Bootstrapping All The Way: Infinitely Virtual CEO Adam Stern (Part 2)

Sramana Mitra: What is the reception for the concept of hosting a virtualized infrastructure in your client base? What was the level of awareness? Were you doing missionary selling? How are you getting customers for that particular value proposition?

Adam Stern: We did talk to existing customers about what we were doing, and only a handful saw the value in it initially. We set down the road of building an e-commerce site with the idea that we were going to sell a very transparently-priced product to our customers. We built e-commerce where people could design their hosting environment online. It took a long time. We started writing articles for digital press to inform the public about what this was. It took a little while for people to really catch on. Very early on, we got some core customers who were great sources of word of mouth. Our growth in the early years was just astronomical. Part of it was to educate possible customers about what the value of this environment would be versus co-located hardware or managed hosting. >>>

Bootstrap First, Raise Money Later from Utah: HireVue CEO Mark Newman (Part 5)

Sramana Mitra: You’re doing this all from Utah. Is that still the structure of the company?

Mark Newman: Yes, 60% of our team is in Utah. 30% is spread throughout the United States. These are people that work from home. Then, 10% of our team is global.

Sramana Mitra: What has your experience been like building this company from Utah? I’ve seen some very good companies come out of Utah. I’ve done a lot of Utah stories, oddly enough.

Mark Newman: I think we’re creating a really special place to build businesses. In 2010, we were the only company besides Fusion-io to raise venture capital. It was a dog market. There was no one coming in. It was really hard to build a business here in those days. Now, I laugh about kids today building businesses in Utah. There are two things that you do get in Utah. One is you get great team member loyalty. >>>

Bootstrapping to $100 Million: Vacasa Co-Founder Cliff Johnson (Part 7)

Sramana Mitra: At this point in 2015, what is the capitalization of the company? Have you continued to build it organically or have you taken financing? How did you scale the company?

Cliff Johnson: We’ve continued to build organically. We’re happy and profitable right now. That’s a good place to be. We do end up talking to different investors from time to time to get their story and their pitch on how they can help us in our journey. One of the things that we’re looking forward to in, probably, three or four years would be an IPO. If the right partner were to come along, that would be something we might consider taking on. Right now, we’re happy. We’re moving the company along but still growing at a fast pace.

We do have an acquisitions department as well and we’re focused on working with some other smaller management companies that have an owner who’s either ready to retire or, in a lot of cases, they’re overworked. They might be very passionate about one part of the business, but when they’re trying to do it all, it’s just too much for one person. That’s worked out really well. We actually had a good amount of acquisitions as well now that we’ve integrated within our company fairly seamlessly. That’s something we’re looking to continue to do as long as the opportunity is right. >>>

Bootstrapping All The Way: Infinitely Virtual CEO Adam Stern (Part 1)

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

Adam has used some equipment financing, and plans to use more debt financing, to scale Infinitely Virtual. He has not used any venture capital or private equity, but has built a substantial company. Read on to learn how.

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?

Adam Stern: I was born in Los Angeles to parents who came to this country in their early teens. Neither of them had attended university or college. My grandfather was denied entrance into university in Hungary on account of being Jewish. I was, early on, told that I was the hope of the family to go to university and do what my grandfather and father could never do. I grew up in a middle-class household. We didn’t want for anything but we didn’t have anything extravagant either. >>>

Bootstrap First, Raise Money Later from Utah: Hirevue CEO Mark Newman (Part 4)

Mark Newman: In 2009 to 2010, it was all about market validation around getting our first big customers in terms of big enterprise brands. These were brands like Red Bull, Hilton Worldwide. Second part was getting validation and integration with the big partners. We got partnerships with Taleo and Kenexa. Third was getting outside market validation. We won our first HR Product of the Year award at the HR Tech Show, which is a really big award for our industry. It helped build some credibility there. Things started taking off.

Sramana Mitra: How did the revenue ramp from 2009 onwards?

Mark Newman: For 2015, we’ll be $30 million plus.

Sramana Mitra: What other capital infusion have you done besides the $1 million round in 2009? >>>

Bootstrapping to $100 Million: Vacasa Co-Founder Cliff Johnson (Part 6)

Sramana Mitra: To net it out, you have about $100 million topline, $50 million gross margin, then about $5 million operating margin, and you’re funneling that profit into growth.

Cliff Johnson: That’s a good general way to look at it without getting too specific.

Sramana Mitra: I want to switch gears a bit and understand how you fit in the vacation rental industry in general. There’s a lot going on in the space. There’s Airbnb on one end where people are listing their properties. Airbnb is not even just vacation rental. Then there are other vacation rental listing sites. On the other end of the spectrum is you who’s doing a lot more than just listing. You’re doing actual property management. Is that a good representation of the spectrum?

Cliff Johnson: Definitely. You summarized it quite well. It’s a common misperception that we have to fight in getting people to understand the difference between our model and Airbnb or HomeAway. HomeAway is actually our largest advertising channel. We work very closely with HomeAway. >>>

Bootstrapping to $100 Million: Edifecs CEO Sunny Singh (Part 7)

Sunny Singh: Edifecs has become a business applications company providing business applications for these transformative things happening in healthcare. We have a lot of runway both in the US and international in servicing healthcare. From $100 million, our expectation is to become a $200 million company by 2017.

Going back to the point where I turned 50 last year, I said, “What do I want to do for my next 25 years even though I want to live more than that?” I want to do a couple of things. One is social enterprise. I created a social enterprise called Sabtera. The idea of Sabtera is to work in a local area in India in the state of Punjab where I live. Working with underprivileged kids and giving them a seven-day week nursing environment based on progressive education. >>>

Bootstrap First, Raise Money Later from Utah: HireVue CEO Mark Newman (Part 3)

Sramana Mitra: People were resonating with your value proposition.

Mark Newman: The product-market fit that we came across wasn’t the value proposition or the value creation that we delivered to our customers. It was the change management. Were people ready to change how they hired? It’s been done the same way since the invention of business. Then saying, “Now, do asynchronously. Trust that the system can ask the questions.” For HireVue, the journey has never been about the initial value proposition. That’s always made inherent sense to people. It’s been about the change management of refocusing how people build and coach their teams. When we do that, we see great results. Just like trying to help people quit smoking, the value is there and people know it. It’s the change and the drive that is the hard part.

Sramana Mitra: Anything that requires human behavior change is a very tough road. It’s an uphill task to make people change behavior. From 2004 to 2009, you invested $100,000. What was the ramp? >>>