Sramana Mitra: But then you got to get them to come. That’s the tricky part. It’s usually true about marketplaces that one side adopts faster. If I’m thinking about your business, these caterers wanted the marketing angle that you provide. That’s the draw why these caterers would come.
Stefania Mallett: Very much so. The story is exactly what you said. We don’t charge the caterers anything unless they get an order. We would say to them, “It would cost you nothing.” As one caterer said to me, “Wait a minute. I have to pay to have my ad in the yellow pages whether anybody reads the ad or ever dials my number. You’re telling me you’re going to give me yellow pages exposure without having to pay for it unless someone gives me an order.”
How did we get the customers? At the beginning, the word of mouth publicity was spectacular. It remains spectacular. It was a lot of word-of-mouth publicity. There was a lot of excitement around how we helped someone who found our website. They would say to their peers, “You’ve got to do this. This is incredible.”
When we didn’t have anywhere near as many caterers and restaurants, they would do that but they always ran into the problem of not being in their territory.” Word of mouth was greatly strengthened by having this national coverage. We got out of angel mode and started bringing in super angels. We started having enough money to do some search engine marketing.
Sramana Mitra: How long did it take you to hit a million dollars in revenue?
Stefania Mallett: About five years.
Sramana Mitra: What happened that changed the growth rate?
Stefania Mallett: The first thing that changed the growth rate was putting a great deal more supply on the supply side of our marketplace. That made a huge difference. That’s when we went to 20,000 in three months. We’re at 50,000 now. The inflection point came when we got out of bootstrap mode and started bringing in large amounts of money. We raised a million dollars all at once. A year later, we raised $2 million. Then we raised $3 million. It was mostly for marketing. Then when we got $13 million all at once in spring of 2015.
Sramana Mitra: What were you able to do with all this fundraising that you couldn’t do in the bootstrapped mode that unlocked the pace of growth?
Stefania Mallett: Digital marketing.
Sramana Mitra: Talk about the customer acquisition strategy that has worked for you to really get this.
Stefania Mallett: In the early days, we did outbound. We did email marketing because we had email addresses from our previous company. We bought the list. We did outbound and it worked. It was very cost effective but it was too slow. When we got a few more dollars scraped together, we went into search engine marketing. We did classic web marketing on Google and Bing and found that sped things up quite nicely. We’ve always had great follow-on from bringing in any customer by whatever means we do. The majority of our customer acquisition since 2011 has been search engine marketing.