Sramana Mitra: The movement right now is very much in favor of Elance. oDesk is more our platform but it’s the same concept. The only way I can run the company is because of what you’ve invented. However, I have always been a bit early in things. I did a fashion company in 1999. That was completely way ahead of this time. We did not survive the dot-com crash. Timing is a concern for a lot of people who are trying to get it right.
There are things that this whole lean startup movement supports where you can experiment quickly. Your timing is more or less okay. You can get something together and get it going. But if you’re working with a really big idea that has a very far-reaching impact potentially and is going to eventually be a very big market but if you’re ahead of the market, a lot of casualties happen. I have actually thought about this a lot. My tendency is to be ahead of the market even with One Million by One Million. It’s way ahead of the market. My strategy to mitigate that is to not put it into a venture timeline.
Beerud Sheth: Keep a low burn rate.
Sramana Mitra: Keep a low burn rate. Keep it going on a bootstrap mode. If and when it starts to find its stride, that’s when you put it on venture timeline.
Beerud Sheth: That’s one approach but certain businesses are not bootstrapped. In hindsight, there was a $50 million round we did in 2001 right around when the market collapsed. That kept us in the game.
Sramana Mitra: Spring of 2000 was when it actually started.
Beerud Sheth: Right. By Fall, it had gone down. I think that kept us in the game.
Sramana Mitra: That $50 million round made you last.
Beerud Sheth: Exactly. It gave us a long runway to be able to do things and to survive. In fact, even at Elance, a bit of the convention was B2C was dead and B2B was where the money is. We took a slight detour where we built out an enterprise solution to help businesses do services procurement and management. It was a very different kind of business. It was focused on enterprises. That was the time when Fabio joined us.
Sramana Mitra: Yes, Fabio talked about that.
Beerud Sheth: Long story short, a few years later, we sold the enterprise software business and refocused on the marketplace. Even when we weren’t heavily focused on it, it continued to grow reliably and stably.
Sramana Mitra: At what point did you find the hockey stick on the consumer business?
Beerud Sheth: I don’t know if there has ever been a hockey stick. It’s just been steady. We had 30% to 40% growth year on year. Certainly, once the numbers started adding up and the scale started growing, we did some more of the corporate stuff. It wasn’t a specific inflection point. The amazing thing was that there was a phase where we were conserving resources. We didn’t spend as much on it. Even then, the growth was always there. It’s a real business. A lot of people depend on it. Right in the early days, a lot of people figured out these emerging business models. They’d find work in the offline world, put it on Elance. It kept growing. It was just there.