Building a SaaS business from the ground up is no small feat, but successfully selling one is an entirely different challenge.
TK Herman, Co-Founder of Aptera and Factor AE, has done both. From getting fired early in his career to launching and selling a multimillion-dollar software consulting firm, TK’s journey is packed with valuable lessons on entrepreneurship, growth, and the power of surrounding yourself with the right people.
Today, we’ll explore how TK transitioned from consulting to SaaS, the critical decisions that shaped his businesses, and the three key principles he believes every entrepreneur should follow for sustainable success.
From Getting Fired to Becoming an Entrepreneur
TK Herman’s story in technology dates back to the early 80s when he first started experimenting with an Apple IIe. But it wasn’t until he was fired twice that he realized he wasn’t meant to work for someone else. At 26, TK quit his last job and made the leap into entrepreneurship, knowing there was no turning back.
His first major success was Aptera, a consulting business specializing in custom web and mobile app development. Founded in 2002-2003 with his partners, Aptera started as a small operation but quickly grew to over 100 employees, working on enterprise-level projects for global clients.
As Aptera scaled, TK and his team built an internal tool called Scorecard to track time and manage projects more effectively. A casual conversation with an architect friend revealed that the architecture and engineering industry had similar needs, and just like that, Scorecard turned into a commercial product.
However, as Aptera’s consulting business expanded, the SaaS product was neglected. For nearly a decade, it sat on the sidelines with minimal updates and poor customer support. Despite this, some loyal customers continued using the tool, proving there was untapped potential.
The Big Decision
By 2018, Aptera had grown significantly, and the Scorecard tools were no longer enough for internal operations. TK and his team faced a key decision:
- Discontinue Scorecard and adopt third-party tools.
- Completely rebuild Scorecard as a modern SaaS product.
They chose the latter, investing $3 million into developing a new, more robust version: Factor AE. By 2021, they were just about to launch it when an acquisition offer for Aptera presented itself.
A private equity firm was rolling up consulting companies like Aptera, but they had zero interest in the SaaS product. Seeing an opportunity, TK negotiated a deal where he and his partner retained Factor AE, along with five employees, and sold Aptera in mid-2021.
This move allowed them to start fresh, focusing solely on the SaaS business. Since then, Factor AE has grown to over 300 firms and 3000 users, with ambitions to scale much further.
Lessons from Selling a Business
- Know Your Value: TK had been in discussions with M&A professionals for years, gathering insights on market conditions and buyer expectations. This knowledge helped him negotiate a better deal when the time came.
- Timing Matters: Coming out of COVID, with an economic downturn looming, TK and his partners saw the sale as a chance to de-risk their financial position while pursuing a new entrepreneurial challenge.
- Keep Options Open: Even though the acquiring firm wasn’t interested in Factor AE, TK ensured it wasn’t part of the sale, allowing him to continue growing the SaaS business.
Scaling a SaaS Business
With Aptera behind them, TK and his team focused on scaling Factor AE. They raised $2.5 million in a friend-and-family round and began expanding their customer base. However, scaling wasn’t just about adding users; it required a strategic mix of sales, marketing, product development, and customer success.
- Listening to Customers (The Right Way)
Factor AE was built with the architecture and engineering industry in mind, but TK knew better than to blindly add every feature request from customers. Instead, his team:
- Analyzed requests to understand the root problem
- Evaluated whether new features aligned with the long-term vision
- Balanced customization with standardization to maintain scalability
- Building a Strong Culture
One of Aptera’s biggest strengths was its workplace culture. Employees were treated with respect and care, leading to extremely low turnover. TK carried this philosophy into Factor AE, believing that if you take care of your employees, they will take care of your customers..
- The Decision to Raise Capital
After proving Factor AE’s viability, TK and his team faced another major decision: continue bootstrapping or raise a significant funding round to accelerate growth. With a well-defined sales process, a solid customer base, and a clear vision for scaling, they decided to seek additional investment to fuel expansion.
TK’s 3 Principles for Sustainable Growth
- Hire the Best People and Get Out of Their Way
- Surround yourself with smart, motivated individuals.
- Give them clear direction but avoid micromanaging.
- Trust them to execute and innovate.
- Don’t Let Perfect Ruin Good
- Speed and execution matter more than perfection.
- Test ideas, learn from mistakes, and iterate quickly.
- Avoid analysis paralysis. Sometimes “good enough” is good enough.
- Work on Your Mindset
- Entrepreneurs often struggle with self-doubt, impostor syndrome, and limiting beliefs.
- Addressing these mental barriers is key for personal and business growth.
- TK firmly believes that a company can never outperform the self-image of its CEO.
Final Thoughts from TK
Success isn’t just about having a great idea. It’s about execution, timing, and continuously challenging yourself to think bigger. Looking ahead, Factor AE is on a trajectory to become the #1 SaaS solution in its industry, and if TK’s track record is anything to go by, it’s only a matter of time before he achieves that goal.
TK’s Background
TK is an accomplished entrepreneur and tech industry veteran. With over 20 years of experience in software development and business leadership, he previously founded and led Aptera, a successful custom software development company that he grew from 2 employees to over 120 before its acquisition in 2021. Under his strategic guidance, Factor AE has expanded to serve over 300 companies nationwide.
Listen to the new episode on: