Paddle founder Christian Owens on changing how software is sold

I caught up with Christian Owens, founder of Paddle, to find out more about his entrepreneurial journey.

We spoke about his early entry into the world of entrepreneurship, why he set up Paddle, growing his business and what keeps him motivated.

Here’s what he had to say.

Christian, what were you doing before Paddle?

I dropped out of school when I was 16 and started my first software company. That grew to be a £3-4m business in 18 months. It was through running that business that I encountered the problem that we try and solve at Paddle.

Why and when did you decide to found Paddle?

I set up Paddle because I had experienced the pain of trying to build and grow a software company first-hand. Dealing with payments, subscriptions, licenses, selling in different language – these are all the back-end tasks that need to be done, but were a massive headache.

I had this belief that there must be a better way to do things, but the more people I spoke to, the more I realised that, while we were all experiencing the same problems and were completely miserable, no-one was trying to solve them. That’s was the starting point for Paddle.

Despite starting out at a very young age, you’ve raised quite a bit of funding to date. How would you describe the fundraising process and what do you wish you’d known before embarking on that journey?

We’ve had a reasonably atypical experience with fundraising, because when we started as a company, I didn’t even know what venture capital was, so I stumbled into it. But I’ve been fortunate in that I’ve met some great and helpful people along the way.

I’d say the more money you raise, and the later stage the business, the harder it becomes in some ways, and the easier in others. It becomes easier in the sense that you have the credibility of both the funding you’ve raised to date and the people behind that funding. But it becomes harder because, as time goes on and the size of the raise increases, so do the expectations. The stakes get higher in terms of how close you’re getting to the vision you’re always working towards. At the beginning, everyone will give you the benefit of the doubt, but the slack gets shorter the further along you get. Investors want tangibility and results.

What I wish I’d known? The people you’re raising money from are part of a very small group of people, in relative terms, and everyone knows each other. If you don’t make raising money a very deliberate process, setting out the amount you want to raise by a set date, you will likely find your process for going about it is warped by others quite quickly. It’s so easy to fall into the trap of talking to a lot of people who one, know each other and two, are competing with each other.

People often focus on getting the deal done, which is obviously the aim but what not everyone will realise is that, in this current climate, there is a lot of money out there and, as a founder, you have significantly more leverage than you think – both in terms of controlling timelines and how the process itself runs. A lot of people struggle to fundraise initial rounds, and not every company will get further than that, but if you do, the tables will turn quite quickly – you can call more of the shots.

The problem, I think, is that if someone has had a tricky situation early on, it’s really hard to shift your mindset. When you start out, you’ll maybe speak to 100 people and one or two will say yes. But you will reach a point where you can be selective, so meeting 100 people is counterintuitive. You can be choosy and actually get to know the people who’ll be writing you big cheques. And that’s important. I guess it’s the shift from survival to strategy.

 

What has been the secret to your success so far and what keeps you motivated?

I mean, that question supposes that we have been successful! In certain relative terms, we certainly have been. But how I think about Paddle is that, six years in, we’re still at the very early stages of what we want to do. We have been able to demonstrate traction to date but, given how this industry grows bigger, faster and stronger, our success can only be measured from this point going forward, I think.

You have to think like that because, when you distil it down, what makes you successful is your persistence. You have to keep working hard, even though it’s not going to be easy. For me, being young is actually somewhat beneficial. You don’t have the same responsibilities and commitments you may have later on in life, and I can only speak for myself but you’re naive enough to believe the s*** you say. That means you can take things to a point where someone with more experience or inertia might have discounted the idea at the outset.

Motivation is an interesting one. Running a software company, and especially trying to scale one, is often a process of repeatedly getting punched in the face. You have to be okay with that. You have to realise that not every day will be great, but also not every day will be terrible. When you’re speaking to investors, you’re speaking about vision and over very long periods of time. It’s those thought processes that keep you motivated, because the everyday reality is that, as a founder, the buck stops with you. And the way you can add the most value is by making sure you’re solving other people’s problems. I don’t have 150 people working for me; I work for 150 people. My challenge every day is making sure I am enabling them to be successful. Thinking in long periods of time helps you remember why you’re doing that, why it really matters. And it’s the only way you can deal with constant rejection.

It’s also very important to stop and take a break, and take stock of what you’ve done successfully to date. I don’t struggle with motivation. I really enjoy what I do and I want to do it for as long as possible. I would still be doing this even if I wasn’t paid, if there was no financial upside. If you think in terms of doing something not because it’s a job, but because you enjoy it, you don’t really need to think about how to motivate yourself.

Do you think you’ve matured quite rapidly as a result of starting your own business as a teenager?

