Bootstrapping Using Services: James Kane, CEO of RWS (Part 5)

Sramana Mitra: How did revenue ramp during this two-year period?

James Kane: We went from about $500,000 to a little under $3 million.

Sramana Mitra: That brings us to what? 2008?

James Kane: Yes, roughly speaking – about when the housing crash started.

Sramana Mitra: How did that impact your business? >>>

Bootstrapping to Inflection: Dan Stewart, CEO of Happy Grasshopper (Part 5)

Sramana Mitra: When you and I started working together and we were looking for the positioning, that was very much our conclusion. It’s okay to cater to people who are coming as inbound leads and are a fit for the technology and product. But from an outbound marketing point of view, you have to pick a vertical and you have to remain focused and committed to get the full leverage of the methodology of getting a laser-sharp positioning in place. Talk about pricing. My recollection is that there were some discussions and debates around freemium and free trial on that front as well. Talk to us about what those decision points were.

Dan Stewart: We were, and remain, willing to experiment with pricing and with trials. On our very first site, there was nothing free. There was no trial. It was $19 a month. As we started to get a little bit of traction in the real estate space, we thought, “Wouldn’t it be smart to increase this?” We created an account that was 50 contacts free forever.

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Bootstrapping Using Services: James Kane, CEO of RWS (Part 4)

Sramana Mitra: As you identified that opportunity, what then did you do to execute on it? What changed?

James Kane: We identified that the opportunity was significantly large here. We then reimagined the company to pursue a much larger opportunity. We moved the business from a small, sleepy college town in New York to Phoenix, Arizona. We had a lackadaisical team. We started the process of building a proper team to pursue the larger opportunity. It all started with the idea that there’s a larger opportunity out there. The first step was the realization that major changes would be needed to realize the opportunity. I wound up bringing on my sister who’s our Chief Operating Officer. Together, we reimagined the business from scratch. >>>

Bootstrapping to Inflection: Dan Stewart, CEO of Happy Grasshopper (Part 4)

Sramana Mitra: How many years was the CRM company?

Dan Stewart: Three years.

Sramana Mitra: How much did you sell it for and to whom?

Dan Stewart: That’s all really confidential. It wasn’t a sexy exit. Our largest customer did not want us to sell to their competitors. They basically bought a license of the code and then we shut down the company. >>>

Bootstrapping Using Services: James Kane, CEO of RWS (Part 3)

Sramana Mitra: What was specifically the customer acquisition strategy? Were you calling these people? Were you visiting these people? Was it direct? Was it channel? How did you sell?

James Kane: The primary customer acquisition strategy was in-person sales at trade shows. The appliance retailing industry is cyclical. They have two buying seasons – in the late summer and in the very early spring. Appliance retailers have big buy fairs where they come together at those two times to buy new merchandise for their store and also to evaluate new business services. Almost all of our initial sales were through those kinds of trade events.

Sramana Mitra: How did the business ramp given that strategy? >>>

Bootstrapping to Inflection: Dan Stewart, CEO of Happy Grasshopper (Part 3)

Sramana Mitra: Your background was in sales training and then construction. Where does CRM come from into this process?

Dan Stewart: Maybe we should go back a little bit further. We all have our gifts and talents. I’ve always been fascinated with learning. I have a very diverse set of interests. Whenever a subject interests me, I obsess about it until I’ve learned as much as I can. My love for computers and technology started in my childhood. I had a Sinclair back in 1981. I was an early Commodore user. I’ve always taken a very active interest in technology trends. When our company had grown to the point where >>>

Bootstrapping Using Services: James Kane, CEO of RWS (Part 2)

Sramana Mitra: After two years of piloting, it brings us to 2003. What happens next?

James Kane: I decided that I had to get back to what my avocation in life was, which was the design and creation of software. I made the decision to sunset flying and to begin the search for a new concept to build a software company around.

Sramana Mitra: What form did that take? What was that new software company going to be?

James Kane: I didn’t have a vision. I needed to find a validated concept to build my company around. What I did is, I assembled a very small group of two or three developers. We went out and worked as consultants. In particular, we were looking for failed software projects. >>>

Bootstrapping to Inflection: Dan Stewart, CEO of Happy Grasshopper (Part 2)

Sramana Mitra: When you decided to shut that down, what was the next move?

Dan Stewart: I went to work for one of my yellow pages clients. I became a construction manager of all things. That was a great experience because I got to sell millions of dollars worth of projects. In the process, I learned to manage those projects and become a better business owner. That led to starting my geotechnical contracting company which kept me busy for a long time. That’s where we won all the Inc magazine awards.

Sramana Mitra: What year was that?

Dan Stewart: We incorporated in 2000. >>>