Scaling a Robust Enterprise Software Company from Chicago: FourKites CEO Matthew Elenjickal (Part 2)

Sramana Mitra: You said you did the startup right after your MBA. So did you then bootstrap it to launch this? Whom did you launch it with?

Matthew Elenjickal: I started the MBA program fully aware that I wanted to start a company. I was laying the foundation, if you will, when I was doing my MBA. I got a lot of free help. A lot of courses helped me really build a network of local venture capitalists. I got a lot of free money through competitions and stuff like that.

Scaling a Robust Enterprise Software Company from Chicago: FourKites CEO Matthew Elenjickal (Part 1)

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This is a terrific case study of smart execution on a complex domain by an entrepreneurial team. Read on !

Sramana Mitra: Let’s go back to the very beginning of your journey. Where are you from? Where were you born and raised? What kind of background?

Matthew Elenjickal: I was born in the south of India in a state called Kerala. I did my undergrad in Chennai and then moved here to Chicago for grad school. I went to Northwestern and took Industrial Engineering and Management Science. It’s a two-year program.

Bootstrapping a Niche E-Commerce Company: Modded Euros CEO Sean Dawes (Part 7)

Sramana Mitra: Where are you now? How far along? What’s the revenue level?

Sean Dawes: We’re doing millions in revenue. It’s about focusing on capturing as much market share as possible. There are still a handful competitors that are larger than us. For us, it’s growing as fast as possible while focusing on profitability.

My motivation is that I want to enjoy what I do, but I also want to ensure that my family’s future is taken care of. That’s what wakes me up every day. My father and grandfather worked all their lives.

Bootstrapping a Niche E-Commerce Company: Modded Euros CEO Sean Dawes (Part 6)

Sramana Mitra: What about inventory financing? Did you finance it all out of revenue or did you do some sort of bank financing?

Sean Dawes: We did a combination of self-financing and bank financing.

Sramana Mitra: Could you give us a range of what level of bank financing you used to leverage the company?

Bootstrapping a Niche E-Commerce Company: Modded Euros CEO Sean Dawes (Part 5)

Sramana Mitra: What are the key inflection points? What strategic moves have you made that led to this?

Sean Dawes: For us, it was being able to offer similar content generation that we were used to working with when we worked in-house. We launched our own content video series where we’d purchase vehicles and show the customer what they could do to the vehicle.

Bootstrapping a Niche E-Commerce Company: Modded Euros CEO Sean Dawes (Part 4)

Sramana Mitra: The transition from dropship to inventory, how far did you get to dropshipping in terms of gross merchandise volume?

Sean Dawes: We did over a million in annual sales before we had to inventory anything.

Sramana Mitra: That’s terrific. What did you learn about the customer base? Were they auto shops or were they consumers?

Bootstrapping a Niche E-Commerce Company: Modded Euros CEO Sean Dawes (Part 3)

Sramana Mitra: How long did you do the marketing services before you were able to switch full-time to the online retail car purchasing?

Sean Dawes: About two years. We spent some time investigating markets because we weren’t sure if we were going to go in the automotive market. We were exploring a lot of different verticals. We looked at everything from baby stores and sporting goods.

We started with things that were of interest to us. I’ve played hockey for the longest time. I had interest there. We said to ourselves, “If our background is automotive, we would be foolish not to enter the automotive market, especially if we needed to go down the route of investment capital.”

Bootstrapping a Niche E-Commerce Company: Modded Euros CEO Sean Dawes (Part 2)

Sramana Mitra: I try to trace the journey chronologically. Tell me what you did after coming out?

Sean Dawes: Towards my senior year, panic set in about what I was going to do. I realized that I was going to be making $12 an hour and have student loan debt. I ended up working in real estate because my aunt was running a real estate firm. I ended up getting my real estate license just to have a backup in terms of cash. In 2008, the real estate market was still not great. I was brand new in the industry. It was hard to generate business.