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Bootstrap First to Exit, Bootstrap Again, Then Raise VC Money ALL from St. Louis: Stephanie Leffler, CEO of OneSpace (Part 3)

Posted on Wednesday, Jul 27th 2016

Sramana Mitra: All this was organically built or did you raise any financing in this process?

Stephanie Leffler: We didn’t raise any financing. We’re both very happy at this point that we didn’t. It wasn’t really by design but it was more because we didn’t even understand that those sort of things were available.

Sramana Mitra: How were you doing customer acquisition?

Stephanie Leffler: We got very good at search engine marketing. In Google, we ranked number one for the term shopping cart, shopping cart software, and e-commerce store. Every day, our sales line was a queue. Sales people would pick up the phone as fast as they could. It was all 100% inbound from our rankings in Google at that time.

Sramana Mitra: The other guys like BigCommerce and Shopify weren’t around yet?

Stephanie Leffler: They didn’t exist. There were two other players in the market who we paid attention to. One was Yahoo! Store. They were the largest at that time, and we were the second largest. There was a competitor that is still around named Volution. They came on the scene while we were in business. They were third largest in the space when we sold. Of course, they’ve continued to grow and done very well.

Sramana Mitra: Awesome. You sold in 2007?

Stephanie Leffler: 2006.

Sramana Mitra: Did you have to go work for them?

Stephanie Leffler: We did. We agreed to go and work for them. We didn’t have a specific length of time but a small portion of our deal was in earn out. We were pretty excited about it because we had never worked for a big company before. What they envisioned doing with Monster Commerce was to have us provide all of the e-commerce, online marketing, and design services for all of Network Solution’s four million small business customers. We were pretty excited. It was a big deal and we were going to have a big role in the combined entity.

Sramana Mitra: How long did that go on?

Stephanie Leffler: It went on, with a high degree of excitement, for a year. We integrated the companies, learning things all the time. After that first year, everybody deemed the acquisition a huge success. Looking back on it, I realized it was the thing that I was staying for. I wanted everyone to look back and say, “I’m really glad we bought them.” They did. We ended up selling the combined company to a private equity firm in March of that year. I was there for 15 months. As soon as that happened, I was ready to move on and start to think about what I wanted to do next. My partner and I left at the same time. That was after 18 months at Network Solutions.

Sramana Mitra: While at this Network Solutions, you were still based in St. Louis?

Stephanie Leffler: Yes, one of our earn out conditions was going from 80 team members to 250 team members in our St. Louis location within three months of the acquisition so that we could staff up to be able to support their full customer base. They saw St. Louis as an advantage because of our cost bases here being so low.

Sramana Mitra: Then what? What’s the next phase of the story?

Stephanie Leffler: We bought an RV. We loaded up our two dogs and decided that we wanted to spend a year driving across the country and seeing the United States. Two or three weeks in, we were in South Dakota and we stopped at a Walmart and bought white boards. I knew that was the beginning of the end. We lasted for about eight weeks.

The whole time we were driving, we would write on these white boards all the problems that we wanted to solve that fit with our skill sets. We kept on thinking of all the knowledge that we gained. There were a lot of ideas on the board that were good ideas but got nicked just because we didn’t know the space. I feel that a lot of entrepreneurs have made mistakes where they jump into a completely new line of business because it’s interesting, but they leave behind all these assets. It was all Internet type stuff.

What we landed on was taking the concept of the shopping comparison engine, but putting it in place for information. Google has now done this incredibly well with their Knowledge Graph. Before Google, it was Free Base. We thought we could build a much better, structured encyclopaedia with all the information that was available online. We came back and tried to figure this out.

From having a team of people who do things, we were back to being in the office where it’s just you again. It was fun but also a rude awakening in how slow you move. We got that going. The interesting piece was we needed a lot of labor to help us get all this information. We didn’t just want to repurpose information we could find online.

We started hiring freelance researchers. It was right around the time when oDesk came out. We started hiring people on oDesk to do this research for us. Very quickly, we found Amazon’s Mechanical Turk. We had hundreds of people doing it but managing all of them was insane. Putting on our software hats, we just thought of it as a support tool. We started to build this tool to harness all these freelancers, bringing them together, managing them, giving them their assignments, and rating quality.

This segment is part 3 in the series : Bootstrap First to Exit, Bootstrap Again, Then Raise VC Money ALL from St. Louis: Stephanie Leffler, CEO of OneSpace
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