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Bootstrap First, Raise Money Later to $120M from Colorado: Madwire CEO JB Kellogg (Part 4)

Posted on Monday, Jun 22nd 2020

Sramana Mitra: What was the revenue level in 2014? What was the split between product and service?

JB Kellogg: $20 million at that point. The mix was somewhere around 20% product and 80% services.

Sramana Mitra: Was it still bootstrapped?

JB Kellogg: 2014 was when the first equity partner was brought on board.

Sramana Mitra: How much did you raise?

JB Kellogg: About $15 million.

Sramana Mitra: All growth capital or did the founders take liquidity?

JB Kellogg: It was mostly growth capital.

Sramana Mitra: How many people at this point?

JB Kellogg: About 175. 

Sramana Mitra: Still in Colorado?

JB Kellogg: Yes.

Sramana Mitra: What happens in 2015?

JB Kellogg: We had launched our Marketing 360 platform a year earlier, so there was a lot more usage. It was beginning to accelerate our growth because of our scalability and our competitive advantage. There wasn’t really a small business platform out there that was anything like it. We were acquiring a lot of accounts.

Sramana Mitra: You’re also doing the services, right?

JB Kellogg: Technology and talent.

Sramana Mitra: You’re not selling the technology but you’re selling technology plus services.

JB Kellogg: Yes.

Sramana Mitra: So it’s a do-it-for-me model as opposed to a do-it-yourself model of pure SaaS.

JB Kellogg: That’s right – tech-enabled services. 

Sramana Mitra: Customer acquisition is still digital with Google and social media?

JB Kellogg: Exactly.

Sramana Mitra: What happens in 2016?

JB Kellogg: We saw a lot of growth. We ran out of space and we needed to find more space. That’s when we moved to Fort Collins. Fort Collins is a bigger town and they had a large space available. We ended up leasing that space. We had about 250 people at that time in 2016. 

Sramana Mitra: From a revenue point of view, where are you at this point?

JB Kellogg: We’re right around $60 million. 

Sramana Mitra: Still with just the $15 million financing?

JB Kellogg: Still the same. It’s still the same till today actually.

Sramana Mitra: What are the highlights of 2017 and 2018? What are the next strategic moves?

JB Kellogg: Between 2016 and 2017, we launched the second version of our Marketing 360. The key piece there is we really focused on business management tools and not just marketing. We built a CRM with email marketing automation.

That was very sticky. We saw improvements in churn at that point. People using a CRM are not going to cancel that because it has all their business management tools in it. That was exciting.

We grew quite a bit from 2016 to 2018. 2016 to 2019 was when we grew quite a bit. We broke the hundred million run rate in under 10 years.

This segment is part 4 in the series : Bootstrap First, Raise Money Later to $120M from Colorado: Madwire CEO JB Kellogg
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