Competing with Blackline: FloQast CEO Mike Whitmire (Part 3)

Sramana Mitra: You got into this accelerator. You got your co-founder. We are now in late 2012?

Mike Whitmire: This is mid-2013.

Sramana Mitra: What happens next?

Mike Whitmire: My second co-founder Chris Sluty joined us. I went to Syracuse with him. We majored in accounting. In college, I knew I wanted to start my own company one day, but didn’t want to do it right after college. The conversation with Chris has always been like, “If you figure out what you want to do, let me know and I’ll hop on board.” I told him about FloQast. It’s pretty amazing that we ended up starting something in the accounting space.

From my perspective, my job was trying to bring on more customers and raise our next round of seed funding. I went out to market. I was running around in the second half of 2013 trying hard to sell our product. I would get on the phone with a lot of customers. We’d run a lot of demos. I’d get really far down the sales cycle, but what would ultimately happen is, we would get to the IT team and we’re housing a lot of very sensitive financial information.

One of the challenges we had is a lot of these companies were not comfortable giving us their data because we’re really small. We’re three guys working out of an accelerator. We have maybe $20,000 left in the bank. They were not comfortable giving us their data. I dealt with this for about six months.

I, ultimately, realized that this is going to be a lot harder than I had ever anticipated. We either need to acknowledge that this is going to take a while or try to figure out a different approach with the product to really solve the need in a better way and also remove ourselves from the security equation a little bit.

Sramana Mitra: How did you do that?

Mike Whitmire: This is the low point in FloQast’s history. The second half of 2013 was me trying to sign on customers and getting rejected a lot in the end. I was also trying to raise money, Over the course of those six months, I got no’s from a hundred different investors.

Sramana Mitra: It doesn’t surprise me. What people are looking for in terms of funding these days, you haven’t gotten to that. How did you break that cycle?

Mike Whitmire: I was very much pitching a product and a dream. It’s a tough thing to pitch when people are very interested in your product, but you can’t get it approved by IT. We’re sitting there saying, “The accountants really want to the point where they’re committing to the sales cycle and going all the way down the funnel.” We just haven’t approached it the right way from a product perspective.

I remember I was raising money. We were pretty much at the end of the road with investors to speak with. I got introduced to a fund by the name of Toba Capital. Toba is a bunch of former entrepreneurs and business executives. When I met with them, they completely understood the pain point immediately. They got where I was coming from. A slow close process was something that impacted them directly because they didn’t get their financial statements on time when they were executives.

Because they were entrepreneurs, they’re not so risk-averse. They were willing to take a leap of faith on us and agree that it’s a good idea. They wanted to fund us completely pivoting on our product and building out a new version of it. I remember we were trying to sell this product. I emailed Cullen. I’m like, “We got to meet up.”

This segment is part 3 in the series : Competing with Blackline: FloQast CEO Mike Whitmire
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