Sramana: What industries did you initially target and what was your sales cycle like?
Mark Organ: Initially, we targeted the insurance, finance, and real estate markets. There are a lot of finance and insurance companies in Toronto and I had a lot of experience working with companies in that space during my time at Bain. However, we quickly realized that our target markets were a problem and the sales cycles were much longer than expected. We had to move fast to understand why and fix that problem.
We quickly learned that lead generation was not a top priority for those companies. We had to find a space where lead generation was mission critical for B2B companies and we found that space amongst technology companies.
Sramana: They are early adopters and are willing to try technology. That is especially true of the time period you are talking about, in the early 2000’s.
Mark Organ: There was a lot of pressure from VCs and the Board of Directors to make a machine out of the lead generation process. We found much more fertile ground in the technology space. I credit our ability to pivot and find that new market as fast as we did to our lean startup methodology.
Sramana: Did you find your product market fit in 2000?
Mark Organ: I think we found our MDP but not necessarily our product market fit. For us, product market fit was a process, not an endpoint. I don’t think you can tell when you have finally achieved it unless you are looking at it in hindsight.
Sramana: Can you talk a bit more about your bootstrapping process?
Mark Organ: We achieved financial profitability on $166,000. We did not set out to bootstrap the company, the market imposed that on us. The market would not give us money, so we had to bootstrap. I think we survived because of the dot com crash and the resulting nuclear winter that occurred in San Francisco. All of our competitors there, as well as in New York and Boston, died. If you look at the marketing automation space today, you will see they are all based outside of main centers.
The money we raised was primarily from friends and family although we had a few angel investors that we brought onboard. It took me 4 years to get rid of those vulture capitalists. We did try to get VC funding but nobody would give us any money. I was fortunate to have a mentor who hated venture capitalists. He taught me how to build a profitable company very rapidly. His method was to raise prices significantly and to build a tremendous service organization while maintaining a very narrow market focus. His favorite saying was that happy customers scale very well.
Sramana: Bootstrapping using services is a methodology in our program.
Mark Organ: I am very happy to hear that. I think that service is underrated and that VCs have denigrated the value of services. You have to take care of early customers and it is OK if that does not scale.