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Bootstrap First, Raise Money Later from Houston: Onit CEO Eric Elfman (Part 4)

Posted on Thursday, Sep 24th 2020

Sramana Mitra: Did you bring in an outside CEO or did you promote somebody from the inside?

Eric Elfman: I had hired a COO who became the CEO. 

Sramana Mitra: Was that the person who sold to the company that had already been a strategic investor? The exit path was already laid out? You just build longer and sell it at a higher price. 

Eric Elfman: Exactly. 

Sramana Mitra: What year did you leave?

Eric Elfman: I left in 2008. It was six years before the ultimate exit. 

Sramana Mitra: What did you do next?

Eric Elfman: I took a year off. I did a lot of reflection. I wasn’t going to do another startup. It takes so much energy, and it’s a young person’s game. I didn’t think I was going to go and start another business but then I had to reflect and figure out what I was. Am I just an entrepreneur or a CEO? Could I be the CEO of someone else’s business?

I donated a year of my life to the Houston Technology Center, which is one of the earliest accelerators. It was funded by the city of Houston. I did consulting for free trying to help other startups through the early days.

I met with a couple of people and got offered CEO spots of young startups. Ultimately, after a year, I decided that the only thing that would make me happy would be to start from scratch and build my own business. I started collaborating with one of my earliest employees in the first company.

We eventually founded Onit, which was two years after starting to play with ideas. That was in 2011. We started collaborating around 2010.

Sramana Mitra: What was the premise?

Eric Elfman: We didn’t have one. We had this basic idea that if you gave yourself enough time and flexibility, there would still be plenty of problems to solve in the market. What we didn’t want to do was run right back into legal technology even though there were still plenty of opportunities.

We invested money and also hired some developers and started playing with ideas. We stumbled on the company builder, which is this idea that despite half a trillion dollars being spent every year in enterprise software, very little of it moved the needle in terms of productivity for end users whether you are a lawyer, a compliance person, investment professional, or running an accelerator.

People like us use Microsoft Office or Google apps to get the job done, and if we can’t solve a problem in a PowerPoint, spreadsheet, MS word document then it wasn’t a problem that was going to get solved.

We coalesce around this idea that the average knowledge worker manages their day through email and that email is the world’s biggest workflow platform. That’s where approvals are happening. It’s a bad place for the work of an organization to be done, so we wrote a note code workflow platform.

Out of the box, there is no specific problem, but it provides 95% of the solution for any workflow challenge. We licensed that platform to lots of our customers.

Our real go-to market strategy has been to preconfigure solutions that solve big problems in big markets and sell them as if they were a standalone product with the advantage of our customers being on the platform, able to expand into every one of our products over time. They can also use our platform to solve bespoke problems.

We are selling four main products today primarily in the legal departments. We also license the platform to our customers to write their solutions to workflow challenges. 

This segment is part 4 in the series : Bootstrap First, Raise Money Later from Houston: Onit CEO Eric Elfman
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