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Paul English09 December 2022

Paul English: How He Built And Sold 6 Companies And Why He Believes Irritation Becomes Inspiration

5Frameworks
12Insights

Frameworks in this episode

Insights & moments

The myth-busts, hot takes, explainers, and tools worth keeping.

Explainer· 1

Explainer13:30

Deets and the Broken Online Review Economy

After selling Lola to Capital One, English opened Boston Venture Studio at BVS.net, now running nine apps, some fun itch-to-scratch releases shipped with source code and some swing-for-the-fences bets. The biggest is Deets, launched two weeks before the interview, built on the thesis that online reviews are broken. Searching Google for the exact phrase buy Amazon reviews surfaces roughly 37,000 pages explaining how; a seller can readily buy 5,000 five-star reviews. The fake review operations are run by PhD computer scientists evading Amazon's bot detection using proxy servers, aged accounts, and real purchases. Yelp and TripAdvisor fail differently: their reviews come from people whose preferences do not match yours, like five-star sushi reviews praising a ten-dollar-a-head New York restaurant. Deets replaces this with recommendations from your friends and chosen influencers, plus TikTok-style look-alike modeling.

  • Boston Venture Studio runs nine apps split between itch-scratchers and big swings
  • Roughly 37,000 pages explain how to buy Amazon reviews
  • Fake review firms are run by PhD computer scientists using proxies and aged accounts
  • Yelp and TripAdvisor reviews come from people with mismatched taste and budget
  • Deets uses friends, chosen influencers, and TikTok-style look-alike clustering

if you go to Google right now and in quotes you search for buy Amazon reviews, you'll see there's 37,000 pages that tell you how…

Paul English · 14:00

TikTok has figured out the stuff I'm interested in and without ever asking me a question.

Paul English · 18:00
#reviews#marketplaces#machine-learning#venture-studio

Story· 5

Story01:30

Six Companies Sold in a Row, and the Seventh Underway

Paul English lists the six companies he has sold consecutively: Boston Light, an e-commerce storefront business sold to Intuit that made him VP of Technology there; Intermute, internet security software built with his brother Ed English and sold to Trend Micro; GetHuman.com, which served customer service information to over 200 million people; Kayak; Moonbeam, a podcast player; and Lola, a business travel and expense company. Kayak was the biggest financial outcome at roughly two billion dollars. He does not formally count a seventh, a software company he created in high school, though he says making money designing software as a teenager remains meaningful to him. He is now on his seventh company.

  • Boston Light was a Shopify-like storefront business 20 years early, sold to Intuit
  • Intermute was internet security software built with his brother, sold to Trend Micro
  • GetHuman.com served customer service information to over 200 million people
  • Kayak was the largest financial outcome at roughly two billion dollars
  • He excludes a high school software company from the count despite its personal significance

I've actually sold six companies in a row, including Lola. I've sold even another one after Lola, Moonbeam, which is a podcast app. And now…

Paul English · 01:30

Kayak was the biggest financial outcome, which I'm deeply appreciative, and I learned a lot at Kayak.

Paul English · 01:30
#serial-founder#exits#kayak#startup-history
Story03:00

Kayak's Origin: The 70% Orbitz Leak and Expedia as Bloatware

Kayak is the only one of English's companies that was not his own idea. Co-founder Steve Hafner, previously a founder of Orbitz, had observed that 70% of people searching on Orbitz would finish, open a second browser, and go directly to united.com to buy the ticket, meaning Orbitz did all the searching and captured none of the revenue. His proposed fix was a company that only searches and then hands the user off to the airline via a link. English and Hafner met by chance and decided to co-found within roughly 45 minutes, each putting a million dollars into the original round. English then took ownership of product, spent about an hour on market leader Expedia that night, and concluded the next morning that it would not be hard to beat.

  • 70% of Orbitz searchers opened a second browser and bought direct from the airline
  • The fix was to do only search and hand the user off via a link
  • English and Hafner agreed to co-found within about 45 minutes of meeting by chance
  • Each founder put one million dollars into the original financing round
  • English judged Expedia to be seizure-inducing bloatware after one hour of use

he had observed that Orbitz that 70% of the people that are searching on Orbitz, but then when they were done, they opened a second…

Paul English · 03:00

Cuz I looked at Expedia as bloatware. It was sort of seizure-inducing. There was so much stuff going on the screen.

