David Sinkinson and Chris Sinkinson, Co-Founders of AppArmor Mobile, shared their journey of building a leading safety app platform without early funding in a recent interview with CanadianSME Small Business Magazine. By self-funding through side hustles and leveraging their niche B2B market, they avoided the need for significant upfront capital. They also emphasized the psychological challenges of establishing credibility, the advantages of bootstrapping for competitive flexibility, and the importance of exceptional customer service in driving growth and loyalty. Their insights offer valuable lessons for entrepreneurs on overcoming challenges and effectively competing in the tech industry.
Brothers David Sinkinson and Chris Sinkinson, are proven SaaS entrepreneurs. Their bootstrapped startup, AppArmor, helped keep people safer with innovative mobile apps and emergency notification solutions for individuals across the globe. In February of 2022, their company was acquired by US competitor Rave Mobile Safety for tens of millions of dollars. Later in 2022, Rave and AppArmor were acquired for over $550 Million by Motorola Solutions.
You both managed to build AppArmor into a leading safety app platform without early funding. Can you share how you approached building your startup differently and what key decisions helped you achieve success without initial capital?
Chris and I had a few things going our way when it came to venture capital.
In our early days, we had a handful of side hustle mobile app businesses on the go. We were able to self-fund our businesses through the small amounts of revenue collected over these various products. As one product – AppArmor – began to show the most promise, we would funnel the revenue of the other products into supporting AppArmor.
This was not a significant sum. We’re probably talking $50,000 from the other products to help get AppArmor going.
Aside from the side hustles, we also thought (and still do!) that early funding is not necessary for a SaaS startup. We like to say that the product is “air”; no shipping, no storage, or inventory costs. We were also in a niche B2B market and as such there was really no need for a significant upfront capital investment.
Owning a business often comes with a ‘crisis of credibility.’ How did you overcome this challenge, and what strategies can other entrepreneurs employ to enhance their credibility in the early stages of their business?
Oh man. This is so real. Like all entrepreneurs, we had our doubters. People thought we were “funemployed”, a “lifestyle” business, or in some cases, suggested we weren’t a startup. It nags away at all entrepreneurs and is a near-daily challenge.
We believe that if your business is driving value for your customer, is profitable, and morally principled, then you are a legit startup. After that, it becomes a question of psychology. As a founder, you need to believe that you are, in fact, a different, legitimate startup.
This is a major theme of our book. Founders are always looking for legitimacy – for what a startup “ought” to be – which in some cases, leads to a path of business decision making based on startup fiction that ultimately hurts their business.
Credibility is a psychological challenge. Block out the noise. Don’t look for validation in your peers, look for validation in the market.
As a small startup, competing with larger, established companies can seem daunting. What tactics did you employ at AppArmor to effectively compete with bigger players in the industry?
On the contrary, competing with big companies we never found terribly intimidating. This is for many reasons, including how we structured our business.
For one thing, big companies tend to overlook small companies in niche markets. This, to some extent, makes sense – those firms aren’t established yet and many startups fail. However, this willful dismissal of your company by larger market players gives you space to get your footing in the market.
In our case, it also important that we bootstrapped our firm. We did this for many reasons, but one big one was competitive flexibility. We felt that because we hadn’t committed to an average price for our product with a group of investors (table stakes for venture capitalists) that we could be more nimble in the market. We could charge less than the big guys, all while delivering a better product more quickly.
Price and speed to market though are only two of several super weapons small firms have against the big guys. Others include customer service (which we get to in the next question), ability to meet custom product asks, flexibility to quickly make small bets on marketing strategies, and much more. The flexibility across the board gives small firms an edge with which to compete.
In a landscape where many companies might overlook customer service to cut costs or scale quickly, you chose to focus heavily on it. Why was this a priority for you, and how did it impact your business growth and customer loyalty?
Any company, startup or otherwise, who doesn’t treat customer support as a product line – deserving of all the attention and dedicated support of any product – is making a serious mistake. Exceptional customer support is one of many keys to true market differentiation.
It’s a superpower for small companies in particular. Startup customer service is almost universally better because, by definition, those companies have fewer accounts to manage; they can spend more time per client. Customer support can be delivered with both empathy and intensity, showing your customers that you care. This greatly boosts retention and even provides opportunities to sell more into the existing customer base.
In our case, our customer service led to annual customer logo churn rates at around 1-2% per year, materially lower than the 3-7% average in SaaS. Further, when we launched new product offerings, our exceptionally loyal customer base would always take our call, see the demo, and generally be likely to buy.
After the acquisition of AppArmor, what was your personal and professional transition like? What insights can you share about the process of moving on from a company you built from the ground up?
When you sell your “business-baby”, you realize that your professional and personal lives are deeply intertwined. When our business was sold, it was the combination of a feeling of jubilation and crisis of identity; we had achieved a real dream of ours but also lost the thing in life that made us feel important.
It was a classic case of “two things can be true”; we were both thrilled and devastated by our success.
At first, the transition wasn’t all that bad as the considerable work kept us busy. Turns out that bringing two companies together is not an easy task. We had a job to do, so we remained focused on that. But as our earn-out neared its completion, a growing feeling of dread began to take us over. We knew that we would be soon closing the curtain on this act of our careers.
It was hard to say goodbye. While financially we were obviously better off, it would take some time before we would be able to come to terms with the change in our identities.
