There are always competitors who have been longer in the game and who are better funded. But it doesn’t mean they will be the winners in the marathon.
A startup is a marathon, not a sprint.
Gobs of VC money never guarantees a startup’s success. A nimble upstart can beat a well funded competitor with a superior strategy.
Here’s a 1 minute 21 second video that explains further:
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Sramana Mitra: What did you learn? Was the threshold one salesperson per state? How were you calculating your expansion strategy?
Lane Rankin: Just about every time we would go and meet with the district, we would win a sale. If we have a presentation, 80% of the time we are winning the business. We were growing so fast that we literally weren’t doing any marketing. It was mostly inbound calls and information.
The problem I was having was trying to make sure that my underlying infrastructure could handle the amount of business we were bringing in. We were always right on the edge of not being able to support the customers out there. Customer support and implementation are very important to us. Those times involved 20-hour days. >>>
This feature from TechCrunch covers the highlights of the 10th Annual Crunchies held in Silicon Valley last week. Called the Oscars of Tech, the award for Hot New Startup went to Otto and the Best Startup went to Slack. For this week’s posts, click on the paragraph links. >>>
Sramana Mitra: Was this was a 3-month acceleration program?
Roy Peleg: No, it was a 4-month program.
Sramana Mitra: Then you went back to Israel?
Roy Peleg: Yes. The business started growing a bit, but not too much. With the feedback that we got and the additional focus that we got on the business model, we slowly added some more people to the team. Every time the revenue got higher, we just took on another employee. We were breaking even every month. >>>
Sramana Mitra: We are now at the point where you bought some portions of your previous company that you bought to Harcourt. You’re now ready to start off on your own in 2009. What happens next?
Lane Rankin: We started over in 2009 with some pieces of a new platform. We had started a new platform to replace the older platform that we had built in 2002. Houghton Mifflin Harcourt didn’t understand what they had, no matter how many times I explained it to them. Because they were hurting for money, they were happy to sell me back that piece. We started over that year with $150,000 in revenue and grew quickly. Today, we’ll cross $34 million in revenue in 2016 and be pushing $50 million in 2017. >>>
Sramana Mitra: You were doing this full-time? You didn’t have a full-time or part-time job at this point?
Roy Peleg: Right. My sister was looking for a job. I decided to hire her full-time. When she went on her honeymoon, I started to look for someone to replace her and also found our first developer. A month later when it was becoming difficult to manage the developer, I found my CTO.
Sramana Mitra: Were these people taking salaries? How did you find them?
Roy Peleg: I was paying salaries out of my own pocket. I convinced the developer to take a lower salary and gradually increased during the year. He probably >>>
Sramana Mitra: You financed the other company using the resources of the first company?
Lane Rankin: Correct.
Sramana Mitra: If you look at revenues and stuff, how was the first company doing? What was the trajectory of the second company?
Lane Rankin: Our turnover was around $2 million to $3 million in the first company. I sold the second company in 2007. At that point, our revenue was about $7 million.
Sramana Mitra: Let’s talk a little bit about the second company and its business. What were you doing there? >>>