Tim Schumacher. Sedo’s Exited Founder on Work-Life Balance
Episode - 44
Tim Schumacher. Sedo’s Exited Founder on Work-Life Balance
Tim Schumacher is the exited founder and former CEO of Sedo, one of the world's largest domain marketplaces, which he led for over a decade before stepping down 13 years ago.
What sets Tim apart is how he mastered the elusive work - life balance while still building his company, something most entrepreneurs only dream of.
This balance helped him avoid the emotional rollercoaster that so many of us face after a successful exit. In this episode, Tim shares his thoughts on keeping life supernormal, the bootstrapper mindset, being a scaler versus a zero-to-one founder, and finding new purpose in tackling climate change.
What We Discussed:
00:00:22: Who is Tim Schumacher?
00:00:36: Tim's mastery of work-life balance
00:00:55: Episode overview
00:01:12: Conversation with Tim begins
00:01:18: Tim's exit from Sedo
00:02:07: Gradual exit process
00:03:25: Tim's feelings post-exit
00:04:05: Boredom and new ventures
00:05:06: Involvement with Adblock Plus
00:05:48: Involvement with Ecosia
00:07:03: Work-life balance perspective
00:07:50: Family and travel considerations
00:08:43: Shift to climate tech
00:09:47: Evolution of motivations
00:12:03: Exit's impact on future focus
00:12:58: Post-exit momentum
00:14:22: Balancing for-profit and climate-driven businesses
00:15:26: Bootstrapper mindset
00:19:18: Balancing bootstrapping and VC
00:21:21: Scaling companies vs. building new ones
00:23:00: Realization of scaling strength
00:24:16: Introduction to the discussion about founders and company scaling
00:25:16: Realizing skill sets and the journey from zero to scaling
00:26:04: Investment into new businesses and gravitation towards intriguing projects
00:28:08: Excitement about scaling versus starting from scratch
00:28:19: Impact of wealth on motivation and personal life
00:31:04: Reinvestment and philanthropy
00:32:16: Change in identity after stepping down as CEO
00:34:18: Impact on parenting and family life balance
00:35:50: Work-life balance while building a successful company
00:37:25: European work culture versus American work culture
00:38:22: Influence of parents on entrepreneurial spirit
00:40:27: Reflections on founding and early investment decisions
00:42:30: Navigating wealth of options post-exit
00:43:00: Reasons for high failure rate of second businesses by exited founders
00:46:33: Insights on varying founder statistics
00:47:06: Value of exposure to different cultures and countries
00:47:42: Introduction to the high school exchange in Seattle
00:48:15: Importance of cultural exposure
00:49:02: Experiences living and studying abroad
00:50:01: Sense of purpose
00:51:44: Description of a perfectly fulfilling life
00:51:59: Conclusion and thanks
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Tim Schumacher: [00:00:00 - 00:00:22]
There are some people who go back right into building, and for some it's great because, I mean, some of the best founders I know, they're actually builders. They're builders who build stuff from zero to one. Their best use of talent is really keep building things and then selling them. And I know some people who are super successful with that, and that's a skill. I have deep respect because it's not my skill. My skill is really seeing something that is there and making it bigger.
Anastasia Koroleva: [00:00:22 - 00:01:16]
Tim Schumacher is the exited founder and former CEO of Sedo, one of the world's largest domain marketplaces, which he led for over a decade before stepping down 13 years ago. What sets Tim apart is how he mastered the elusive work life balance while still building his company, something most entrepreneurs only dream of. This balance helped him avoid the emotional rollercoaster that so many of us face after a successful exit. In this episode, Tim shares his thoughts on keeping life super normal the bootstrapper mindset, being a scaler versus a zero to one founder, and find a new purpose in tackling climate change.
Hello, Tim. So good to have you in my studio today.
Tim Schumacher: [00:01:16 - 00:01:17]
Thanks for having me.
Anastasia Koroleva: [00:01:17 - 00:01:32]
Fantastic. So why don't we go back to that moment 13 years ago when you just exited Sedo I want to know how you felt.
