From an EIR Experiment to a Fast Growth SaaS Company: Joe Kinsella, Founder and CTO of CloudHealth (Part 7)

Sramana Mitra: How much did you do in 2014?

Joe Kinsella: We don’t disclose our revenue numbers.

Sramana Mitra: How many customers did you close in 2014?

Joe Kinsella: We went from nine customers in 2013 to around 60 in 2014. It grew to 300 in 2015 and we’re 600 plus now.

Sramana Mitra: What is your pricing model?

Joe Kinsella: It’s a percentage of spend. Companies consume cloud infrastructure. We needed some way to approximate the complexity of what we do for >>>

Thought Leaders in Cloud Computing: Blackbaud CTO Mary Beth Westmoreland (Part 1)

Blackbaud is a SaaS company that caters to the philanthropic segment—helping non-profits manage their donor management workflows. This interview explores the trends and evolutions of the sector.

Sramana Mitra: Let’s start by introducing our audience to Blackbaud and yourself.

Mary Beth Westmoreland: I’m Chief Technology Officer and Senior Vice President of Product Development at Blackbaud. Blackbaud has actually been around for quite some time. We’re the leading provider of software and services for the global philanthropic community. A big chunk of that is the non-profit space. We’ve grown our customer base by about 15% and our stock price by about 70% over the past two years. We’re a growing company. We serve more than 35,000 customers today in the philanthropic space and also the consumers. >>>

From an EIR Experiment to a Fast Growth SaaS Company: Joe Kinsella, Founder and CTO of CloudHealth (Part 6)

Sramana Mitra: At this point, you had a bunch of customers. You had validation. Did your venture fund write you a check?

Joe Kinsella: They did not. Along the way, I had a series of advisors. I had six advisors. The goal there was to really find people who complemented my skills. I had just two questions I wanted to ask them. One is, “Should I continue bootstrapping this business or should I raise money? If I should raise money, will it be a seed round or an A round?” The second one is, “Do I hire a CEO?” It was a great discussion.

The net result was to go straight for an A round and hire a CEO. Before I raised the A round, I figured I’ll bring the CEO on board. Dan was CEO at Silverback. I sat down with Dan and reviewed everything together. He looked at me and said, “Why am I not your CEO?” At that time, Dan had been building out the Entrepreneur Center over at UMass Boston. I knew from earlier that he had been thinking about doing a startup at some point in the future. The timing just aligned. >>>

From an EIR Experiment to a Fast Growth SaaS Company: Joe Kinsella, Founder and CTO of CloudHealth (Part 5)

Sramana Mitra: Can you backtrack for me for a second and answer a couple of questions before we get to this point? I have a bit of a gap in the process here. You said you were running a bunch of experiments and one of them turned into this situation. How many such experiments around different product hypothesis did you run?

Joe Kinsella: It wasn’t product hypothesis. I knew the business I was starting was management of cloud infrastructure in some way, shape, or form. It was taking different hypotheses where the market could go in different directions in trying to understand how people were thinking about this problem. I ran, at least, six experiments.

Sramana Mitra: You were going to do something in cloud infrastructure management and you were just trying to find the angle through which to get in. >>>

From an EIR Experiment to a Fast Growth SaaS Company: Joe Kinsella, Founder and CTO of CloudHealth (Part 4)

Sramana Mitra: What year are we now?

Joe Kinsella: 2012.

Sramana Mitra: What was the relationship with Northbridge? Is that the company that had funded the company that you went to work for?

Joe Kinsella: Yes, Northbridge was one of the investors in Silverback. One of the partners there, Jeff McCarthy, was on the Board at Silverback. I looked at two firms for an EIR. I also looked at a newer firm in Boston. I ended up deciding to go with Northbridge.

Sramana Mitra: How did you utilize your EIR time?

Joe Kinsella: I needed the brand to work under. As I started making calls and engaging with people, I had something more than just me as a one-person >>>

From an EIR Experiment to a Fast Growth SaaS Company: Joe Kinsella, Founder and CTO of CloudHealth (Part 3)

Sramana Mitra: Did you go work for Dell?

Joe Kinsella: I did. I like to tell people that I spent three years at Dell, two of which I can explain because I was under a contract. I wasn’t sure why I stayed the third year. Dell is a great company, but I’m a software person.

Sramana Mitra: It’s a hardware company.

Joe Kinsella: It’s better now. I noticed this morning, they actually sold out their software group. At that time, it was really hard because I think they were trying to morph from system integrator DNA into hardware DNA. There was a very early form of that software group where Dell was doing acquisitions on a steady basis. One of the West Coast companies that was acquired was Evergreen. They had a whole series of SaaS acquisitions. >>>

From an EIR Experiment to a Fast Growth SaaS Company: Joe Kinsella, Founder and CTO of CloudHealth (Part 2)

Joe Kinsella: From there, I decided that I wanted to start a business. I started a company called Tarragon. I wanted to build out a tools business. It ended up being more of a consulting services business. I wasn’t able to balance the consulting and software side. I built a small team of people. We would build backend infrastructure for the fast-growing dot-com businesses. I did that for several years.

I do combined equity deals with companies. Some of them are successful and some are moderately successful. There were some that were not so successful. It was a great experience. From there, one of my clients was a company called Silverback Technologies. >>>

From an EIR Experiment to a Fast Growth SaaS Company: Joe Kinsella, Founder and CTO of CloudHealth (Part 1)

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

Joe founded CloudHealth as an EIR at a Boston VC firm. Last year the SaaS company had 300 customers. The story explores how he achieved product market fit and found its stride.

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

Joe Kinsella: I grew up in a little town outside of Syracuse, New York. It’s just a little urban town out in the middle of nowhere. I spent my life right through college in the New York area. I took a Computer Science degree. I noticed that there were a lot of tech companies in Boston and San Francisco. I put a lot of thought into it and decided to head out to Boston and started looking for a job. >>>