Featured Videos

Bootstrapping Eloqua, Crowdfunding Influitive: Lessons From Mark Organ’s Entrepreneurial Journey (Part 5)

Sramana: Was the high tech space your narrow market niche?

Mark Organ: We actually worked hard to be very specific in the verticals we addressed. We became very good at micro-verticals within the application software space. The idea is to split the market into thin verticals and then get absolute dominance of those verticals. We were able to become profitable in 6 months, right after September 11th, 2001.

Sramana: Everything you have said is institutionalized within our program. You cannot bootstrap a company without razor sharp positioning. This is exactly what you are talking about. You need repeatable sales within a micro-vertical. That is essential to working in a capital efficient manner.

Mark Organ: That allowed us to achieve profitability faster. We were profitable for three and a half years before we raised money in 2005. >>>

From The Seedy Underworld of Drugs and Prostitution To Entrepreneurial Success: David Sharpe’s Journey with Empower Network (Part 7)

Sramana Mitra: All right and with this model, you have generated about a $100 million in affiliate commissions so far. Of which, about 70% of that has been paid-out to your partners?

David Sharpe: Technically, 100%. Last year, we did around $63 million in product sales. All of that, less processing fees, are given out as commissions.

>>>

Bootstrapping Eloqua, Crowdfunding Influitive: Lessons From Mark Organ’s Entrepreneurial Journey (Part 4)

Sramana: What industries did you initially target and what was your sales cycle like?

Mark Organ: Initially, we targeted the insurance, finance, and real estate markets. There are a lot of finance and insurance companies in Toronto and I had a lot of experience working with companies in that space during my time at Bain. However, we quickly realized that our target markets were a problem and the sales cycles were much longer than expected. We had to move fast to understand why and fix that problem.

We quickly learned that lead generation was not a top priority for those companies. We had to find a space where lead generation was mission critical for B2B companies and we found that space amongst technology companies. >>>

From The Seedy Underworld of Drugs and Prostitution To Entrepreneurial Success: David Sharpe’s Journey with Empower Network (Part 6)

Sramana Mitra: If you’re claiming that part of your secret stuff in building this company is this 30,000 affiliate network, then I need to understand how you got to 30,000 affiliate partners in two years. I’m looking for round numbers. Let’s say you pay 90% commission to one layer of affiliate and they go and recruit their own affiliate, how much commission is that layer of affiliate getting as they recruit their own affiliate? Two, I need to understand what the compensation structure is that drives this multi-layered affiliate structure.

>>>

Bootstrapping Eloqua, Crowdfunding Influitive: Lessons From Mark Organ’s Entrepreneurial Journey (Part 3)

Sramana: What was your pitch to potential clients?

Mark Organ: We can provide the best quality leads to your sales people, because those leads are already on your website and you just need to talk to them.

Sramana: It is very easy to get people to talk to you when you give them that pitch.

Mark Organ: We had plenty of people talk to us. The key was getting an order and we ended up getting an order from a nutrition eCommerce site. They went out of business two months after I left my job at Bain, so we ended up losing our order. At that point, we didn’t really have an option other than pressing forward and building the product.

Our first real customer was a division of Cushman & Wakefield, one of the largest real estate firms in the world. We won them as customers because they took pity on us. They were our supplier and were looking for space for us. They probably thought that if they were our customer, we would be more likely to pay the rent. We had leased more than 100,000 square feet from them so far so they have had a good return on their investment. >>>

From The Seedy Underworld of Drugs and Prostitution To Entrepreneurial Success: David Sharpe’s Journey with Empower Network (Part 5)

Sramana Mitra: You pay what percent as affiliate commission?

David Sharpe: It’s not quite 100% commission because we’ve got merchant, accounting , and processing fees. The commission is between 90-94% for our core product lines.

We’re doing a $12,500 event at the beginning of March. Clearly, there’s event cost for that but instead of paying a $2,000 commission, we’re paying almost a 50% commission. That allows us to pay for the event cost and also gives us a nice margin. More importantly, it’s giving our affiliates a nice commission.

Sramana Mitra: Affiliates are making most of the money and whatever balance that’s left in the pool goes into the operating cost of managing this network, what is your revenue model? Is it the monthly affiliate fees that you derive out of all this affiliate partners?

>>>

Bootstrapping Eloqua, Crowdfunding Influitive: Lessons From Mark Organ’s Entrepreneurial Journey (Part 2)

Sramana: What specifically did you do during the incubation process at Bain? What did you accomplish before you left to run Eloqua full time?

Mark Organ: I focused on customer development. One of my co-founders, Steve Woods, was also at Bain and did a lot of coding. He was also on a lot of customer calls with me. We would call up prospective customers and tell them what we were doing and ask them if they would be willing to buy our product. We started to get enough people saying yes to feel that we had received validation of our concept.

We started to get invited to pitching conferences for entrepreneurs. At the time, that felt like re-validation although in hindsight it probably was not. When we had somebody place an order with us, I left Bain to work full time. >>>

From The Seedy Underworld of Drugs and Prostitution To Entrepreneurial Success: David Sharpe’s Journey with Empower Network (Part 4)

Sramana Mitra: What were the profiles of these people? Were they sales people?

David Sharpe: Yes. Initially, we were looking to find people who would help us go out and promote our products and services. We went after salespeople, promoters, and marketers.

Sramana Mitra: What did you tell them? What was the call to action for these 40-50 people?

David Sharpe: It was a call to action combined with a vision. I think a lot of times when an entrepreneur is launching a business, one of the biggest mistakes that they make is just saying facts. We all know that facts and telling stories don’t work. Our call to action was simply buy our products, use them, go through them so you can buy-in to what you’re actually promoting. What we did was, in combination with giving them a call to action, we also painted a vision of where we wanted to go with the company.

>>>