Decorative

October 26, 2022

These SaaS Co-Founders Are Three Businesses Deep and Looking to Play Success on Repeat

Founder Stories
These SaaS Co-Founders Are Three Businesses Deep and Looking to Play Success on Repeat

Ori Tamuz and David Bitton have history. As in they’ve worked together now in three businesses, with two exits already under their belts and two co-founder credits. ASG entered the duo’s entrepreneurial story in 2018 with the acquisition of their co-founded company, PracticePanther. Serving the law firm vertical, the already successful business took off with both organic growth and M&A at ASG and was our launching point for building Paradigm

Working with Ori and David after the PracticePanther sale, we had a chance to get to know them and see everything they bring to a software business — from Ori’s almost supernatural ability to find an underserved niche in the software market to David’s penchant for crafting marketing playbooks that improve with every single iteration. 

So, when they called earlier this year saying they were raising funds for their newest company, DoorLoop — which they had already grown past the point PracticePanther was at when we acquired it in the space of a year — the buzz in the ASG offices was palpable. While we’re normally acquiring SaaS companies, with David and Ori at the helm of a project we couldn’t pass up a chance to be involved. 

We’re beyond honored to be part of this next chapter with them, and we had the pleasure of catching up with them on everything that’s happened since we last worked together. 

An interview with Ori Tamuz and David Bitton, co-founders of PracticePanther and DoorLoop

You two have worked together in three companies, and founded two together. We know a lot about you both from your time with ASG over the years, but for our readers could you tell us a bit about yourselves and your entrepreneurial background?

Ori: My entrepreneurial story started when I was pretty young. My dad is a business consultant for the Israel equivalent of Fortune 500 companies. so I was very exposed to and interested in the business world even as a kid. Then I studied computer science in high school, and at the University of Tel Aviv.

When I graduated, I started working in an Israeli startup. That was back in 2008. I still remember working in the tech hub of Tel Aviv. It took an hour to get into the city with all of the traffic, and you couldn't find a parking spot or get lunch unless you had made a reservation a week in advance. 

Then the financial crisis hit and everything started emptying out. Paychecks didn't come in when they were supposed to. That was a turning point for me. I realized that I didn’t really want to work for someone else — I wanted to have more control over my own destiny. 

I was lucky that around that same time my friend and business partner in my first venture came up with an idea to build a point-of-sale system for specialty retail. I knew there was more opportunity there than at the startup I was working for, so I dropped everything within about three weeks and started working on the new project.  

It did great, but we were very young and inexperienced so we couldn't really take it too far, and in 2014 we sold it to a larger company. 

David: Shortly after graduating college from the University of Miami, I joined Ori’s first startup as the third person on the team. I learned everything from sales, support, billing, and customer service, but I really fell in love with marketing and became the marketing director. After that business sold, he approached me and we started PracticePanther together. 

Ori: I realized that my journey wasn’t done after that first business. David and I worked really well together, and he wanted to start something as well. 

At first our idea was to create software for all kinds of businesses. That wasn’t working very well because we didn’t focus on a niche market, so we pivoted and decided to focus on a new vertical, law firms. Both of our wives were attorneys, so we had first-hand knowledge about the pain points in the industry. As soon as we relaunched, it immediately caught traction.

So PracticePanther was the first business you founded together, and ASG reached out to you about buying it around 2017, right?

Ori: Correct. The short version is that we sold to ASG in 2018 and the business later merged with Bill4Time, MerusCase and Headnote to become Paradigm, which exited to Francisco Partners in 2021.

For more on Ori and David’s PracticePanther chapter, check out their conversation with ASG and Paradigm CEO Soumya Nettimi.

I think going into PracticePanther though we both really had a financial goal in mind, and that was to reach financial independence. 

David: When ASG contacted us, we weren’t actively looking for an acquisition or anything. Once you reach a certain level of brand awareness online you get a lot of VCs, PE, and other people approaching you and we ignored almost all of them. There was one email from ASG that caught my eye though, so I took a call. 

It sounds cheesy, but from that first call, I just thought, wow — these are awesome people. We connected and clicked with everyone. 

Ori: Yeah, pretty soon after selling I went to a summit Alpine was holding in Sausalito, and I got to meet a group of the most incredible people I've ever met. There were hundreds of other CEOs and Alpine’s CEOs in Training there. 

We’d made a conscious decision to take some chips off the table in selling, but meeting that group and spending that time seeing PracticePanther grow, we learned so much about building successful businesses, growing a team, scaling, and M&A. 

So you’ve taken all that, and you’re working on business number three together now. Tell us about DoorLoop! 

David: I don’t know if this is just my version of the story and I don’t remember the exact timing, but I know we were still working on PracticePanther. Ori had started investing in real estate a bit and was managing a couple of rental properties. He ended up looking for property management software because of that. 

