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Student Entrepreneur to $10M Revenue Run Rate: Extrabux CEO Jeff Nobbs (Part 4)

Sramana: You were chugging along, making some progress, and then you hit an inflection point. What was that inflection point and what led up to that?

Jeff Nobbs: The inflection point was the holiday shopping season in 2011. I don’t think there is any one thing that led up to it. We had 20% month over month growth, but that was growth on a very slim amount of revenue. As the revenue number begins to grow then that number starts to get a lot more significant. That is when we launched our “refer a friend” program. >>>

Student Entrepreneur to $10M Revenue Run Rate: Extrabux CEO Jeff Nobbs (Part 3)

Sramana: You started hiring after being awarded 25,000 dollars for winning the business plan competition. However, that is not a lot of money. Whom were you hiring?

Jeff Nobbs: More than anything winning the business plan competition was a nod of approval from the University which helped us raise more money. Over the course of the following year we raised close to a million dollars. The 25,000 dollars helped but it did not get us very far.

Sramana: Let’s look at that in a granular fashion. What money did you raise and how did you raise it?

Jeff Nobbs: The next thing we did was raise another 50,000 dollars from friends, family and angel investors. We did not have any VC or institutional investors. >>>

Student Entrepreneur to $10M Revenue Run Rate: Extrabux CEO Jeff Nobbs (Part 2)

Sramana: Why would stores offer cash back to customers?

Jeff Nobbs: We think of it as a win, win, win. For stores, we are an outsourced marketing arm. We not only drive new customers, but we also make their existing customers more loyal by offering cash back on every purchase. If you are an Extrabux.com member, which is free, and you shop at JC Penney, Home Depot, Victoria’s Secret or any of our other 3,000 stores, and you make a purchase, then we get a commission. Let’s say you spent $100 and we earned a 10% sales commission. We will pass the majority, more than 80%, of that commission to you as cash back to your Extrabucks account. >>>

Student Entrepreneur to $10M Revenue Run Rate: Extrabux CEO Jeff Nobbs (Part 1)

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

Jeff Nobbs is the founder and CEO of Extrabux, a highly regarded shopping rewards site. He co-founded Extrabux as a student at the University of Southern California in 2006. Two years later, Extrabux was submitted to the USC business plan competition, where it won first place.

Sramana: Jeff, let’s start with the beginning of your story. Where are you from? What are the circumstances that led up to the Extrabux story?

Jeff Nobbs: I am from San Diego. I was born in Northern California and spent two months there before I decided it wasn’t for me! I grew up in San Diego and went to college at USC in Los Angeles. While I was at USC, I started Extrabux with my co-founder, Noah, a guy who lived two doors down from me in the dorms. We started it as a side project while we were at school, and it stayed that way for a few years. >>>

Cool and Creative Serial Entrepreneurship: 99Designs and DeveloperAuction Co-Founder Matt Mickiewicz (Part 7)

Sramana: What kind of numbers do you have? How many engineers apply to be on your platform?

Matt Mickiewicz: We typically have 2,000 to 3,000 engineers apply every month. Of those, we accept the best 150 or so engineers. We take care of the upfront vetting. We look at their intent to switch jobs as well as their skill level. We look for people who have been in their job for two to three years and are ready for the next challenge. Our intense screening allows employers to conduct a dozen interviews in a single day. >>>

Cool and Creative Serial Entrepreneurship: 99Designs and DeveloperAuction Co-Founder Matt Mickiewicz (Part 6)

Sramana: Tell me a bit more about the value proposition of DeveloperAuction.

Matt Mickiewicz: We are a two-sided marketplace for hiring full-time engineering talent in Silicon Valley, New York and Boston. The basic premise is that we curate a pool of 150 engineers every single month who went to the top computer science schools and worked at Google, Facebook, Twitter or who have notable open source contributions. On the flip side, we curate a pool of 450 venture-backed companies that are interested in recruiting engineers. >>>

Cool and Creative Serial Entrepreneurship: 99Designs and DeveloperAuction Co-Founder Matt Mickiewicz (Part 5)

Sramana: In three years you gained huge traction. How dramatically has your adoption curve changed?

Matt Mickiewicz: We have been pushing international expansion heavily. We are seeing which markets work for us. The growth curve has continued very strongly. Our CEO has done a very good job.

Sramana: Have you changed CEOs or have you changed CEOs?

Matt Mickiewicz: We have only had one CEO aside from my co-founder. I don’t remember the exact date, but we recruited him while we were in our bootstrapped phase. We moved him from Melbourne to San Francisco to grow our San Francisco operation. My business partner is Australian and had kids there so he was unable to move to the US. We knew we needed to have a strong U.S. leadership and management team in order to grow the business. >>>

Cool and Creative Serial Entrepreneurship: 99Designs and DeveloperAuction Co-Founder Matt Mickiewicz (Part 4)

Sramana: Why did you decide to raise money?

Matt Mickiewicz: To expand our marketing and increase customer acquisition. We also wanted to pursue international expansion. We used the money to hire a chief marketing officer, a chief financial officer and expand internationally, which included language expansion. Recruiting in San Francisco is much easier when you have strong financial backing. When you tell people you are bootstrapped and profitable, they don’t necessarily see it as a good thing. After we had the VC backing, we were able to grow the company from 40 people to 80 people. >>>