Tim Schumacher: [00:01:33 - 00:03:57]
So interesting, interesting question. And I guess for me, it wasn't that one time, although the 13 days, 13 years ago, you hit it, right. That was the time when I exited Sedo and I stopped being the CEO and I went out. So that was an exit in terms of, okay, before my life was focused on one company, and then after a little bit of a transition time, my life was, I had a lot of time, but it was purely a time thing 13 years ago. My actual exit was many years before it kind of came in stages. And I think that's differentiating us a little bit from many usual founder exits. We did one exit where we sold a portion, then another portion, then we took the rest public through an existing shell. And so it was kind of a staged exit, but yeah, probably so that part was, it was very gradual, but definitely the exit of me as a CEO and founder is kind of leaving my baby. That was 13 years ago. And that, in retrospect, was the bigger change in life than making an exit and getting some money in return for some shares you sold, which is obviously a very virtual thing. Still life changing, but more in the long run. But yeah, I still remember that when I left as a CEO, I suddenly had a lot of free time. We went on a holiday in New Zealand for a few weeks and suddenly the days were empty. And in a good way, though, because being bored in a positive sense, I never had a time in my life where I was so open for starting new things and doing new things without any pressure, without any team, without anything. And I think that's, that was my. So it was a feeling, since you asked me, was a feeling of, on the one side, anxiety, what's next? On the other side, also relief, because I done cedar for a very long time and I've been really trying to work towards that time when I, when I actually could turn over to my successor as the CEO. But, yeah, then also quite a bit of boredom was the feeling, which then I started to fill with other things. Yeah, I guess those three things were the main feelings.
Anastasia Koroleva: [00:03:57 - 00:04:03]
All right, so you felt bored. And how did you go about that?
Tim Schumacher: [00:04:05 - 00:05:48]
I had started. Even before that, I had started some angel investments and I got more involved into them and I started to do more of them because I really enjoyed that part. I enjoyed talking to new founders. I started. I enjoyed, yeah, growing companies. I've always enjoyed that. And one of the businesses which I then happened to actually spend the majority of my time or two businesses over the next couple of years were one I had done the angel investment before was the company behind Adblock plus, now world's leading adblocker. The company name is IO, but most people know it by the name of Adlock. And I got quite involved during that time into taking that company was a fledgling little startup with just a few employees and helping my co founder to grow that. And the other business was. And that investment came during that time after I left Sedo, which was the green search engine, ecosia.org dot. It's a green search engine that plants trees, works like Google, but then it takes the money to plant trees. And so it's essentially a philanthropic effort but with the means of technology. And back then I actually got involved there and helped them to scale over the coming years. So, yeah, I fairly quickly went into those two other businesses, one, which is these days my largest philanthropic effort, and the other one is the biggest company.
Anastasia Koroleva: [00:05:48 - 00:06:30]
One regret I hear a lot from people who exited long ago is that when they look back, they often say, oh, I should have taken more time to just rest and heal. It's one of the things, for example, that famously Steve Jobs also said he wished he spent more time healing before he jumped into Next after he was ousted out of Apple. And I'm curious how it was for you? Do you feel you rested and healed whatever needed to be healed after your ten years at Sedo?
Tim Schumacher: [00:06:30 - 00:07:21]
I didn't feel the need to be healed or anything. I wasn't. I think, for one, I think if you're ousted or the company goes bankrupt or something, I'm sure that's a very different situation in my case, after ten years, I was like, okay, it's time for someone else to take, to do the next ten years of this company. So it was a very conscious choice. I still stayed on, on the board. It was a very peaceful transition. I left the company in good hands, and I think I always had a fairly healthy work life balance. I mean, I hear from a lot of founders who work like 80, 90 hours. I was never that way. I always try to work very productive in my 40, 50 hours. I work, but to not work more than that, and so I didn't have that need to really. Yeah, have a complete rest or something.
Anastasia Koroleva: [00:07:21 - 00:07:22]
How old were you?
Tim Schumacher: [00:07:22 - 00:07:26]
Well, that was. I was what, 30, 32, 33.
Anastasia Koroleva: [00:07:26 - 00:07:31]
And at the time you had a six year old boy… Not 6, Three wasn’t he?
Tim Schumacher: [00:07:31 - 00:07:32]
Yeah, three.
Anastasia Koroleva: [00:07:32 - 00:07:50]
Did you feel that you wanted to do something completely other than business at any point, like focus on parenting or go travel the world or it was clear for you that you just wanted to have more time for your angel investments?
Tim Schumacher: [00:07:50 - 00:09:47]
Traveling the world is definitely something I love to do, and I'm still doing quite a bit. I always like to combine it with business, though. So do some sort of business, do a few extra days or with a family, take some time, do remote. But I didn't feel the need to be like, okay, I'm going to be traveling the world for two years now. That urge I didn't have also. I mean, kids keep you somewhat grounded in a way. They like to see their friends, to go to kindergarten or school or whatever. Definitely that makes a founder, whether exited or not, a lot more immobile than someone who's maybe in the twenties, has no family. And so, yeah, for better or worse, I think that was kind of the life. And then, no, I wanted to do, and that's probably been the driving force. Then over the last 13 years, I wanted to take my skills, which is building companies, but also some more specific skills, like software, online marketing, those sorts of things, to use it for something more purposeful. Which is why I really, for the last, over ten years now, been carving myself out a niche a lot at the intersection of software and climate tech. I'm really passionate about climate tech. I think, you know, the way our economy is run burning fossil fuels, plastic waste, all of those things. We're just over utilizing the planet. I think we're setting ourselves up for a massive disaster in the coming 2030, 40, 50 years. And so I'm very, very passionate about this topic and I'm trying. And Ecosia was the first step, but there are others to come was the thing where I said, okay, I want to use my skills and actually devote them in a meaningful way to something that really motivates me.
