Bootstrap First, Raise Money Later: Ensighten CEO Josh Manion (Part 3)

Sramana Mitra: How far did that take you? What were you able to do with that model?

Josh Manion: I described that as it was enough to survive but that was about it. That got us to maybe $100,000 in revenue. It wasn’t much.

Sramana Mitra: It was you and your wife at that point?

Josh Manion: Yes. If you think about the growth of that, we struggled along in that state for couple of years where I would describe it as if you’re an entrepreneur and you started a services business, you go on this yo-yo of feast or famine. You’re either selling or delivering. If you’re delivering, you’ve got money but not time to sell. If you’re selling, you’ve got plenty of time to sell but generally no money. You’re oscillating between those two things. >>>

Bootstrap First, Raise Money Later: Joe Speiser, CEO of Little Things (Part 5)

Sramana Mitra: Let me see if I understand what you’re saying. You had a large audience on Facebook and you wanted to do content marketing to that audience and drive the traffic towards a different site, which you would then monetize with Google AdSense. Is that what you’re saying?

Joe Speiser: Almost. Before we made the change, we would send traffic from Facebook to blogs at PetFlow. These blogs were mostly pet-related content but around that content were advertisements. Those advertisement were helping us pay the bills and get us to profitability.

Sramana Mitra: What is the scale of the Facebook traffic that allowed you to do this?

Joe Speiser: Over the four years that we built out the audience, I think we had a million fans on Facebook. We had a really strong following. >>>

Bootstrap First, Raise Money Later: Ensighten CEO Josh Manion (Part 2)

Sramana Mitra: She’s also from the Midwest?

Josh Manion: Yes, she’s from the Chicago area. We settled around Chicago in the western suburbs. I took a quick job with a network technology bar. That didn’t work out very well. That was nine months of craziness. Their business wasn’t doing well in the post dot-com world.

After about nine months of that, my wife and I decided to found a company called Stratigent. Because we barely knew what we were doing, we decided that we would do analytics consulting. It’s something that I had developed some expertise in back at Myteam.com. My perception was the timing would be very good because it was all about accountability and bringing some rigor back into marketing that had maybe slipped away briefly during the dot-com days.

Sramana Mitra: What did you decide to do in terms of your own idea? >>>

Bootstrap First, Raise Money Later: Joe Speiser, CEO of Little Things (Part 4)

Sramana Mitra: Not all categories of e-commerce have very slim margins. We’ve got great stories of bootstrapped e-commerce companies. I think in your case, pet foods doesn’t have a lot of margin.

Joe Speiser: It doesn’t. When we started, the gross margins on pet food were actually very high. But it’s the shipping that takes away most of it. Then, you also have incidental things like materials and software to run the warehouse. Before you know it, there’s a re-haul and you take a big step back. There’s a lot of things that go into it.

That being said, we knew that we wanted to scale this business fast and we needed more money for advertising to do it. We raised a round with Lightspeed Ventures in 2011. I think it was July. With that money, we were able to bring on additional help. We hired Mike. He’s now our President. He’s been promoted multiple times throughout the last few years. >>>

Bootstrap First, Raise Money Later: Ensighten CEO Josh Manion (Part 1)

Josh is a fellow MIT alum, and a fellow believer in the tried and true methodology that we espouse in 1M/1M: Bootstrap First, Raise Money Later. Josh raised his Series A with $5M in revenue. The company today is growing at 150% year-over-year. Wonderful story!

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

Josh Manion: I grew up in a little town in Wisconsin called Jamesville, which had about 50,000 people. My dad delivered little snack cakes to grocery stores and stocked the shelves with them. My mom ran a store. It was a Midwest upbringing. The unique element for me was that I was actually homeschooled all the way through high school. That afforded me some unique latitude to pursue some of the things that I’m passionate about. One of which is chess, which I took to some extreme. I actually played as a professional chess player for a couple of years before going to college. I have one sister three years older than me. >>>

Bootstrap First, Raise Money Later: Joe Speiser, CEO of Little Things (Part 3)

Joe Speiser: In 2005, we were a very profitable business and were scaling quickly. We had 50 to 60 employees at that time. This was my first large business, so I felt that we needed help. We needed some outside experience to guide us on how to scale this company. We brought on private equity. We sold half the company to TA Associates and Strikes Group. We started recruiting the grey-haired management team that you’re supposed to have in place. Things moved very quickly from there. We kept expanding. We went from $50 million to $200 million in revenue. It was on fire. That brings us up to 2010.

Sramana Mitra: The company was private equity owned from 2005 to 2010 and scaled to $200 million. You were still with the company at this point?

Joe Speiser: Yes.

Sramana Mitra: What happened to the company? >>>

Bootstrapping to $20 Million with Intelligent Financial Engineering: Tim Hentschel, CEO of Hotelplanner.com (Part 7)

Sramana Mitra: Given that the market is $45 billion, there’s obviously a huge amount of head room to build a larger business here. Could you have grown a lot faster? Are there levers that you could push? I’m not saying that you should grow faster. I’m asking out of intellectual curiosity.

Tim Hentschel: There definitely is. If you gave me capital, I can spend it really quickly. You’re spending unlimited amounts of money when you’re trying to educate consumers especially on a worldwide basis. We’ve still got bootstrapping roots and are growing organically. It reflects in the growth that we continue to see.

We just surpassed two million registered group coordinators. That’s a good metric. We hit our first million in 2013. It only took us two years to hit our second million. We have a 70% net promoter score. As the number of people using us and liking us gets bigger, the word of mouth grows exponentially. We’re just hitting our stride. >>>

Bootstrap First, Raise Money Later: Joe Speiser, CEO of Little Things (Part 2)

Sramana Mitra: You started this in 2000?

Joe Speiser: We started the deal sites in early 1999.

Sramana Mitra: This was bootstrapped at that point?

Joe Speiser: Yes, there were no VCs. These businesses were profitable in the first few months. If we weren’t able to make money in the first few months, we’d move on to the next set.

Sramana Mitra: On what kind of revenue level were you doing this in the 2000 to 2001 time frame before you partnered with your competitors?

Joe Speiser: I think it was around $300,000 to $500,000. >>>