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Capital Efficient Entrepreneurship: Philippe d’Offay, CEO of PMD (Part 7)

Sramana Mitra: Talk to me about revenue ramp. You talked about hitting $1 million in 2009. How did the business accelerate from thereon? What were the drivers?

Philippe d’Offay: We’re a four-time Inc 5000 nominee. That is one distinction that we’ve had. Last year, we generated $6.4 million in revenue. From 2009 to 2015, there was a six-fold increase in revenue and a two-fold increase in profit. Of course, we’re a recurring revenue model, so keeping those customers happy allows us to start the year with new revenue on top of revenue from new customers. We’ve always been obsessed with customer support and providing a great service.

The other thing we found was that eventually, we got so big that nobody was able to keep up with their customers anymore. It just got to the point where each of us had 500 or more doctors who knew us by name. It got to the point where everybody was spread thin. Everybody was trying to do all of their duties. >>>

A Serial Entrepreneur’s Journey: Wowza CEO David Stubenvoll (Part 4)

Sramana Mitra: It was the height of the bubble. The market was really crazy. It’s no longer possible, thankfully. But at that time, it was possible and a lot of crazy things were going on at that time. Did you blow through all those dollars and not make it?

David Stubenvoll: Pretty much. We had actually solid routing technologies that were also able to determine an organization’s hierarchy based out of the communication that was taking place. In the end, it was too early and the VCs were too impatient. This was the time when you’re being lambasted at your Board meeting for not spending $40,000 a month on PR.

Sramana Mitra: Then you moved on.

David Stubenvoll: I moved on and helped a friend out who had a little investment bank for a while. Then I ran Mergers and Acquisitions for Adobe. >>>

Capital Efficient Entrepreneurship: Philippe d’Offay, CEO of PMD (Part 6)

Sramana Mitra: What you described is a very interesting organizing principle for organizational behaviour.

Philippe d’Offay: It was fascinating. I’m one of those people who can’t just stop thinking about identifying the solution to the problems.

Sramana Mitra: When you figured this out, you were able to put back the right dynamics in place?

Philippe d’Offay: Yes. Another really interesting thing happened as well. The people that we had hired in the past and the people who worked really well in that small environment were not the same people that we had to hire as we were growing. I call it the soldier mercenary type of environment. Earlier, we had these people who would just do whatever you told them to do.

Then all of a sudden, those people had to decide if they were willing to report to somebody else. Some of them were willing and some. So we >>>

Bootstrapping Using Services to $12 Million: Square Root CEO Chris Taylor (Part 3)

Sramana Mitra: What year did you start selling products as opposed to just services?

Chris Taylor: We started that shift in 2010. The journey was a much longer one that I expected. We were running at our typical parent consulting margins of 20% to 40% depending on the project and the year. We decided that year that we’re going to roll all the profits back in. We’re going to stop trying to make a profit and invest in product development thinking that that would be a year turnaround on that investment. That transition took three and a half to four years to really make for a lot of reasons.

One, is it is hard to change the DNA of a company that has been doing consulting into one that’s focused on product. It’s not impossible like some people say, >>>

A Serial Entrepreneur’s Journey: Wowza CEO David Stubenvoll (Part 3)

Sramana Mitra: Who were the target audience for this product?

David Stubenvoll: We wanted the interest and attention of consumers in order to sell advertising to various financial players. One of our biggest advertisers were mutual fund companies and brokers.

Sramana Mitra: How did it ramp? How did you get the consumer base to attract the attention of these advertisers?

David Stubenvoll: Honestly, it was a lot of luck. There were a couple of other personal finance sites out there at that time and we were able to stay ahead of the curve and offer premium information for free. It was typical PR. We didn’t do much advertising ourselves. The Internet was very small at that point. >>>

Capital Efficient Entrepreneurship: Philippe d’Offay, CEO of PMD (Part 5)

Sramana Mitra: After you moved to the Bay Area, what were the next major strategic moves?

Philippe d’Offay: After moving to the Bay Area, we had a product that physicians were very happy with. We were cash flow positive for four straight years. I talked about almost being bankrupt when we were in Atlanta. The turning point was we also had our first opportunity to be profitable. We maintained that momentum. We came to the Bay Area with a profitable company and with a product that was well-respected. We were generating almost 100% of our year over year revenue in new customers through word of mouth.

Sramana Mitra: That, by the way, is the point to move to the Bay Area. If you have any aspiration of moving to the Bay Area, that is the point when you should move. If you move before doing those things and that level of validation, you basically get killed. >>>

Bootstrapping Using Services to $12 Million: Square Root CEO Chris Taylor (Part 2)

Sramana Mitra: What year was this when you were the only employee?

Chris Taylor: 2006. That’s how it started. For the first couple of years, I did a lot of different projects around the auto industry and also for a lot of startups out in the West Coast.

Sramana Mitra: You were consulting at that point?

Chris Taylor: Yes, I was consulting services and looking to develop products out of that. One of our values today is being customer-inspired. That comes from those early days where we would get in and learn our customer’s problems by being in the trenches with them and trying to extract a horizontal value proposition out of those. We had a couple of different products. >>>

A Serial Entrepreneur’s Journey: Wowza CEO David Stubenvoll (Part 2)

Sramana Mitra: What did Gulp do?

David Stubenvoll: We were your very typical startup in that we wandered a little bit. We started out providing mutual fund information on the Internet. It blossomed into creating websites for mutual funds. We actually created a trading platform, and became one of the larger personal finance sites on the Internet. It was called Net Worth. We sold the entire business to Intuit, and Net Worth became Quicken.com.

Sramana Mitra: I see. That was a pretty major product for Intuit.

David Stubenvoll: This was the website – not Quicken itself. In the end, we brought the Internet foundation to Intuit. I had the great pleasure of working >>>