Anastasia Koroleva: [00:09:47 - 00:10:26]
So help me understand the evolution of your motivations. So climate change now motivates you a lot, but it probably is not why you started Sedo. I know you started coding at 15, so I assume there is an element of just interest and love for coding. But what was your original motivation to start the company and how that changed through the exit, through your sequels and angel investing until today and brought you to this place where you are so passionate about climate change?
Tim Schumacher: [00:10:27 - 00:11:53]
Yeah, that's a great question. So as a teenager, definitely I like coding and I started quite early with that. And then I just wanted to build a company. That was my primary motivation. Yeah, Cedaw obviously had no climate angle, had no larger purpose, so to say it was a good digital marketplace for domains, but I wouldn't say there was deeper meaning in life to it. And I just wanted to succeed. As any startup founder, I was always passionate about the climate in a way that I was raised in Freiburg, which is a very green, smaller eco city in Germany. It's one of the most eco friendly cities in Europe. A lot of solar already at the end of the nineties, biking, public transportation, recycling, the usual things. And I think that was always my worldview is like we got to live within, within our planetary boundaries. It just basically for the time I was running a startup, those values were, they were still there, but they were not at the forefront of my life. And I think that definitely has changed after the exit because of course, the exit also frees one from, from the primary means of needing to make money right now and then. Yeah, I was able to do that. So, yeah, that's kind of what changed after the exit.
Anastasia Koroleva: [00:11:53 - 00:13:17]
So the exit gave you this luxury of time, financial freedom to actually focus on things like that. It's one pattern I see a lot among exited founders and I definitely had my own experience, is that after an exit we are carried with this really strong momentum, a really strong force to keep doing things. And many of us don't actually have the time to stop and think and process the previous experience, but also to decide what it is we want out of life and who we are. And it takes about a decade for people to actually rebalance and get to the point when they really dig into that and start building more fulfilling, more purposeful lives because they finally understand what it is they want in life and who they are. I would be very curious to see how you went about this. Did you let that momentum carry you and how you feel about that? Or did you at any point decide consciously, I want to stop doing business and focus on something else?
Tim Schumacher: [00:13:17 - 00:15:35]
No, I never let. And to the day, I still run for profit businesses. So I split my time between the climate world and the pure software world. I think being an entrepreneur at heart, I also just like building companies, no matter kind of what they do. Sure, they shouldn't be doing something very bad to the world or something, but a software company is first and foremost neutral. It's neither good nor bad. And I think I still also, for example, I enjoy building SaaS Group as one of the companies, and I enjoy building a remote company with a lot of people from all over the world who also very often live in different places. A very fluid system of also free thinkers, very autonomous. So building a great company with a great operating model I also find very fulfilling. And I think we're also, in a positive way, touching people's life. I'm also, by the way, dealing with a lot of exited founders because we're buying companies, small companies, usually enterprise value is about $5 million on average. ARR is usually one to 5 million. And most of those founders have bootstrapped those companies. So then it is actually a life changing exit. It is one. If you're somewhat frugal, you can retire. So now I'm very often on the other side. I deal with founders who go into this, and it's also interesting because some I see are very, for them, the exit is a huge change in their life and others just carry on. So I see also both worlds and so. But back to your question. I really enjoy running company, and I'm running this company and I enjoy that, or the ad blocking company, although there I'm only at the board. But I'm really enjoying running good companies, software companies as well, in addition to financing climate founders and bringing that part forward. And I think that's the part which is hard to. It would be hard to let go for me, given that I really enjoy doing what I do.
Anastasia Koroleva: [00:15:35 - 00:16:16]
You wrote this fantastic article on bootstraper mindset which I can very much relate to because all my companies were bootstrapped. And sometimes I feel, oh, did I choose to do things the hard way by doing that, or was it the right decision? We all question those things. But I'd love you to talk a little bit about your view on Bootstraper mindset. What do you mean by that? And whether it's a good thing for a founder to keep that after they existed their company for their next repeat businesses.
