How Does An Ethical Hacker Become A Successful SaaS Founder?

This week, as part of the UserActive Founder Interview series, Peter sits down to interview Joshua Crumbaugh. His intriguing journey is not one to miss! Joshua shares how he went from two decades of ethical hacking to growing a cybersecurity SaaS PhishFirewall to $1.2M ARR and assembling a remarkable team of 10.

• The Transition: From spending two decades breaking into some of the world’s most secure facilities, to launching an AI-powered SaaS solution that solves the human element challenge in cybersecurity.

• Funding and Growth: Discover his remarkable journey from seed funding to a Series A round with $2.5 million secured. 

• Crafting Sales Success: Joshua shares how he tackles sales. Plus, gain insight on his approach to hiring and firing.

Check it out in the video below.

Check out all our SaaS Founder Interviews here on our YouTube channel.

About Joshua

[00:00:02.970] – Peter

Okay, I’m here with Joshua Crumbaugh from PhishFirewall. Hi, Joshua. Would you like to introduce yourself? Tell us a bit about who you are.

[00:00:09.830] – Joshua

And what you absolutely so well, like he said, I am Joshua Crumbaugh, the founder of PhishFirewall. I’m probably a little bit unique compared to a lot of founders because I come from an ethical hacking background. I spent the better part of two decades breaking into some of the world’s most secure facilities. While it was a blast and just an incredibly fun job, it really did shine a massive element on… A massive light on the biggest problem in cybersecurity, which is the human element. I realised we were just not making any progress on th aat front. Maybe on every other front, but not there. And it’s the top thread. Well, that inspired me to go out and build a solution and so that’s sort of how PhishFirewall came around.

[00:01:03.330] – Peter

Okay, sounds great. Sounds like you had a really interesting career before this leading up to it. Joshua, where are you today with the business? What’s the kind of size of your team? Where are you in terms of funding and revenue? If you could just talk us through.

[00:01:17.590] – Joshua

Yeah, so we’ve done right at about 2.5 million in our series seed. We are starting a Series A next week and our team is ten strong and I’ve just got an amazing team really knocking it out of the park for me.

[00:01:38.190] – Peter

Awesome. Okay, well, that sounds great. So initially you bootstrapped, is that right? And you also started from a consulting kind of business and pivoted towards SaaS. Can you talk us through that?

Transition from Consulting to SaaS Founder

[00:01:53.410] – Joshua

You know, we knew we didn’t have all the answers and initially we didn’t want to go out and get traditional funding. Me and my co founder, we just started a consulting practise. We’re really good at cybersecurity, so we would go out and help companies with mostly harden their networks to make sure that another incident would never happen again. Because too often we’re not brought in preemptively, we’re brought in after the fact. We’re basically helping them clean up with a gun to our head because we know that if we don’t get them cleaned up quickly enough, that the bad guys are going to be right back in. 

[00:02:37.650] – Joshua

So we did consulting and that helped really build the foundation of the technology. Gave us the time to create a bunch of content and a million other things. Learn what our buyer personas were. Learn a little bit about how to drive a sustainable, reliable pipeline which changes so quickly that I don’t know that that little bit of learning actually helped us, but nevertheless, it helped us grow it. In 2021, we realised that, A, because of the consulting, we had a little bit of an identity crisis and people didn’t they looked at us as a consulting company, not a tech company.

[00:03:20.290] – Joshua

In 2021, we decided to get out of consulting and pursue our SaaS product fully. That’s PhishFirewall. The first year we largely worked on getting that funding, closed the first half of our round, the end of 2021, and then from there it was sort of off to the races in 2021. We spent most of our year sort of getting rid of those technology gaps and landing a few key flagship clients, if you will, that we could use our logos. And then, well, now we’re sort of about to start our Series A. So it’s been a fun and exciting couple of years, probably the most stressful couple of years of my life. But hey, I did this because I wanted a challenge, not because I thought it’d be easy.

[00:04:11.830] – Peter

Great. Okay, well, it sounds like a great start. Interesting journey so far. And what’s been your experience with funding? What have you learned from your early Seed Stage funding and also thinking forward towards your Series A now?

