Bootstrapping Using Services from North Carolina: Ateb CEO Frank Sheppard (Part 1)

Frank and his co-founders have built a sizeable bootstrapped business in North Carolina. Read on to learn what has worked for Ateb and what you can learn from them.

Sramana Mitra: Let’s go to the very beginning of your story. Where do you come from? Where were you born, raised, and in what kind of circumstances?

Frank Sheppard: I was born in Florida but I was raised in Atlanta in a typical middle-class suburban environment.

Sramana Mitra: Where did you do your schooling? >>>

Bootstrapping a Billion Dollar Unicorn in Online Real Estate: Auction.com CEO Jeff Frieden (Part 5)

Sramana Mitra: The entity that you sold to private equity was still REDC?

Jeff Frieden: That’s right.

Sramana Mitra: You bought the Auction.com domain name and rebranded your original entity as Auction.com?

Jeff Frieden: Correct.

Sramana Mitra: It seems you’re doing hybrid auctions but you’ve expanded from residential distressed properties to commercial distressed properties. >>>

Bootstrapping a Billion Dollar Unicorn in Online Real Estate: Auction.com CEO Jeff Frieden (Part 4)

Sramana Mitra: You were still focusing only on real estate?

Jeff Frieden: Only on real estate. Then the market crashed in 2007. We were able to pivot very quickly to help out institutions like large banks that had a tsunami of foreclosures coming in when the market blew up. In 2007, we held our first ballroom auction during this crisis up in LA of 350 homes for Bear Sterns. There were 6,000 people. We ran half a million to a million dollar media campaign. We had this hybrid technology that we had built ourselves. We went on to build our own technology offshore. We started to play with doing it without the physical auction. All online.

Obviously, that grew very quickly because of the tsunami of foreclosures. Since 1983, I had started investing in commercial real estate in Orange County. If I made money, some would go into the bank, some would go into the stock market, some would go into my business, and a lot of it would go into buying commercial real estate. >>>

Bootstrapping a Highly Profitable Company in Social Media Marketing: Brand Networks CEO Jamie Tedford (Part 6)

Jamie Tedford: Acquisition was strategically important for us because it completed what we thought was an important part of our story and what the market was telling us, which is that brands and agencies wanted to work from one platform. There’s this converged media phrase that had taken hold at that time. We really believed it and started to see our customers asking for it. The idea was we wanted to be able to take a piece of content from conception and approval to the analytics around that piece of content and follow back up to the ROI of that piece of content.

Sramana Mitra: What are your assumptions around that? Are you producing that piece of content or is that content being produced and marketed through your platform but the agencies are producing the content? >>>

Bootstrapping a Billion Dollar Unicorn in Online Real Estate: Auction.com CEO Jeff Frieden (Part 3)

Sramana Mitra: You bought these parcels of land and you ran this auction. What was the outcome of the auction?

Jeff Frieden: We made a million dollars in one day.

Sramana Mitra: Oh, wow! Terrific!

Jeff Frieden: There were thousands of people there betting competitively on this land. It was the 1987 to 1988 timeframe. The real estate market was good then until the recession in 1990. We actually got a second one in before the market crashed in 1990. We bought 200 more right after that. When the market crashed, they had really built a lot of new homes and condominiums in Southern California. >>>

Bootstrapping a Highly Profitable Company in Social Media Marketing: Brand Networks CEO Jamie Tedford (Part 5)

Sramana Mitra: We are huge fans of bootstrapping entrepreneurs, so congratulations on doing that. What scale did you reach before you raised the private equity round?

Jamie Tedford: We were almost a hundred people. We were very profitable and had 50% EBITDA margins. When we decided that we were going to talk to the private equity market, we got a lot of raised eyebrows for our P&L. Thankfully, a lot of the private equity firms in Silicon Valley had never seen a balance sheet that had profit. A number of them asked if there was supposed to be a parenthesis around the numbers.

Sramana Mitra: What range are we talking? Are we talking about a $5 million dollar company or a $100 million company? You can give me range, but I just need to understand how far you bootstrapped. >>>

Bootstrapping a Billion Dollar Unicorn in Online Real Estate: Auction.com CEO Jeff Frieden (Part 2)

Sramana Mitra: How long did this go on? How many years did you run this?

Jeff Frieden: From 1980 to 1983. We once hired an auctioneer to come in one day for an auction of these televisions that we had in containers sitting out in the parking lot. We actually sold more merchandise in that one day than we did in a week or two. We were really fascinated by the auction business. Then in 1983, we sold that business.

Rob, my partner, went off to Auction School, which is in Billings, Montana. We had made quite a bit of money for our age. We saw an ad in the LA Times for a land auction at the LA Convention Center. We went up to LA and sat through that auction. We wrote down the prices of the 200 pieces of land that were mostly in California. We took that and went off to the county recorders. Today, all this is available online. >>>

Bootstrapping a Highly Profitable Company in Social Media Marketing: Brand Networks CEO Jamie Tedford (Part 4)

Jamie Tedford: We took a step back at that moment and thought, “We’re sitting on a tremendous amount of equity value.” We had now become, not just a strategic partner of Facebook, but we had also accessed the Twitter platform as well as LinkedIn and thought about how we could become the preeminent software for helping brands on-board content across social platforms. All of a sudden, the market changed again and we were ready to switch to ad tech. Although we had gotten to that advertising side of space, we had to grow quickly. It was at that point, almost three years ago now, that we decided to go out and think about some private equity funding to spur growth.

Sramana Mitra: Let me ask you a few questions before we move on from this point. You said you had a bunch of publishing tools that Facebook did not have that you were providing like scheduling. Facebook, now, has all of that in place. Hootsuite has that available as well. Before you made the switch to ad tech, what were you doing in publishing tech to keep up with the times and those changes in the market? >>>