Multiple Pivots, Taking on Giants, to Over $100 Million in Revenue: Matthew Calkins, CEO of Appian (Part 2)

Sramana Mitra: Let’s pause for a moment. I want to ask a few questions about your survival. Were you bootstrapping this company or were you funded? How did you manage to survive this pivot financially?

Matthew Calkins: Our cash flow was quite strong. We were running a services business. We were doing a little bit of intellectual property, but mostly we were just developing that and selling it on the cheap in order to make money on services. We were also doing a little bit of analyst work in order to establish our bonafide as thought leaders in personalization. We had the Appian personalization report that sold for $20 to $30. We sold a few copies of it. It made us look like we were the thought leaders. Our cost structure was very low.

Sramana Mitra: Services means that, at least, you had cash coming in. When you pivoted, it was more of services work, right? The portal was more services, right? >>>

Bootstrapping, Fund Raising and Exit: Mads Jensen’s Journey with Sefaira (Part 4)

Sramana Mitra: What else is interesting and strategic from decision making or navigating this venture?

Mads Jensen: Our partnerships were very important. We work in an ecosystem where there are some big design firms and technologies that people already use. You may know Autodesk, which is a big software company. That’s one of our partners and that was extremely important for us. SketchUp is another partner. It’s owned by Trimble who ultimately bought Sefaira. Those partnerships are really important and without them, we would not have been able to grow in the way we did.

Sramana Mitra: In terms of business generation, how much business does Autodesk generate for you? What is the structure of the Autodesk deal? Is it an OEM deal?

Mads Jensen: As technology and marketing partners, they don’t sell our product but our partners have helped us in many situations. They help co-market and >>>

Bootstrapping, Fund Raising and Exit: Mads Jensen’s Journey with Sefaira (Part 3)

Sramana Mitra: It was 2012 when you launched the product. How did you do that year? How many customers were you able to bring on in 2012 after the first year of the launch?

Mads Jensen: We grew at an accelerating clip from 2012 and until the exit this year. I couldn’t say exactly how many users we brought on in the first year. It was more work initially because it was a commercial offering and we were very keen to monetize. We didn’t have a freemium strategy. It was more of an enterprise strategy.

We went out to firms and we wanted them to pay us a subscription fee. The first 10 firms was incredibly hard. They liked what they saw but architects are not big spenders. We had to convince them of the merits of investing with us.

Sramana Mitra: How much were you charging? >>>

Bootstrapping, Fund Raising and Exit: Mads Jensen’s Journey with Sefaira (Part 2)

Sramana Mitra: What was the concept that you were working with while you were pursuing your one-year MBA at INSEAD in the 2008 timeframe?

Mads Jensen: Peter Krebs and I had a a lot of experience in software and technology and we both have worked in the construction industry. Peter is a Civil Engineer and my family had been in that business. We knew that there was a big opportunity within sustainability in the sense that buildings are responsible for more than a third of the carbon emissions.

They are a big part of the problem of climate change, but they’re also a big part of the opportunity. We can build much better buildings and that will really address that, but far too many buildings are not sustainable. We thought that it was a good opportunity. What if we could make buildings more sustainable. That was a couple of years after Facebook took off. Web applications were all the rage. >>>

Bootstrapping, Fund Raising and Exit: Mads Jensen’s Journey with Sefaira (Part 1)

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

Mads started working on Sefaira while an MBA student at INSEAD Business School. He went on to launch a sustainable architectural design software product, raised $18 million in funding, and recently exited the company. Read on for more.

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

Mads Jensen: I was born and raised in Denmark. I’m from a family with several generations of entrepreneurs. I grew up with business in my blood. I was fortunate enough that my grandfather, in the early 80s, thought this computer thing might have some potential. He bought me a computer when I was quite young. All kids these days grow up with computers.

Sramana Mitra: Where were you growing up? >>>

Bootstrapping to $5 Million: IdeaScale CEO Robert Hoehn (Part 7)

Robert Hoehn: Just to circle back to the competitive advantage, another one is data. Early on, we took the stance that we don’t want to charge volume-based pricing, which is against the grain for enterprise software. Most people are looking at it and saying, “Enterprise CIOs expect to pay per seat.” We’re afraid that customers will limit their audience and not try to build a crowd within the company because they might be saying, “I’m just going to do a small pile at first and pay for that. If that does well, I’ll roll it out to a larger audience.”

We really want to take out every hesitation for that, even for pricing. We want them to build the crowd as fast as possible, get as many people talking and interacting with each other, and get those numbers up as high as possible. We decided to go with a fixed model with unlimited community members. That’s one way that we’re different. The other cool thing is, we managed to build a huge dataset — a dataset of people, their behaviors and how they interact, voting on an idea, while moving an idea through various stages. >>>

Bootstrapping to $5 Million: IdeaScale CEO Robert Hoehn (Part 6)

Sramana Mitra: What did you learn in your international expansion? Was there any particular geography that was adopting your technology faster than others?

Robert Hoehn: On the marketing side, a lot of people shy away from it just because it’s hard work. It’s already hard to run a marketing campaign with SEO and demand generation. To do it in other languages is very difficult. We’re still learning but we’re definitely into it. We love it. On the product and engineering side, it’s like building a new market without having to build new, complicated products. I know how it needs to work. I just need to translate it.

Sramana Mitra: Is your product then localized in all these different languages at this point?

Robert Hoehn: Yes. >>>

Bootstrapping to $5 Million: IdeaScale CEO Robert Hoehn (Part 5)

Sramana Mitra: How many enterprise customers were you able to gather as paying customers to get to this million dollar annual revenue?

Robert Hoehn: I think it was about 50 enterprise customers.

Sramana Mitra: How were you selling? Were you selling on the phone? How were you going to market?

Robert Hoehn: I did it all on the phone.

Sramana Mitra: How many people were in the company at this point?

Robert Hoehn: There were about eight or nine, I think. >>>