Yes. You have to. It’s interesting because, when you first start out, people talk about your age, and the question is ‘is this person mature enough?’ – it’s not even a question of experience, it’s ‘do they have enough willpower to do this?’. One of the things I’ve found is that, the more time goes on and we can demonstrate that we can do something, the less that even features as a question. It’s not about me maturing as an individual anymore; it’s about the maturity of the thing we’re creating.

When I talk to people my age who don’t do this – who’ve gone down the route of university and then getting a job – I realise that one skill I’ve had to learn is understanding the magnitude of different situations. And you do have to learn very quickly not to complain and that, however tough days can be, you’re getting to do what you enjoy on each of them. That makes you incredibly fortunate. If you combine those two things, the aggregate response is that not maturing is actually quite dangerous. One hundred and fifty people rely on me to not make stupid or childish decisions. They have mortgages, they have families. That forces you into some kind of maturity.

On a more light-hearted note, a lot of the Paddle team – and this is something I love – are incredibly mature in some respects, and not in others. Take them out of a work environment, and you realise that everyone is a kid at heart!

You’re a bit of an anomaly in the sense that you’ve only ever worked for yourself. What have you learned about yourself to date? Would you ever work for someone else?

One of the things I’ve learnt about myself (and there are many!) – and it’s also a trait I’ve seen in others – is that people who can actually work for themselves also thrive in environments where everyone is self-motivated and working as a group towards a common goal. I think about it in terms of working for the logo and not the individual. If you work for yourself and you start a company, you put yourself in a position where you have to think about collective functions, not in terms of the individual. I’ve learnt that I’m not really motivated by my own progression. Title doesn’t bother me, and I’m more than happy doing the most boring, menial things that I don’t like if it means it benefits the wider organisation. That’s a fundamentally different way of thinking about things than the individual who sees the organisation as a tool for self-progression.

Would I ever work for someone else? Sure, absolutely. I mean, I’d probably find it quite difficult initially, but if someone was inspiring enough and had an idea that I cared enough about, then definitely. I don’t profess to be the best in the world at anything, but one thing I’ve done really well is hire people who are better than me. Perhaps working for the right person would be a good opportunity to prove where my skills actually are… although whether someone would want me working for them is a different question!

What advice would you share with other entrepreneurs?

Just work really hard on something you care about and not something that other people find exciting. And if you do have some kind of success in whatever way you define that, don’t believe your own hype – it can all change tomorrow. It’s very easy when you go to events, or get asked to do an interview like this, and people compliment you and say nice things, to believe them and become an asshole. Don’t do that. Focus on building something and creating value. If you’re doing something for the wrong reasons, make sure you’re able to recognise that, and then stop.

Where do you see Paddle going and why? What’s your ultimate goal for the company?

I really believe in the problem we’re trying to solve. Software is not going away; it’s ingrained in people’s minds and in the way businesses are run – and that that will only increase as people build more products and tools to make software development easier.

I want to build the biggest company that no-one has ever heard of. I want Paddle to be the thing that is a contributing factor to people’s success – the people who are actually building the things that are solving problems for businesses and people. There are lots of people out there focusing on aspects of things that are really hard – finance, brand new technologies. I want to ignore all of that. I want to build the infrastructure that every software company in the world – all the companies doing those exciting things – can use to run and build and grow their business, removing all the unnecessary obstacles.

Running a business is really hard, and if you look at the number of software companies that are started versus how many fail, it’s actually pretty terrible odds. If someone has decided they’re going to start something, and they want to make that thing really big, everything we can do to make that process a little bit easier and help that person focus as much time and energy building their product and building value, rather than all this necessary but boring operational stuff they have to do, but that doesn’t move the needle of their ability to be successful, we will do.

Our goal is that no software company will ever have to make the trade-off between doing something that’s necessary and doing something that is core to their business. How much time you can devote to things that don’t really matter should not be any the marker of success any software company had to use.

And beyond that, our goal is to make sure that no-one ever asks this question again: why do we exist? It’ll be obvious why people choose and use Paddle, and the idea that you wouldn’t use it – that you’d put yourself through the pain and anguish of trying to solve the problems we solve for you alone – is mad.

 

Starting your own business puts you in an uniquely, and in my opinion, privileged position in the sense that you’re able to create something from scratch. With this in mind, how important is culture for you and what are you doing at Paddle to retain talent as the company scales?

I agree. If you think about starting a company, particularly a software company, you’re creating a product from scratch, but you’ve also got to create an organisation. You’ve got a group of people coming together to solve a problem. The two things that actually matter in terms of building a company are the products you build, and the team you build to accomplish that. The team is the significantly more important piece of that puzzle. After all, you’ll hear plenty of people saying they’ve pivoted on the product or go-to-market strategy. But seldom would you ever find someone who’s pivoted on team.