Tim Schumacher: [00:16:16 - 00:19:18]
Yeah, great that you read that, and great that your businesses were also bootstrapper businesses. And what I mean by that is really that the absence of money, and I think you can transform some of those thinking into, on the personal level, on an exit or pre exit versus post exit world, is that I see a lot of bootstrap companies. I also see a lot of VC backed companies. What I really admire about the bootstrap companies is their frugality, their focus on customer satisfaction, their focus of just building a great product, their focus on maximum efficiency, not just hiring someone, but actually very often then solving the problem at the root cause. And at SaaS Group, we've bought some amazing businesses. We've bought two businesses. Now we're both in. Both times, the founder was running the business alone and made 2 million in revenue with obviously a huge profit margin, just purely alone by super efficient processes. And to me, that's the opposite of a lot of VC backed companies, which also might make 2 million, but they burn 5 million and very often they don't grow that much more, but they just add a lot of layers. And I think that thinking is, is, I think a very healthy thinking. It's also, it's a minimalist thinking, which I think is also what the world needs, is kind of the less is more mantra. I think it's also quite healthy for people to just not start to amass stuff and buy stuff because same as what companies do, they get a lot of money from VC's. They start hiring people without thinking. And so I have deep respect for Bootstrap founders, if they can do it, and that's the big catch, is an if, because I think there are a lot of businesses. So, so to end that phrase for Bootstrap founders, maybe a little bit, there are a lot of businesses where you need VC for, like if you have, for example, hardware heavy stuff, which we have in climate tech quite a bit, you know, you're building certain factories, certain processes. It's not SaaS where you can start things. Bootstrapped VC plays a super crucial role in bringing the ecosystem in a lot of areas forward. I think the mistake we're just making is spoiling areas, especially in software, which are really well run and which have this great bootstrapper mindset with too much cheap money, or we used to. I think that was really, I think that article I wrote in 20 2021, which was probably the worst time in terms of a lot of free, cheap money. And that's when I think it also, just like a lot of money can make people unhappy after an exit, which I'm sure you know through your interviews, you know a lot more than I do, and I'm sure you're seeing that quite a bit. A lot of money can also make companies unhappy and unproductive. And so that's kind of keeping a healthy balance. I think that's one of the hardest things.
Anastasia Koroleva: [00:19:18 - 00:19:51]
I think another problem is that incentives of VCs and founders are not necessarily aligned. In fact, they usually are not. But you are now playing the role of the VC. How are you ensuring that your companies invest in keep this bootstrapper mindset? And how do you reconcile it with a natural desire of a venture capitalist that the company grows as fast and as big as possible?
Tim Schumacher: [00:19:51 - 00:21:21]
That's a great question, and it's a hard fight, because within our BC fund, I am the software bootstrapper by heart. And so I know quite a bit about how to build a company and usually kind of the voice of reason when it comes to keep your burn down. How do you increase efficiency? That's really what I tend to be good at companies, while I also know that you need to think big, you need to have a great vision, you need to have multiple funding routes for some of the bigger companies. And so I think me and my co founders, we also, in a way, act as balancing factors there. They're both from the VC world and they understand, for example, the VC metrics quite, quite well, and they, they would push for kind of thinking bigger, which is also a super important skill, one which I sometimes lack as a bootstrapper. And I'm the one who is sometimes the voice of reason. I think at the end of the day, any good startup needs both. And you, you constantly balance, you have certain periods where you need one more than the other. But all great companies have elements of both. And so I think in the mix it's fine again, but it sometimes can be almost a little battle between the worlds.
Anastasia Koroleva: [00:21:21 - 00:22:32]
Another idea of yours, which I found very interesting, and I want us to talk about it, is how at some point you realized that you are better at scaling companies than starting and building something new. I think this is extremely important because what I see quite a lot is when somebody who is a natural creator after an exit, starts investing into other people's companies, just to realize a few years later that they're totally bored, they're not interested because what they want is to get their hands dirty and go back to creating. But by that time, they usually wasted a lot of time and money and created this negative feeling about the whole experience. And some of them end up retiring completely, which I think is a tragedy for not just for them, but for our society as well. So I'd love to hear how you realized that you should focus on scaling and whether you still think it was the right realization for you.
Tim Schumacher: [00:22:32 - 00:25:15]
Yeah, no, for me it was definitely the right thing and I think you said it very well. There are some people who go back right into building, and for some it's great because, I mean, some of the best founders I know, they're actually builders. They're builders who build stuff from zero to one. And their best use of talent is really keep building things and then selling them. And I know some people who are super successful at that. And that's a skill I have deep respect because it's not my skill. My skill is really seeing something that is there and making it bigger. And I think for me, probably the AHA effect came through. Both Ecosia as well as adblock is where in both cases, I'm not the inventor of the product, it was the inventor of someone else. But they both struggled with building a company. They were at the very early stages. One adblock was a complete hobby project. Ecosia was very small and I could see that my biggest value add is really helping them scale, but not just giving advice, but actually also getting my hands dirty. And that's what I enjoy doing. And I think that was also, at the end of the day, what led me to start SAS group, because there we do it in a systematic fashion, because we see a lot of founders with SAS Group who come to that one to 5 million mark in revenue. But that's almost like a glass ceiling for a lot of founders. It's like when, when a company grows beyond a family size, like 510 people, that's when you start, actually need to start real management. And that's where a lot of founders just don't like it anymore. They don't enjoy their job, they burn out, they get stressed. We've seen founders who don't take a single day of vacation, and then they also, they go through this realization process and they're like, well, maybe someone else can take that off and we come in and we know exactly what to do and we have, we bring in the right GM's, the right general managers, we bring in the right skills and then we, and it doesn't always work. Sometimes there's also a glass ceiling in the market and the company just stays at a million revenue or something and that's okay. But we've taken a lot of those companies then from a million to 10 million and for us it's really okay. That's very quote unquote, simple execution, still on a sweat and work. But I, but that's what our playbook is and that brings tremendous value. And the founders go back to starting something and are super happy. And so it's kind of, yeah, it's almost the opposite to my own skills. But yeah, I guess that's, the older you get, the more you know what you're good at and whatnot.
