From Video Game Botting to $25m Acquisition (almost) - The Story of Rayobyte
Early Days
I grew up in a small, rural, town called Wilber, NE (Wilber with an 'e'!). We're the 'Czech Capital of the USA', believe it or not, and my great grandparents spoke Czech still. In a town of just 2000 people, everyone knew everybody. I was ok with that - I spent most of my days playing video games with my brother. During these years, I realized: "Why would I spend hours playing the game to accumulate wealth in the game, when I could: 1) write software (bots) to play the game for me and 2) open up a pawn store - buy low, sell high". And so began my tech+business journey!
From writing bots, I found other worlds online. One that I remember vividly were sites that paid you to view ads. Well, I could just make a bot that viewed them for me, cashing in a few dollars every day. Not bad for my early teens! This curiosity bloomed into other areas of the internet, and I stumbled across an old Internet Marketing forum called the ‘Warrior Forum’. On the WF, people were selling guides on “how to make money doing [insert some internet marketing scheme]”. This ranged from writing your own eBooks, building affiliate sites, creating email lists and promoting products, and so forth. I tried them all, and some more. Any dollar I’d scrape by (online, or helping my dad with construction) I would spend on the next ‘guru’ guide.
I started finding my niche though through trial and error. I got really good at SEO. Mind you, I was only about 15 now, which dates us back to around 2009. For anyone who knows a little about SEO, you know those were the good days :). You could rank a website overnight by posting a few articles or backlinks online and boom - #1 on any listing! So, I created affiliate websites and ranked them as fast I could. One of the sites I remember was “cat5-cable-tester.org”. I knew nothing about Cat5 Cable testers, but I could bs some keyword-targeted articles and rank the site! These affiliate sites started earning me maybe $50-$100/mo. I was hooked - I could make money online!
Finding my niche
As I did more of my own affiliate sites, I learned more and more about web automation, particularly in SEO. There were tools that would help you automate posting articles and backlinks that helped rank your site. So, I started offering SEO services to people who wanted to rank their site. This got me further into the niche of “Web automation”, which required the use of proxies and servers.
At this point, I was still active on the Warrior Forum and was getting ready to graduate high school. I was making good money with a Diablo 2 bot I made, and less on the SEO, but I still wanted to make a sustainable business online. I found a guy post on the Warrior Forum: “Hey, I’m a computer science professor from North Carolina. I can write code for free, but I have no ideas. Does anyone want to partner up?”. For those who know me - I have PLENTY of ideas :). I reached out, and we formed a business together! We had never met each other before and after a year of business together we did a trip to Hawaii. The first time I saw his face was in the airport. I was 18, he was ~40. Age gap aside, it was a great trip!
College
When I got to college, it was time to ‘grow up’. By grow up, I mean: get by in my computer science classes (I graduated with some kind of ‘cum laude’ or something - clearly it wasn’t a concern of mine), and drink a lot of beer. I partied a lot against my better judgment, but hey, it made me who I am today. Throughout college I continued chipping away at 100 different ideas, most of them around some form of web automation or SEO services.
At one point I was even offered a $50k/yr salary from a guy in Minnesota doing some SEO work. I was shocked! I was only 20 years old in a college dorm and was getting a salary that was bigger than my parent’s at the time. I pondered it with my friends and decided to give it a shot… but he ghosted me then! Said it wasn’t a good time. Crushed my heart… but wow, did it pay off these many years later!
I tried and tried and tried ideas to make more money throughout college. One stuck well enough that it was making $1000/mo~ as I was approaching the end of my college days. As a college kid with no expenses, this was enough to get by I thought :). My parents kept hounding me: “Neil, do you have a job lined up! A ‘real’ job?!”. I reassured them I was fine with this $1k/mo and wanted to keep trying my hand at being an entrepreneur. I don’t remember feeling too urgent about things, which surprises me in hindsight.
And that’s when it happened…
Blazing SEO
Idea #951 of mine since I was 15 finally hit. Because I was using so many proxies and servers for my SEO work, I had a good pulse on the quality (or lack thereof) of the proxy providers. At this time, 2015, there were maybe only ~5 legitimate proxy companies in the world - and they all sucked! I thought there had to be a better way… so I hired a freelancer on Elance without knowing a thing about infrastructure and naively said: “Hey, uhm, I want to build a proxy. Can you do it?”
They say luck plays a big role in every entrepreneur’s story. This was one of those moments. The freelancer I chose to hire worked for a Ukrainian outsourcing agency that I hire to this very day. There are a lot of crappy outsourcing agencies out there, but I got lucky and found Alex and Vadim (co-founders), along with one of the smartest engineers I know (Anton). Anton built the first proof of concept, and I went where I knew best to market it: my SEO circles that I had built up over the past 5 years.
I started posting on forums and groups that I was selling proxies. Some people knew me, others just wanted a fresh start to the crappy service they had been getting, too. And wowee, things took off. In the first 3 months of business, which happened to be my last 3 months of college before I was pressured to find a “real job”, the company made $100k in revenue. In year 1, $1.1m. In Year 2, $2.9m. It was crazy!
