How Grasshopper CEO David Hauser Built A Company With No Money And Lots Of Trust

by Tim Jahn on May 28, 2010

In this interview, I’m chatting with David Hauser, co-founder of Grasshopper, a Boston based company that provides a virtual phone system for entrepreneurs.

A special edition episode from Big Omaha

I caught up with David at the Big Omaha conference, which happened May 13-15, 2010 in Omaha, Nebraska.  This episode is part of a series of special edition interviews I shot while at Big Omaha.  The conference is all about highlighting entrepreneurs and the amazing work they’re doing in Omaha and the surrounding Midwest regions.

I highly recommend this conference and consider it the best conference I’ve been to all year.  The speakers provided tons of value in their presentations and the event was intimate enough (they cap attendance at 500 people) to allow you to build relationships with fellow entrepreneurs and truly connect with people.

Transcript

David Hauser:
My name is David Hauser and my company is called Grasshopper.  I started the company six years and a half years ago with my business partner and we’ve grown it to about fifty people now.  I love doing it every day and we have a great time.

Tim Jahn:
What is Grasshopper exactly?

David Hauser:
Our core product of Grasshopper is a virtual phone system for entrepreneurs.  Press one for sales, two for support, on hold music, transferring, all that stuff you would normally get with a PBX but with no hardware or software needed.  Reasonably priced so any entrepreneur can afford it and have that professional image no matter what.

Tim Jahn:
What made you start that?

David Hauser:
It was a really simple problem; we didn’t have a crazy business plan.  Of course, we created a business plan after the fact.  Both my business partner and I had the need for it in past companies and it didn’t exist.  We didn’t want to answer our dorm phone or our house phone or cell phone and we decided we needed a better way.  So we created it.

We built Grasshopper to fix our own problem and luckily we found that a lot of other people have the same problem.  We’ve now served over 80,000 entrepreneurs since we started and continue to grow.

Finding what you want to do is not that hard.  You need to find what you’re passionate about.  For us, it happened to be a specific thing we wanted to do.  At the end of the day, we knew we wanted to serve entrepreneurs because it’s a community we love and a community we love being involved in, so this was a way for us to do that.

In terms of getting started, we raised no money, had nothing when we started.  We had enough money to buy the few servers we needed to get started and literally piece it together.  There’s a lot of challenges in doing that, like talking to vendors, trying to get them to buy into our business plan when we had no cash to give them.  Telling them we need to buy lots of big Oracle software and stuff but we don’t have any cash right now, so you have to trust us and buy into what we’re doing.

So we had to find some great partners who really understood where we were going and what we wanted to do, and we got them to buy in.

Tim Jahn:
That’s impressive, the whole idea of a trust based relationship.  I imagine that’s tough these days.

David Hauser:
I think it’s the same as selling your business plan to anyone else, like a partner or the first employee.  It’s the same exact pitch: do you believe in what we’re doing and do you buy in?  For a vendor, that partnership could be very easy as their risk is very low.  They’re financing something over 3 or 6 months.  Since their risk is very low, they’re willing to buy in, but we had to go through a lot of vendors before we found the right people.

Tim Jahn:
What did you do before Grasshopper?

David Hauser:
I started a few other companies, so I’ve always had the entrepreneurial spirit.  I started a company when I was in high school and continued from there, doing everything in between.  From promoting parties in New York to selling bus trips for skiing and stuff.  It’s always just been what I did.  To make money, I figured out ways to do it.

The entrepreneurial spirit has been in my family.  My dad and my grandfather both ran their own companies, so I always knew I wanted to be an entrepreneur.  I think the good thing is my dad never encouraged me to go into his business.  He actually didn’t want me anywhere near his business.  He didn’t think the business would survive very long and it wasn’t a growing industry, so he said I should go do my own thing.  He taught me that spirit of being your own boss and creating something and a community of really employees.

Tim Jahn:
I like what you said.  You needed to make money so you found ways to do it.

David Hauser:
That’s where entrepreneurs come from.  It’s not about going to school.  You need to do something you love and make money at it.  The people that say you just need to do something you love, that’s silly.  You have to make money.  It’s not about making tons of money, it’s about making money so you can live a lifestyle you want to live while doing something you love.  And each person’s lifestyle is different.

The advice I like to give young entrepreneurs is go out and do something.  It doesn’t matter if the idea is right or wrong, just try something.  You might fail at it, but if you tried it, you’re going to learn something.  And maybe the best thing you learn is what you actually want to do.

When we started, we thought we were going to be the biggest telecom or whatever, but those things don’t matter.  What we discovered is that we truly love serving entrepreneurs.  And that’s where the company has gone over time.  If we hadn’t started, we’d still be sitting there talking about it.  My advice is always go out there and do something.  Try it, maybe you do well, maybe you don’t, but you’re going to learn.

Tim Jahn:
You talked a bit about company culture in your Big Omaha presentation.  How important is that to you, the idea of having a culture worth talking about?

David Hauser:
I think culture worth talking about is important and I think what’s even more important is culture you want to be in.  As a founder, you want to go to work every day and enjoy the people you’re with, and the environment in.  And not dread that.

I think a lot of people that come from large companies just hate that environment.  I never wanted to create that.  I wanted to create an environment that is fun, energizing, goal oriented.  It’s not all about fun, because that’s not really interesting.  It’s about working hard and having fun.  Having a culture that really promotes that has been a passion of mine for the past three years.  And being able to talk about our culture proudly and say this is what we’re about.

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