Anastasia Koroleva: [00:25:16 - 00:26:04]
I'm very curious to find out how you reached that wisdom and at what point. Because in Sedo you were there from zero to one, right? And then stayed on. So you had, you stayed through that critical moment when lots of founders realize that they cannot scale their company. So you had that whole experience from zero to all the way to, I think the company was valued like 200 million when you left, right? So you stayed for the whole cycle.. How and why did you realize that your particular skill is scaling and not zero to one?
Tim Schumacher: [00:26:04 - 00:27:45]
When I bought or invested into, as a majority investor into those two businesses, into Acousia and Adblock, and at the same time I also dabbled with one or two ideas where they were basically concept stage, which I would have taken from really zero to one. And I probably, I didn't think about this. It was not a conscious process. But I was, I kept gravitating to both Adloc and Ecosia, which I was so fascinated by both of them. Like Ecosia is like, okay, well, you take the most profitable thing of the Internet and you do something extremely meaningful with it, namely planting trees, and you can scale it indefinitely. And you also attack a really Goliath competitor, in this case Google, on a value based, I found this like super intriguing, this idea and adblock as well. Like we had like 5 million users back then where you, you could, you could erase the entire online advertising for these users, help them with their Internet experience, also with their CO2 footprint because it's ads are actually consuming quite a bit of the CO2 footprint and we already had 5 million users and it was very clear to see how we got the five to 50, which we did within like two years, and now we're at 500. So I think I naturally gravitated towards those. And the other ones were like, well, wait a minute, should I really sit there for two years and flush out the concept of the first website and acquire the first users? And it, it was not a conscious process, but it just didn't resonate with me.
Anastasia Koroleva: [00:27:45 - 00:28:40]
So it sounds like you listened to your own reaction to those two options. You were more excited about scaling something rather than starting from scratch. So when, if you were genuinely the zero to one person, it would probably feel the other way around. You would be bored by the idea, but very excited by the idea of starting. Okay, that's great. That's awesome. So can we now talk about how getting wealth affected you? I know in your case it didn't happen at once, but I'm mostly curious about how it affected your motivation in life and why you continued doing what you're doing, even though I assume you could also stop doing business.
Tim Schumacher: [00:28:41 - 00:30:40]
It's a little bit like, again, comparing to a company. I'm always advocating for not giving too much money at once, but giving it kind of, while you grow. You need to learn to spend money, and companies and people are no different. Companies are also run by people at the end of the day. So, I mean, generally, I would describe what, how I, how I approach this is I live a fairly frugal life. Like, I bike to work. I don't have any, any luxurious hobbies. Sure. You know, things grow over time and it's obviously not average, but still, I think I've always tried to be super low key and very down to earth, which is probably also a bit of the german heritage. On the negative side, I think what people say in Germany about founders and wealth is that it's unlike in the US where I've lived for a couple years, for three years, it's somewhat inappropriate to show things too offensively and to celebrate wealth, and it's ensure there are people who are different. But it's overall compared, there's definitely. Things are always a little bit more. For better or worse, we also celebrate entrepreneurial cultures less, which of course leads to lower founder rates, lower success rates there. So I think it has a. A flip side, but I would say on the, on the side of how people then live their lives, maybe sometimes it's healthy, but I guess at the end of the day, we're all within the culture we grew up. And I think that german heritage is part of that. But overall, I think that I would argue that that has helped me because I still, I live a super normal life.
Anastasia Koroleva: [00:30:41 - 00:30:54]
There was not, not much shock for you because you already, because first of all wealth came in stages and second, culturally you were prepared to not be affected too much.
Tim Schumacher: [00:30:55 - 00:32:06]
And I also reinvested a lot. So I keep the liquid part to a small portion. And I've invested most of my money again, invested in companies, invested in some philanthropic efforts like Ecosia. I'm also these days doing a bit more pure philanthropy and also climate, quite a bit climate protection. And so it's really something that I made very conscious effort to put my money also back into the circle, but for building companies. And sure that's on the one side, it's chasing, chasing more money, but it's not the money that motivates me. I think as most founders it's actually the wanting to win in a way and wanting to be proving that you can actually build cool stuff with the money, build cool stuff out of nothing. I think that's, I would argue that that's what's driving the motivation of most founders, including me. And so it felt kind of natural to just invest that back.