Paul English · 04:00
#kayak#co-founders#product-strategy#travel
Story04:30

Why He Sells: Ten Years of Editing the Flight Screen

Asked why he sells rather than holding companies the way Dharmesh Shah has held HubSpot, English says Kayak was his longest stint at ten years, including taking it public in 2012 and selling shortly after to Priceline, the parent of Booking.com. His reason for leaving was simple boredom: he felt he had been editing the flight screen for a decade and wanted something new. What made the exit possible was the strength of the tech leadership team he had built, with people who could own UI, product, and architecture, so he could leave without hurting the company. His first company was financed by blowing through his 401k, but by the time of Kayak he had sold a company for 30 million and could afford the million-dollar founding check comfortably.

  • Kayak was his longest run at ten years, IPO in 2012 then sold to Priceline
  • He left because he was bored of editing the flight screen
  • A deep tech leadership bench let him exit without damaging the company
  • His first company was financed by burning through his own 401k
  • A prior 30 million dollar exit made Kayak's million-dollar check affordable

And I just frankly was bored. I felt like I was editing the flight screen for 10 years, and I wanted to try something new.

Paul English · 05:00

I just sold a company for 30 million, so I could have the the million wasn't that hard for me at that point.

Paul English · 04:00
#exits#founder-psychology#team-building#kayak
Story06:30

The Famous Misses: Airbnb, YouTube, Snapchat, Dropbox

English catalogues the deals he saw early and passed on. He met Brian Chesky when Airbnb was financing at a one billion dollar valuation and found him iconic, passion-driven, serious, intense and charismatic, but could not see how many people would want strangers living in their house. At Sequoia's office, Mike Moritz introduced him to Chad Hurley and Steve Chen as guys putting videos online, and English thought it was merely cool. He met a Snapchat founder when they were financing at an 80 million dollar valuation. He met Drew Houston early and passed on Dropbox because he believed it would be plagued by security problems, a concern he still holds given that Dropbox does not meaningfully encrypt user files.

  • Passed on Airbnb at a one billion dollar valuation, now worth roughly 100 billion
  • Met the YouTube founders at Sequoia via Mike Moritz and did not see it
  • Met a Snapchat founder at an 80 million dollar valuation
  • Passed on Dropbox over security concerns he still holds today
  • Read Chesky correctly as an exceptional founder but misread the market size

I said, "This seems awesome for people who want to have strangers living in their house, but how many people are going to second to…

Paul English · 07:00

I missed Snapchat. I met one of their founders when they were financing at an 80 million-dollar valuation. That would have been a big outcome.

Paul English · 09:00
#angel-investing#misses#pattern-recognition
Story33:30

Bipolar and Proud: The Bipolar Social Club

English was diagnosed with bipolar illness at 25 and is candid that it is a serious condition where people end up losing marriages, jobs, and lives. He has bipolar two rather than the more severe bipolar one, and says it took him a good ten to fifteen years to learn how to manage it. Rather than hide it, he built bipolarsocialclub.org, a video series where ten people with bipolar illness tell their own journey, aimed at de-stigmatising the condition by acknowledging both the genuinely bad parts and the funny ones. He wants to extend it into a clothing brand so people can wear it proudly, comparing his ability to spot another bipolar person across a crowded room to what gay friends call gaydar. He notes some people still cannot disclose because it would damage their careers.

  • Diagnosed at 25 with bipolar two, the less severe of the two types
  • It took him ten to fifteen years to learn to manage it
  • bipolarsocialclub.org features ten people telling their own bipolar journeys
  • The goal is de-stigmatisation by naming both the bad and the funny parts
  • He wants a clothing brand so people can wear bipolar and proud openly

I have bipolar illness. I was diagnosed at age 25, and it's a pretty serious illness. You know, a lot of people end up killing…

Paul English · 33:30

If you go to bipolarsocialclub.org, there's 10 people with bipolar illness who kind of tell their journey. And it's kind of de-stigmatizing it.

