Bootstrapping First from Colorado, Then Scaling with VC Funds: Faction CEO Luke Norris (Part 4)

Sramana Mitra: Do you have a sense of where your pricing model is settling into based on these early interactions? When you were starting to get bombarded by VCs, did you know where your price point was settling into?

Luke Norris: I had an idea where my price point is settling into. Still to this day, we don’t have a lot of comparables. A lot of it involves having a high MSRP and then working back the partner discounts and further discounts to close the customer.

Bootstrapping First from Colorado, Then Scaling with VC Funds: Faction CEO Luke Norris (Part 3)

Sramana Mitra: At this point, the revenue that you’re making is from this product that you just demonstrated at VMWare?

Luke Norris: A third of our revenue is from that. The other third is through the sharing of networking and sharing of compute resources.

Sramana Mitra: The revenue that is coming from this product, who are the early customers?

Bootstrapping First from Colorado, Then Scaling with VC Funds: Faction CEO Luke Norris (Part 2)

Sramana Mitra: Where were you based while you were doing all this?

Luke Norris: I was still in Denver. At that time, I was working a lot in New York. I didn’t have a permanent place out there, but I was there several weeks a month.

Sramana Mitra: What happens next and what year are we going to go to next?

Bootstrapping First from Colorado, Then Scaling with VC Funds: Faction CEO Luke Norris (Part 1)

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

Luke has executed a tremendously effective Bootstrap First, Raise Money Later strategy with Faction.

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

Luke Norris: I was born in Nevada. 

Capital Efficient Entrepreneurship: Jeff Wilkins, CEO of Motili (Part 7)

Sramana Mitra: Did the pricing change when you made this switch to providing these insights?

Jeff Wilkins: Somewhat. We’ve always underpriced our services and probably devalued some of the things that we do. We definitely left some money on the table. Over time, we’ve been trying to rationalize that more. Maybe if we can help them spend the money better, we don’t have to be cheaper at all. Maybe you don’t need three S’s; maybe you just need one S. At the moment, we’re still offering those three components.

Capital Efficient Entrepreneurship: Jeff Wilkins, CEO of Motili (Part 6)

Sramana Mitra: How long did it take you to hit a million in revenue?

Jeff Wilkins: Two months.

Sramana Mitra: What sized contracts were you doing?

Jeff Wilkins: We started as a reactive company. A client or one of their tenants had a problem with one of their HVAC units. In the early days, they’d call or email us, and we would dispatch a contractor.

Capital Efficient Entrepreneurship: Jeff Wilkins, CEO of Motili (Part 5)

Sramana Mitra: Let’s get to the genesis of Motili. What were you thinking? Why did you start this company? What did you want to do with it?

Jeff Wilkins: I was selling another company. There was a product registration business that I had called Interaxis here in Denver. Our clients were consumer durable manufacturers like Whirlpool, LG, and Samsung.

Capital Efficient Entrepreneurship: Jeff Wilkins, CEO of Motili (Part 4)

Jeff Wilkins: It was fascinating to see that one virtue of being lean was that you’re going out. In some cases, we’ve even got companies that had such a pain point to pay us for creating a solution.

The challenge is, you need to be able to retain enough rights to the IP so you can market more broadly. That can be a very good way of making sure that you’re working on a problem that really matters to a customer. There are nice to have. That’s not the same as writing you a check.