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Bootstrapping to $13 Million with Freemium and Free Trials: SurveyGizmo CEO Christian Vanek (Part 6)

Sramana Mitra: I have a few questions on this. First, talk to me about your freemium strategy. What did you offer for free and what did you offer for premium?

Christian Vanek: What we offer for free now is probably too much. That comes back down to the cultural problems in my organization. I tend to undervalue software so we tend to give a lot of it away. One way that we competed against the other freemium products was we didn’t limit the number of responses you could collect. We didn’t limit the number of questions or pages. We’ve tried various mixes over the years. That made us incredibly popular because you could do so much with our software. >>>

Bootstrapping to $20 Million From London: Guy Mucklow, CEO of PCA Predict (Part 5)

Sramana Mitra: You’re saying that your main competitive strategy in winning accounts that would use your software for their sales enhancement process was to find them through different channels where you were not facing competitors?

Guy Mucklow: Largely. I guess, it was also about the way in which we sold. We had a major focus on delivering an incredibly good self-serve customer experience.

Sramana Mitra: I guess what I would like to hear a little bit about is the product-side differentiation. You talked about finding touch points with customers where you had less competition. Was there product-side differentiation also?

Guy Mucklow: There have been two major product innovations in our business. If I can relate it back to the overall vision of the business, which is to >>>

Bootstrapping to $13 Million with Freemium and Free Trials: SurveyGizmo CEO Christian Vanek (Part 5)

Sramana Mitra: You said you that you rank in the first three search results for survey software. As you said, there is lots of competitors. Why do people buy your software over your competitors? What is the key positioning point that you win on?

Christian Vanek: We serve two markets. The first market is definitely price sensitivity for function. We’re not the cheapest. Over the last 10 years, it’s also about building name recognition. Early on, there weren’t quite as many competitors as there are now. That helped us. The only ones that did appear had problems. One of the things we heard early on was that the name of the survey software mattered because they wanted people to take them seriously. >>>

Bootstrapping to $20 Million From London: Guy Mucklow, CEO of PCA Predict (Part 4)

Sramana Mitra: Tell me about how you sell. Whom were you selling to? What was the sales decision making cycle?

Guy Mucklow: Our main target audiences were e-commerce businesses. Another really important learning and a key theme that underlines and underpins our whole business is about choosing your routes to market very carefully. Most of our competitors tend to congregate in certain channels and markets. We made a conscious decision to power our own furrow – to be a business that went against the grain. One of my first trade shows had around five or six of my competitors there.

Being the sixth or seventh conversation, it didn’t matter how well differentiated our technology was to everyone else’s. When you’re the sixth conversation in that chain, everyone is thinking exactly the same about you. Everything tends to merge into one. What we did was we chose a number of specific trade shows to >>>

Bootstrapping to $13 Million with Freemium and Free Trials: SurveyGizmo CEO Christian Vanek (Part 4)

Sramana Mitra: I was about to ask you about the commercial terms that you negotiated with the company that was giving you all this input about what to build. How did you structure the terms?

Christian Vanek: The terms were very simple. It was a gentleman’s agreement to be honest and we still are upholding it today. That organization could use SurveyGizmo for free forever, provided that they kept the “Powered by” byline. All of those other individuals that I was introduced to worked for organizations all across the United States, from very tiny market research firms to large publishing firms. These folks also had that same deal: Help me build the software and you get the software. They were so excited about the prospect that they were very involved in it and helped develop all of the initial features.

Sramana Mitra: Who was your first paying customer for the service customer? >>>

Bootstrapping to $20 Million From London: Guy Mucklow, CEO of PCA Predict (Part 3)

Sramana Mitra: What was the focus? What drove the process of determining where you were going to focus?

Guy Mucklow: One of the things that we had done in trying to get PCA off the ground was to look at a piece of technology, which actually is very prevalent in the UK, around capturing data really quickly and simply. In the UK market, we have the benefit of an incredibly grand database, which is managed by the Royal Mail for the purposes of improving the efficiency of the postal delivery service. It’s got 29 million records in it. It contains pretty much every single address that exists in the UK. It’s updated very regularly.

Most people in the UK know their postcode. From a single postcode, you can get to a list of 20 to 30 addresses. One of which is likely to be yours. The Royal Mail had recognized that there was a market opportunity for them in being able to license this data to a technology community to enable them to build services around provisioning that data. The data itself, as provided by the Royal Mail, comes in all shapes and sizes. It’s actually a real nightmare to deal with. >>>

Bootstrapping to $13 Million with Freemium and Free Trials: SurveyGizmo CEO Christian Vanek (Part 3)

Sramana Mitra: How long did you stay at this?

Christian Vanek: I stayed at it for two and a half years before I ran out of money.

Sramana Mitra: That brings us to 2001?

Christian Vanek: Yes.

Sramana Mitra: What did you do next?

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Bootstrapping to $20 Million From London: Guy Mucklow, CEO of PCA Predict (Part 2)

Sramana Mitra: What did you burn the $200,000 on?

Guy Mucklow: Partly salaries and technology. Though we were building a lot of stuff ourselves, we needed infrastructure to support the service we were building. If you look back on those times, you think, “Why on earth did I do that?” We spent $50,000 on just building a business plan and using a third-party consultancy to build that business case and put a great presentation to enable us to go out.

Sramana Mitra: You learn. You don’t know what the priorities are. I’ve been through that. I know exactly what you are talking about.

Guy Mucklow: It’s about priorities. We just didn’t realize what the key priorities were for us. In hindsight, spending a quarter of your capital on a strategy plan was absolutely nuts. It’s one of those things. It seemed right at that time. Everyone was doing it. I don’t even remember the name of the company. It seemed to be the right thing to do at that time. >>>