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Cool and Creative Serial Entrepreneurship: 99Designs and DeveloperAuction Co-Founder Matt Mickiewicz (Part 3)

Sramana: Who were the early adopters of 99Designs?

Matt Mickiewicz: The earliest adopters were Silicon Valley and New York startups. In the first couple of years in the business we did not do any marketing. We relied on press, media attention and word of mouth.

Sramana: How did you get press? That can be very challenging to do early on.

Matt Mickiewicz: We found it to be relatively easy to do because we rode the crowd sourcing bandwagon in 2008 and 2009. There were a lot of bloggers, podcasts and webcasts about it. I had a compelling story having started my first company in high school. >>>

Cool and Creative Serial Entrepreneurship: 99Designs and DeveloperAuction Co-Founder Matt Mickiewicz (Part 2)

Sramana: You started that website while you were in high school. What happened after you graduated?

Matt Mickiewicz: The business went really well up until the dot-com crash. All of our advertisers went bankrupt, which make me scramble to find an alternative business model. I turned to book publishing. I published over 70 books in 20 languages on our website for download. They were books about various web technologies. Eventually we sold those through Amazon and Barnes and Noble as well.

We had built a passionate community of web developers and designers. One of the things that emerged in our community was design contests. Designers would make up fictional projects and compete against each other. They were passionate about graphic design and they wanted to connect with other designers around the world. It also let them build out their portfolios. >>>

Cool and Creative Serial Entrepreneurship: 99Designs and DeveloperAuction Co-Founder Matt Mickiewicz (Part 1)

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Matt Mickiewicz, who was named to the Forbes Magazine “30 under 30” list in 2012, co-founded 99designs. The company has hosted more than 200,000 design contests and paid out more than $50 million to designers, while winning a 2010 Webby Award for “Best Web Service” and raising $35 million from Accel Partners. Matt has also co-founded Flippa.com, which has helped entrepreneurs sell more than $70 million in websites and domain names. INC Magazine named Matt to their “30 under 30” list in 2011.

Sramana: Matt, let’s start at the beginning of your story. Where were you born and raised? What is the story that prepared you for your entrepreneurial career?

Matt Mickiewicz: I was born in Poland under Communist rule in 1983. A couple of years later, my parents immigrated to Germany to avoid Communism. They had four-hour lines just to buy a block of cheese. I lived in Germany for just shy of five years, until 1991. My mother worked in the service industry and my father worked in construction. >>>

Startup, Survival, Scaling: Kareo CEO Dan Rodrigues (Part 7)

Sramana: What did you do, strategically, after you achieved profitability?

Dan Rodrigues: Once we turned the corner and made positive cash flow we re-invested it in our business by purchasing more advertising, buying another server or hiring another customer support representative. We started to grow the business slowly but surely. That kicked off act three of the play where we found a predictable growth model. The product was mature and we were able to scale, which was in 2010. We did around $4 million in revenue with 17 employees. >>>

Startup, Survival, Scaling: Kareo CEO Dan Rodrigues (Part 6)

Sramana: So the medical billing companies were not the ones paying you?

Dan Rodrigues: We sold our software as a monthly fee to the doctors. For us. the revenue was about activating licenses with the doctors via the medical billing offices. We were building out forecasts around a quicker adoption cycle. Doctors were not adopting as fast as we had forecast, mainly because at the time the product was not mature and there were still a lot of features that the older client–server character-based systems had that we had not developed. >>>

Startup, Survival, Scaling: Kareo CEO Dan Rodrigues (Part 5)

Sramana: How much did you raise in your first round?

Dan Rodrigues: We raised $2 million. That was in 2005.

Sramana: What is interesting in healthcare IT startups in that time is that the rest of the market had not figured out that it was a hot space. VCs realize that something is hot at some point and then every VC firm will take a position in that category. It is interesting because from an entrepreneur’s point of view, it can be very uncomfortable being one of the first in a new market.

Dan Rodrigues: It’s not easy being in early. We definitely had our share of challenges early on. When I tell people the story of Kareo, I tell them that if Kareo were a play there would be three acts. The first act would be the startup, the second act would be the survival act, and the third act would be the growth phase, which is where we are now. >>>

Startup, Survival, Scaling: Kareo CEO Dan Rodrigues (Part 4)

Sramana: You were working as a consulting developer for a small company to develop a medical front office management and billing solution. Did you decide to spin that out as a new company?

Dan Rodrigues: As that project grew in scope, I started getting more and more excited about healthcare. I learned that the healthcare market is 20% of domestic GDP. All of the growth trends, for the next several decades, favor healthcare. I was the lead consultant on the project so I got into the weeds of medical billing. I learned how doctors get paid and how insurance companies manage their offices. It was so inefficient, and there were so many problems to be solved. >>>

Startup, Survival, Scaling: Kareo CEO Dan Rodrigues (Part 3)

Sramana: What did you do after you sold the company in 2000? Did you make enough to fund your next company?

Dan Rodrigues: I made enough to take a few years off and fund my next venture, but not enough to retire on. After we sold that company, I teamed up with two of my former co-founders. We spent 10 months working on a startup in the online gaming space. We thought we were pretty early identifying what was going on with multimedia search when we started Scour. The second company that we worked on was a similar type of company. We saw a lot of grassroots interest from young adults and college students in competitive gaming. Kids were organizing LAN parties where they would set up their computers in a warehouse so they could play networked games against each other. They even had cash prizes for the winners. >>>