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October 11, 2022

This SaaS Founder Has Seen His Business Through Two Successful Exits

Founder Stories
This SaaS Founder Has Seen His Business Through Two Successful Exits

Tim McCain has a big fan club at ASG, and it's easy to see why if you get the chance to talk to him for even 10 minutes. Relationships are at the center of Tim’s world, whether he’s connecting with people through his work as President & Founder of PhotoLynx, chatting up his Uber driver (and everyone else whose path he crosses) when he travels, or helping people who’ve hit hard times get their lives back on track through his soul-feeding work as a pastor. 

Tim combined that superpower for building relationships with his love of the hustle to buy and grow PhotoLynx, a SaaS business that provides workflow, image and studio management solutions to high-volume photographers. He led the company as CEO for 15+ years before a breakfast meeting with ImageQuix CEO, Alex Kovacevic, which resulted in him selling to ASG in 2019. Now the two businesses, along with Capturelife, are headed to Charlesbank to write their next chapter of growth. We had the pleasure of reflecting on the past and looking to the future with Tim right before the sale officially closed. 

An Interview with PhotoLynx Founder, Tim McCain

We know you pretty well by now, but for our readers, can you tell us a bit about PhotoLynx and its founding story in your own words?

Well, 20+ years ago, I got involved with a guy named Chris Burton, who had a software company that was the start of PhotoLynx. Back then he only had a couple of clients and a couple of employees. I started working with him and started slowly buying parts of the company from him. 

Chris was running it to make a little extra money — it was one of like 10 pieces of software that he had written. I was very sales oriented, and project workflow minded. So anywhere where I could save somebody money in their workflow, I started doing it. And to make a long story short, I eventually bought the majority of the ownership from Chris and started running and growing the business. 

I owned it and ran it as CEO for about 15 years after that. Then one day I had breakfast with Alex Kovacevic after ASG bought ImageQuix — which had been my competitor for years — and he became the CEO. He just wanted to sit down and we had a really good talk. 

Alex thought I’d have this animosity towards him or ImageQuix because we’d been such long-time competitors. But I believe in abundance theory and that there's enough for everyone to go around. So I thought him wanting to ‘clear the air’ was funny because from my point of view there was no air to clear. 

At the end of that meeting, I said, ‘It'd be really neat if we did something together. And you might tell ASG that I'm open.’ I got a call from ASG about a week later. We started talking and we wound up doing a very fast close on a deal for us to join ImageQuix at ASG. We had a great reputation in the industry, so it was very strategic for ASG, and I thought there was a good synergy for PhotoLynx, too. 

You sold PhotoLynx to ASG in 2019. If we can quote you, back then you said, “I had taken Photolynx as far as I could and I wanted to get back to the technology side of the business. With ASG’s backing, I got the resources I needed and I’m able to stay on and watch the company grow.”

We’d love to reflect on that quote with “2022 Tim.” 

It still stands true! And here we are again, right? We've taken it to the level we’re at today, and we’ve hit all the goals we meant to with ASG. Now we're going to go on and work on even more M&A and more growth with a new partner. That's a neat thing. 

I feel like I’m a poster boy for what ASG says they're going to do. I got a promise in an LOI, and it held true — I got my money. I got my deal. I stayed with the company. I watched it grow. And now we're going to the next phase. That was all that was implied when I originally sold. And it happened.

Founder Tim McCain reflects on selling his SaaS to ASG.

I think that takes two roles though. The founder has to be humble. (Does it still sound humble when you call yourself humble?) If you’re going to stay in the business as I did, you have to realize that you're not in control anymore and you have to start listening to other people. 

If you’re not able to do that — it's like people who get advice from a lawyer and then ignore it. Why did you pay that lawyer? I don't understand it. So when we made the deal, I made a commitment in my head. I was always going to share my opinion, but if the board or the leadership team felt strongly about something after hearing me out, I would defer to them. Once I got in that mindset and started doing it, it just worked out.

On the flip side, you need the people you’re signing up to defer to be genuine, good people. Because if they’re not, it’s gonna go sour — fast and hard. 

I had a phenomenal experience with ASG. I never felt dismissed or disrespected. I always felt honored as a founder. And I always felt heard, which is a huge part of that.

Tim McCain, founder, reflects on two successful SaaS exits with his business, PhotoLynx

Tell us more about stepping out of the CEO role and back into the tech and product side of the business. That was something you were excited about when you sold, but there must have been certain things you were ready to give up and maybe others that you liked doing. 

That evolves. There were some things I really liked doing, so I just talked to Alex and he said, “Okay, let’s have you jump back into that and put that back in your job description.” It was very fluid. And that was a beautiful thing because I love sales. I love going in and showing somebody how you're going to save this amount of money by doing this, and getting them all excited. I don't like to travel, though. I'd been traveling for years, and I'd had enough of those 18-20 hour days. So I stopped doing that. 

And then there are things I’ve shifted back and forth on. I used to be in a meeting where we would go over numbers with the Director of Finance, and my eyes would just glaze over — it was so boring to me. And finally, someone just asked the question of whether I wanted to be in them. I said no, and they were like “Then why are you here?” 

