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A $14M Bootstrapped Family Business in Eugene, Oregon: Palo Alto Software Founder Tim Berry and CEO Sabrina Parsons (Part 3)

Posted on Saturday, Jul 21st 2012

Sramana: How were customers finding you? How did you generate all of those downloadable sales?

Tim Berry: At that point it was a nice convergence of retail and web. We were buoyed by good reviews in magazines like PC World, Entrepreneur, and Inc. As the web grew, those reviews became links. We had a full-time salaried position for SEO starting in 1998. We were focused on having people find us through organic search. The important thing to note is that retail and web channels coexisted well.

Sramana: When did you learn about search engine optimization?

Tim Berry: In March of 1995 we launched as a free small business planning resource. That site got attention and was cited a few days after it was launched on MSNBC. That made me pay attention to the importance of the web. That was when I recognized that SEO was important.

In the early days, I knew meta tags were important. The first Palo Alto Software site was something that I did, but I did not make The most important thing is that I worked with smart people who knew a lot more about the space, and I learned things like SEO from them.

Sramana: From 1995 to 1998, you had already built a good web following in the small business space, so when it came time to offer downloadable software you already had a vertical to sell it to.

Tim Berry: Several of us made a very smart choice in 1995. We decided at that point we were not going to compete as the best small business resource webpage. We already had some tough competition in that category. Instead we focused on becoming the worlds best business planning resource. We kept that site as a free resource focused entirely on business planning. That gave us real positioning in the subsequent years.

Sramana: Your growth was all organic and bootstrapped, correct? You did not take external financing, did you?

Tim Berry: At one point in 1994, we had three mortgages and $65,000 in credit card debt. We funded it with our own risk. I was in the business of business planning. I had an equity stake in a company that went public in 1986. I think I knew all along that we did not have the combination of factors that would have offered a good ROI to investors. We really needed to build our own market. We were not going to be able to convince anyone otherwise. We crossed $5.5 million in 2000. In 2001 we fell to just over $5 million dollars. At the end of the day, we built that market and we were successful.

Sramana: In 2001 the market crashed in a big way. It sounds like you remained reasonably strong there as well.

Tim Berry: I always thought we would be counter cyclical because of the way recessions push entrepreneurs. It turned out that as NASDAQ failed, our sales failed in a directly correlated manner. It turns out that we were not countercyclical, and the decline in interest in entrepreneurship associated with the dot-com crash hurt us. We were not used to sales going down. It was a very uncomfortable feeling.

This segment is part 3 in the series : A $14M Bootstrapped Family Business in Eugene, Oregon: Palo Alto Software Founder Tim Berry and CEO Sabrina Parsons
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