Sramana: Was the high tech space your narrow market niche?
Mark Organ: We actually worked hard to be very specific in the verticals we addressed. We became very good at micro-verticals within the application software space. The idea is to split the market into thin verticals and then get absolute dominance of those verticals. We were able to become profitable in 6 months, right after September 11th, 2001.
Sramana: Everything you have said is institutionalized within our program. You cannot bootstrap a company without razor sharp positioning. This is exactly what you are talking about. You need repeatable sales within a micro-vertical. That is essential to working in a capital efficient manner.
Mark Organ: That allowed us to achieve profitability faster. We were profitable for three and a half years before we raised money in 2005.
Sramana: What was your customer acquisition strategy in the bootstrapping period?
Mark Organ: We used our own technology intensively. We modified it to be useful for sales reps. We could identify when people were interested and we would call on those who showed interest. We did a lot of guerrilla outbound marketing. Eloqua was the first company to integrate with SalesForce, and the companies basically grew up together.
Sramana: Did you use telesales?
Mark Organ: Yes. We had an inside sales team and I ended up closing a lot of the deals myself. We did transition to a field sales team. One of the biggest risks I took was hiring a field sales rep from SalesForce.com. She was the most expensive hire and our first remote hire. She helped us win a lot of deals in the Bay area. Subsequently, Eloqua became a field sales organization. I am fortunate that one of my mentors at Eloqua was a profession sales instructor. He put me through his method and taught me how to sell.
Sramana: What was your revenue level when you hit your inflection point?
Mark Organ: We were doing about $3 million trailing when we started to see the hockey stick coming on. It was not just our technology, the market also shifted. We were growing 50% a year and then in 2004, we grew 100%. That is when we started doing marketing automation. We built an automation engine so that marketers could have a precisely controlled electronic conversation with prospects.
Sramana: Did you raise money to scale and build a bigger product?
Mark Organ: We had a problem with our angel investors and we had to get rid of them. One in particular was a real problem and we had to buy him out. I also ran into the VC king of bootstrapping, Javier Rojas. He is at Kennet Venture Partners and he wrote a great piece on how to bootstrap and when to raise money. He said that the time to raise funding is when your market growth is accelerating and you can reliably add revenue generating units at a profit. We felt that. We knew the market was growing. Our business operations had become sophisticated enough where I could add two sales reps, one lead generator, and half of an SE and create a unit. I could make that unit profitable in just over 4 months.