Bootstrap First, Raise Money Later, Build an EdTech Unicorn from Canada: John Baker, CEO of D2L (Part 5)

Sramana Mitra: Let’s talk about a bit of metrics so we can pin the journey all the way to bootstrapping before you got a funded company model. How far did you get from a revenue point of view, customer metrics, employee metrics? What were the vital statistics?

John Baker: We’re somewhere in the neighborhood of 300 to 500 people when we raised the largest Series A at that time in Canadian history. It was for $85 million. That was back in 2012.

Capital Efficient Startup, Venture-Scale Growth: ShipMonk CEO Jan Bednar (Part 6)

Sramana Mitra: You think the unemployment pay from the government is preventing people from looking for jobs?

Jan Bednar: 100%. People told us that on the phone. We called people from our database. Their mentality is, “Why would I work if I can make more money not working and I’m safe?” It’s a tough argument. You can’t blame them for not wanting to work.

Bootstrap First, Raise Money Later, Build an EdTech Unicorn from Canada: John Baker, CEO of D2L (Part 4)

Sramana Mitra: Is there anything else that we should discuss about that bootstrapping period before we switch into the next inflection point?

John Baker: One thing I would like to discuss is how we differentiated from the competition. In my case, I spent a lot of time on the engineering and design side.

Capital Efficient Startup, Venture-Scale Growth: ShipMonk CEO Jan Bednar (Part 5)

Sramana Mitra: Where in California did you open?

Jan Bednar: In Redlands. It’s a DisneyLand warehouse. We were hiring new people and trying to keep the culture. It was a lot of fun. The first couple of years was really tough.

Then in 2018, we went from $11 million to $28 million. We moved to an even bigger warehouse. Last year in 2019, we went from $28 million to $67 million. This year, we’re going to do north of $140 million. 

Capital Efficient Startup, Venture-Scale Growth: ShipMonk CEO Jan Bednar (Part 4)

Sramana Mitra: Shopify has done one of the most aggressive and successful PaaS strategies where they have invited developers to develop and extend their platform.

Did you take advantage of that with your software? Did you integrate with the Shopify platform? Was the Shopify marketplace a good source of leads for you?

Jan Bednar: That was the first piece we did. We knew that our customers were going to come from Shopify, so we built a pretty robust integration to make sure that orders sync effortlessly. That was one of the value-adds that we add to our customers. 

Bootstrap First, Raise Money Later, Build an EdTech Unicorn from Canada: John Baker, CEO of D2L (Part 3)

Sramana Mitra: The sales model at this point is still direct selling?

John Baker: Yes, still the same. It had expanded into going to conferences to figure out who to talk to. Now we were talking to Deans or Provosts. 

Sramana Mitra: How was the average deal size moving?

Bootstrap First, Raise Money Later, Build an EdTech Unicorn from Canada: John Baker, CEO of D2L (Part 2)

Sramana Mitra: In the very beginning, when you were going door to door asking people to sign up, what were you charging?

John Baker: In the early days, I built a model that was based on cost per student. The faculty members that I reached out to didn’t have the budget for this. I said, “Don’t pay me. I will charge the students just like they would pay for a textbook in the bookstore.”

Capital Efficient Startup, Venture-Scale Growth: ShipMonk CEO Jan Bednar (Part 3)

Sramana Mitra: Did you choose the first few customers by some threshold? Were they doing a certain amount of business already?

Jan Bednar: It was almost the opposite. They were companies that nobody wanted to do business with. A lot of the fulfillment companies in 2015 didn’t want to work with small startups because they couldn’t support them.