Bootstrapping An UpWork Hustle Into A $6m+ Business In Two Years
When covid caught him off-guard, he turned his $16 Upwork account into a thriving seven-figure business.
Hampton member Taylor Hersom didn't mean to start a business. Not originally, at least.
He got his start as a Deloitte consultant, learning IT and cyber security on the job, and was quite content to work as an executive in other companies until covid caught him with a brand new house, car, and wedding to pay for... And no job.
He scrapped on Upwork to make ends meet, and, well... that worked out better than expected. Demand grew until he eventually migrated off the platform, built a more robust offering, and found himself running a multi-million dollar business with a team of 30.
To me, he's a great example of how successful founders really do come from all sorts of backgrounds. It's not just the "visionaries" or "rebels" or Steve Jobs wannabe's who only own turtle necks. It's normal people with something to offer, and the guts to give it a shot.
If you wake up each day, put one foot in front of the other, and just keep going, you can figure this out.
Here's one person who did...
Hello! Who are you and what business did you start?
Howdy! I’m Taylor Hersom, the founder of Eden Data. Eden Data is a cybersecurity startup that build and manages security programs for startups and scaleups. Basically, it’s really dang hard to manage security and compliance when you are trying to grow your company: you’ve got regulations to worry about who will fine you for not staying in compliance, you’ve got customers demanding security requirements before they’ll give you that bag ($$$), and then you’ve got to protect yourself against yahoos like Putin out there who are orchestrating cyberattacks to fund their efforts. Eden Data’s main service is that we simply take over security & compliance for our customers so they can stop worrying about the above, and we put it all in a simply subscription model.
Eden Data was founded in January 2021, and is currently on track for over $6M this year. But we JUST signed a big partnership that I’m not allowed to talk about just yet, and this will likely change the forecast considerably! At the time of this writing, we have 15 employees (30ish on the team when you include contractors). We operate as a fully remote team and I’ve been able to hire almost exclusively from the Big 4 and former military professionals!
What's your backstory and how did you come up with the idea?
I started my journey by selling my soul to Deloitte (Uncle D for us insiders), where I was recruited to partake in IT auditing for Fortune 100 companies. As a guy that went to school at the University of Montana, I was just happy to get a job and had no idea wtf IT auditing was. Spoiler alert: it wasn’t fun, like at all. But it got me connected with more folks at Deloitte who transitioned me into a cybersecurity focus, and it was right about the time that cybersecurity was becoming sexy for consulting firms and the broader world in general (thank you Target breach).
From there, I took a job as a Chief Information Security Officer (CISO) at a local firm in Austin and that allowed me to further expand out my skills. I didn’t love the job, and so I quit the last week of February, 2020. I had interviews lined up, had all these big plans, and then COVID hit… My girlfriend (now my wife) and I had JUST bought a house, a new vehicle, and gotten engaged, so my timing seemed terrible. All my interviews dried up as the world went on pause, and my better half was telling me I better get my shiz figured out!
As any security nerd would do, I started doing some cyber sleuthing and came across Upwork. I spun up a profile there and was pleasantly surprised that there were quite a few startups that needed help with various security tasks. I had never really done that type of work (security is a BIG field) but I had Google on my side, so I just applied for EVERYTHING. I did my first few projects for dirt cheap so that I could establish a gentleman’s agreement with the customer to give me an awesome review, as that’s how the Upwork algorithm works.
All throughout 2020, I never expected to launch a company. I perpetually felt like I didn’t know what I was doing, which motivated me to try new things and learn new skillsets. Upwork customers were my guinea pig for what is now our subscription model: Upwork makes you specify an hourly rate when applying for any project, so I would put some ridiculously high number in there and then in the comments say something like “if you decide to let this horse hitch to your wagon, I’ll work out a monthly retainer rate instead of my ridiculously high hourly rate.” It took a lot of tweaking, but it allowed me to scale quickly!
Fast forward to the tail end of 2020 and my Upwork career was taking off. I had too much work because I applied for way too much crap, and it wasn’t until about that September time frame that I thought “Maybe I can start a business.” It also helped that I had now served some really cool startups and gotten direct exposure to a whole new world. As a guy that went to school in frikken Montana, I had no insight into the startup world and always thought it was so nifty! Lastly, Upwork’s cybersecurity opportunities were increasing throughout 2021, which led me to believe there was a market.
It took me a few months to line up contractors and employees, but I got everything (spinning up the LLC, launching the website, figuring out how to legally hire folks, etc) ready and launched January 2021. We had no sales team (we still don’t) and so there was a 6 month period where some of our leads were coming through Upwork and then I was just pinging random people on LinkedIn asking to partner with them. Partnerships really helped us break away from Upwork, as the commission rate they were charging was not ideal.
