Sramana Mitra: In the timeframe that you’re describing, there was activity in the competitive landscape. Of course Quora, with a huge amount of funding, came into the picture and has since become a very large site. How do you view Quora vis-à-vis Answers.com?
David Karandish: First of all, we like to see investment into the question and answer space in general. If you look at the areas that we sit in between, you’ve got an ex-Facebook guy at Quora, you’ve got Twitter guys at Jelly and Medium, and you’ve got an ex-Huffington Post guy at BuzzFeed. If you look at the question and answer, and social and viral article space that we’re in, some of the brightest minds of some of the biggest companies in the last 10 years are now, for their next act, going into this space. So I think we picked the right category to go into. >>>
Kyle Vucko: A smaller handful of my mentors got very engaged with the business planning process, providing feedback every few weeks. After being unsuccessful in getting the money in the business plan competitions, I went back and told one of them that we want to raise money and take this to the next level. He agreed immediately and offered some terms. I also talked to some other people and put together a mini-angel. Within a month of that first meeting, we had raised $40,000 to get the idea from concept to reality, build a website, and prove that we could sell a single suit over the web through customer measurements. That’s how it happened. The actual process of raising money in my case was very easy, but it was actually the result of months of relationship building.
Sramana Mitra: What year are we talking about?
Atul Jain: We did our first acquisition in 2006 when we were around $20 million. Over time, we have done five acquisitions and this year, our revenue is going to be about $180 million.
Sramana Mitra: So in 2006, you bring in another $5 million of revenue with an acquisition and then you launched this analytics product into your existing customer base. What did that do to your revenue?
Sramana Mitra: You brought in $20 million worth of revenue through Answers.com. What strategic reengineering did you do to the property to get it to the next level?
David Karandish: The previous team at Answers.com was doing very little optimization and split testing. For those who aren’t familiar with this, split testing is where you create a version of the page, create a duplicate version with one or two slight changes, and then you throw 1% of your traffic at that. They were doing an A/B test where they had the default version of the site; they had another version of the site that they wanted to run, and they’d run one or two, maybe three of those at a time. We came in and with our technology, we were able to vastly improve that to where now we’re running thousands of split-tests every single month, all in real-time. >>>
Sramana Mitra: Let’s stay in the 2006 to 2007 timeframe. I’m assuming that you’re talking about a period when you hadn’t yet started the business because all of these things had to be in place to launch a custom tailoring shop, right?
Kyle Vucko: Right.
Sramana Mitra: So you identified one or two tailors in China and then you launched this site?
Kyle Vucko: We had to track down a couple of tailors. We had to learn how they measured.
According to a MarketsandMarkets report published earlier this year, the global cloud data storage market is projected to grow 33% annually over the period 2014 through 2019 to be worth $56.57 billion. The researcher estimates the market to be worth $13.57 billion this year. The growth in the market is attributed to the continuing production of both unstructured and structured Big Data along with the need to allow for collaborative and remote working within an organization.
Sramana Mitra: What timeframe are we talking about when you were $20 million in revenue in this business?
Atul Jain: About 2005 to 2006 timeframe.
Sramana Mitra: A $20 million dollar business and now you have a competitor that is going belly up and you buy that competitor for cash.
Entrepreneurs are invited to the 235th FREE online 1M/1M roundtable mentoring session on Thursday, October 23, 2014, at 8 a.m. PDT/11 a.m. EDT/8:30 p.m. India IST.
If you are a serious entrepreneur, register to “pitch” and sell your business idea to Sramana Mitra. You’ll gain straightforward feedback, advice on next steps, and she’ll answer any of your questions. Others can register to “attend” to watch, learn, and interact through the online chat.