Paul English · 34:00
#mental-health#founder-wellbeing#destigmatisation

Takeaway· 2

Takeaway09:30

Betting on Founder Mojo: A 40x on Pilot and 22x on Kensho

English reports investing in 60 companies with an IRR he puts at 30.5% over recent years. His best outcomes came from backing people rather than ideas. He first met the Pilot.com founders as a judge at the MIT 100K competition, where they were running Ksplice, a technology that patched a running Linux operating system without a reboot, which sold to Oracle. He helped them win, invested in their next company Zulip which sold to Dropbox, and when they left to start something new he asked to write a check before knowing what they were building. That check went in at a 30 million dollar valuation against a last round near 1.2 billion, a 40x. His 22x came from Kensho, backed because former Kayak CTO Pete Kraska was there.

  • 60 investments with a reported IRR of 30.5% over recent years
  • Wrote a check into Pilot.com before knowing what the team was building
  • Entered at a 30 million valuation against a later 1.2 billion, roughly 40x
  • Kensho returned 22x, backed because a former Kayak CTO was there
  • The signal was team chemistry: intense, high energy, finishing each other's sentences

So I wrote them a check before I knew what they were doing and that's a 40Xer.

Paul English · 10:00

They were intense, high energy, they laughed a lot, they finished each other's sentences. They just really enjoyed working together.

Paul English · 10:30
#angel-investing#founder-evaluation#returns
Takeaway19:00

Is Starting a Company Easier When You're Already Rich?

English rejects the common claim that wealth dulls a founder's edge. He says anyone who works with him would confirm he works as hard now as during his first company, when he was blowing through his 401k to finance it, and he redefines what working hard means: to him, work hard is recruit hard, meaning lead, coach people, and get them excited. The genuine advantage of money is mundane, that a stupid problem costing five grand to fix can simply be paid away, which was impossible in the first company. Sean Puri adds the counterweight: recruiting gets easier and you waste less time on rookie mistakes, but you may lose the edge and you must actively recognise new technology waves and inflection points, since the wave that carried your first win has passed.

  • English claims his work rate is unchanged from his 401k-burning first company
  • He redefines working hard as recruiting hard, leading, coaching and exciting people
  • The real advantage of wealth is paying away five-thousand-dollar problems instantly
  • Sean notes rookie-mistake waste drops but edge can diminish
  • Repeat founders must actively spot the new technology wave rather than ride the old one

If you talk to anyone who works with me, they'll say I'm working as hard now as I was during my first company when I…

Paul English · 19:00

There is some advantage having money that if you see a stupid problem that costs five grand to fix, you know, when you create in…

Paul English · 19:30
#founder-psychology#second-time-founders#motivation

contrarian· 2

contrarian16:30

Yelp Is a Protection Racket and a Twenty-Year-Old Dinosaur

The origin of Deets was compassion rather than market analysis. English is friends with Boston restaurant owners and watched their difficulty through COVID, and every one of them told him how much they hate Yelp. He describes Yelp's model as mafia-like: they call a business about its bad reviews and offer to clean up the listing for hundreds of dollars a month. He points to the 2019 documentary Billion Dollar Bully, whose opening scene features an Italian chef whose restaurant windows were repeatedly broken until a man offered to guarantee no more breakage for a hundred dollars a week, the same man who had been breaking them. English calls Yelp a twenty-year-old dinosaur and frames Deets as claiming the next twenty years, built for a world where Gen Z makes purchase decisions through influencers.

  • Deets originated in compassion for Boston restaurant owners during COVID
  • English characterises Yelp's sales motion as a protection racket
  • He cites the 2019 documentary Billion Dollar Bully and its broken-windows opening
  • He frames Yelp as a twenty-year-old dinosaur to be replaced
  • Gen Z making purchase decisions via influencers is the structural change he is betting on

Yelp is just like mafia where you pay if you they call you and they say you have a lot of bad reviews, pay us…

Paul English · 16:30

So I look at Yelp as a 20-year-old dinosaur. That's the last 20 years, we want to be the next 20 years.

