Bootstrapping Using Services from The Netherlands to a $300M+ Exit: Quintiq and ActiVote Founder Victor Allis (Part 3)

Sramana Mitra: What kind of companies were these seven companies that you invited? Were they logistics companies?

Victor Allis: One was in the Rotterdam harbor; they unloaded ships. They told us that it’s a unique process and there was no product that could handle that. Then there was another one. It was a copper factory. We said that our product is so flexible that, no matter how crazy your process is, it will fit in our software. That was true. That was the unique thing. We made very flexible software.

Bootstrapping Using Services from The Netherlands to a $300M+ Exit: Quintiq and ActiVote Founder Victor Allis (Part 2)

Sramana Mitra: What you’re describing is a track that we have called bootstrapping using services. It’s a tried-and-true path in which a lot of entrepreneurs have built companies. We have great regard for this method.

The services work, I understand. The product that you were developing, what was going to be in that product? How well did you understand the product, the requirements, and the positioning? What problem were you going to solve? How well did you understand all that?

Bootstrapping a RegTech Venture to $20M: PerformLine CEO Alex Baydin (Part 6)

Sramana Mitra: At this point, it’s more of executing the business that you’ve described so far?

Alex Baydin: Yes, that was the last pivot that got us sustainable traction. We’re still very focused on consumer finance because it’s such a big category. As I mentioned, the platform and the technology provide this level of sales, marketing surveillance, and remediation across six channels: Web, Call Center, Email, Messages, Social, and Documents.

Sramana Mitra: What kind of revenue level are you at now?

Bootstrapping Using Services from The Netherlands to a $300M+ Exit: Quintiq and ActiVote Founder Victor Allis (Part 1)

Victor bootstrapped Quintiq to $30M, raised funding, and then sold the company for over $300M. ActiVote is his second startup, currently self-funded.

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

Bootstrapping a RegTech Venture to $20M: PerformLine CEO Alex Baydin (Part 5)

Alex Baydin: They had the same compliance constraints that they had in terms of not being deceptive or misleading. There was a lot more probability that something would go wrong in a free-form phone call. We decided to build a speech analytics module and that’s where we started thinking about our product vision. However, our customers are interacting with their prospects, and we wanted to be able to offer this layer of protection so they can move fast.

We set upon a roadmap of launching a new channel every 18 months or so. We added a call center. Now we had a nice cross-sell engine play. If we’re doing a good job, we could get introduced to the call center compliance team and sell them capacity as well. Then we launched email compliance, followed by messaging, and then social more recently.

Bootstrapping a RegTech Venture to $20M: PerformLine CEO Alex Baydin (Part 4)

Sramana Mitra: Expand on that limited exclusivity. When you do deals like this, you’re almost developing the software for their use. How do you get out of the limited exclusivity and go from a services business to a product business where you can sell that to other people?

Alex Baydin: I got lucky. This customer was rooting as much for me as he was for having a viable solution for his business. It might have only been 9 or 12 months of exclusivity but we were soon free to bring other customers onto the platform.

Sramana Mitra: It took you that long to build the software anyway.

Bootstrapping a RegTech Venture to $20M: PerformLine CEO Alex Baydin (Part 3)

Sramana Mitra: During the period that you’re describing, vertical ad networks were starting to be fairly big. I remember we were covering companies like Adify and vertical search engines like Kayak. In this period that you were describing, a vertical ad network was starting to develop.

Alex Baydin: A couple of signals started happening. Because we were delivering this report which entailed screenshots of all the user experience that generated the lead, we started hearing from our customers that the quality of what we were selling was good and the volume is low. They said, “But that report is super interesting. How do I get that report when I buy from the vertical ad network or I buy from the large ad networks?” They were very interested in that.

Bootstrapping a RegTech Venture to $20M: PerformLine CEO Alex Baydin (Part 2)

Sramana Mitra: Once you decided that you wanted to own your own business, what were you going to do?

Alex Baydin: I was working at one of the internet companies that I mentioned. I actually got fired for the first time in my life. I’ve been working since I was 15. I took it really hard.

Sramana Mitra: Why were you fired?

Alex Baydin: The company was trying to get better performance out of a certain group. I was running the lead gen division there. I may have had a different communication style that my boss wasn’t a huge fan of. I just took it really hard. I ended up in the hospital that night. I felt literally sick to my stomach.