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Bootstrapping a Highly Profitable Company in Social Media Marketing: Brand Networks CEO Jamie Tedford (Part 1)

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

Jamie bootstrapped Brand Networks to a highly profitable, large business leveraging the disruption in brand marketing caused by social media. He then sold minority stake in the company to a private equity firm. Excellent execution for bombbomb alternatives!

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

Jamie Tedford: I was born in a town north of Boston, Massachusetts. It’s a very typical middle-class story and family. I’m third-generation Jamie Tedford. My grandfather started a family business. He was actually an MIT alumnus. He came out of MIT during the Great Depression. He went to work for a paper company and decided to start a lumber mill. He is the first of the family that I can track back who’s an entrepreneur. The business eventually turned into a commercial lumber yard. The family stayed pretty close to home. My dad went to work for him. >>>

How to Manage A Successful Pivot: Bullhorn CEO Art Papas (Part 6)

Sramana Mitra: In a nutshell, you basically pivoted to a vertical CRM strategy and then started building out more and more verticals and developing work flow in your product for those verticals. You went after mid-market companies in each of those verticals.

Art Papas: We did. We have a lot of tiny customers and then we also have a lot of mid-market customers. Being SaaS, you can service a one-person company. You can service the person who wants to be on their own or you could service a mid-market company. Being vertically-focused allowed us to go up-market. We landed our first Fortune 500 account back in 2005. We got traction because we had all this vertically-focused workflow. We were able to get traction with these very large players early on. That also has been a key to the success – being able to go all the way up and down. We applied that across multiple verticals as we grew. >>>

How to Manage A Successful Pivot: Bullhorn CEO Art Papas (Part 5)

Sramana Mitra: I get the whole vertical workflow woven into your product. Can you provide some examples of what somebody who’s buying a Salesforce.com CRM system would not be able to do versus your system? Let’s say recruitment vertical. What’s an example of workflow that’s specifically designed in your product?

Art Papas: A great example I use all the time is how many times, as a sales person, have you walked into a meeting and you’re there to pitch something new to the customer. You’ve been servicing the account and you’re there to say, “I’ve got something new I want to talk about.” But they open the meeting with, “I want to talk to you about this that occurred over the last three weeks with your team.” Your entire meeting is just blown out of the window because you can’t pitch a new business idea when you’re not delivering on the business you sold last time you were in there.

In the staffing industry, we would hear that from customers all the time, “I need visibility into the performance of my team.” An interesting invention that came out of that was one of our developers said, “Wouldn’t it be cool if you could give the sales rep a bird’s eye view into all the communication activity over email with that customer and all the contacts?” We came up with some really cool ways to organize that >>>

How to Manage A Successful Pivot: Bullhorn CEO Art Papas (Part 4)

Sramana Mitra: Before we go on to 2008, give me a bit more detail about the strategy of building the business. You started with this recruiter CRM system as you described it. How much business did you do in the recruiter vertical? It sounds like that’s you’re primary vertical in the beginning, right?

Art Papas: It was. In many ways, it’s still an important part of what we do. Those early customers were all in the recruiting industry. We branched out to more professional services from there because those were natural corollaries. Now, we have commercial real estate, accounting, and all sorts of different types of business. Back then, it was just the recruiting industry.

We got to know more about that industry than I ever thought I would. We engaged deeply with customers to understand how they sell to customers. When they land an account, how do they expand it over time? What are the challenges they face? How do they differentiate from the competition? How can we help them have a better leg up? >>>

Bootstrapping an Evergreen Business From Oregon: Kirstin Quinlan, CEO of Certified Languages International (Part 6)

Sramana Mitra: What is the current thinking now that you’re approaching $30 million? Many companies at your stage start thinking about selling a portion of the company…

Kristin Quinlan: There has been a lot of interest in our company from outside. We’ve been through two exercises on what that would look like. That was about three years ago. It occurred to us over the course of these exercises that it would be absolutely crazy to sell. First of all, we’re growing so strong. We’re finally having a whole bunch of fun. I can’t imagine turning what we have grown and developed into a one of the kind in this industry and then turning it over to some big corporate clog who’s just going to swallow it up and make it part of a large corporation. Our mentality here at CLI is very unique.

Sramana Mitra: You want to keep running the company. You’re enjoying it and you want to continue doing that. Is that accurate? >>>

How to Manage A Successful Pivot: Bullhorn CEO Art Papas (Part 3)

Sramana Mitra: Was it a large recruiting firm?

Art Papas: It was mid-sized. There was about 45 people. It wasn’t a huge business. For them, all of a sudden, they’re able to service national accounts. It was a big deal during the recession. He was really looking for ways to get his business going. He was now able to deliver an outsized growth rate even in the recession compared to the rest of the industry. It was a great outcome for him.

We went to our investors and said, “We have this amazing thing that we’ve stumbled into. We should be a CRM for vertical markets and focus on these niche industries.” The investors hated it. They wanted nothing to do with it. They were like, “The Internet thing seems like a fad. Who’s going to buy a CRM software from the Internet?” We could not raise money from an outsider. >>>

Bootstrapping an Evergreen Business From Oregon: Kirstin Quinlan, CEO of Certified Languages International (Part 5)

Sramana Mitra: Where are you right now revenue-wise?

Kristin Quinlan: Last year, we were at $23.2 million. We’re on course to do, at least, $27 million this year. We can be as high as $30 million.

Sramana Mitra: Is this a highly profitable business?

Kristin Quinlan: Yes, it’s highly profitable. All of our growth has been self-funded. We had no investment capital whatsoever. In the early years, it was really lean. We depended upon $100,000 rotating loan at the bank for interpreter pay every month. There were many lean years where we were really tight but we had never gone to any outside funding. It was really important that we grow at the rate that we could fund. Part of our growth was slower. Our cost was being managed really tightly. At one point, things became leaner and leaner. Today, there isn’t anything we can’t do or anything we won’t fund. We have shown incredibly strong profitability. We have significant investments in technologically developing our business. >>>

How to Manage A Successful Pivot: Bullhorn CEO Art Papas (Part 2)

Sramana Mitra: So you’ve been around doing this company for a while.

Art Papas: Yes, we started in 1999. I stayed at Thomson for a year after college. Then, I went and joined another startup that I didn’t enjoy at all.

Sramana Mitra: You really wanted to be on your own.

Art Papas: I really did. I didn’t like implementing other people’s ideas.

Sramana Mitra: What was the idea that you started Bullhorn with? What were you going to do?

Art Papas: It was 1999. Everybody was raising capital. I felt that the Internet was just exploding. There’s so much opportunity. I had a notion about the way people look for jobs and I thought, “There’s something around the way developers and web designers are finding work.” I had two >>>