I remember him coming to work one day and saying “There's no easy software for this. They're all complicated. They're all old. They're ugly. They're outdated. They're hard to use, and they're expensive.” He was like, “Let’s build it! Let’s do it!” We were so focused on PracticePanther though, that we ignored the idea and moved on. 

That’s always the story I go back to and I think the idea had just kept brewing in his head over the next few years. Eventually after we’d sold PracticePanther, exited the business, and had some time off, we started analyzing the property management industry and the competitors. And there were some really big competitors, but they were all very outdated, very old school — just like they had been a few years before. 

We thought, we've done this twice already. We know we can do it better. Let's do it. 

Ori: With DoorLoop we’re taking all that learning from those other businesses and trying it again. And this time we’re trying to do it bigger and better. We’re focusing on a larger market, starting with a stronger group of founders — not just two people this time — and we’re hiring the right people and investing more money into the business.

David Bitton, who sold his SaaS PracticePanther to ASG in 2018 talks about his latest business, DoorLoop.

Your first business and PracticePanther were both self-funded. With DoorLoop you’re taking on investors and raising. Tell us more about the decision process for raising this time around and what you see as pros and cons of bootstrapping and raising.

Ori: I'm a big believer in bootstrapping. That's what I've done, and it’s worked. I've also noticed that it causes burnout. And potentially, there's a limit to how much you can do while growing organically just based on whatever you have to invest in the business and the revenue you’re bringing in. 

On the other end of the spectrum, you see a lot of companies that just raise money and spend it on growing without any consideration to the cost of that growth. There are a lot of unhealthy companies like that, and a lot of companies who raise money before reaching product-market fit. 

So I think bootstrapping can help you a lot and guides you the right way, especially as you build a product and get to that fit. All of your early decisions will be financially based, and financially-based decisions will always make sure that you go to market as soon as possible with a real MVP. It makes sure your mindset is on finding more customers who will pay you real money, and developing features and strategies to retain those customers. 

Once you finish that MVP stage, I think it gets more difficult to keep bootstrapping. Development is getting more expensive. Customer expectations when they sign up for software now are different. It needs to be fast. The UI and UX needs to be incredible. The product needs to flow and be easy to use, and have all these support resources available for the customer to onboard. There's just a lot of expectations now. Building DoorLoop was a lot more expensive than our past businesses — by magnitudes of tenfold. 

We’re lucky to have the money to do that from having already had successful exits. But we hit a point pretty quickly with DoorLoop where we knew we had product-market fit and we were growing so fast. The opportunity to scale is now. 

David: Time is the right word. At this stage, I feel like our lives are all about time. We know what we need to do. We have a five year roadmap. We didn’t need to raise. But we all had a meeting one day, and we said, “We have these five year goals. What’s stopping us from hitting them in one year?” We know how to do that, and funding was the gas we needed to pour on the fire to get us there. 

We have the KPIs. We’re making money back on every dollar we spend. So it felt like maybe we were setting our goals too low. We felt like we had a real opportunity with the right team, the right experience, and the right timing to make this bigger than ever before. For us, the motivation was building something exponentially bigger and better while having fun and learning something new in the process. 

What advice would you give founders weighing some of these decisions between bootstrapping and raising, or even raising and selling?

Ori: I think it really depends on where you are in your personal journey. But I think financial independence is a great starting point for a goal. It gets you to a point where your mind is very clear and you can really look at the whole picture and where you want to be, personally. Where do you want to live? Do you want a family? Do you want kids? How do you want to raise them? And from a business perspective, it allows you to get really focused on doing great things without the financial stress.

Founder Ori Tamuz talks to ASG about his new SaaS, DoorLoop.

If you’re not financially independent and you have a business where you can make an exit where you 25x your annual spending, I’d say go for it — don’t think twice. That 25x number follows what’s called the 4% rule, which means that if you have a million dollars, then you can spend 4% of that, or $40k a year and never have to run out of money for the rest of your life. 

David: I agree with that. I think it totally depends what stage you’re at in your life. If you haven’t hit that financial independence stage, maybe you should consider selling. When we were running PracticePanther we were making good money, but I personally hadn’t hit complete financial freedom. 

I was always super paranoid about a black swan event at the company or in the market. Even if it was a small possibility, it was always in my head. There’s that saying, “A bird in the hand is worth two in the bush.” ASG’s acquisition offer was the bird in the hand. Sure, we could have kept going and maybe later we could’ve sold for more, but getting nothing was also a rare but scary possibility. There are stories of companies going under. It’s rare once you hit product-market fit and a certain level of ARR. But as a founder, when all of your finances are tied to that business, it’s hard to get past that possibility existing. 

