Sramana Mitra: What kind of scale are we talking? How many customers were you able to get? What pricing model were you using? What are some of the business metrics at the point at which you quit the job?
Robert Hoehn: I apologize. It’s been a little while, so I don’t quite remember. The basic model was a freemium where people could create their own surveys and then send it out to 50 people or something like that. You could upgrade to a $15 a month package where you could have bigger lists. Then we had an SMB package that, at that time, was pretty cheap at $49. It was all credit card transactions.
Sramana Mitra: What kind of numbers did you have? How many paying customers did you have?
Robert Hoehn: I think it was 50 at that time.
Sramana Mitra: What did that give you in terms of monthly revenue run rate?
Robert Hoehn: I don’t remember what it was back then.
Sramana Mitra: In these Bootstrapping Using a Paycheck stories, it’s always interesting to know how far you can actually get to without quitting your job. By doing that, you increase your probability of success because you have validated the business, you have customers, you know who the customers are, and you know how to acquire customers. It’s a solid way to get a business off the ground in our view.
Robert Hoehn: Yes. We kept putting off the concept of raising capital because we just came from the roots of getting another customer. We always thought, “Maybe our customers are our investors. Maybe we just need to keep creating a viable product.”
Sramana Mitra: Customers make better investors than actual equity investors.
Robert Hoehn: I agree.
Sramana Mitra: Tell me more about what happened. After you quit, what happened to the company?
Robert Hoehn: It allowed us to focus more on it. We were one of the early adopters of the concept of SEO. There wasn’t even a name for it then. We learned early on how the Google page rank system worked. We did a ton of work around making sure that bloggers write about us. We would give away the license to non-profits and ask them to write about our tool and how they used it.
At that time, that was extremely cutting-edge. No one was doing that. We found that we could just generate a ton of traffic by optimizing search. It’s always been a black box but back then, there was nobody writing about how it works. I would say that’s probably one of the biggest drivers of the business in the early days.
Sramana Mitra: How far did this business go in that format? What kind of scale were you able to achieve with that and at what kind of growth rate?
Robert Hoehn: I think we were growing about 40% to 50% year on year.
Sramana Mitra: That’s very good for a bootstrapped business.
Robert Hoehn: Yes, I think so. It’s easy to say this now but back in the days, there weren’t words for these concepts. Early on, we were really obsessed with self-service because we had day jobs. We’re like, “Let’s stay up all night writing help articles because we can’t have a support team.”
Sramana Mitra: Necessity is the mother of all inventions.
Robert Hoehn: Isn’t it amazing? A lot of that stuff around making a really simple website was just because we couldn’t get on the phone and help people create their own survey. You have to remember that back then, consultants were creating surveys by hand and they were custom-built.
The idea for people to be able to login and create a survey was just incredible. We tried to look at other growth strategies like getting non-profits to create surveys. Again, there wasn’t much of a concept of freemium. Some people called it free but we identified the idea of laddering our marketing.
In other words, we would talk to one customer and say, “We’re not going to white-label this. There’s going to be the Question Pro logo somewhere.” Why that’s so important is because if it’s a B2B service, we want people to use the tool and when a survey is sent to them, they would see the QuestionPro brand and learn about it.
That concept of B2B vitality was very powerful. I’m very aggressive with my brand and where it’s placed. The idea of co-branding things is hugely important. In the early days, everyone was coming from this world of, “I installed this on my server. I get to do whatever I want with it.”
It was just blocking and tackling with customers to say, “No, you are using a service and you can’t just do whatever you want with the survey.” One of those very important things is there will be a QuestionPro logo somewhere and that was very difficult. To this day, it’s actually still difficult. But customers are getting it now. What’s interesting is some customers are even understanding the idea that it’s almost disingenuous to try to say that this is my own software. That was a huge win for us. I don’t think we really understood the power of it until years later where we saw the exponential growth in users.