Seed Stage Funding

[00:04:27.350] – Joshua

Well, for Seed Stage, it’s all about relationships, so it’s really about getting out there, meeting angels or even the Seed Stage VCs. But you have to build those relationships because at that stage, they’re not investing in the business idea as much as they’re investing in the owner and the founders and their team and the people that they put together. So A, you need a team, and that team should include a board of directors with some people that have some exits that’s going to help give them a lot more, I guess, a lot more faith that you’re going to have the right guidance. But just remember, they’re investing in your team at that point down the road. They’re investing a lot more in your numbers, but they’re investing in your team.

[00:05:14.570] – Joshua

I think the other big thing that I learned is that you’re really feeling pressure the second you get that first wire into your bank to start hiring as quickly as you can. And that’s because you’ve got all these projections pro forma that you’ve put out there and you’re freaking out about the numbers twelve months from now, because those numbers are really big.

[00:05:43.470] – Joshua

My biggest advice is take your time, make sure you’re hiring right, and just don’t fall into that. As long as you have money in the bank, you’re good. But if you spend it too quickly, then you’re going back to your investors and depending on how well you did, they may or may not write you another cheque, and it may or may not be on good terms.

[00:06:05.570] – Peter

Joshua, did you feel the pressure from investors to use that money and grow quickly, like the rate at which you need to do it? Or do you just feel that pressure kind of like within your own business, yourself, to show progress?

Pressure and Decision Making

[00:06:22.010] – Joshua

I think it’s just the founder spirit, right? You’re going to put more pressure on yourself than anyone else will. I’m friends with the investor. Like I said, it’s all about relationships. And so I developed a friendship with him and not just him, but the group and the people around him as well. I didn’t want to let them down.

[00:06:48.130] – Joshua

It was that, but it was also about we have this pro forma that says we’re going to hit these numbers by this timeline. And you’re just looking at it and three months out you’ve got numbers that you haven’t even come close to being able to hit yet. So there’s a lot of pressure and I think it’s natural for anyone to feel that urgency.  While there is some, I think you have time because you just got a cheque and don’t waste the money, which is wasting your time, if that makes any sense.

[00:07:21.810] – Peter

Yeah, I guess that pressure you feel on yourself makes you want to move fast and then with the pressure of moving fast, it kind of increases the likelihood of making a mistake or a wrong decision, for instance.

[00:07:34.540] – Joshua

I mean, I certainly made a few that I had to correct, but I think everyone does. Everyone will. But I feel like if I’d just gone a little slower that I would have made a couple less mistakes.

[00:07:49.560] – Peter

Yeah. Okay, well, that’s a good takeaway. And obviously that’s something going into your Series A that stakes get a little bit higher, the decisions have a bit more impact. So you got that frame of mind going in there. What are the biggest challenges that you’re facing in the business currently? What do you struggle with most of all at the moment?

Current Challenges

[00:08:10.830] – Joshua

I think the struggle that I have is the same struggle any SaaS founder has. It’s all about sales. A lot of SaaS founders tend to be a little bit more technically minded. So the problem becomes is that you want to focus on the technology. But, at least my experience is that, you don’t have time to focus on the technology. You need to trust other people to do that for you because your job is sales.

Even though you have a sales team, you’re ultimately the person closing almost everything pre Series A. And even most of my friends who are at that Series A and even the Series B level, they’re still doing a tonne of closing if they’re still in the captain’s chair, if you will. So your job is to sell. Your job is to recruit users. Your job is to be the frontman. Your job is to make decisions. But it’s all too easy for technical people to get in the weeds and do the technical. But that’s not the best use of your time.

[00:09:19.010] – Peter

Yeah, I see. How about building and sustaining an effective team? It sounds like you’ve got a really great team with you now, but I know that’s a lot of effort and a long journey to build a team that’s effective and that has a good spirit. How’s that been for you in the last couple of years?

Building and Sustaining an Effective Team

[00:09:39.290] – Joshua

Well, I’d say I certainly haven’t got hit home runs every time at bat by any means. But what I will say is that the number one lesson I learned is hire slow, fire quick. And really what that means is just take your time hiring. Try to make sure you’re doing it, getting the right person out of the gate. But if it’s not working out and you can’t seem to fix it, don’t let a mistake drag on because that can be the death sentence. Especially at a series seed. You’ve got so little room for error that it’s almost stupid. And so during those rounds, you want to just minimise your mistakes.

