Spot a pattern, build a product – a formula for entrepreneurship that has generated Disco Labs founder, Gavin Ballard, a seven-figure income. An ex-lawyer who gave up sixty-hour weeks to code full-time, Gavin has since founded a digital agency and SaaS product that helps Shopify Plus merchants create bespoke payment experiences for their customers.
Gavin started slow, freelancing his way up the Shopify food chain and taking note of every engineering request. When the work poured in, he hired help and founded Disco Labs. What happened next was all about spotting patterns – listening to what customers wanted and then finding the points of overlap. Gavin wondered: Was there a product opportunity here?
“A lot of the consulting work we do is building a one-off solution that’s also useful to other merchants,” said Gavin. “Despite them being huge, multimillion-dollar businesses, we were essentially building the same stuff over and over again but customizing it to each merchant. Once I saw the demand, a subscription product began to make sense for us.”
How Did a Digital Agency Transition to SaaS Startup?
Gavin doesn’t touch front-end, marketing, or branding. Instead, he and his 12-person team build the scaffolds for payments, workflows, and integrations. Such focus means Disco Labs has built some of the most complex projects in the Shopify ecosystem, building back-end functions for billion-dollar businesses like HarperCollins, Four Seasons, and JB HiFi.
Despite these feats, Gavin couldn’t afford to work on product full-time without outside funding. “With a team of 12, you’re not big enough to carve off a team and say, right, you’re just working on the product now,” Gavin said. “You’re also not so small you can focus on product for six months without agency money coming in the door. So that has been quite difficult to navigate.”
Although Disco Labs began as an agency, Gavin fosters a dev-friendly culture similar to that of a modern SaaS company. Developer capacity is split across sprints and cycles are expressed in story points rather than hours. “Projects sometimes run over or change,” Gavin said. “We’re bootstrapped so the priorities dial is always swinging between clients and product.”
With no outside funding, Disco Labs built its flagship, Submarine, iteratively using subscriber income. The early versions, Gavin admits, were a bit rough. “Because we were building Submarine for different merchants, it turned into a bit of a Frankenstein’s Monster. Now, we want to pare back some features and offer bespoke solutions – almost like enterprise SaaS.”
The Power of Network Effects
The Shopify ecosystem has been a great fit for Gavin who’s spent over twenty years writing software. Although he studied both engineering and law, it didn’t take long for his affinity for building to outshine the prospect of years poring over dusty law books. “Maybe I should’ve known that law wasn’t for me because, you know, lawyers tear stuff down rather than build it.”
Gavin’s first freelance client was a Shopify merchant based in Portland, Oregon. Five years later, Disco Labs emerged to serve the growing client roster seeking Gavin’s expertise. “A lot of agencies do the branding and the design and build the front end of your store, but we were one of the few companies exclusively focusing on custom applications.”
It’s no surprise, then, that agencies were an important distribution channel for Disco Labs’ first SaaS product. “Submarine solves a very specific problem around subscriptions or pre-sales or tokenized payments, for example,” Gavin said. “Other agencies do the rest and we slide in to meet that one specific need. We couldn’t do that without building good relationships with them.”
Gavin admits to being a terrible marketer and credits much of Disco Labs’ success to Shopify and agency referrals, which have remained strong despite the pandemic. “There’s more collaboration than competition in the Shopify space, which is unique. Everyone is friendly and helpful. Even during COVID, there’s been incredible support for people building on Shopify.”
Today, Submarine generates $50,000 MRR. While an incredible accomplishment for what was essentially a side-project for several years, Gavin acknowledges it’s time to swap his engineering hat for a marketing one. “At our current size, we have enough referrals to feed us. But in the future? We’ll probably need to market Submarine a lot harder than we have been.”
Buying Time: Why Gavin Accepted a Financial Lifeline
Gavin is proud to have bootstrapped Disco Labs and built Submarine without any outside funding. But the power struggle between client demands and product development forced him to rethink his priorities. Recently, Gavin agreed to a cash injection of $250,000 from Tractor Ventures in a revenue-based financing deal, which has bought him much-needed time.
“With this money in the bank, we can afford to offboard some of our larger clients. Once we’ve transitioned them to a new agency, we can spend all the time we’d have spent on their projects on Submarine instead, which will accelerate things for us. The guys at Tractor are all SaaS experts so that’s also been useful, hearing their thoughts on scaling and stuff.”
Does this mean Gavin is open to raising money again in the future? Not if it means burdening himself or his team with a mountain of new responsibilities. Sustainable growth and the work-life balance have long been at the heart of Disco Labs culture. He wouldn’t give that up for the sake of a few million in the bank and has been one of the reasons he’s been resistant in the past.
“I had a child earlier this year so I want to work thirty to forty-hour weeks. I sometimes do more but I want the choice, and to do it for me and not to please a board. I won’t rule out funding but it would have to be with investors who were aligned with the type of company we want to run. One of the great things about Tractor is they’ve given us the space to be who we want to be.”
Has Disco Labs lost its “bootstrapped” status now it’s accepted outside funding? Where do you draw the line? Does a bank loan or friends-and-family round count? Perhaps true bootstrappers are those who retain equity while recognizing there’s more to life and entrepreneurship than newsworthy numbers. By that definition, Gavin fits right in.
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