Anastasia Koroleva: [00:32:06 - 00:32:42]
So it's a combination of competitiveness, love for what you're doing, loving the game and loving doing it. Let's talk about how you dealt with a change in your identity. So you were the CEO of one of the largest marketplaces for domain names in the world. Then you step down. Was it a problem at any point for you that you no longer were the CEO and co founder of a well known brand?
Tim Schumacher: [00:32:42 - 00:33:49]
There were a couple people I knew who were friends and some are still friends and others I lost track over the years, but there were also a lot of other people, whereas like, yeah, it's okay, you know, they were business partners and nothing more. And I not in touch anymore, so it's okay. But it was, I wouldn't say it was a big identity, maybe it would have been and if I would have done nothing else after that. But I think I fairly quickly went into then for example, the ad block business. So I had a kind of a, I had a role. And to me it's a lot about is this, this some of my co founders, they tell us, like the party, the party question, like if at a party someone asks, what do you do? They struggle with that or some struggle with that because they're not doing anything and that, I never had that because I went kind of fairly seamlessly from one thing to the next one. But I can see how identity plays a role if you don't have that.
Anastasia Koroleva: [00:33:49 - 00:34:34]
It hits the hardest the people who take a break and then socially it's very difficult. But also internally, in terms of understanding who we are, it becomes very challenging and if we have enough time, we start facing into that abyss of our own soul and it can get very scary... To you understand who we are? Okay, so about parenting and family, how these things were affected by you no longer working full time?
Tim Schumacher: [00:34:34 - 00:35:32]
That part we Can probably skip fairly quickly because I don't think they were affected, at least not in the short run. I mean, given that I lead a fairly normal life, it was always quite stable over the years. Kids go to school, sure, maybe the house is a little bigger than the average, but it's also not outrageous. It's not a villa or something. Again, very low key. I don't think it was materially affected in any way. And yeah, also it came in stages. And also the work, I think I always, and that was very important for me. I always try to maintain a really healthy work life balance. But even when I was still working at Cedaw. So yes, I travel. There are weeks where I travel a bit, but on the other side, I mean, most people do if they're in a business world or also if they're employed. And it was never outrageous or something.
Anastasia Koroleva: [00:35:32 - 00:36:03]
I interviewed another German a few weeks ago, Tony Kula. I don't know if you know him, and he was another person who told me no, I had such a beautiful work life balance even before the exit. So everything was fine. I'm very curious about that. How did you guys, or you in particular manage building such a super successful company as Sedo while working, as you said, 50 hours a week?
Tim Schumacher: [00:36:04 - 00:38:22]
I don't know. I mean, at the end of the day, the seeker is always also good delegation. And I think, you know, you can delegate equally well in 40 hours and you can do in 60 or 80 hours or something. Also, work has diminishing returns. I mean, sometimes now I have stretches of work, like in the summer, for example, when we traveled the US, I worked very little, maybe 2 hours on average a day. I got all the major stuff done. But of course, yeah, the difference between zero and 2 hours is quite a lot. The difference between 8 hours and 10 hours is not that big because then, yeah, I might circles in some cases, yeah. And so, yeah, maybe that is a european thing to a certain extent. Again, for better or worse, I'm definitely not judging it either way because I think also, let's be frank, Europe has not brought any tech successes on the level of the US, like by far, like even the most successful ones, whether it's Spotify or it's SAP, which is a bit older, it dwarfs the Googles and Facebook of the world. So I think that maybe they need some more crazy people to really achieve that maximum level of success. But on a personal level, of course, also money. I was just talking about diminishing returns. Money has very diminishing returns. So the difference between zero and 1 million is fairly big. Also between one and ten is still very big. The difference between ten and 100 million, I would argue is negligible in your personal life. In terms of real happiness, it probably doesn't buy you anything. And so, and still of course it's fun. You said about the competitiveness and the loving of the game. I think still there's a motivation to go higher, but in terms of a healthy work life balance, it's absolutely not necessary. And I think Europeans tend to be through all levels from founders, same as employees tend to be more on this level. Hey, let's take it a little easy. Again, for better or worse. Not judging either way here, but I think it's, it's through the fabrics of society on all levels, including founders.
Anastasia Koroleva: [00:38:22 - 00:38:43]
Talking about that, what do you think your parents role was in you becoming entrepreneurial? So for example, I know you have a 16 year old and an eleven year old. Now, what it is you do as a parent, if anything, to support them being more entrepreneurial?