So here I was, somewhat of a college drunk (ok… I wasn’t that bad, mom!) trying to figure out ‘how the heck am I going to manage and build this business?!’. I rolled up my sleeves and got to work.
Fun times lead to stagnant times
They say: in life, the challenges are the things you look back on with the greatest joy. I would agree. I was only 20 and got thrown into a business I knew nothing about, handling millions of dollars, working 12+ hour days, 7 days a week… yet… I loved that period of my life! It was stimulating! Fun! I had money and could do more trips and found my passion for travel. I found adulthood in my responsibility very quickly. I learned like crazy (my top 2 virtues I live by: 1) Curiosity 2) Love of Learning).
After the boom of the first couple of years, I made the mistake every entrepreneur makes: I got distracted. My “visionary” tendencies (I don’t really like that word, but let’s use it) had me wanting to create 10 different products, with a team of just 20 people. I convinced myself: “Well, I built the first product with just 2 people, why can’t we do more?!”. It caused us to be spread thin across too many things, leading to disarray and stagnant growth.
I committed to change. I wanted to “level up”, and started a search for a COO (Chief Operating Officer). I was introduced to our former COO, who was a Senior Manager at Deloitte at the time. He had (and has) a kind heart, a care for others, and a super analytical mind. He could bring that ‘big company thinking’ to what I perceived as a chaotic startup environment. He was everything I needed - to tighten us up and get our ship on the straight and narrow!
And honestly, that’s what he did. We did grow quite well in those middle years (year 3-5), just about doubling our revenue. We killed many of the product ideas I had started up and focused on our core product - proxies.
Growth at all costs, question mark
We were growing. Our headcount doubled, as did our revenue. But towards the end of that range of years, something didn’t feel right. We were doing ok, but I was losing my spirit. I lacked purpose. What once used to be an “inventor’s playground” - me chasing around a new idea everyday - became a corporate bureaucracy. Everything was about the money. All from my own doing too… I had intentionally hired people, and built the culture to be this way. I didn’t see it until it was too late.
Morale was declining for various team members, and I felt it myself. Sometime in 2022 I decided I wanted to sell the company. I told our leadership team in tears that I was ready to ‘let my baby go’. We began the search for a suitable buyer.
Money, the key to happiness
Our search quickly led to a reality I wasn’t prepared to grasp: the company I had founded was worth in the $20m-$30m range (gulp). We had investment bankers telling us they could easily get the lower end, with others promising higher. One of my top requirements of any deal was that all of our team members would be guaranteed 6 months of employment after the deal, which is hard for some investors to stomach. At one point, a strategic partner came to us and it looked like a match made in heaven. They were receptive to most terms, and even insisted that we keep the team together! It appeared to be a done deal as the conversations progressed… but once again, something didn’t feel right.
We were about 4 months in and I started to feel weird about it. “Why was I doing this? To get loads of money? And then what?”. It nagged at me. In parallel, I tried finding purpose in other ways. I wrote some silly short stories to see if I had a writing career in me (in short: I don’t!). I played around with building some new products. Everything felt empty and void.
I began journaling… and a lot. Since this period of time, which was ~2 years ago, I have accumulated over 200 pages of journal notes around a single topic: purpose. Why am I here on earth? What am I here to do? Is it to cash out and sit on a beach? Buy a fancy house, or a boat, or whatever else people with money do?
I found no answers, but I knew two things: 1) I was convinced money couldn’t buy me the happiness/purpose I was seeking 2) I wasn’t done with Sprious (Rayobyte).
(Re)committing
My life-changing coach, Phil Towle, has always reminded me of a common theme over the years: “You don’t have to know the answers. You just have to take a step forward, and then look around.” And that I did.
I decided to stop the search for a buyer, and then change how Sprious would operate as a company. With those changes came confronting conversations with those still at the company. We had become everything to everyone, which translated to nothing to nobody. I had the hard conversation with the company and put my foot down - “enough is enough. You can get on this boat, or off, you decide. There is no in between.”. We called it ‘Sprious 3.0’ (here’s page 1 of this 6 page credo).
Within 6 months of the declaration, 50% of our leadership team was no longer at the company, and we had a turnover of around 25% in total (~10 people).
To say it was a difficult year would be an understatement. I wish them all the best and have learned a valuable lesson in life: people aren’t “good or bad” for a company, they just are. I believe these people will go on to find homes that are a greater fit for their value systems and that company's culture, and I root them on in doing so.
Today
Fast forwarding to today, May 23, 2024. Things are really great. The company’s morale is higher than ever. Revenue is growing rapidly on one of our most important product lines. And, for me, I believe I am closer than ever to understanding, not finding, my purpose. In business, I believe it all starts with the principles of Conscious Capitalism - using business as a force for good.
We've just begun the process of getting some of these ideas down on paper here - a public Playbook that we hope to inspire others, even if it means we give our competitors a "look under the hood". I have many thoughts on his, but I'll save those for another blog post - please subscribe below :).
For now, I know everything is right where it’s supposed to be, and I’m excited for what the next chapters bring 🙂.
If you have any questions or perspectives, please Contact me. I love chatting!