Sramana Mitra: What did you do after the pivot?
Tom Coburn: We try to not talk about 2014 to 2015 because they were very hard years. I remember the Board meeting at the end of 2013 where I said, “We have $1.7 million in the bank. We need to pivot this idea to something different.” Their first question was, “What should we pivot to?” I haven’t figured that out yet. Thankfully their answer was, “We invested in you and your co-founders more than we invested in a specific product.”
The only thing they asked me to do was to make sure we didn’t hire more people until we hit certain revenue milestones. I remember we had a plan to grow from 8 to 10 people to 25 over the next six months. It ended up about a year and a half to hit that first milestone. It was hard mostly because we had no idea what the product was going to be. We knew the problems with the first version of the product, but we hadn’t landed on what the new version is going to be.
We experimented with bad concepts. There was a period when we built our own ad network and publishing network. We eventually aligned on our core offering. We launched our first SaaS offering in the middle of 2015. It was a simple product at that time. It was the ability for brands to attach a thin bar to the top of their websites that would pop down and ask questions, and help direct consumers to the right parts. It was almost like a widget to improve site experience. We hit our first million in ARR on that product. We realized that there were a few challenges that led us to pivoting to what we do now.
Sramana Mitra: What segment were you getting traction to get to a million ARR?
Tom Coburn: E-commerce and travel brands.
Sramana Mitra: What sized players were they?
Tom Coburn: Mid-market and enterprise. We went for enterprise right out of the gate. In 2015, we landed some big deals with Mazda, Expedia, and eBay. It was a very sales-led model.
Sramana Mitra: What you’re describing is large deals?
Tom Coburn: The average deal was about $40,000 to $50,000 a year.
Sramana Mitra: You were direct selling right?
Tom Coburn: Yes.
Sramana Mitra: What happens after you hit the million ARR? This is not the direction that you’re going next.
Tom Coburn: This is now 2016. The first meeting it came up in is a meeting with the marketing team at Constant Contact. I remember I was in the room with them looking at the bar on the page. Then the guy pulls it up on his phone and the experience looks horrible on the phone. You have the website which was built for desktop and now shrunk to a smaller screen.
Then you have our little bar that’s sitting across the top of the website. We are seeing that so much more of our customer’s traffic is coming through mobile. We realized that the user experience was not going to work in the future. We also realized at the same time that many of the marketing teams had this problem where they had these legacy websites that were built to be desktop-first. All they had done was make those websites responsive.
The thing we kept hearing was the mobile responsive experience is not the ideal experience. I’ll give you an example. I’m an e-commerce brand that sells jeans. I might have 50 pairs on my website. The person that’s looking at my site to buy might be standing in line at Starbucks who just clicked on an Instagram ad. The chances that they are going to scroll through 50 pairs, do research, and checkout is very unlikely. The chances they’re going to engage with a small bar that comes down on the side is even less likely.
The good news with the whole backend system that we had built is we kept them. We revamped what the frontend experience looks like to a consumer. We built everything to be this fully immersive experience that takes up the entire screen, and are built to be mobile-first. If I click on that Instagram ad, I’m brought to a full-screen Jebbit experience. While I’m standing in line at Starbucks, I can simply answer the five questions about my interests and preferences. I can either checkout right there or email it to myself. That pivot to be this mobile-first interactive experience led to a lot of attraction for us.