During today’s roundtable, we had three American companies for a change.
First up, Lona Duncan from San Francisco pitched Style Lend, an app for renting and leasing designer clothing for women. Lona already has a validated business, and of course, the category is already validated by Rent The Runway. Lona’s concept has a slight twist over Rent The Runway that I like a lot. In general, the trend of renting and leasing clothes is rising. Next wave of the sharing economy!
Next, Thikshan Arulampalam from New York pitched WasteGate, a somewhat complicated concept whereby Thiksan proposes to have people list their items that they want to get rid of or donate, and other people who want those items can arrange to get them. He wants to make money by providing contextual data to advertisers. Interesting concept. Not sure if it would work without seeing some validation.
According to the College Board, the average annual cost of textbooks and supplies for students has grown 50% over the last decade to $1,200 per year. Online text book rental service Chegg hopes to reduce the costs of these books by enabling students to rent out books at a more affordable price instead of purchasing them.
In case you missed it, you can listen to the recording here:
Sramana Mitra: It sounds like the business was starting to become more of an enterprise business from there on.
Steve Liu: Very much so, yes.
Sramana Mitra: How did it scale? 2008 was when you made the transition to the new CEO. Between 2008 and 2014, what are the milestones and scaling strategies that you deployed?
Steve Liu: I think the big things that happened during that time were that we shored-up the product where the product just can’t meet expectations, and we put money and resources in making the product rock solid. Then, it was just building up and hiring. These days, we’re about 160 employees.
Sramana Mitra: All in Atlanta?
Sramana Mitra: I don’t know if you’ve read it, we’ve released a book called Bootstrapping Using Services where we deal with this topic extensively. We have companies that have gone up to $25 million in revenue using bootstrapping using services. This is a very viable strategy. However, you have to do it right.
Harman Singh: I agree with you. I wouldn’t do a lot of things I had done in those days. It survived only because of one reason—perseverance. There was nothing else that got us to this point.
Sramana Mitra: I understand. Frankly, I used to think a lot like you when I started out. That was a long time ago. I started my first company in 1994 while I was still a graduate student at MIT. I didn’t know any of this stuff. I’m talking of an era which >>>
Sramana Mitra: What trends are you seeing in your marketplace? Is the market penetrated at this point or is a lot of your customer base still on legacy systems?
Chris Sullens: There’s a lot of white space because of the new entrants and the capabilities of these small guys to now consume the technology. At the high-end, there is pretty high penetration where you have legacy solutions. The small companies have been doing things with white boards and spreadsheets and finding a good dispatcher who has it all in the head and leaning on that particular person to be their solution.
From that standpoint, there’s a lot of white space which is also the case from the field service side. More and more people are finding solutions for the market, but I would say that over half of our customers come to us with no system at all.
Sramana Mitra: Was the company based in Washington?
Steve Liu: In Atlanta, actually. The hospital medicine job that I got was in Atlanta.
Sramana Mitra: I see. You recruited a CEO who would run the company in Atlanta?
Steve Liu: Exactly.
Sramana Mitra: How did you find this person? What was the criteria and process of finding this person?