Now I’m back on those meetings, because we’re moving in a new direction, and that’s interesting to me. 

That’s what I mean when I say it’s evolved, and Alex has allowed that fluidity that makes it work for me. 

I’ll tell you the best thing about the transition was the stress level though. When you're an owner, and you're managing that business, and you have to make payroll there can be some hard decisions. There were times when I went without a paycheck so I could pay everyone else. And that stuff just wears on you. And it all just went away when I sold to ASG, and I mean it went away rapidly. Alex took those stresses on, and ASG backed us. 

I had never had a backing like that. That was easy to transition to. And I felt good. It still does to this day. Like today — it’s Friday heading into a weekend, and we’re in the middle of this sale process, and of course, it’s stressful. But I’m going to have a good weekend. I’m not going to stay up all night long wondering what’s going to happen. 

Alex is taking that on, and that’s his job now as the CEO. And I’ll be there for him if he wants to talk this weekend, but I don’t have to be that guy now. And that is a wonderful feeling. 

I can’t say that enough. If I was talking to a founder and they asked me ‘Hey, what was one of the best things about selling?’ I’d tell them it's taking away the level of stress that's on you from running a business and making payroll and your own family, and those of everyone who works for you being dependent on the decisions you make. That's a heavy load. And it just goes away, but the business keeps going.

Founder TimMcCain reflects on the best parts of selling his SaaS, PhotoLynx

That is a big difference — and all of a sudden your business decisions aren’t also your personal financial decisions. 

That’s a big thing, too. I sold in 2019, and then the following year COVID hit. And in a lot of ways, COVID later accelerated our growth since it hit the gas pedal on the industry shifting online, but I don’t know if I could have gotten the business through those early days personally. ASG was able to get us through without firing anyone or putting people on leave or losing any customers. I could not have done that personally. 

What surprised you about the transition? 

A good surprise was relationships. You generally think of PE firms as very cold and making purely financially-driven decisions. Cautious. Risk-averse. Those are the words that come to mind. 

So my first couple of months I was like, “Yeah, yeah you’re just saying that.” But the proof was in the pudding. So the relationships I gained with people that were just absolutely genuine, and who did what they said they were going to do — that was a nice surprise. “PeopleFirst” is true, it's not just a statement. And I drank the Kool-Aid after a couple of experiences. 

I expected to keep working in the business for maybe a year or 18 months tops after I sold. Here I am three years later and about to sign up for more because of the team we work with and that we built with Alex and ASG. 

Relationships also surprised me on the negative side. I had a lot of relationships and friendships in the industry. As you can probably tell, relationships, friendships, and quality time with people are extremely important to me. And I had what I thought were good ones. But when I was not the decision maker anymore, some of those relationships went away. That was a sad surprise. But it’s one of those moments when you find out who your friends really are.

I guess that was a good lesson — but I’ll still always be someone who wants to connect. I hold it as a truth that things have to be about more than money, even in business. It has to be about connecting with people, and if you don’t connect, you’re not doing it right. That’s just my philosophy. 

It’s a great one, and it’s probably a huge part of why PhotoLynx has such a strong reputation and why you were able to build such a cohesive team. We’d love to talk more about the moment of bringing the PhotoLynx team together with ImageQuix because you were such competitors. What did moving from that competitive view to building such a cohesive team look like? How did you and Alex build that bridge for people?

It took a little bit for everyone to feel the team vibe because we'd spent the last 15 years competing. So it wasn't just like putting two teams together into one big happy family overnight. It was two very competitive teams that were actively selling against each other on every sales call. 

At first, everybody was very apprehensive of each other. I remember very early on I was in a meeting and someone on the ImageQuix team said they thought I was going to come in and take over. I have a bulldog personality, and Alex is very much my opposite in that way. And this person was worried that I would run over him and them. 

I thought it was great that they brought it up. And I just said, “Hey, I don’t want to do that and I’m not after anyone’s job here — not Alex’s, and not yours.” 

Everyone could always talk. That took two things. Alex and I had to be open. And we had to keep our reactions in check. You can’t have someone telling me I’m a bulldog and me jumping down his throat because that would just prove the point. 

Another big thing was that we vented to each other, and not to the team. So if I had an issue with something that was going on, I would talk it out with Alex, and he would do the same thing with me. 

It’s not like Alex and I never disagreed, but we were always able to talk it out quickly. And that helped add to the trust and I think the team took their cues from our relationship. 

We were also careful about how we talked about the business. In the beginning, people would say “the ImageQuix side” or “the PhotoLynx side.” We would stop and say, “You mean the PhotoLynx product line?” It was probably a pain in the butt for people for a while, but now I think everybody's got it and they know that we’re one team with different products. That helped a lot. 

So it was interesting at first, but we brought everybody together. And we're such a good team now, all the way across the board. Everybody is going towards the same goal and just killing it. And we’ve worked with ASG on some structural things that needed to happen for us to grow. And now we’re heading into the next phase, which is exciting as well. 

