Building a Robust Business in Australia: Investorist CEO Jon Ellis (Part 3)

Sramana Mitra: What market were you going after? Was Investorist focused on the Australian market to start with?

Jon Ellis: To start with, it was. Initially, Investorist launched as an idea of working just in the Australian market. As soon as I launched, I’ve probably been active for six months and then I realized that to make it successful, it had to go global and it had to go global almost straight away.

Sramana Mitra: What did you accomplish in the first six months? Were there enough transactions happening in your marketplace within Australia? >>>

Building a Robust Business in Australia: Investorist CEO Jon Ellis (Part 2)

Sramana Mitra: After you quit Mirvac, you started an ad agency?

Jon Ellis: I didn’t intend to start an ad agency. I just intended to work as a marketing manager for other property developers. Very quickly, I realized that there weren’t a lot of experienced marketers. There was an opportunity to work for a number of different companies. I, very quickly, brought on more and more stuff until I was spending a lot of money with ad agencies every year. I started an ad agency called Extension, which is still running today.

Sramana Mitra: You said you ran it for four years. How big did the agency become? What kind of revenues were you doing?

Jon Ellis: It was $3 million a year.

Sramana Mitra: That’s awesome. When you decided to move on from that, what drove that decision? >>>

Building a Robust Business in Australia: Investorist CEO Jon Ellis (Part 1)

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

Jon has side-stepped venture capital, and raised a significant funding from his customers. He hopes to take the company public in Australia once the company gets to about $50 million in revenue.

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

Jon Ellis: I grew up in a small town in Australia on the border of New South Wales and Victoria. It’s got a population of about 40,000 people. My father is a mechanic and has owned his own business for many years. My mother is a teacher.

Sramana Mitra: What did you do for education? >>>

Bootstrapping to $18 Million: Vlad Friedman, CEO of Edge Hosting (Part 5)

Sramana Mitra: If you can attract bank financing and can do things with bank financing, it’s hugely advantageous from an ownership point of view.

Vlad Friedman: Exactly. Today, we’re at about $18 million run rate and on our way to hit $20 million this year. We’re still in the same position. We still have a strong balance sheet. We still have a fantastic relationship with our banks. I’m completely non-diluted because everything is just simple debt financing.

Sramana Mitra: What do you want to do with the company? You’ve been running it since the mid 90s and now we’re in the mid 2010s. It’s been 20 years since you’ve been doing this. What do you want to do? Where do you want to go from here? >>>

Bootstrapping to $18 Million: Vlad Friedman, CEO of Edge Hosting (Part 4)

Vlad Friedman: Over the course of time, it was almost like there was an impasse where by the time the recession hit in early 2000, we had just reached our stride. We were sitting in a good place. We were starting to build these relationships with more and more customers. As the market bottomed out, our business just exploded. While all of our competition wasn’t focused on services before, as soon as they lost their funding and valuations, they drastically slashed staffing and quality of support.

My organization was already positioned for high-quality support and high-quality service, and we had this huge rush of customers into our business, which really helped the foundation of Edge. We flourished in the recession because all of our competition fell off the map because they weren’t focused on value and service. As companies cut people out of their organizations, their IT still needed to be managed and needed to be serviced. I think these are pretty basic business principles. You focus on quality and delivering great outcomes. >>>

Bootstrapping to $18 Million: Vlad Friedman, CEO of Edge Hosting (Part 3)

Sramana Mitra: What year did you come up with the insight?

Vlad Friedman: It was in the mid-90s. I don’t remember the exact year.

Sramana Mitra: You started to provide a hosting solution in the 1995 to 1996 time frame. What was the customer base that you went after with that?

Vlad Friedman: Interestingly, the hosting solution came in 1998. That’s when I went into the automotive space and started to understand the recurring business model. I built that up to a couple of million dollars a year company at that point. In 1998, I said, “This Internet thing is cool. Let’s put up our first website.”

I fired seven vendors in a row because nobody was really outcome-focused or service-focused back then. >>>

Bootstrapping to $18 Million: Vlad Friedman, CEO of Edge Hosting (Part 2)

Sramana Mitra: You basically would do whatever it is the client was asking you to do, I imagine, at the beginning. As time progressed, what became your core competency even in the mode of delivering consulting or solutions? Where did you find your sweet spot?

Vlad Friedman: I had a couple of stages along my evolution. Obviously, consulting was the first piece of it where I cut my teeth and started my career. The first place where I really started to make an impact was when I started to get a reputation for pulling off projects that most other companies just considered impossible.

Sramana Mitra: Can you give me an example? >>>

Multiple Pivots, Taking on Giants, to Over $100 Million in Revenue: Matthew Calkins, CEO of Appian (Part 4)

Sramana Mitra: What year are we talking?

Matthew Calkins: 2003. There was a long transition and it was difficult for us. BPM naturally needs an interface in which you can consume all of the information that goes with it. You might need broad awareness and a portal interface would be good for that. You may need lots of pieces of information to synthesize a decision. Furthermore, that information needs to be targeted to you. So we said, “We’re going to get into BPM, but we’ll call our offering not just BPM but a BPM suite because these other things are synergistic enough for you to buy a suite around BPM and not just the core product itself.” We had to say that because all we had was the suite. We didn’t have the BPM in the middle. >>>