Capital Efficient Entrepreneurship from Arizona: Heidi Jannenga, Co-Founder of WebPT (Part 6)

Heidi Jannenga: One big lesson that we learned was that valuation is important, but it’s not the most important thing. The terms of the deal are the most important. People can give you valuation but at the end of the day when it comes to the contract, it’s really about the terms. Even on a minority deal, they can put in terms in there that feel very much like a majority owner. You lose a lot of control, potentially, if you’re not watching the terms.

We went down the aisle with two companies, got starry-eyed with valuation, but at the last minute, we took a deep breath and said, “We’re not sticking to what we said we were going to do here.” We walked away at the altar and did not go through with the deal. It was one of the best decisions that we’ve ever made. We went back to the grindstone for six months and several companies came back to us saying, “Are you sure?” We probably had, at least, 40 to 50 >>>

Bootstrap First to $10 Million from Australia, Raise $25 Million Later from the US: Ashik Ahmed, CEO of Deputy (Part 5)

Sramana Mitra: From a customer acquisition point of view, how did you go to market?

Ashik Ahmed: It was really, really hard. We spoke to a lot of customers. In the second round where we went for anyone can just sign up, you don’t need to get the word out. Back then, I don’t think we even understood the M of marketing. One of the other things we realized is that we do quite a lot of time and attendance but we don’t do payroll.

There was this company called Xero which was growing very fast in Australia. They do accounting and payroll. We built and did integration. Most of our customers used to say that it took them a day or two to do payroll. We took it down to one minute. You just >>>

Capital Efficient Entrepreneurship from Arizona: Heidi Jannenga, Co-Founder of WebPT (Part 5)

Sramana Mitra: Talk to us about the hiring of this CEO. What was the process that you followed and how did you decide who was the right CEO for you? This is a very difficult and challenging exercise to bring in an outsider to replace the founders.

Heidi Jannenga: I want to be very clear that it was not to replace. We made that very clear through our hiring process that this was not a replacement. This was an addition to our team. One of the emotionally-intelligent decisions that we made was understanding what our strengths were and what we were missing. Through the hiring process, we didn’t want to replicate either one of us.

We wanted to adjunct to our strength with the piece that we felt was missing. That missing piece was a process-oriented, metrics-driven kind of person which neither of >>>

Bootstrap First to $10 Million from Australia, Raise $25 Million Later from the US: Ashik Ahmed, CEO of Deputy (Part 4)

Sramana Mitra: Did you fire the CEO that you brought on?

Ashik Ahmed: Yes.

Sramana Mitra: How did that go?

Ashik Ahmed: Not pretty. I doubted myself whether I would be capable of being the CEO of this company. I didn’t even know what the job description of a CEO looked like back then. My lesson out of that is, although I had to fire him, I had failed in hiring the right person. If I want something, I have to go get it. I can’t rely on somebody else to make that happen for me. >>>

Capital Efficient Entrepreneurship from Arizona: Heidi Jannenga, Co-Founder of WebPT (Part 4)

Sramana Mitra: You’ve done all this organically. Right from the beginning, you didn’t raise any money.

Heidi Jannenga: Yes, we are huge proponents of bootstrapping. We have been building it for four years. We’re profitable. Within two years, we were at a million dollar run rate. They passed the Affordable Care Act around the same time we launched. That was a huge compliance impetus for the industry to now become much more aware of electronic medical records. Even though physical therapists didn’t receive incentives from the government to adopt an electronic record, it was “the rising tide raises all boats” situation.

Physicians were getting incentives. They were adopting EMRs very rapidly. Professionals couldn’t be sending handwritten >>>

Bootstrap First to $10 Million from Australia, Raise $25 Million Later from the US: Ashik Ahmed, CEO of Deputy (Part 3)

Sramana Mitra: From a vertical point of view, it was all in the hospitality area?

Ashik Ahmed: That’s correct – all restaurants, bars, and hotels. That was the industry we were focusing on.

Sramana Mitra: How many customers are we talking?

Ashik Ahmed: By the end of 2013, I believe we only had 150.

Sramana Mitra: These are small businesses? You were working with small businesses? >>>

Capital Efficient Entrepreneurship from Arizona: Heidi Jannenga, Co-Founder of WebPT (Part 3)

Sramana Mitra: Talk to me about customer acquisition. What did you start with? What worked and what did you settle into as your primary customer acquisition strategy?

Heidi Jannenga: It’s a funny story actually. We built our own website from the very beginning. Back in 2008, there was not a lot of competition in SEO and keywords. It was not something that people in the physical therapy software space even understood. The bar was low. Part of my co-founder’s background was building enterprise software platforms and understanding the SEO strategy. When we built our first website, we incorporated a lot of that information. >>>

Bootstrap First to $10 Million from Australia, Raise $25 Million Later from the US: Ashik Ahmed, CEO of Deputy (Part 2)

Sramana Mitra: This is an Entrepreneur Journeys story. I’m going to help you tell that story as a journey. You started with this concept back in 2008 with your co-founder. What was the first thing that you did?

Ashik Ahmed: Coming up with the name. To be honest, I resigned from Aero-Care in February 2007 because I believed I’d achieved what I wanted to achieve. I actually wanted to go and work for Apple or Google where I could get some industry experience. But Steve came up with the idea of taking it to the world.  >>>