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College Bootstrapping Buddies: Grasshopper Cofounders Siamak Taghaddos And David Hauser (Part 4)

Posted on Saturday, Apr 10th 2010

SM: After the first year, what were some of your major milestones and challenges?

ST: The primary challenge that we have had from day one is scaling the company without external financing. We continue to reinvest the money and make smart bootstrapping decisions. We grew for the first few years. We were #66 on the Inc 500 list in 2007 simply by continuing what we were doing. The market was great and business continued to grow.

Around 2008, the market was going down. We saw real estate going down hard and we knew we had to make a decision to implement changes in the company to prepare us for the next level. Any business 101 class will teach you that 2,000% as we experienced our first four years is never sustainable. You will eventually hit a plateau of growth.

As a result, in 2007 we decided that we needed to re-brand the company. A challenge that we did not see when we founded the company was that the name Gotvmail was a very difficult name to spell, remember, and understand. Some people thought it meant Government Voicemail. We put a lot of effort into branding a company that was not memorable. We wanted to be more than just a telecommunications company. We wanted to empower entrepreneurs through any offering, including our telecom services. That is when we re-branded ourselves as Grasshopper. Our goal was to make Grasshopper brand for entrepreneurs much like Virgin is a brand for consumers. We set our vision to have 1 million entrepreneur customers within ten years. All the decisions we now make are focused on those core values.

SM: How many entrepreneurs do you have as customers today?

ST: We have served 90,000 so far. We have 40,000 active entrepreneurs out of 150,000 active users.

SM: What is your revenue level now?

ST: It is above $10 million.

SM: Are you still sticking with the bootstrapping model?

ST: Correct. With all the tools such as Grasshopper available to entrepreneurs, it is possible to hire good employees regardless of where they are located. We are now moving toward a dispersed workforce. We have subleased half of the space in our headquarters in Boston because we are hiring great talent in various cities. Austin, Texas, is our second headquarters. We have lab members in Portland, Sacramento, San Francisco, and North Carolina. We are moving toward a dispersed workforce.

SM: To some degree it seems as though you have a solid virtual PBX service which is scaling nicely, and there is not much more to do in that realm other than focus on customer service in terms of development.

ST: All we have to do is scale the product. We have to listen to the customers and update their experience and listen to their needs for new features. That product is our bread and butter. However, our vision is to become a brand for entrepreneurs. We want to empower 1M entrepreneurs to start and grow their business more efficiently.

When someone thinks about entrepreneurs and entrepreneurship, we want them to think of Grasshopper. Grasshopper Labs builds the products that enable entrepreneurs. The first product we launched from the labs is called Chargify. If you are an entrepreneur and you have built a Web app you can now charge for that application efficiently. Before you would have had to hire a programmer to develop a billing system for yourself, or you would have had to use a company to manage that for you. We launched that at TechCrunch50 last year. That product has its own CEO.

This segment is part 4 in the series : College Bootstrapping Buddies: Grasshopper Cofounders Siamak Taghaddos And David Hauser
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