[00:10:22.470] – Joshua

In terms of finding a good team, take your time, trust the people you have already found, and make it a team effort hiring. Get everyone’s opinion. I mean, ultimately it’s your decision, but trust the people around you because they may have better intuition or maybe you have better intuition, but maybe somebody else is super analytical and really into the psychology and knows the right questions to ask. Hey, nowadays also you have ChatGPT to generate some amazing interview questions that can help you hone in on how honest they are, how hardworking they are, things like that.

[00:10:58.100] – Joshua

Also use AI, for sure. And I will say we’re heavily automated. That’s part of what allows us to be so small and do so much.

[00:11:09.990] – Peter

That’s really cool. So when you’ve been implementing in practise hiring slow and firing fast, what approach do you take to that? Is it hiring contractors or just having a lengthy interview process and then maybe a trial period? How have you managed to make that work?

Hiring Approach and Tips

[00:11:29.210] – Joshua

Well, the number one thing, I try to find at least five qualified candidates. I try to find at least two or three people that I like. There needs to be some competition. And I think the big rule is don’t take the first person that comes in the door that looks like they can do the job, because the second or third or fourth or fifth person that comes in the door may be the one that just blows you out of the water.

[00:11:54.840] – Joshua

I think that’s part of it is taking your time, collecting enough resumes and doing a little bit of your own recruiting is never a bad thing either. I find that when I need somebody, I can just go get on LinkedIn, find people that match the criteria and start recruiting. Heck, I’m connected to most of my competitors salespeople because of exactly that. I did learn. Don’t have anything automatically like posts, because you might accidentally like your competitors posts. That was an awkward day.

[00:12:29.340] – Peter

Cool. Well, that sounds like a really good approach. Sometimes I’ve interpreted that as thinking of one person hiring them slowly, so you’re trying it out with them. But I see you’re thinking about the whole process, giving yourself time to find suitable candidates and have enough that you can compare to. Really find the best one, pick the best one.

[00:12:53.760] – Joshua

If they’re not local, fly them out. Get to know people. Like, have that in person, because there’s just nothing that’ll make up for that. And I think you’re trying to be so cheap during Series A, you don’t want to fly people out, but just know you have the money. Fly them out, get to know them, and make sure that they’re a good fit. I’ve had people spend a couple of days working with the team as part of the interview. If it’s like a critical role, like your sales director or something like that, fly them out.

The Future for Joshua & PhishFirewall

[00:13:24.030] – Peter

Yeah. Okay. That sounds great. And it sounds like you’ll probably be doing a lot of hiring after the Series A, so I’m sure a lot of these things that you’ve learned after your seed stages are going to really help with that process. Hey, Joshua. It’s been great. Pardon?

[00:13:40.530] – Joshua

I said we’ll make all new mistakes with Series A.

[00:13:44.310] – Peter

Yeah. More things to learn. Hey, it’s been great to connect with you. I really enjoyed hearing a bit about your background and how you’ve been building PhishFirewall. I wish you all the best with the journey we’ll keep following. How can people follow you? Are you active on social media?

[00:14:01.710] – Joshua

I’m sorry, you cut out. I didn’t hear any of that.

[00:14:04.130] – Peter

Oh, sorry. I was asking how people can follow you, whether you’re active on social and they can kind of follow your journey or just check out the business.

[00:14:16.690] – Joshua

Yeah. So I guess I do a lot on LinkedIn. I’m in B2B marketplace, so I’m big on LinkedIn. It’s just Joshua Crumbaugh on Twitter or X now, I guess it is. I’m @phishdoctor and I mean, those are my main socials.

[00:14:38.030] – Peter

Awesome. Okay, Joshua, thanks so much for speaking with me today.

[00:14:41.210] – Joshua

All right, have a good one.

[00:14:42.670] – Peter

You too.

Check out all our previous SaaS Founder Interviews here on our YouTube channel.

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