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From Friends and Family Funding to $30 Million Exit: Vertical Response Founder Janine Popick (Part 1)

While we’re spending a great deal of time analyzing billion dollar Unicorn companies, it is important not to lose sight of the capital-efficient, bootstrapped or minimally capitalized companies that have achieved success, provided significant return on investment to their stakeholders, and built value for their customers. Read Janine Popick’s wonderful story!

Sramana Mitra: Let’s start with some of your background. Where are you from? Where did you grow up?

Janine Popick: I grew up in a small town called Wingdale, New York. It’s about an hour and 40 minutes north of Manhattan. It’s pretty rural. My dad was an engineer for IBM for 35 years. My mom was a nurse. I went to public school and had a great education, but I really felt the need to get closer to Manhattan. I went to Hofstra University, which is about half hour away from Manhattan. I studied Communications and frankly, >>>

Building a Fashion Accessories Marketplace from London: Kiyan Foroughi, CEO of Boticca (Part 7)

Sramana Mitra: What kind of ramp did you see based on that?

Kiyan Foroughi: I think the most interesting stats I can give you are actually how well we did in the Christmas of 2014 versus Christmas of 2013. We increased our conversion rates by 90%. It was beyond my wildest dreams to increase it by such a big percentage. I had predicted perhaps 25%. We really improved our marketing efficiency. We are actually making 30% more on revenue by spending 40% less than what we were spending previously. We also fine-tuned our marketing to make it a lot more profitable and efficient on top of the website and the product.

Sramana Mitra: What do you attribute the 90% increase in conversion to?
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Achieving Product-Market Fit That Allows You to Build Billion Dollar Unicorns: Gaurav Dhillon, Founder of Informatica and SnapLogic (Part 7)

Sramana Mitra: Help me rationalize what’s happening right now in the market regarding late-stage valuation bubbles. We have two kinds of bubbles in the startup venture world. One is in the seed capital. In 2013, 70,000 companies were angel-financed. That’s too much actually. It’s great that they got angel-funded, but then if you look at the next level, it’s 1,000 venture funding or 70,000 paired down to 1,000. Technically, those companies probably need to be bootstrapped and they’re not going to be scalable venture-scale companies, which should not have been funded in the first place. A lot of people are going to take tax right off. That’s one part of the bubble.

I actually don’t think the early-stage venture capital Series A and Series B is in that much of a bubble. It’s more in the Series C, Series D, and in some cases, Series E, that is completely out of control valuation, right? Part of the issue that we’re going to have to resolve somehow is that the public market is not in a bubble. What is your analysis of this market? You recently raised money. What was your experience in navigating this market?
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Achieving Product-Market Fit That Allows You to Build Billion Dollar Unicorns: Gaurav Dhillon, Founder of Informatica and SnapLogic (Part 6)

Sramana Mitra: This time around, are there any surprises in the product market fit process? You repeated the same process, I imagine.

Gaurav Dhillon: The same thing but with a twist. With Informatica, the timing was spot on. The change was happening in a big way. Year 2000 was coming. From the time we raised venture capital in 1995 to the time we got to $50 to $60 million in revenue in 1999, our timing was spot on. With SnapLogic, our timing was a little bit early. We had built out this technology. We had SnapLogic running on AWS in 2008. That’s like seven years ago. Enterprises weren’t there yet.

If you look at SaaS at that time, SaaS was a mid-market phenomenon. Among people using SaaS today, the majority of revenues and by far, the vast majority of profits for SaaS companies are coming from the enterprise. In fact, Workday is an enterprise-only SaaS company. They don’t even sell to mid-market. Their average deal size is probably $2 million. All these things were just coming out at that time. I think we were slightly early. Of course, we had the technology. >>>

Building a Fashion Accessories Marketplace from London: Kiyan Foroughi, CEO of Boticca (Part 6)

Sramana Mitra: What were good sources of emails for you?

Kiyan Foroughi: Our on-site campaigns are usually the most successful ones. But we had fine-tuned a way with Facebook ads to really get some good subscribers that would activate into good customers. The other thing was partnerships.

Sramana Mitra: You were doing Facebook advertising. Is that what you’re saying?

Kiyan Foroughi: We did Facebook advertising. The other thing was partnerships with some of our affiliates. We were looking inside our affiliates where the best customers were coming from. Those were sites like ShopStyle and all these shopping searching engines. We built >>>

Achieving Product-Market Fit That Allows You to Build Billion Dollar Unicorns: Gaurav Dhillon, Founder of Informatica and SnapLogic (Part 5)

Sramana Mitra: The story is very different for a Dave Duffield starting Workday or a Gaurav Dhillon starting SnapLogic, because most of the people who are starting companies without that kind of track record do not have the options that you have. They have to figure out some way to navigate that early cash issue.

Gaurav Dhillon: You’re very kind to include me in the same breath as Dave. Dave is on his third company. I’m only on my second. You’ll recall he did this in the mainframe with Tesseract. Every two years, there’s a change in the compute platform.

But you’re right. I do have the advantage of having had a phenomenal outcome for my employees and investors at Informatica. Conversely, there’s also the install base of integration, some of which are products that were built by yours truly in 1992 that are still up and running. For example, at SnapLogic, we have to do a much better job in terms of product attributes for the cloud to win over the very same customers. In a sense, to upgrade them to the new logo. >>>

Building a Fashion Accessories Marketplace from London: Kiyan Foroughi, CEO of Boticca (Part 5)

Sramana Mitra: How did you meet these two funds?

Kiyan Foruoghi: I knew one of the founders of the first fund. I didn’t know that he had founded this fund because he was the CEO of France’s biggest e-commerce company called PriceMinister. I just reached out to him as an angel investor. He loved the project. He said, “Actually, for the amount that you’re looking for, I’m the founder of this new fund called ISAI. We’re 60 entrepreneurs who put our money into this fund. We invest in Internet businesses founded by French entrepreneurs across the world.” That’s how we met them.

As for the Japanese fund, our launch was covered in Nikkei Business. One of the guys read the article and cold-emailed me. He said, “I really like what you’re doing.” I said, “We’re actually in the middle of closing a round. We have some room left.” They came to London. We met. >>>

Building a Fashion Accessories Marketplace from London: Kiyan Foroughi, CEO of Boticca (Part 4)

Sramana Mitra: What levels were you able to get to before you raised the convertible notes? There were actually transactions happening on your site?

Kiyan Foroughi: There were transactions happening but we’re talking about single digits daily before the convertible notes. It was still very early. We started seeing more traction, and I can talk about it later as we get to it, down the line.

Sramana Mitra: £250,000 in convertible debt from whom?

Kiyan Foroughi: These were mostly business friends and mentors. I don’t want to say they were friends and family because we didn’t really have any friends and family in there. They were mostly people we knew from the industry. To give you an example, my old bosses at TA invested in the business. Some people were introduced to us like the Head of Digital at Burberry at that time. It was all business angels. These were industry people who we either knew or were introduced to us. >>>