Your team is your company, and I’ve said publicly before that I want to build the best product, but also the best company. We’re asking people – and this is true of any fast-growth company – to come to work every day and ask them to do difficult things, answer questions that may have never been asked before, and build a product that’s providing value in a way never done before, we owe it to them to attribute any success we have to them. I want anyone working at Paddle to feel like they are empowered, that they can come into work, tell me that I’m wrong, and help steer this ship on the best possible course. That’s the point of hiring people who are smarter than me. The next step is to ensure you’re building an environment where those people can make decisions, have ideas and execute them.

You also have to back all of that up with making your company a great place to work by focusing on career progression and learning. People talk about free yoga classes and lunches, and sure, we offer that stuff, but I think the key to a good culture is people going to bed Sunday night and not dreading work on Monday. A free yoga class doesn’t really help with that.

At Paddle, we give every single person £1,000 each year to spend on improving their career and/or their lives. Some people choose to take courses specific to their role, others learn a language or how to drive (that’s pretty popular!). We sit down with everyone and come up with a six-month plan, helping them understand what they want out of life and their job, what their journey looks like and how we can support them. The key thing there is how they can make the best possible decisions for themselves. Do they want to be the best person in the world at product design? Or, do they want to lead a team of product designers? For a lot of people, working at Paddle is their first job out of university, and it might not be what they imagine they’d be doing. We make sure they have the opportunity to learn as many skills across the business as possible, so they can make sure they are doing what they really enjoy. And the personal development budget can help with that.

Something I have learnt is that – and this is to do with me starting the business so young – not everyone is going to work on it with the same level of intrigue and magnitude. You quickly realise that people are at different ages and stages in life with things that matter more to them, like their family. That means you need to build an environment that enables them to do incredible things while they’re here, and does not penalise them for having a life away from Paddle.

A lot of people wonder why we spend so much on employees, but we think in very long time horizons. Paying for someone to learn to drive does not benefit the business right now. But we intend to hire hundreds, then thousands, more people. Would we want to be the business that didn’t enable our employees to achieve what they want to achieve, that wasn’t the company people reference in years to come as being a particularly good place to work? Imagine being known as the company that stopped a fantastic employee from taking a trip of a lifetime? It’s such a small thing to do in business terms, but we believe it’s vital. This is an environment where there are hundreds of incredible businesses talented people could go and work for. I want to make sure Paddle is top of their list.

Also, sometimes in life you just do things because they’re the right thing to do. If we fire someone, we offer them coaching to help them move onto their next thing. Maybe skills were lacking, maybe they don’t know what’s next. Just because it didn’t work out with us, doesn’t mean they can’t, and won’t go on to better things. We want to help them with that and be a part of it. Also, how cool would it be if the next Slack, or Dropbox was started by someone who left Paddle and we were supportive in that process? Maybe they’ll even be a customer.

I find in life that fulfilled, happy people tend to beget more fulfilled happy people. You get back what you put into the world.

Are you still involved in hiring. If so, what do you look for in employees?

I am – not every single role but certainly a lot of them, especially if someone is reporting to me or it’s a new role. Some of our roles are reasonably entrenched and we have great processes and managers involved. There comes a point where I’m the least qualified person to do the hiring. If I’ve done my job correctly, there are people in the team far better at choosing our forty-fifth engineer or a good technical writer.

The thing I look for more than anything else is passion for the thing we’re working on. Ambition is really important, too. You have to have an appetite to learn in a fast-growth company. People’s roles change over time, as do expectations of them. The other thing that really matters to me is asking whether this person is a good human. There have been a number of times in the hiring process where we’ve been biased towards the person who is less qualified on paper because we know they have a base level of competence (i.e. they could do the job) but they seem like a nicer person. Give that person the right set of parameters, and I believe they’ll make a better decision than the more qualified person who’s also an asshole. The asshole never works out. And people who were in that second box at Paddle have always had, quantifiably, the biggest impact on the business.

Where do you see the industry going?

I hate this question so much. Over a long enough period of time, it’ll continue to be successful and things will move up and to the right. But short term, there is way too much money floating around and people are raising too much and at unsustainable valuations. I think over the next 12 to 36 months there will be a correction. It’ll be harder to raise money, and it’ll be part of a recession in tech generally.

I wouldn’t be doing this is I didn’t think that the outcome over a long enough period of time wasn’t going to be positive. I hate getting into the ins and outs of where people are going to make loads of money. There are all the obvious ones – AI, VR and every other acronym you can come up with. But tech is an industry of trends. Something is exciting for a while, then it’s not exciting. The overall message is that everything will be fine; It’d be foolish to bet against this industry in the long term. But it’s important that we all build sustainable things because the way we’re going now isn’t immediately sustainable.

I make no predictions over the next big thing, or the current big thing that won’t be a big thing in the future. If I knew any of that, I’d probably be a VC.