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Building a Fat Startup: Apptio CEO Sunny Gupta (Part 6)

Sramana Mitra: You didn’t go after the Goldman kind of customers from where you picked up the idea. You actually went after the smaller customers to get a feel of the product.

Sunny Gupta: I wanted to get the product and security model validated. I was talking to the Goldmans of the world all along, but I was trying to get the first five customers who were willing to pay me a check. The buying process of large companies tends to be longer, as you know. The validation cycle tends to be longer. They need a richer feature set. >>>

Comment-Selling on Facebook: Smocked Auctions Founders Amy Laws and Nicole Brewer (Part 7)

Sramana: On the surface, Facebook advertising does not seem all that complicated. A lot of people also believe that fans don’t turn into leads. You are getting leads and transactions out of Facebook. What have you learned that is worth sharing?

Amy Laws: Once that fan likes your page, you have to put your best foot forward every single day. We can tell very quickly if the new fans are helping us grow or not. Being on social media and understanding the importance of the ‘Like’ has forced us to have the best services possible. >>>

Building a Fat Startup: Apptio CEO Sunny Gupta (Part 5)

Sramana Mitra: Your point is well-taken but you have to be able to afford it. You’re starting with a $7 million Series A. Not all entrepreneurs have the luxury of starting with a $7 million Series A.

Sunny Gupta: I understand. I have myself been there when I started, which was literally two years prior to that. I was running on angel money, but my fundraising experience was different. I had angels who had written me $200,000 checks. >>>

Comment-Selling on Facebook: Smocked Auctions Founders Amy Laws and Nicole Brewer (Part 6)

Sramana: So now in addition to your auctions, you are also offering traditional e-commerce on your website?

Nicole Brewer: Yes. We still have our auctions as well.

Sramana: What infrastructure do you use to complete your auctions? Is that still custom software?

Nicole Brewer: We have a partner that we are using. We post a picture along with a price and quantity. >>>

Building a Fat Startup: Apptio CEO Sunny Gupta (Part 4)

Sunny Gupta: Then came the fund raising. Greylock and Madrona were my prime investors. I started talking to them as I was validating the idea in the summer of 2007. I think their perspective was, “We have a lot of faith in you. Great teams can take a bad idea and make it into a great market and execution. Bad teams can take a great idea and screw that up.” They had a lot of conviction and faith in me but also had enough conviction in the idea. When it was time for fund raising, I ended up going back to these people and went through a partnering agenda. I could have funded the company on my own at that stage, but I decided to raise more money than less. We closed the first round Series A in a matter of weeks. That was a $7 million round. It was co-led by Greylock and Madrona. Mark Andreessen and Ben Horowitz were angel investors.

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Comment-Selling on Facebook: Smocked Auctions Founders Amy Laws and Nicole Brewer (Part 5)

Sramana: What percentage of the business is girls clothing versus boys clothing?

Nicole Brewer: About 70% to 30%. Girl moms definitely shop more than the boy moms. You can do a lot more with a girl.

Sramana: When you decided to move to a more automated payment process, how did you manage that decision process? >>>

Building a Fat Startup: Apptio CEO Sunny Gupta (Part 3)

Sramana Mitra: You got this input from the CIO of Goldman Sachs. Did you go talk to other CIOs in the financial sector or other CIOs in general?

Sunny Gupta: Yes. I came home back to Seattle. On a long flight back, I thought, “This is the most ridiculous idea I’ve heard because it’s too easy. Why hasn’t it been done?”  Having sold to a lot of large customers, I felt that building a company just based upon one customer’s data point is a disaster. That’s where a lot of entrepreneurs go wrong. I believe in deep customer validations and whatever I did next had to be a big category idea. To do that, I wanted to go talk to at least 40 IT leaders. >>>

Comment-Selling on Facebook: Smocked Auctions Founders Amy Laws and Nicole Brewer (Part 4)

Sramana: How much overstock inventory did you have to buy in terms of dollars?

Amy Laws: We probably bought $30,000 of inventory.

Sramana: What kind of markups were you getting on that $30,000 overstock inventory? >>>