The two elements powering Factor House’s global success

A half-hour video call helped propel Melbourne development tools startup Factor House to its next stage of growth.

Co-founders Kylie and Derek Troy-West already had big aspirations for the business. Together with their founding engineer, Tom Crowley, they’d forged Factor House during the difficult months of Melbourne’s COVID-19 lockdowns, in between home schooling their young children.

The couple had an unshakeable belief that they could build best-in-class tools to help software engineers work more efficiently. Their first product, Kpow, was designed to help engineers get the most out of the open-source platform Apache Kafka, which was which was increasingly being adopted by big-name brands to build data-rich products.

While they had successfully bootstrapped the company through its first five years, it became clear they were going to need external capital to keep delivering for their growing stable of enterprise clients.

At the time, they’d never raised funds before and didn’t know what materials they’d need to ask for capital.

Despite this, Kylie booked in for a “Pitch Deck Review” call through LaunchVic’s Office Hours service.

“I said, ‘I don’t actually have a pitch deck… but I’m just going to tell you what we’re doing, and then maybe you can give me some advice on where to go,’” Kylie said.

The Factor House team didn’t yet know it, but asking for guidance in this way would deliver huge dividends for the company in the long term.

That one call led the team being introduced to Eleanor Toulmin, who went on to become Factor House’s chief of staff, as well Rachael Neumann, whose Flying Fox Ventures would later become an investor.

Soon enough, Kylie and the team were also connected to LaunchVic’s Alice Anderson Fund and Blackbird Ventures, who would eventually lead Factor House’s $5 million seed round.

“Once we had made that decision to enter the seed funding phase, we started to gain quite a bit of momentum,” Kylie adds.

The power of relationships

Building connections across startup ecosystems in Victoria and across the world has been a key feature of the company’s success.

The value of these relationships was not lost on Factor House, which had been operating in stealth mode for years during the pandemic.

“When we popped out of that and said, ‘We’re ready now’, it was really amazing the way that people leveraged their relationships [for us],” Kylie said.

“Making the right introductions and having people leverage their personal capital to do it, is quite a big thing. Having those strong personal relationships has been hugely helpful.”

Connecting with other women-led businesses through LaunchVic’s Alice Anderson Fund has also been important to Kylie. She’s seen first-hand how many people expect the founder of a software engineering business to be male.

“When I am emailing clients, they come back and call me ‘Kyle’ all the time. I’ve added a photo to my email signature to try to help with that,” she said.

Finding networks of female founders has been a bonus as Factor House has continued to grow.

“Having that sounding board and someone you trust that you can ask questions of and share things has been really valuable.”

A strong product focus

Strong relationships are just one part of the success equation for Factor House.

The founders also had a strong conviction that they could build a market-leading product for developers who used Kafka, so they concentrated all their energy on this core offer.

“We were just focused on solving our one problem and building that in the best way possible,” Kylie said.

This approach helped the company secure enterprise clients like Hewlett Packard, Block, Afterpay, Pepperstone, and Airwallex while barely spending on customer acquisition.

“Our first customers happened quite naturally and quite easily,” Kylie said.

“With a very small team and a non-existent marketing budget, we were still able to keep growing our customer base.”

Their steadfast belief in the quality of the product has also helped the founders navigate the many challenges of bootstrapping a business.

This included a particularly stressful moment when fraudulent transactions drained the couple’s personal savings account just before they were due to be paid for their first big enterprise contract.

“That was an incredibly stressful moment, and it would have been easy to go, ‘That’s it, we’re done,” Kylie said.

“But we were both so invested in our idea and had such faith that we were moving in the right direction that we scrambled and made it through.”

Six years into the journey, most Factor House’s clients are based in the US and the startup is ready to build a truly global business from Australia.

“There is phenomenal tech talent here. We couldn’t be happier with the team we’ve put together.

“By the end of this year, we think we’ll be a team of 24 – all of us in Melbourne.”