Two years later, Eden Data has served over 100 customers and I’ve kept the company bootstrapped since Day 1! When folks ask me how much I invested to start the company, I tell them “$15.98”, as that was the price for my Upwork premium profile!
Take us through the process of building and launching the first version of your product.
Oh dear, the first few iterations of our productized service were crapshoots. We had to convince the market that subscription-style professional services made sense, as the whole world is trained on paying an hourly rate. Then we got plenty of pushback because people insisted we tell them how many hours we were working and tried to get us to track time. I worked forever on a pitch to explain to customers that we operate on a performance model instead of an hourly mode, and then would reference my days at Deloitte to remind people that these firms are designed to take as long as humanly possible to finish things because they are getting paid by the hour. We, on the other hand, are incentivized to be as efficient as possible so we can serve more customers and increase our margins!
Quite early on in Eden Data’s history, we developed the Seed, Sprout, and Sapling subscription packages and put pricing on our website. This is completely unheard of, as most professional service firms don’t give you pricing till like the 37th sales call, and then they are just ballpark estimates with a clause in the contract that they can go a certain percentage over said estimate. The names of the packages stemmed (see what I did there?) from the brand direction we were trying to go, as the name ‘Eden Data’ pays homage to the original definition of the Garden of Eden, which is ‘bringing order to chaos’.
One of the most important things to me is that Eden Data was able to serve ANY size startup. We wanted to convince the startup market that no matter what size your company is, there was a service for you. This was so frikken hard to accomplish, as 99% percent of B2B companies want to go straight for mid-to-large businesses. The beauty of what we were building is that we were essentially being paid to test out new ideas and new services. Customers desperately needed help with security and we didn’t charge for our time if we messed up and took 10x longer to do things, so it was a win-win for both parties.
All of 2021, we kept tweaking our service offering and trying new services for our customers under our existing subscription packages. This allowed me to figure out a few things:
- What startups actually needed help with
- What services could work under a subscription service and what couldn’t
- What types of professionals we needed to hire in order to be successful
Since I had built up my Upwork profile, there was no real ‘launch’, as we already had customers that were fans and simply transitioned from Taylor Hersom to Eden Data. I put a ton of time and effort into the website, only to learn that literally no one was going to it, it still looked like dog poo because I’m not a marketer, and our type of business needed relationships instead of a pretty website.
Since launch, what growth channels have been most effective for you?
The hardest lesson I learned along this journey was that Eden Data didn’t need to be like other companies when it comes to growth. I was convinced I had to do ads, I had to invest heavily in SEO, and I had to have pretty marketing slicks. In reality, all we needed was a pretty website that I wasn’t ashamed to send people to, and then to put all my time and effort into partnerships.
Very early on, we established partnerships with an audit firm who was auditing a lot of startups we worked with. They became such a great lead generator for us and put us on the map. I also heard about this random SaaS company that offered compliance automation software (basically a way to streamline what we were already doing manually) called Drata. They started at the same time we did but went the venture backed route, and had built a software that essentially made our jobs easier. This became one of the best things to happen to Eden Data, as Drata continued on to reach crazy valuations, raise a bazillion dollars, and be a fantastic partner and referral source even in spite of the immense growth.
In full transparency, we don’t do much in the form of outreach. We invested in some basic SEO services, we hired a PR firm to get us onto websites that had better Domain Authority than us, and we continued to refine our website with content that actually added value. However, none of this has meaningfully moved the needle for us.
Interestingly enough, the founder brand approach has also helped our cause: I get a consistent flow of people reaching out on LinkedIn after seeing one of my posts to explore services with Eden Data. In fact, this was how we were able to establish our most recent ‘though shall not be named yet’ partnership!
The last sales strategy that’s worth mentioning is that we invested heavily in providing an exceptional service to our customers in order to make us as sticky as possible. We didn’t want to achieve stickiness (that sounds weird) by binding companies to long term contracts, but instead by delivering consistent value. We have dumped a LOT of time and money into how we project manage, how we achieve our goals, how we stay agile so that we can help customers with things as they arise rather than constantly adjusting our scope of work. Because of these efforts, we retain customers for a long time, and have only churned a single digit amount of customers since we started (most of this was due to the SVB fiasco).
The beauty of our service in general is that when our customers hire us, they typically need us to either help them meet contractual obligations with their customers or to help them pass an upcoming audit that a customer of theirs demanded. In either case, the effort is a loop and not a line, meaning that once they contractually commit to something, they have to maintain it and can never stop maintaining it. As such, as long as we continue to offer a great service, our customers keep us around indefinitely!
One other fundamental change that we tested was how flexible our contract was. We looked at the market that we serve (startups) and determined that these businesses change on the fly. As such, a long term contract and a very specific SOW simply doesn’t make a lick of sense. We instead made it to where people could adjust as their needs changed, and we made our SOW’s purposefully broad so that we didn’t need to change the contract to jump in and help with new problems related to security/compliance.