Paul English · 17:00
#yelp#contrarian#local-business#influencers
contrarian36:30

On Elon's Twitter, and the Kind Twitter He Wants to Build

English says he followed the Twitter acquisition closely and puts himself on the list of a thousand people who want to build a competitor. He had forgiven Musk's eccentricity because of the products, owns Teslas and has held the stock since 2016, but turned on him over the layoffs, arguing there was no reason to march people out of the office and that the richest man in the world did not also need to be cruel. His deeper objection is one person controlling what is meant to be the world's main information source. What he actually wants to build is a kind Twitter with no trolls and no cruelty that also flags misinformation such as claims that COVID vaccines cause autism, without filtering out independent voices, since in many places, and for people with conditions like bipolar, being publicly identified carries real risk.

  • English forgave Musk's eccentricity for the products until the Twitter layoffs
  • He objects to one person controlling the world's main information source
  • He wants a network without trolls or cruelty, contrasting Twitter with TikTok's positivity
  • He wants misinformation flagged without suppressing independent voices
  • He notes public identification is dangerous for people with stigmatised conditions

put me in the list of a thousand people who want to create a Twitter competitor right now.

Paul English · 37:00

what I want to do as a Twitter competitor is create the kind Twitter where there's no trolls, there's no cruelty and then also deal…

Paul English · 42:00
#twitter#social-media#content-moderation#elon-musk

resource· 1

resource27:00

The 300-Domain Idea Vault and What It Costs

English owns roughly 300 domain names, each paired with a Google Doc containing the idea for the company behind it, making the portfolio an indexed vault of written-up ideas rather than dead registrations. He is obsessed with brands and names and, like Dharmesh Shah, is prepared to spend big money for a good one. Renewals run about ten dollars each per year, roughly 3,000 annually, but he has paid hundreds of thousands of dollars in acquisition costs. He rarely sells because he still believes in the idea that caused each purchase, though he occasionally releases one to a young entrepreneur with a genuine plan for it. Some are worth 100,000 dollars or more, others are funny only to him. Lola cost 500,000 in a bidding war and is for sale again after Capital One dropped the name.

  • Roughly 300 domains, each with an attached Google Doc holding the idea
  • About 3,000 dollars a year in renewal fees, hundreds of thousands in acquisition cost
  • He rarely sells because he still holds the idea that motivated each purchase
  • Some domains are worth over 100,000 dollars, others are private jokes
  • Lola cost 500,000 in a bidding war and is for sale again post-Capital One

I own about 300 domain names and every domain name has a Google Doc associated with the idea for the company.

Paul English · 27:00

Lola we paid 500,000 to buy Lola. We were in a bidding war.

Paul English · 44:00
#domains#idea-capture#branding

idea· 1

idea30:00

middle.net and funcontact: Apps Built Purely to Stop an Annoyance

English shares two apps he built because the irritation was real, not because they were businesses. middle.net came from living in Boston, spending time in New York, and knowing only the West Village, Tribeca and Soho, so that meeting someone on the Upper West Side meant not knowing where to go. It takes locations from two or more people's browsers and suggests a coffee shop or bar in the middle. funcontact.com came from disliking conferences as a self-described shy introvert and finding contact-swapping tedious. It holds a set of QR codes exposing different slices of his information, so he can swipe to the right one depending on who he is meeting and be added to their address book. He used it the night before the interview to share his number with four fashion-industry people at a West Village restaurant.

  • middle.net grabs multiple people's browser locations and suggests a midpoint venue
  • It exists because English did not know New York outside three neighbourhoods
  • funcontact.com holds multiple QR codes exposing different slices of contact info
  • He chooses which code to show based on who he is meeting
  • He is candid neither will ever be a company, and built them anyway

I'm like, this is annoying that there isn't a website where they can see if they where they are, where I am, and pick a…

Paul English · 30:30

One QR code might be just my email. Another one might be my email, my home address. And based on who I'm meeting, which information…

Paul English · 32:00
#side-projects#scratch-your-own-itch#product-ideas