Tim Schumacher: [00:38:43 - 00:40:09]
I don't support them to be entrepreneurial, to be honest. Not if you mean entrepreneurial in terms of business. You were asking about the role of my parents and I think it's something I'm trying to also be as a father is to just encourage them to do whatever they want to do, to encourage them to do what they like, to praise them for what they do well, but to not nudge them into an area. Also, I'm not from an entrepreneurial family. My father was a doctor. I have to say though, and maybe there are some commonalities, he was a very entrepreneurial doctor in a way that he went into a completely new field, established that in Germany was non existent then in the seventies, built this up from the groundwork. So in his field he was very entrepreneurial. But I was the first founder and business person probably for a long time in the family. And yeah, I'm trying to do this. It's just encourage kids what they like to do and they should find their path, but they should in no way be pressured or even manipulated into doing what I do. In fact, my younger son, he tends to always say, like, your job must be super boring. All you do the whole day is sit in front of your computer, write emails, have Zoom calls and phone calls. Like, I would never do your job.
Anastasia Koroleva: [00:40:09 - 00:40:15]
Almost any, any kind of job these days requires you to sit in front of a screen. That's a problem.
Tim Schumacher: [00:40:15 - 00:40:19]
That's true. Yeah. Reality will catch up. But unless he does something very different.
Anastasia Koroleva: [00:40:19 - 00:40:27]
If you sold your business for the first time today, what would you do differently from what you did?
Tim Schumacher: [00:40:27 - 00:42:30]
It's hard to say because every situation is unique. I mean, our situation in a way was, I think we made every mistake in the book. So when we started CEDaw in 2001, we took a 40% investment from a strategic for 400,000. So post money valuation of a million, we gave away 40% kind of, on day one. And obviously every mistake you can do now was it, could we have been more successful? I don't know, because they also helped us a ton, like they were. The company, the strategic partner was the, is the second biggest web hosting company worldwide after GoDaddy. So they're the european goDaddy. And there were so many synergies in our markets that it was like the perfect fit and there were very tangible things we got out of that and maybe we would not have gotten bigger. Maybe we would have gotten bigger. Maybe Godaddy would have paid twice for us if we would have been independent. I don't know. But yeah, it's certainly something. If someone asked me today, that's what I would consider the founding time, because then at the exit time we didn't really have much choices. We already had a shareholder, they also had a majority then option and they had structured that very well. And so we had a really good relationship, but we didn't have much leverage in than selling the remaining parts. And so of course we kind of maneuvered us into a pretty bad situation. They were super fair. I mean, the prices, everything was all cool. So I have no regrets on the exit side, but of course it was. Setting things up in the beginning is really kind of what I would advise everyone to do different is, okay, take it step by step, take some value at angels first. But also, hey, it was 2001, the markets were collapsed after the.com bust. There was no angel network. It was a completely different situation. So it's really hard to compare those Two things.
Anastasia Koroleva: [00:42:30 - 00:42:42]
on the personal level. If we're talking about after your exit, do you think you should have done anything differently in the past 13 years?
Tim Schumacher: [00:42:43 - 00:43:42]
There's so many options. And a friend who also had an exit a few years before me, I still remember what he advised me during my exit. He said, well, the hardest thing is that suddenly so many options open up. And I still remember that advice because that was true. It was at the end of the day, that wealth of options. That was one of the hardest things to just being able to do so many things. And do I know if some of the other options would have been better to know what those options are? I mean, I can, of course, I talked to a lot of founders who've also had exits, and some are very happy, some are very unhappy, just like in the general population, and they pursue all very different options. Would they have been, my options would have been sell other options for better. It's really hard. It's really hard. Speculations, I really don't know.
Anastasia Koroleva: [00:43:43 - 00:44:00]
You've seen many businesses, you've invested in many businesses. You have friends who exited businesses and started them again. Why do you think statistically, 70% of repeat businesses fail?
Tim Schumacher: [00:44:01 - 00:44:08]
Oh, is that a stat? I didn't know that. So you're saying 70% of the founders who start something new, they fail?
Anastasia Koroleva: [00:44:08 - 00:44:41]
Exited founders, yeah, exited founders’ repeat business. I find this absolutely fascinating because you would think that we are, as exited founders positioned so well for success. And, okay, some of us, like you, are very wise and we decide to not start new businesses, but rather invest into someone else's businesses. But those who do start new businesses, the statistics is horrendous. Interesting, especially given that the venture capital community is so willing to give us money.
Tim Schumacher: [00:44:41 - 00:44:49]
Right. Those 70% is probably still better than the failure statistics of first time founders. Right. What is that in comparison?
Anastasia Koroleva: [00:44:49 - 00:45:06]
But that's interesting because 80% of all businesses fail. Yeah. I was shocked when I first came across that. And I started really looking into that. And I like asking people like you who have seen many businesses.