I have to end this with a shout out to a fellow Hamptonite, Pat Walls, who featured Eden Data twice on Starter Story. This is, far and above, the most referenced article when people say they read about us online!
Did you ever have an “oh shit” moment where you thought it wouldn’t work?
Only about three times a week! There was a period of time where I was convinced no one would ever accept our subscription model and that I wasn’t good enough at explaining the value of it. It took so many sales pitches to get this right! I think the thing that kept me motivated was the fact that in spite of me not being great at pitching or explaining the differences in our packages, people still signed up due to the fact that they were typically talking to me when this was a very real problem that needed to be solved quickly for them.
I also had a period in time where I had to part ways with the initial two people I had hired to help build the company, and I was convinced that Eden Data wouldn’t survive because of it. The main motivation to me was the fact that existing employees stepped up and became leaders, and the departure of the two individuals didn’t cause a single customer loss or employee turning over. I was really convinced in the beginning of my Eden Data journey that I didn’t know much at all, and NEEDED to have business partners. This simply wasn’t true, and it set up others up for failure because I didn’t know what I needed and therefore kept moving the target on my colleagues.
Lastly, I’m so thankful that I haven’t had to lay off and am inherently risk-averse to the point that we likely don’t invest as efficiently as we should! I still perpetually stress about sales and where we get leads from because we STILL don’t have a sales team in place, but thankfully Eden’s brand has grown enough in the startup market that the demand is still higher than supply, so I’m able to focus my efforts on providing a better service rather than replacing customers faster than they churn!
Can you break down the keys to this business model for us? What makes it work? And What do outsiders typically not understand about your industry?
Unlike the software industry, professional services is inherently a tricky business when it comes to numbers. Everything requires people, and people cost more moolah, so margins are typically lower. I have obsessed on the numbers to see where I can create efficiencies and avoid a human doing something, and this is for multiple reasons:
- It of course helps our margins
- It allows me to lower the cost to my customers
- It helps me to avoid employee burnout, because we humans never like to do the same thing over and over again
One of the first things I wanted to do was increase our valuation, as I had heard stories from my friends that professional services firms are valued at 1 - 2X revenue and I ain’t about that life. The main reason is because these firms operate on hourly and project models, so their revenue is anything but predictable. We started off with a mixture of subscription and project services, but I’ve since gotten rid of project services. Subscriptions make our revenue predictable, which makes it easier to make decisions and also helps our valuation! When we consider new services, we only consider things that we can bundle into our existing subscription model. In order to keep our prices low, we typically will pass along software services at cost and make our money purely from the professional services. I’d love to take the company to a point where we have a marketplace of technology vendors who offer our customers discounts and generate at least a small amount of revenue for us in commissions!
We’ve only been around for a couple of years but our growth has been 300% YoY. That’ll likely reduce this year to 200%! I must say that when you look at the numbers in terms of traditional marketing efforts (i.e. monthly website traffic, average time on site, email outreach and subscribers, social media, etc.) we are absolutely pitiful on paper. We don’t have a ton of traffic on our site and when we get them there, they almost always have heard of us through a referral partner or via one of our employees’ networks. We don’t even have a newsletter and up until about a month ago, we weren’t capturing emails on our website!
My short term goal is to fix this and to generate interest in our brand from as many different avenues as possible: we have a small waiting list right now and I’d like that waiting list to grow exponentially! We’d also like to further refine the core services we offer to incorporate more automation, better efficiencies, and more prescriptive project plans for our customers.
My longer term goal is to knock our partnerships out of the park. We have some really cool opportunities for partnerships and we have the potential to grow the company at a much faster rate than even what we’ve experienced, but we have to be able to essentially productize our service. I want Eden Data to be the Uncle D to the startup world and be a name brand firm that founders think of when building their companies. My vision is to serve 1000 startups by 2025 and we are just over 10% there, so I gotta get a move on!
What platform/tools are absolutely crucial for your business?
My answers are likely quite different from many of the other Hampton members, but we have a few tools that are game changers for us!
The first one is pretty vanilla, but we have built our entire product offering on the back of Asana! Half of security/compliance is just cat herding, and Asana allows us to cat-herd really well. It also allows us to offer a better experience to our customers by keeping them informed on exactly what we are doing and on what timeline!
Another great tool for us has been Slack Connect… seems like a lame recommendation but in reality, this was the gateway drug for our customers to get ahold of us instantly and allowed us to build more meaningful relationships with those customers. This is the polar opposite of our competitors who do the traditional weekly status meetings with boring PowerPoint presentations! Customers can submit requests, tickets, or even celebrate a win with us!
