you going to do? What are the plans? So what is your product roadmap? You have to develop your own personal roadmap as a founder, like what you want to learn, what you want to achieve. That you save time also for yourself to talk to other people who are working in a completely different businesses and find the right coach.
Because I had something like, if I have a coaching conversation during my tenure with Apple, like, okay, take that box. But you haven’t gone that deep because you’re so immersed in your journey that my wife at that time was screaming and telling me like, hey, I can’t hear you. You can’t hear me. Wake up.
And that’s something that you need to avoid. So create your personal roadmap. And at the same time, that’s a more human aspect here. Now also building three businesses, SaaS businesses with great teams. Is, hey guys, charish your team, even at times when you have to say goodbye to people.
Gerrit Brouwer: And you need to, if you’re working together with more co-founders, have a close eye on each other’s battery. Because sometimes, you know, the battery power is depleted. There’s no power at all. But if you make a decision to say goodbye, you know, be precious about that. Make sure that people get the right place after the journey.
And in my view it was like, okay, this is not going to work, let’s go. And then that can also create hostility at some point, because you’re so busy, there are so many priorities. But always think of the exit. Maybe too much from an HR angle, but the exit also triggers your destiny in the right way.
Johan: Hmm. Thanks for sharing that, Gerrit. I think it tells more than the average calculation that we normally do with an exit. It’s what your personal exit of it is. I think the three great suggestions that you gave to the listeners and to the viewers. Any last questions from you, Anke? You want to?
Anke: No, I think it’s fascinating to hear the story, especially because you’ve been so candid with us about the personal struggles. And I think a lot of founders, especially also this year of 2024, where the business is rough. And also I think asking yourself the question, am I still the right girl or guy to lead this shop or not fit for face? And we might reconsider how to move from here.
Yeah, you probably will get some DMS from people going through similar phases and what they can learn from your experience and maybe how to do it differently. Because I think the topic is very relevant for many people listening to this episode. So thank you to everyone. Like read the book. I guess that’s where you will read many more insights.
Gerrit Brouwer: Yeah, and you’re welcome.
Anke: Where can people get to you? What’s the best way for them to approach you?
Gerrit Brouwer: The best way is via LinkedIn. So via my LinkedIn profile, they can get in touch with me. So put in my name, Gerrit Brouwer, with some Chinese signs there. You see my headshot and yeah, happy to be in touch and happy to see where I can help. And yeah, one last thing, always do the things that you feel like making an impact too. So if you do the things as a founder, if you feel like you can make an impact here, double down on it and leave the rest to your team and others. Because in the end, even if you think like you can do things better than anybody else, that’s not the case. Focus on your core.
Johan: Wise words, Gerrit. Thanks again for being on the show and sharing your open and honest story. Really great.
Gerrit Brouwer: You’re most welcome and thank you so much for having me. Have a nice day and good weekend.
Anke: Bye guys.