Sramana Mitra: What was your revenue level in 2010? The 9,800 customers translated into what kind of revenue level?
Mitch Harper: Our average per user back then was about $40 per month. It was somewhere around $5 million to $10 million at that time.
Sramana Mitra: What were the milestones that you set for yourself with your Series A financing?
Mitch Harper: The first milestone was to double the number of merchants we had—from 10,000 to 20,000 in that year, which we did. The second thing was to focus on building a really good team in Austin. By the time we landed that Series A, we had setup an office in Austin, Texas. We had a small sales and support team. We wanted to build those teams out to scale ahead of the business.
With merchants, they expect phenomenal support. Support is something I’m passionate about. I wanted to make sure that we could give phenomenal support. I look at companies like Zappos and what they do with support. I wanted to bring that culture into our business. Make the product easy to use, but when someone calls you, you give them a phenomenal experience that they will tell everybody about. We really wanted to make sure that we have a good support team. We added a few sales people to handle all of the inquiries that were coming in. However, our sales team is still relatively small.
Sramana Mitra: In terms of your model, you sell online, right? People buy your product online or do you actually have to sell?
Mitch Harper: For the small business product, that can all be done online. For our enterprise product, which we launched at the beginning of the year, you do have to call up.
Sramana Mitra: What was the thinking behind setting up your US operations in Austin?
Mitch Harper: We initially had a marketing consultant who was based in Austin. He was helping us with marketing and branding. We mentioned to him that we wanted to setup an office in the US. We asked him what he thought about San Francisco, New York, or Chicago. He said that San Francisco is too expensive. We’re a startup, so we should be in a place like Austin. It is in the Central Time Zone, so we can do support easily on the east coast, west coast, and Europe.
We were right near the University of Texas, so we could get graduates who wanted to start in a company like ours. It was just a cheaper city to rent space in. That’s why we initially chose Austin, but we’ve remained in Austin and have almost 300 people in Austin at the moment. We also have an office now in San Francisco, which we set up earlier this year.
Sramana Mitra: So Austin has become your primary operation then?
Mitch Harper: It has, yes.
Sramana Mitra: But you are still based out of Sydney, or have you moved to Austin as well?
Mitch Harper: I’m in Sydney. We just do a lot of flying back and forth.
Sramana Mitra: When did you raise your Series B?
Mitch Harper: We did it exactly a year after, in July 2012.
Sramana Mitra: What was the thinking behind this series? What did you want to accomplish with that money? How much did you raise? Whom did you raise it from?
Mitch Harper: I think there’s really three stages of startups. The first is product market fit. The second is getting ready to scale. The third is scaling. We raised our Series A to get ready to scale. We put the right people in the right places. Then we wanted to raise the Series B to actually scale and really grow aggressively. That was the main reason we raised the Series B. That was $20 million and all from General Catalyst.