From Free To Premium With Ease: YouSendIt Cofounder Ranjith Kumaran (Part 2)

SM: What was the competitive landscape like at that point?

RK: Right around the time we launched another small company out of Los Angeles called Dropload. It did not take off as quickly as hoped. Dropload was a one-to-one distribution system. You could upload a file, send someone an e-mail to tell them it was there, and then once it was downloaded it was gone. We were more open. We allowed files to be sent to five people, and it just fanned out from there. We were very active in going out and touching the photography communities. We even powered a photo community in the early days as part of their discussion board.

A lot of the people on the boards we were posting on were writers and bloggers. We started getting written up in newspapers and magazines. We got written up in Wired and Playboy. Playboy has a photography section, and one of their photography tips was to use our service to send the incredibly large 5MB pictures. We worked ourselves into lots of places where people were writing.

SM: Would it be fair to say that the process you followed for validating your business was building the technology and putting it out there?

RK: Ultimately, yes. We talked to IT support professionals at the time about the types of FTP solutions available. It was really the management and security of the FTP servers and e-mail servers we were relying on. I worked at startups where I had that problem and I knew it was impossible for them to manage. It was in our DNA from the beginning. As we rolled it out we gave it to the IT professionals they also recommended it.

Ultimately we thought it would be a very horizontal market, and it has proven to be that way. It is transactional, everyone uses it, and it is a global business. It is not a United States-only, small business. It started with casual photographers and grew from there. Even my parents use it to send videos of their grandkids.

SM: What happened in 2003 after people started using it?

RK: In late 2003 I had the domain name, and we put out a limited system. We got a minimal response. By the end of 2003 we knew it was sink or swim time. We opened it up to 1GB files and let people send files to multiple users. That is when we saw traction starting. In the middle of 2004 it was up to 500,000 unique senders each month.

Our users started telling us that they realized we had ads in order to keep the lights on, but that they were taking it to work. The security requirements came from that. It was a great way to learn from the market. For the next 18 months we scaled and listened to the use cases. We figured out how people were using the technology at work.

That was ultimately the thesis for the first venture round. We had a few smart guys, a bunch of traffic with over 3 million unique visitors a month, and an advertising based system. That did not monetize as well, but that is where we were in the early days. We started showing poorly targeted ads, but it kept the lights on and paid for the bandwidth.

This segment is part 2 in the series : From Free To Premium With Ease: YouSendIt Cofounder Ranjith Kumaran
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