How did that play out when Capturelife was acquired later in 2020? Do you think the PhotoLynx experience helped prepare everyone to welcome a third product and team?

Scott, who co-founded Capturelife, and I had done business together for a lot of years. I was always looking for a fit for Scott, and I always thought that they missed the boat on where they were trying to market the product. They were trying to bring it into the school market. But it wasn't for the schools. It was for the sports world and event space in my mind. 

So we started having these long talks with Scott because ASG was interested in the product and how it might extend what we had going with ImageQuix and PhotoLynx. He wanted to talk to me about how things went down in my deal, and he especially wanted to know how ASG dealt with problems. I think my experience and the fact that I had stayed on helped make the case. 

And now we're just on the cusp of breaking loose with Capturelife and they're part of the team and have brought some really strong people with them. 

That’s interesting to have had an opinion on a business for years and then to have the opportunity to help bring that opinion to life. 

It was neat. And Scott’s a great guy — we do business together, but he’s also someone I just enjoy spending time with — so it’s great to see that product growing and to be working together. 

Talk to us about joining a leadership team — with brand new members — to help lead the business you had run for 15+ years. What was it like to hand over the reins in that way? 

I already talked about the mental commitment I made when I sold that I was going to share my opinion, but that I wasn’t in charge anymore. On ASG’s side, everyone always asked my opinion on everything. I was on all the board meetings, and people genuinely wanted to hear what I had to say. At one point we had a board member change, and Jamie — ASG’s CFO — joined the board. He flew out so he and I could build a relationship and not just base things off the transactional one we had before from when I had sold PhotoLynx.  

There were just a lot of real things like that that helped to build the trust up. And you know, if at any time, someone from ASG had gotten on the phone and made me feel like an idiot, we probably wouldn't be having this conversation right now. I'd have been gone. But no one ever did. Everyone met me where I was at. They didn’t over-talk me or under-talk me. 

This is almost embarrassing. But in the first couple of meetings, I was Googling terms that came up. I didn't go to college and I didn’t go to business school and now I’m working with these guys who got MBAs from Wharton and Duke. I love the fact that I basically got a three-year on-the-job MBA from ASG because everyone always asked, ‘What do you want to know?’ and then humbly explained it. That meant the world. 

Well, you did pretty well on your own without an MBA! And you had a ton of industry knowledge — we know the learning went both ways. But we love that you have that personal takeaway from your time with ASG. Looking back, what are the biggest ways ASG helped or invested in PhotoLynx's growth?

Structure. And discipline — particularly around pricing. When you’re the guy who’s responsible for payroll and you have a potential customer beating you up, you can wind up making a deal you know is bad just to get it done and get people paid on Friday. I learned from ASG that you just stay true to what you know is right and the deal will still go down. Being a step removed from the business financially really improved that for me. 

Did you ever weigh being part of the team against exiting the business completely?

In terms of staying on, I just still love it. I’m a pastor as well, and that work feeds my soul, but I also need the hustle.

At some point, I told my wife that I would sell, and then I could just retire. I had this idea that I'd love to just buy a lawnmower, and go down to all the neighbor's houses and mow their lawns and charge them $10. 

My wife just laughed at me and she said, “You wouldn't do that. You would hire 10-15 people, and you would start a route, and you would start managing them and it would be a business.”

And she’s right — I’m totally like that. I love the action.

ASG recently sold PhotoLynx, Capturelife, and ImageQuix. How are you feeling about the sale? How does this moment feel the same or different from your first sale to ASG? 

So it's different in a couple of regards. For one, when I sold to ASG, I was the only person who ran diligence. I couldn't tell my team, obviously, at the time. And I had a mom-and-pop lawyer, as opposed to running any kind of formal process. Going through a formal process with bankers and a legal team and all of that is a way different experience. 

The piece that’s the same is that there’s a lot of paperwork when you sell a business. But I’m not the one who has to do it this time, so that’s kind of fun. 

Ha! That’s fair. Selling a business often really caps a chapter for the business. What will you remember most from your ASG chapter? 

I’m repeating myself — but it’s absolutely the people and the relationships I’ve built. I feel like we were in a foxhole together. We went through COVID and these stressful times, and now we’re stronger for it and looking forward to what’s next together. 

And what are you looking forward to next as the businesses join Charlesbank?

I think it's good for the team, honestly. And it’s such a humbling experience. I was a big fish in school photography. And then I jumped into ASG, and I felt like a little small fry. And our new owners, Charlesbank, they're really big.

I think it'll be extremely humbling for our team, which is a good thing, and I think we’ll learn and grow a lot. 

I've enjoyed the whole experience. It's been educational. That's what feeds me. So it's been great on that front. It's been stressful, too — there's no way to get around that. We started talking about selling being the next right step for the business close to 9 months ago. That’s a lot of anticipation.

But going through this with our leadership team is just a reminder of how impressed I am by the team we have, so I’m excited to move forward. We're talking about doing bigger things and taking it to the next level. And there's a bunch of new M&A opportunities ahead of us and we're excited about that, too. 

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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