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Bootstrapping a Category Leading E-commerce Company: Tony Ellison, CEO of Shoplet (Part 1)

If you haven’t already, please study our Bootstrapping Course and Investor Introductions page. 

The Shoplet case study is interesting because it illustrates how an entrepreneur has bootstrapped a category leading e-commerce venture by trading off margins in favor of minimizing logistical challenges.

Sramana: Tony, let’s start with the beginning of your story. Where were you born and raised? What is the backstory of the Shoplet story?

Tony Ellison: I was born and raised in Israel. I came over to the US to study and I stayed here. The Shoplet story began as an accident out of my research. I have 7 years of experience on Wall Street and I realized from my time there that more and more companies were migrating to online e-commerce. I also realized that the Internet offered a level playing field for small and medium sized businesses, allowing them to compete with big businesses. That is where my journey began. >>>

Building India’s First Billion Dollar Tech Company: InMobi Co-Founder Amit Gupta (Part 7)

Sramana: I have noticed a couple of trends that are very strong. Zoho is one of the first who did product development in India while selling globally as a SaaS product. I have seen a lot of companies following that model. They don’t even need to have a presence in the U.S. because they sell and acquire customers online. This model has produced a lot of interesting mid-scale companies who are doing anywhere between $3 million and $20 million in revenue. A lot of these companies are bootstrapped as well.
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Building India’s First Billion Dollar Tech Company: InMobi Co-Founder Amit Gupta (Part 6)

Sramana: Given the growth you have been describing and the model you had for expansion, I imagine that everybody was willing to give you money. Who did you select and why?

Amit Gupta: Yes. For our next round, we spoke with a lot of potential firms but we ended up taking money from SoftBank. They are a Japanese company that invested $200 million. There is a big reason for selecting SoftBank. We liked their control and understanding of the Chinese, Japanese, and Korean markets. We felt they could assist us in those markets.

Sramana: What is your revenue split amongst the markets?

Amit Gupta: Our revenue split is very diverse now. In 2013, North America represented almost 35% of our revenue. EMEA and GPAC split the remaining revenue equally. We call ourselves a global company now and I believe our revenue splits back up that claim. >>>

Building India’s First Billion Dollar Tech Company: InMobi Co-Founder Amit Gupta (Part 5)

Sramana: Have you been able to follow that strategy?

Amit Gupta: Absolutely. We have remained headquartered in India and have since expanded to pursue the Asian market. After India, we focused on Indonesia, Malaysia, Thailand, and Singapore. We have since expanded into countries such as Nigeria. We are growing country by country.

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Building India’s First Billion Dollar Tech Company: InMobi Co-Founder Amit Gupta (Part 4)

Sramana: How many people did you have in the company at that point?

Amit Gupta: We had four co-founders, and then we had 8 people on our support staff. We had a small team, but when you are starting up a company, every expense is very important. When we ran out of cash, we started using our own credit cards to support ourselves. We were lucky to have almost 15 credit cards amongst the four co-founders. That became very handy for us and gave us some oxygen.

During that time, our new platform was finishing its initial development. We started to introduce that platform to our advertisers. We started to take 10% to 20% of whatever orders we received and started to run them on our mobile Internet. >>>

Building India’s First Billion Dollar Tech Company: InMobi Co-Founder Amit Gupta (Part 3)

Sramana: What was your run rate for the $500,000 that you raised?

Amit Gupta: We were trying to build our own B2C property, so that also involved marketing money. We had to solicit that money without a defined run rate. We started with some basic promotions. We quickly realized that we had a very new concept and we were creating a new market. We decided to find another business model, that of Groupon, and become a network. We targeted companies who already had SMS users such as India Times. >>>

Building India’s First Billion Dollar Tech Company: InMobi Co-Founder Amit Gupta (Part 2)

Sramana: What is Naveen’s background?

Amit Gupta: Naveen and I went to IIT together. While I started pursuing my career in software, he decided to join McKinsey in India. He then went off to do his MBA and after his MBA, he joined some startups. When he was looking to move back to India, he maintained his passion for the startup culture. He was looking for a strong investor story. He came back to India for a vacation and we got together. He started talking about an idea and I found it so compelling that I decided to join him to create this company.

Sramana: Did you shut down your analytics company?

Amit Gupta: I did not shut it down, I just moved out. I had a co-founder there as well. That company continued on for another 4 years. It was a difficult business model to execute. It became a boutique outfit. >>>

Building India’s First Billion Dollar Tech Company: InMobi Co-Founder Amit Gupta (Part 1)

If you haven’t already, please study our Bootstrapping Course and Investor Introductions page. 

[Also check out my Entrepreneur Journeys book, Seed India – How To Navigate The Seed Capital Gap in India]

InMobi is probably going to be the first billion dollar global technology company built out of India. Read their thrilling entrepreneurial journey.

Sramana: Amit, let’s go back to the very beginning of your personal story. Where are you from and what kind of circumstances were you raised in?

Amit Gupta: I was brought up in Kanpur which is a city in northern India. My family has been in business for many generations. I had the opportunity to step outside of the family business. That shaped my decisions for schooling as well as the companies that I could work in after my schooling was completed. >>>