Bootstrapping an Evergreen Business From Oregon: Kirstin Quinlan, CEO of Certified Languages International (Part 2)

Sramana Mitra: We’re doing an Entrepreneur Journey story. We’ve got to focus on a bit more chronological telling of the story of how you put one foot before the other. I realized that you didn’t become the CEO of the company until 2006 but I do need to capture some of the beginning story of the company to get to 2006.

Kristin Quinlan: I understand. I was hoping to give a blanket overview of what our company does. We’re not a very common service. A lot of people don’t have an understanding of what an interpreting company is.

Sramana Mitra: When you got involved, that was in 2000?

Kristin Quinlan: Yes. >>>

Bootstrapping an Evergreen Business From Oregon: Kirstin Quinlan, CEO of Certified Languages International (Part 1)

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

There is a trend among entrepreneurs wanting to keep running companies without seeking an exit. Certified Languages International (CLI) is one such evergreen company.

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

Kristin Quinlan: I was born and raised in Portland, Oregon. I went to school at the University of Oregon. My children are also there. One is graduating from there now and my daughter is currently enrolled. They are fourth-generation University of Oregon attendees. I spent a year of my education in Amherst, Massachusetts. Other than that, it’s all been here.

Following graduation, I was floundering for a bit. I taught skiing and worked in a ski shop. I did that for about nine months. After that, I was hired by a distributor for Pioneer Electronics. I didn’t know a thing about consumer electronics, but I dove in. I worked in sales for that >>>

Serial Bootstrapper: Oversee and Manage Founder Fred Hsu (Part 7)

Sramana Mitra: What do you want to do? You’ve had one successful exit. You’re in a financially comfortable position. You’ve built a second company that is also bootstrapped and very profitable. You’re still fairly young. What do you want to do with your business? How are you thinking about your choices and options now?

Fred Hsu: For me, it’s all about people. From a business perspective, I want to make sure my founders and the employees who stuck around see similar success to what I’ve seen in the past and also take enough knowledge from what they’ve learned here to their next startup. On a personal side, I have two children. They’re three and five. I want them to see daddy work. I don’t play golf. I’m not going to be home in my bunny slippers. I don’t even have slippers. Probably work, life normalcy, and high aspirations for my co-founders, employees, and my kids.

Sramana Mitra: Do you want to continue running this company and growing this to a much larger scale? Or do you want to exit this company and start another one? >>>

Serial Bootstrapper: Oversee and Manage Founder Fred Hsu (Part 6)

Sramana Mitra: What are the milestones of this business? By how much did it scale? How fast did it scale? What kind of strategy did you follow to make it grow?

Fred Hsu: What we wanted to do at first was to basically get a good sense of the market and establish a few key customers. We all had this internal confidence that if we got the customers, we know how to go out there and get the demand. We can build the full stack and do it better than anybody else out there. It started with a simple kernel. There wasn’t an intense capital need. Computing power was already ten times more powerful at a fraction of the cost than it was back in 2000 when I started doing startups. We didn’t need a lot of outside capital.

We also didn’t necessarily need a large sales force or support infrastructure just yet. We didn’t want to get too many customers to start off with. We really wanted to focus on making sure our systems work for a small set of deep pocket clients. The business lost $50,000 in 2011. But in 2012, it generated about $2 million in gross revenue. In 2013, $18 million. In 2014, we ended up with just under $80 million. >>>

Serial Bootstrapper: Oversee and Manage Founder Fred Hsu (Part 5)

Sramana Mitra: In 2009, you were out. What did you do next?

Fred Hsu: I moved out of LA. I married and had two kids. I raised them for a couple of years and got the entrepreneur itch again. Then in about 2010, I met up with an old college friend called Kai. He was in the Computer Science program in UCLA with me. He and I had actually met the day our parents dropped us off at the dorm. We were about 17 back then in 1996 and had been very close throughout the years. We decided we wanted to do some more projects together.

In 2010, we created a company called AppBank. The concept there was to capitalize on the social wave. We allowed end users to create their own apps on Facebook. It went from zero to single-digit millions in revenue pretty quickly. It was very profitable.

Sramana Mitra: Was it a platform company?
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Serial Bootstrapper: Oversee and Manage Founder Fred Hsu (Part 4)

Sramana Mitra: How many people did you need to make this equation work?

Fred Hsu: We had a peak of about 225 employees across three or four locations.

Sramana Mitra: What function required a lot of people? At some level, it sounds like if you’re doing all this by technology, it’s not probably that people-intensive but I may be missing something here.

Fred Hsu: It’s probably about 40% technology, because we have large and complex systems. It involved babysitting a lot of technical hardware, which operated at orders of magnitude less efficiently than machines today. We also had to innovate pretty heavily because the space got quite competitive. The rest is sales and administrative functions. >>>

Serial Bootstrapper: Oversee and Manage Founder Fred Hsu (Part 3)

Sramana Mitra: Did you bootstrap it all the way?

Fred Hsu: If I were to relay anything and I could teach people, we raised money when we least needed it. We raised $150 million for Series A.

Sramana Mitra: $150 million?!

Fred Hsu: Yes.

Sramana Mitra: What were your metrics in the business that you were successful in raising that much money?

Fred Hsu: Very high gross margin, pretty defendable tech, first-to-market advantage, and a lot of others like the patent I talked about. That and good business practices got us to several hundred million in revenue per year. >>>

When Should You Move To Silicon Valley?

The question continues to come up often in our work with global entrepreneurs, so further to my earlier Harvard Business Review piece, I will add more color to it. First, here’s a recap from the HBR piece:

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