Sramana: What were the circumstances behind that acquisition? Did they approach you? What was the rationale behind selling?
Matt Dusig: They came to us in the summer of 2004. They were going public in August and they wanted to make an acquisition. They made us an offer that we laughed at. At the time, we were exploring it just to explore it. We wanted to see what our business was worth. By October of 2004, we saw where our revenue and profits were. We called back the CEO of Greenfield, the company that was looking to acquire us, and we told him that we were going to do $3 million in EBITA. We wanted to know if they were still willing to pay 10 times earnings, which equated to $30 million in cash. Their CEO said yes. Six months prior they had offered $15 million.
This was our first big win, and it was a lot of money for Greg and me. We definitely had a company with upward momentum. We would have gone to up to $30 million within a few years, but we also had a few risks. We had taken on an angel investor who was not necessarily a professional angel investor. That person was smart enough to ask for preferred stock and our lives miserable at board meetings. If we said black, that person said white. It was one of those things where we never saw eye to eye. The investor would say things like, “If a salesperson starts to make too much money, you should decrease their commission so that they never make over a certain amount.” We felt we would lose our salespeople if we knocked down their commissions for being successful.
In addition to that investor relationship, we realized that a third of our revenue came from one market research firm. We felt that represented a significant client risk. We saw the opportunity to sell to Greenfield as an opportunity to take some chips off of the table and divorce ourselves from a horrible investor and board member. It just made sense for us.
Sramana: That is a fine way to build a serial entrepreneur journey. Each time you do a venture you learn certain things. The next round you are going to doing things better. Reset and restart. That is great.
Matt Dusig: Exactly. We had a three-year non-compete. We sat out and built three other websites, one of which we sold in 2010. There was no major success.
Sramana: Talk to me a bit about Greg; he sounds like an important part of your entrepreneurial journey.
Matt Dusig: We are best friends and more like brothers. Sometimes business partners fight, but if Greg and I fight then I can bring up some old girlfriend from college and we will both laugh about it. We have so much history together that I know exactly what he is thinking based on his body language. I know if a meeting is too long, too short, and everything else.
Our families knew each other growing up. We saw each other at family events from age six on. His brother and my sister were the same age and had the same classes together. In college I was in a fraternity, and Greg came to pledge. It had been a couple of years since we had seen each other, but right there at 18 and 19 years old we immediately became best friends again. We are basically on our fourth business together and this is by far our fastest growing.
Sramana: How about skill sets? What are your skills compared to Greg’s?
Matt Dusig: Greg is the horsepower and I am the brainpower. Greg is super smart. What I try to explain is that he is a wind-up machine and goes nonstop. Greg focuses mostly on corporate development, business development, and partnerships. He handles the supply side. I focus on corporate strategy and the demand side of the business. I work on figuring out new channels and customers. I work in technology and product and draw on my graphic design background. Steve Jobs was my hero in terms of being a leader who spends time wanting things to look right. I am obsessed with design and typography.