So I took that bird in the hand and even if I could, I would never go back and change that decision. 

You both sound like you were part of the FIRE (Financially Independent, Retire Early) movement — but you definitely haven’t retired!

Ori: So, I used to be a FIRE movement person. Now I just believe in the FI part. I think retiring early isn’t good, and it's not something anyone should ever wish for. I never want to retire. I think everybody needs to wake up every morning with a purpose. Retirement is just not where I want to be. 

And I’m not just saying that. I tried it. After we sold PracticePanther to ASG we went from working more than full-time to working five days a week and managing less of the business because people were hired to take care of some of the things we were worrying about up to that time. 

Then we went to four days a week, then three, and then we started working with ASG just consulting on other projects. Then it was two days a week, and eventually it was zero. And it was great for a while. I traveled, spent time with my wife, and picked my kids up from school every day. I took them to the park. But it was kind of just me, the moms and the nannies, and it got to the point where I felt like, “Great, I'm financially independent, but I'm the only one in my group. So, what's the point?” All my friends were still in the rat race, everybody was still super busy. 

And I started thinking about my kids who are still very young — the oldest is going to turn eight later this year. What kind of a role model was I going to be to them? They really hadn’t seen ‘entrepreneurial Ori’ who built businesses and did great things. They just saw the dad who worked out and picked them up from school. That's not really the kind of example I want my kids to have. I want to spend time with them, but I also want them to know that you have to work hard. I think it’s important for them to actually see me doing that, not just talking about it.

SaaS founder Ori Tamuz on what he learned after selling his software business to ASG.

Combine that with boredom, and this FOMO I felt when you see all these amazing people. I had this moment where I really wished I could be Soumya, who was our CEO at Paradigm. While I was getting bored she was having this amazing journey with ASG. And I felt like I learned so many things throughout the PracticePanther journey with ASG that I wanted to execute on. It gave me the drive to do this again, and do it bigger and better from a more mature place — personally, financially, and from a business perspective. 

David: For me the big thing is maximizing my life satisfaction, and part of that is keeping my mind active, busy, and sharp. Otherwise it gets boring. Everyone thinks that when they sell their company, they’ll have their dream life. They’ll be happy, retire, and live on the beach the rest of their life. I think it really depends what age you are. If you're actually at retirement age, yeah — go for it. But if you're young, I think take a break and then you need to figure out what you want to do with your time. 

I was 30 at the time we sold PracticePanther. I thought, “I'm gonna travel the world! I'm gonna do X, Y and Z!” I learned really quickly that life happens, most of us will just stick to our normal routines, and not much actually changes. 

Many people think that money equals happiness. The opposite is actually true. In a great book called The Happiness Advantage, they prove that that happier you are, the more successful you’ll be. So money doesn’t bring happiness, but happiness does bring money.

So you started DoorLoop, and you went from MVP to crushing it fast. How did the conversation around ASG being a financial partner for DoorLoop start? We’re usually acquiring businesses, and you had term sheets from VC firms who make these kinds of investments all the time. Why partner with ASG again?

David:  So, we decided we were going to raise, and we went out to market and started talking to VCs. We knew ASG doesn't usually do minority investments, but midway through our search, we figured we'd shoot over an email just to see if you’d consider it or were interested at all. 

We talked to Mark Strauch, the co-founder of ASG and partner at Alpine Investors who we originally connected with about PracticePanther all those years ago. I think within about a minute he replied, “Let's talk tomorrow.” And when we talked the message was, “We haven’t done it before, but we want to do it. The answer is yes. Let’s figure it out together.”

Entrepreneur David Bitton on what to look for in a partner when you're selling a software business

Ultimately, we ended up going with ASG out of all the funding options we had. The trust factor was there. Working with ASG on deals is just so nice. Having a partner in your business like this is almost like a marriage, you have to compromise. Certain VCs are willing to compromise only so much. ASG is very willing to work with you and be very creative to figure out a way that makes everyone happy. 

And what’s next for DoorLoop? What are you most excited about?

Ori: We want to build the best product for landlords, property managers and HOAs, whether they're big or small. With the money we’ve raised, and the talent we have, and the brand reputation we’re building I think we can achieve that. We can be the best. 

We will have the best product, the best customer service, the best onboarding process, the best account managers, the best devs, the best UI/UX, and the fastest and most flexible software to serve this industry. We’re only accelerating on everything we have. We're very lucky that we've gone through our life experiences to know what to focus on now and we’re excited to have the opportunity to work with ASG again.

Read more: 

Thinking about selling your SaaS? 

If you’re considering selling your SaaS we’d love to connect and answer any questions you might have about our process, valuation, our approach to growing the businesses we own, or whatever else is on your mind. Get in touch.

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