Bootstrapping, Pivoting, Gaining Liquidity, Scaling to Over $100 Million: MediaAlpha CEO Steve Yi (Part 4)

Sramana Mitra: Each of you had worked on this travel startup before, and you had sold this startup. You got a little bit of money and were willing to put some of that money into starting something else as a collective group.

Steve Yi: That’s exactly right. You said it much better and succinctly than I did. One of the things that I fell into the trap of was thinking too hard about trying to find a great idea. Ultimately, we were successful when we decided to focus on the auto insurance lead generation. It was after we decided to keep it simple and focus on an industry that was generally doing well. In our case, we were in Internet advertising, so we wanted to pick an industry where there was a lot of advertising.

The advertising ecosystem in auto insurance was very similar to what we had dealt with in travel. We felt very comfortable with the technology platforms that we had built in the past and our ability to leverage our expertise there to build better advertising platforms tailored to the auto insurance market. Once we knew >>>

Bootstrapping, Pivoting, Gaining Liquidity, Scaling to Over $100 Million: MediaAlpha CEO Steve Yi (Part 3)

Sramana Mitra: What did you start next?

Steve Yi: I next started a travel advertising company. After I left, it took about a year to iterate. I knew I wanted to have my own company again. I iterated on different ideas and different consulting projects. I, finally, got connected with a couple of people who I used to work with. These are people who I loved working with who had skills that were completely complementary to mine.

The three of us had no overlapping skill set. We started the travel advertising business. We did that for about a year and a half. Then we ultimately sold that company for a relatively modest amount. What it did do is, it gave us seed capital to enable us to really focus for a good six to nine months without having to worry about salaries to start MediaAlpha. >>>

Bootstrapping, Pivoting, Gaining Liquidity, Scaling to Over $100 Million: MediaAlpha CEO Steve Yi (Part 2)

Sramana Mitra: Do you want to quickly summarize what you attempted in the last two startups?

Steve Yi: My first startup, which was in 2004, was a customizable search toolbar platform that any publisher or website can customize and distribute to their users. The second company was a travel advertising site. It was essentially just an affiliate marketing website focused on the travel space.

Sramana Mitra: The first one didn’t work because there was no monetization model?

Steve Yi: Actually, there was a monetization model. You can monetize it through a deal with Yahoo! or with Google. It didn’t work because we were squarely within the crosshairs of Google who wanted the toolbar market. It was a very important market for them. In terms of getting distribution of their toolbars, >>>

Bootstrapping, Pivoting, Gaining Liquidity, Scaling to Over $100 Million: MediaAlpha CEO Steve Yi (Part 1)

If you haven’t already, please study our Bootstrapping Course and Investor Introductions page. 

Fascinating story of MediaAlpha, beautifully told by Steve, relates how the team has navigated through various experiments to over $100 million in revenue.

Sramana Mitra: Let’s start at the very beginning of your personal journey. Where are you from? Where were you born, raised, and in what kind of background?

Steve Yi: I was born in Seoul, Korea. When I was seven, my family immigrated to Minneapolis, which is where I consider myself to have grown up. I went to high school in a small town. I went to Harvard College and majored in East Asian Studies. I had no idea what I wanted to do afterwards. I gravitated towards professional services. I worked at a company called Mercer Management Consulting, which is my first introduction to the business world. I opened my first spreadsheet working in management consulting. >>>

Bootstrapping from Ukraine: BPMOnline CEO Katherine Kostereva (Part 7)

Katherine Kostereva: We do account-based marketing campaigns around those companies. As soon as we acquire the partner, we do onboarding processes. We invest in onboarding the partner and have them start developing the market. In some regions, we have unbelievable success. In South Africa, we have a partner who’s bringing several customers every month. Our direct sales force is doing nothing to get those customers. We just support our partner to do the job. That’s our channel number one.

To summarize, we do account-based marketing targeting system integrators. Those system integrators get into their existing customer base selling BPMOnline. The second vector is classical inbound marketing. We do lots of educational content. Every week on our website in the Insights sections, our prospects and >>>

Bootstrapping from Ukraine: BPMOnline CEO Katherine Kostereva (Part 6)

Sramana Mitra: Talk to me about organic growth versus financing. Is all the growth that you’ve achieved so far organic?

Katherine Kostereva: It’s all organic. We never took loans and we never had investors. The approach is very simple. We reinvest everything we earn into our business. Nowadays, we have 700 people on board in six offices globally. You can roughly split those 700 people into two parts. One half is R&D and technical support. The other half is marketing and sales.

Sramana Mitra: What percentage of this is in Ukraine?

Katherine Kostereva: R&D is almost 100% in Ukraine. We have several people in different locations to support our customers. It’s split for sales and marketing. For example, I work in our Boston office because I’m leading the expansion into the American market. We are heavily investing in our Australian >>>

Bootstrapping with Affiliate Marketing: Zeeto CEO Stephan Goss (Part 5)

Sramana Mitra: What happened in 2012?

Stephan Goss: We started hiring pretty extensively on the tech side. I think, by the end of 2012, we got up to about 12 people. The questions were just statically built. They weren’t optimized. There wasn’t anything about switching them around. We started hiring a lot of developers around that concept. We started building a platform that would basically power it all dynamically.

We built the full ad exchange to optimize which of the buyers were bidding on the inventory. That was the year in which we heavily invested in tech. We ended up getting up to about a $12 million run rate. We started to get a lot bigger and had to finance the hire of some more experienced people. Just having better technology ended up paying off significantly. >>>

Bootstrapping from Ukraine: BPMOnline CEO Katherine Kostereva (Part 5)

Sramana Mitra: When it came to a head-to-head with Microsoft, how did you win?

Katherine Kostereva: I win against Microsoft now in America as well. First, what is the differentiator. The differentiator of BPMOnline is that it is built on BPM platform. Even mid-size companies who value Business Process Management as the core of CRM application see this value. I would say that any strong company will value this engine below CRM functionality. They, obviously, prefer BPMOnline.

We provide the agility to our customers to change processes in CRM faster than any CRM solution. Why we’re winning deals from Microsoft and Salesforce today is because of our BPM engine. Let’s put it into two parts. To be successful, we need great technologies and need great sales and marketing. >>>