John spent $200,000 to get to his first million in 18 months with GoGrid. One year from that, the company got to $5 million. Today, they are at over $50 million in revenue run-rate, all organically grown. Read John’s insights on a tightly managed entrepreneurial journey.
Sramana Mitra: John, let’s start with introducing our audience to you personally. Where are you from? What’s your background?
John Keagy: I was born in Evanston, Illinois. I went to University of California, Berkley. I came to the West to chase gold like the miners did, because Silicon Valley is a great place to forge a career.
Sramana Mitra: What did you study?
John Keagy: Civil Engineering and Business.
Sramana Mitra: What year did you come out of college?
John Keagy: I came to the West in 1985 and graduated college in 1989.
Sramana Mitra: What happened after you graduated college? What did you do next?
John Keagy: I made it through 11 months of programming in COBOL for Anderson Consulting, which is now Accenture. I built the module that, to this day, calculates the charges for call waiting on your specific AT&T phone bills. Then, I became an entrepreneur.
Sramana Mitra: What was your first entrepreneurial venture?
John Keagy: I developed fingerprint identification technology in Russia.
Sramana Mitra: Tell me more.
John Keagy: The Cold War had just ended and the Berlin Wall had just come down. The brilliant scientists and mathematicians, in particular, in Russia became available. I supplied them with 386SX computers. To my knowledge, it was one of the first off-shoring relationships with Russian talent.
Sramana Mitra: You were building a company based in Silicon Valley with a Russian back-end?
John Keagy: That’s exactly right. I used the Internet to manage the Russian resources – to communicate with them and to share codes. It was, to my knowledge, one of the earliest business implementations of the Internet. This was 1991. This was before people had heard of the Internet. I was using the Internet successfully to achieve something.
Sramana Mitra: Who were your customers?
John Keagy: In the end, an exclusive license to the technology was acquired by Unisys for $47 million.
Sramana Mitra: That was your exit. I imagine that the company had to be somehow kept afloat by either acquiring financing or financing with customer revenues. What route did you take?
John Keagy: We had a small amount of law enforcement contracts for government law enforcement agencies.
Sramana Mitra: What year does that bring us to when you sold the company?
John Keagy: 1994.
Sramana Mitra: What happens after that?
John Keagy: I knew I needed to start an Internet access provider. I did that and it became the West Coast’s largest profitable Internet access company.
Sramana Mitra: Which one was that?
John Keagy: InReach Internet.
Sramana Mitra: How long did that go?
John Keagy: I sold that in 1999. I believe they’re still operational.
Sramana Mitra: What was your next step after that?
John Keagy: I became a venture capitalist for a year and then I started the first incarnation of my current company, GoGrid.
Sramana Mitra: Which is in the early 2000 time-frame?
John Keagy: That’s right.
Sramana Mitra: What was GoGrid supposed to do?
John Keagy: GoGrid began as a pioneering dedicated server company.
Sramana Mitra: What was the premise of that investment thesis?
John Keagy: We were one of the first services where you could get a dedicated server on a hosted basis. The concept of a $99 a month server is something we pioneered.
Sramana Mitra: I imagine that by this time you made enough money from your other exits. This was, at least at the beginning, self-financed?
John Keagy: Yes. For the last 14 years, I’ve operated without investors whatsoever.