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Bootstrap First, Raise Money Later: Ben Hodson, CEO of JobNimbus (Part 2)

Posted on Friday, Jul 23rd 2021

Ben Hodson: Later, that code ended up evolving into something that could auto-rekey those servers without ever having any downtime. We dubbed it Encryption Management. We hadn’t come up with all of that at the time when we were doing this business plan competition, but that was the seed of that idea. The business plan competition was really fun. You would go into a giant auditorium at the University of Washington. You would have a little booth. They gave a bunch of people Monopoly money that was given by business leaders in the area. These were people from well-known companies. I remember the CTO of Chase bank was there. High-level people from Microsoft were there. They would walk around and you would get to your elevator pitch.

They gave you a minute. You have to pitch them your idea, your company, and why they should invest in you. They would then decide whether or not to give you some Monopoly money. We kept collecting money and pitching for the whole session. The competition ended and they counted all the team’s money. We ended up getting into the top ten teams, which then went into session in a closed-door room. It was scary.

You are walking in with all these business leaders that are way ahead of you in their career, and you are just a kid trying to figure things out. You had 10 minutes to do your presentation and then they had 10 minutes to ask you questions. They were grilling us pretty hard. They were treating us like they were venture capitalists. We had to have an interest. We ended up winning the third position in the competition. The cool thing was that we got $50,000 from that. We used that towards legal fees. We incorporated the company and we started writing some patents on this idea. We took some of that money to buy some computers. We also convinced a couple of students to work with us. We got a buddy to let us into the basement of his house that was near the University of Washington. We would do our schoolwork during the day and then we would go and spend almost all the night coding and building the product.

We built a prototype that was good enough to pitch to Verizon. I got a meeting with the C suite. It was amazing. We showed them what we had. Since the pain was so high around the expiring certificates, they were interested in our solution. They were our first customers. They ended up paying $250,000 for the first year. That got the company off to the races. Six months later, we ended up raising our first round from Utah Ventures who led the round of $5.5 million. That was from 2002 to 2003. 

Sramana Mitra: You were based in Utah at this time?

Ben Hodson: Yes, we were still up in Seattle after we closed on Verizon. I wanted to get some higher-level developers. The students were good, but they didn’t know a lot of things. We tried to hire people in Seattle but everybody was saying, “I already work at Microsoft.” We would say, “Wow, we can’t pay you that much money.”

We just couldn’t give those options. We didn’t have health benefits and things of that nature. A buddy of mine lived in Utah and said, “Hey Ben. We are perfect for you. We went out of business recently. There are a lot of good developers that are out of work. I think they can fit in working for you guys.” We went out on a Saturday and spent the whole day interviewing 20 people.

People were saying, “Yes, I would come aboard.” They were experienced senior people. They were more senior than me. It was a risky move, but we said, “We are going to have to go to Utah to get this company moving. It’s the only way to get the talent that we need.” I told my wife, “Hey, we are moving to Utah.” She was, “Okay, I believe in you. Let’s do it.”

We moved into a little rental house. The rental was about two blocks away from the company. We only had one car, so I could walk to a little office that we rented for $250 a month. My partner, Rob Thornton, and I would sit at one desk. We had a phone line and Internet access. We would go over there and work. We got another desk. We put two developers there. We started having a real product to build over that year.

This segment is part 2 in the series : Bootstrap First, Raise Money Later: Ben Hodson, CEO of JobNimbus
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