SM: How are you structuring your products as you spin them out of Grasshopper Labs?
ST: We want brands that are self-sustaining. We are structured like Coca-Cola is. They are the manufacturing company and the flagship product. However, they also have other brands. Our virtual PBX is our flagship product, but we have other brands as well.
SM: Are you launching other products as Grasshopper products with another brand or as other companies with other brands?
ST: We are launching them as other brands. When Chargify launched we gave it a brand. We knew there was so much opportunity for entrepreneurs that we knew we did not want to become a Google Labs-type product. We wanted to start self-sustaining companies along with their own team for marketing, operations, and so forth with their own CEOs. They are grown at Grasshopper Labs.
SM: Who is the corporate entity? Are they separate corporate entities?
ST: We have one corporate entity, which is Grasshopper.
SM: So you essentially have product managers running your other brands?
ST: It all depends on how big their product goes. We gave Chargify its own corporate entity because we brought in a CEO for it to essentially co-found it and grow it with us. However, the majority of the products that we are going to come out with will not require full-time employees. In those cases we will have a product manager within our team for those.
SM: So Chargify is unique as a separate corporate entity, and you intend to have most of our products will be brands under the Grasshopper corporate entity?
SM: In your product vision, you are focusing on items to help small businesses get off the ground?
ST: We want to focus on products that will get small companies established or help them grow. In our vision of empowering entrepreneurs if we find an opportunity that is not a service for entrepreneurs then we will not do it. If we can create a disruptive product for entrepreneurs which is better than anything else anyone else is doing then we will do it. Right now at Grasshopper Labs we have dozens of ideas for labs to start. It is not just a matter of finding out what products are the right ones for us to focus resources on.
SM: How do you see yourself vis-à-vis larger companies such as HP and Intuit that have the same strategy regarding their desire to serve small businesses?
ST: Our focus and understanding of entrepreneurs, and what we are doing for entrepreneurship, is something that cannot be matched to the entrepreneurship community. Our competitive advantage is really our understanding and connection of entrepreneurship. No way will Intuit or HP ever understand entrepreneurs like we do. They will try to get into the small business market and they will do a great job of it, but they will not get into the entrepreneurship market.
SM: I would contend that any entrepreneur who starts a business will use QuickBooks.
ST: Entrepreneurs use QuickBooks because they have no other choice. There are other better services out there such as LessAccounting or FreshBooks which are in our circle. Those are much better options for entrepreneurs. It is just a matter of time before Intuit realizes that their product is doing well because it has been the only service available for such a long time.