Tim Schumacher: [00:45:06 - 00:46:35]
I can Think of two reasons. One is that you just don't sweat as hard for the second time. A lot of, in my personal experience, a lot of the founders I've met, they treat sometimes their second business is a lifestyle business. It kind of runs on the side. They're not fully committed to it, and that people notice that. So that's number one. And the second one is that we always look at individual founders, but very often it's the team or it's also the combination. The team is the combination of individuals with different strengths and weaknesses. And so Sedo, for example, we were four founders and with very different skill sets. Very complementary. Now just taking out one person and giving that person money is like, hey, run with it. You were successful once because very often it's not the same team. It's then one person wanting to prove that he or she can do that alone. Different combinations. It's not the same team. And what didn't work in the first team doesn't work in the second team. Sometimes it works. That's, I guess, the 30%. So the rate is still a little higher than with a regular founding population. But I think it's the combination of those two things. I don't know what else. What are the other things you're hearing?
Anastasia Koroleva: [00:46:35 - 00:47:31]
Overconfidence. Overconfidence is one thing, because we think we succeeded once, we'll succeed again. And that actually feeds into the problem that you mentioned, that people don't try as hard because they're overconfident. I love asking people like you, who are very experienced in business after the first one, what your opinion is. And I love your two reasons. It makes a lot of sense.
What do you think living in other countries and being exposed to different cultures give you on a personal level? And also as an entrepreneur, is it a good idea for someone who never lived in any foreign country and sold their business to actually experience that as part of their post exit journey?
Tim Schumacher: [00:47:31 - 00:47:36]
Yes. Yeah, absolutely. I think. Well, as post exit or even earlier?
Anastasia Koroleva: [00:47:36 - 00:47:37]
Well, earlier, We're too busy.
Tim Schumacher: [00:47:37 - 00:50:00]
We're too busy. Well, no, I was just about to say it starts, I think, in your school life. And I know it's a thing more from Germany to the US than the other way around, but I did. And that's why I want to mention that when I was 15, I did a high school exchange to Seattle. And I still know what a profound effect the visit of Microsoft in the early nineties had to me in my entrepreneurial journey, kind of seeing what's possible there. My son at the moment is also doing high school exchange in the US. Another part. But I still think it's super important, even from this early age, to be exposed to other cultures. I mean, there's also a reason why migrant founders are actually dominating the us super tech companies. If I look into my circles, I very often also found it with people who are not from Germany. For example, my co founder at Adlob, Vladimir Palant, came from Moldova as a kid. Now my co founder at the climate fund, Daria Saharova, she came from Latvia as a teenager. And so I think it's being exposed to something which is out of your comfort zone. I think that's what it's the end of the day is overcome resilience, prove yourself in a different setting is super important. And I only lived abroad for, I think in total about four years in the United States. But still those four years, I think were very important. It's much harder, of course, for people who permanently relocate, but those or things during your studies, I mean, I did that in Sweden. I was in Sweden for an internship and for my studies for a year. Whether it's during school, during university, in early, in early possibilities in Europe, employment, life, I think I would encourage everyone to use that. It doesn't have to be permanently. If it is permanently cool, if not even a year, two years sometimes are really life changing. And I think that it makes you also stronger as an entrepreneur and more resilient and opens up a whole new world.
Anastasia Koroleva: [00:50:01 - 00:50:08]
Do you have a sense of purpose? And what gives you that sense?
Tim Schumacher: [00:50:08 - 00:51:44]
Well, to me it's really mostly on the climate front. I think it's. If I would pinpoint the one problem humanity has, like, sure, we can argue about a lot of problems which are problems, issues. Some of those. A lot of those are important. Important for local communities, important for certain segments of the population. And all of those are important, don't get me wrong, and I have a lot of respect for people who work in those fields. But to me I feel like as humanity, there is one problem which is irreversible and which can basically jeopardize the life of billions of people and will jeopardize the life of everyone if we don't tackle it properly. Problem is that it's so abstract and that is climate change and us burning fossil fuels and just basically being on the path for such a warming that it will distort everything from agriculture, the way we live, the way we feed people, everything. And that's why to me, that's what I'm contributing to tackle. And that's probably what gives me the most sense of purpose on the actual vision part. Other than that it's the purpose in daily life. It's just running a company, running it well, in a humble, nice, remote, smart fashion that also kind of, in a day to day doing, probably gives me the most, the most purpose in a, in a very today, tangible way compared to climate change, which is, yeah, super abstract and which is part of the problem why it's hard to grasp for people.
Anastasia Koroleva: [00:51:44 - 00:51:50]
So how would you describe a perfectly fulfilling life for yourself?
Tim Schumacher: [00:51:50 - 00:51:59]
Spending the time with people you like and doing things that do something meaningful and not creating too much harm.
Anastasia Koroleva: [00:51:59 - 00:52:05]
Tim, thank you so much for this interview, for your time, and for sharing your wisdom and experience with us.
Tim Schumacher: [00:52:05 - 00:52:06]
Thanks for having me.
