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Bootstrapping a $25 Million E-Commerce Company: Saatva Co-Founder Ricky Joshi (Part 5)

Sramana Mitra: Tell me a bit about what else is strategic in your story of building this company. What other strategic moves have you made that are worth discussing in an interview like this?

Ricky Joshi: One thing I would say is we do nothing normal. Every single thing that we’ve done has been different. Our marketing has been more creative. I don’t mean branding. We’re just smarter about stuff. For example, if you type mattress, you’ll see a bunch of white beds. We put in branded shops with backgrounds that stand out. I’ll give you another example. This is pretty nuanced. The way AdWords works is you set a radius around an area. A lot of times you’re setting LA or New York. But our customer doesn’t necessarily live at the same zip codes. We actually went and took the average home value of a radius around every city and put a modifier on average home value to target zips as opposed to targeting city areas. We do stuff like that all the time.

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Building an Internet of Things Platform Company from Zaragoza, Spain: Alicia Asin, CEO of Libelium (Part 4)

Sramana Mitra: Somehow, you managed to get through 2007 and 2008. At what point and what strategic moves did you make to get to a more sustainable path?

Alicia Asin: I think it was 2009. Through the maker shop, we were able to sustain the salaries of all the personnel. We were 10 people by 2009. We launched our official business line, which is the biggest one now and the one that is generating 70% of the revenues. I think that was the inflection point for us.

Sramana Mitra: When did you figure out that product – the product that today is generating 70% of the revenue? What was the process in figuring out the precise specs and product/market fit of that one? That’s the real business builder, right?
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Serial Entrepreneur Building a Luxury Business: Trevor Traina, CEO of IfOnly (Part 5)

Sramana Mitra: It’s so hard to get that timing right, isn’t it?

Trevor Traina: It’s hard to get the timing perfect, but I find that if you really listen to your inner voice and talk to other people, you can pretty much figure out which spaces are important and growing and which spaces aren’t. I counsel friends and entrepreneurs who are looking to do new endeavors. I always say, “Let’s look at the space. Is this an area where there’s an opportunity?” I always tell people that if you pick the area of opportunity, you’ll have five times the result by working just as hard.

The other thing I learned is that one should always be honest about where their skills and desires lie. Being a CEO is a very specific skill set. Being a founder is a very specific skill set and it’s not for everyone. >>>

Building an Internet of Things Platform Company from Zaragoza, Spain: Alicia Asin, CEO of Libelium (Part 3)

Sramana Mitra: Let’s go back to that November 2006 time frame. You decided you were going to do an IoT platform. How did you get the company off the ground? Was it self-financed, bootstrapped, or did you raise money? How did you get going? What was the process of getting this started?

Alicia Asin: We had two very clear ideas. The first one was that we didn’t want to risk the money of our families or friends. We wanted to be in this alone. The second thing was that we didn’t want to be the typical R&D company that allows itself not to produce any revenues because it’s an R&D company. We focused on creating revenues and getting all the resources that we could. First of all, we applied for as many entrepreneur awards and grants that we could. By the second year, we had already raised $100,000 from different institutions just by winning awards. If you go to our website, you will see that we have 27 awards. My co-founder was the winner of the Innovator of the Year by MIT two years ago. That was one part.

Sramana Mitra: How much money were you able to gather by winning these awards?
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Serial Entrepreneur Building a Luxury Business: Trevor Traina, CEO of IfOnly (Part 4)

Sramana Mitra: Let me see if I got everything. You did two companies after Compare..net One was SchemaLogic and the second was the one you sold to Intuit.

Trevor Traina: Yes, as of 2006.

Sramana Mitra: For both of them, you were Chairman, not CEO.

Trevor Traina: Correct.

Sramana Mitra: Were these your ideas or were these ideas generated by people who came to you for funding? How did you connect with the entrepreneurs?
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Bootstrapping a $25 Million E-Commerce Company: Saatva Co-Founder Ricky Joshi (Part 3)

Sramana Mitra: Absolutely. Tell me more about the business itself. First and foremost, who were the people involved when you got this off the ground? You mentioned your co-founder. Where did he come from? How did you meet him? Where do you know him from?

Ricky Joshi: There are basically three co-founders of the company—myself, Kris, and Ron. I actually hired Kris at Craigslist. We also had a startup that we were incubating. I just knew that Kris and I would be working together. Kris is one of the smartest and most disciplined persons I’ve ever been around. It’s interesting because oftentimes, you have these people who are famous and have these brand names. Kris definitely has that spark.

Sramana Mitra: What is his background?

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Building an Internet of Things Platform Company from Zaragoza, Spain: Alicia Asin, CEO of Libelium (Part 2)

Sramana Mitra: This is not unusual. First time entrepreneurs start with very vague ideas with what they’re going to do. When I started my first company, I was a graduate student at MIT and I wanted to be an entrepreneur but I didn’t have a good idea about what I was going to do. Can you talk us through the process of how you navigated your way? Once you started, what happened? What did you do? How did you get your bearing?

Alicia Asin: We started thinking about doing projects in wireless sensor networks.

Sramana Mitra: These would be custom projects? You would do contract software development?

Alicia Asin: Yes. We thought about being a solutions provider. From the very beginning, we had a very clear vision that we wanted to be a global company. We thought that, from a scalability point of view, being a solutions provider and working project >>>

Serial Entrepreneur Building a Luxury Business: Trevor Traina, CEO of IfOnly (Part 3)

Sramana Mitra: You were doing lead generation for online stores, but the revenue models changed.

Trevor Traina: Correct. Instead of expecting the brands to pay us for consumer choice data, we let the retailers pay us for qualified leads.

Sramana Mitra: That has become the standard business model for that part of the ecosystem—comparison shopping.

Trevor Traina: Very much so, but at that time, it was not the standard model. We ended up taking up $5 million in VC money.

Sramana Mitra: Who was the investor?

Trevor Traina: The lead investor was called Media Technology Ventures. We took money from GE Capital and Intel.
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