Lastly, Shift has been a heck of a tool for us. The problem with serving multiple customers is that there are multiple sets of tools, multiple IT environments, and even multiple ways to communicate. Shift allows us to break each client into a different environment that shows us only what is relevant for that customer and prevents us from intermingling client data in any way.
I would totally mention ChatGPT as well but that song has been sung enough already!
What have been the most influential books, podcasts, or other resources?
At the risk of making this article sound like it was sponsored by Sam Parr himself, I do have to say that the My First Million Podcast has fundamentally changed my life. It’s how I’ve kept up with the tech world and the topics that are worth paying attention to.
I strongly believe that my health plays a big role in my success and so I’m a big fan of Andrew Huberman’s podcast, Peter Attia’s book Outlive, and Ben Greenfield’s podcast. I’m always trying random new biohacks and I have no idea if they work half the time but having a hobby outside of cybersecurity and growing a company is good enough for me!
Lastly, I’m a big fan of pretty much all of Ryan Holiday’s books, especially his new four book series. I reread those because there are so many dang nuggets of gold that I attempt to apply to my life!
Where do you see untapped opportunity in the market? What business do you wish someone else would build that would make your job easier?
With the rise of AI, there are inherently a lot of areas in cybersecurity that currently require human intervention that shouldn’t need human intervention. Today, things like building policies, mapping controls to environments, or even just making basic changes to cloud infrastructure all taken human effort and brainpower. The concept of these tasks is pretty rudimentary, and I think there is an opportunity to automate at least part of them! I also think that there is a huge opportunity to convince the business landscape that we should all follow the same security principles rather than each of us aligning with separate standards and frameworks. Companies have tried this before but no one has really nailed it.
In terms of things that would make my life easier, I’d love to see some kind of service that tacks on to Midjourney to where I could generate content to my heart’s content and then have a service on the back end take the ones I like and turn them into reality! I’ve generated countless ideas for PDF marketing slicks, social media posts, and even app ideas, and my team can execute on some but not all of them. If I found a design I was all fired up about and there was a button I could click that says something like “make this design a reality in 2 days for $500” (for example), then that company could take all my money!
What are some strong opinions you have about leadership, and how do you actually put those into practice in your company?
I strongly believe that one of the biggest mistakes that leaders make, especially founders, is that they expect the same of their employees that they do of themselves. They expect the same output, the same quality, the same obsession. It’s dumb, and it it’s why there are so many bad leaders (if you want to call them that) in the world. True leadership, in my very humble opinion, requires the ability to identify what someone is good at, what they are passionate about, and leverage those two things to get the most out of them. What someone is good at and what they are passionate about are often two very different things, but they can both still be leveraged. If I’ve got someone on my team that is amazing at customer service and hyper-passionate about traveling the world, I’m not going to put them on technical engagements where they are configuring cloud environments and never talking to customers. I’m also going to make sure that I give that person the opportunity to fly to customers and go to conferences and work from wherever the heck they want. I strongly believe I can get value out of anyone, but it’s my job (not theirs) to identify how.
I also believe that a lot of leaders also happen to be arrogant, self-centered, and desperate for attention. This drives me CRAZY! I very much believe in the founder brand and think that a large part of Eden Data’s success comes from the network I have personally built, but I also encourage every single person on my team to work on their personal brand and I support it wherever I can. We have people on the team with side hustles, people who like to write content, and then plenty of people who like to be in the limelight but don’t know how to admit or ask. I’ve hired a PR firm who lines up new opportunities to be on podcasts and guest blogs and then I offer up those opportunities to the entire team. We have even had team members who have created new products that we now sell, and it makes my heart smile! There is plenty of success to go around: don’t be a selfish cotton-headed ninny muggins. It’s that simple!
One last thing I’ve implemented at Eden Data (with tremendous help from our leadership team) is profit sharing. Our employees know exactly what their expectations are and they can either meet expectations or they can exceed them in terms of how much revenue they manage for the company. If they go beyond what is expected, then they get a portion of the profits, and there are multiple tiers they can hit. We have very strict guardrails in place on how we gauge success of a project, so someone can’t just take on ten clients and do a crappy job for them all, but the model has worked out really well thus far!
11. Where can we go to learn more?
Connect With Me!
More on Eden Data:
Personally, I find being the CEO of a startup to be downright exhilarating. But, as I'm sure you well know, it can also be a bit lonely and stressful at times, too.
Because, let's be honest, if you're the kind of person with the guts to actually launch and run a startup, then you can bet everyone will always be asking you a thousand questions, expecting you to have all the right answers -- all the time.
And that's okay! Navigating this kind of pressure is the job.
But what about all the difficult questions that you have as you reach each new level of growth and success? For tax questions, you have an accountant. For legal, your attorney. And for tech. your dev team.
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