Bootstrapping to $15 Million: Ernie Bray, CEO of ACD (Part 4)

Sramana Mitra: Essentially, the $400,000 in the first year was from about 8 to 10 deals?

Ernie Bray: Yes. We had about 8 to 10 clients.

Sramana Mitra: These were clients that would remain as recurring revenue clients, because they would continue to use your system and the pricing model is based on number of claims processed.

Ernie Bray: Right.

Sramana Mitra: What year did you start again?

Ernie Bray: 2004 was our first full year of business. >>>

Bootstrapping to $15 Million: Ernie Bray, CEO of ACD (Part 3)

Sramana Mitra: When you were actually processing claims, what did you see that triggered this idea?

Ernie Bray: What I saw was that claims technology systems were outdated. They were just green screen technologies at that time. I’ll give you an example. When I was looking at AAA, appraisers would go out and take photographs of a car and then get those photographs developed. Then, they would have to attach them by tape on to a file. We digitize the process. We have digital photographs uploaded immediately to insurance companies. Just something as simple as that. Giving insurance companies a really good platform for that helps them become more efficient. When we started, insurance companies were still focused on paper. We even had one company in 2004 that said, “We can’t get on to the Internet. You’re going to have set access everyday.” We were right there pretty much when companies were starting to move to that digital process.

Sramana Mitra: Let’s do the next level of double-clicking. How did you get your first client? Were these large insurance companies?
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Bootstrapping to $15 Million: Ernie Bray, CEO of ACD (Part 2)

Ernie Bray: After three years, we ended up shutting down the business. It was my first taste of starting something on my own from scratch. We didn’t make much money, but during that time we didn’t know how to monetize something on the Internet. This was new, but it was the thing that clicked for me. I then continued working for other insurance companies. Around late 2003, I finally had been in the industry long enough to understand where there was a need. What’s happening is that technology in the auto insurance sector is very antiquated. It’s very paper-centric, and the whole process is very cumbersome for a policy holder. They have to do so many different things that are very antiquated. I saw an opportunity to bring technology and mash it with the services side, and come up with a solution. We created a claims workflow solution that meshed the services and technology for insurance companies to process their claims. >>>

Bootstrapping to $15 Million: Ernie Bray, CEO of ACD (Part 1)

Ernie leveraged his domain knowledge in auto insurance claims processing, and has built a robust, sustainable business. He uses a virtual workforce strategy to scale.

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

Ernie Bray: I was born in a small town in Central California called Porterville, California. It’s a farming community. My dad was a teacher. My mom stayed at home and took care of us. I grew up in a small town environment.

Sramana Mitra: Where did you do your schooling?

Ernie Bray: I was a basketball player and went on to play college basketball. I ended up getting a degree in Sociology and Institutional Analysis from UC Santa Cruz. At that point, I really didn’t know what I wanted to do. I did an internship for the DA of Santa Cruz County. >>>

Bootstrapping With A Paycheck: Katie Echeverry, CEO of Unique Vintage (Part 5)

Sramana Mitra: You sell apparel through them or shoes?

Katie Echeverry: Apparel.

Sramana Mitra: That’s awesome actually.

Katie Echeverry: It is. I really knew nothing about wholesale. They were so patient with me with all the terminologies. I remember saying, “What’s EDI?” They were very patient and have taught me a lot. I couldn’t have asked for a better teacher. I was so impressed and touched by the way they treated me when I was the one selling them my line that I actually flew my entire company up to Vegas to tour the Zappos headquarters. They’ve had a very big impact on me.

Sramana Mitra: Can you give me a quick anchor timeframe? For how long did you do this company in this mode of doing the pharmaceutical sales job and bootstrapping the company before you went full-time with it?
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Bootstrapping With A Paycheck: Katie Echeverry, CEO of Unique Vintage (Part 4)

Sramana Mitra: At what point did you introduce alternate channels like eBay and Amazon?

Katie Echeverry: I brought eBay into the mix in 2003. We were doing so well in 2006 to 2007 that I stopped, because I couldn’t manage two platforms. This was before there were a lot of connector tools that can keep track of your inventory. Since then, we’ve been able to get on to a web platform that is able to feed through eBay with a connector tool.

Sramana Mitra: Is that Channel Advisor?

Katie Echeverry: Yes, we use them. We’re doing that for Amazon and eBay.

Sramana Mitra: How does the business split now? How much of it is direct? How much of it is in the retail store? How does the business distribute?
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Bootstrapping With A Paycheck: Katie Echeverry, CEO of Unique Vintage (Part 3)

Sramana Mitra: Do you remember what your revenue level was in 2007?

Katie Echeverry: About $100,000.

Sramana Mitra: For the year?

Katie Echeverry: Maybe a little bit more. We got our first space to accommodate the Internet business, but people were coming in off the street wanting to shop. We made a little showroom. Within six months, I had outgrown that space. My neighbor moved out, so we knocked through the wall and expanded. The retail store was growing, so was the Internet store. We were all over each other for several years there.

Around 2009, we moved out and remodeled that space to be a real retail store. It’s a 4,600 sq ft retail store now. We moved to a warehouse down the street to accommodate the Internet business. From that point, we just continued to grow. About two years ago, we moved into a 35,000 sq ft warehouse and office space here in Burbank as well. I have 35 employees. >>>

Bootstrapping With A Paycheck: Katie Echeverry, CEO of Unique Vintage (Part 2)

Sramana Mitra: What happened in year one and year two? What kind of numbers did you do in year one and year two?

Katie Echeverry: I think I did about $3,000 in my first year, and then $6,000 the next year. Every year, I doubled.

Sramana Mitra: In year three, you still have your pharmaceutical job, and Glamour magazine calls you their favorite place to shop for vintage clothing.

Katie Echeverry: At that point, I was doing $1,000 a month. That month, I did $5,000 a month. That got my attention. I never thought that it would make me enough money to pay the bills. I was really excited about that. Then, I put more and more energy into the website. By 2005, I had gotten married and was pregnant with my first daughter, and I had a decision to make. By this time, I was probably working three or four hours at night on my website. With the baby on the way, I was unsure what to do. I had a nice job with a nice salary and a boss that I adored. It was a tough decision for me. >>>