Bootstrapping to $18 Million: Vlad Friedman, CEO of Edge Hosting (Part 2)

Sramana Mitra: You basically would do whatever it is the client was asking you to do, I imagine, at the beginning. As time progressed, what became your core competency even in the mode of delivering consulting or solutions? Where did you find your sweet spot?

Vlad Friedman: I had a couple of stages along my evolution. Obviously, consulting was the first piece of it where I cut my teeth and started my career. The first place where I really started to make an impact was when I started to get a reputation for pulling off projects that most other companies just considered impossible.

Sramana Mitra: Can you give me an example? >>>

Bootstrapping to $18 Million: Vlad Friedman, CEO of Edge Hosting (Part 1)

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

Vlad has built his business using only bank financing, and has aspirations of growing it to $50 million. Read how he has done it, including about on-dilutive financing mechanisms.

Sramana Mitra: Let’s start at the very beginning of your journey. Where are you from? Where were you born, raised, and in what kind of background?

Vlad Friedman: I was originally born in Ukraine back in 1973. In 1979, my family decided to immigrate to the United States. I came to Baltimore, Maryland at the age of six from Kiev. My family and I have lived here ever since.

Sramana Mitra: What about education? >>>

Multiple Pivots, Taking on Giants, to Over $100 Million in Revenue: Matthew Calkins, CEO of Appian (Part 7)

Sramana Mitra: The competitors who went away, were you winning their customers?

Matthew Calkins: We were winning the deals that they attempted to compete in.

Sramana Mitra: But people were not switching necessarily.

Matthew Calkins: By and large, whoever has done that installation doesn’t want to do it again. They’re going to hang on to whatever they’ve got until it dies on its feet. We weren’t able to go back to lost deals and win them the second time around, at least not in the near term. We were stronger proportionally in the new deals. They had this turmoil going on.

Sramana Mitra: We are talking 2012? >>>

Multiple Pivots, Taking on Giants, to Over $100 Million in Revenue: Matthew Calkins, CEO of Appian (Part 6)

Sramana Mitra: Interesting. So you closed the $10 million round before the financial crisis on a questionable business plan. What happens next?

Matthew Calkins: It’s an odd journey. Now we have $10 million and we could be strategic. That felt very nice because there was so much we wanted to do. We’ve always been an ideas company and we had such plans. Finally, we had this moment to breathe and invest. The thing we decided to build was an exceptionally simple and elegant interface. This stems from our belief that BPM is hobbled by its complexity.

Processes should be simple and if they’re not, people won’t participate voluntarily. If they don’t, then only the people whose job it is will ever be a user of BPM. I wanted BPM to be an easy, attractive, and unifying experience whereas it was an exclusive, irritating, and dis-unifying experience. The first thing we did when we got this money is begin to develop what we called the Tempo interface. >>>

Multiple Pivots, Taking on Giants, to Over $100 Million in Revenue: Matthew Calkins, CEO of Appian (Part 5)

Sramana Mitra: How many enterprise customers were you able to get in 2004? How were revenues scaling?

Matthew Calkins: I think we were growing at about 20% to 30% in those years. Our customer gain was never what we wanted but still steady and lucrative. In fact, we didn’t have a growth problem until 2008 when we were investing hoping for better results. Then we hit a few problems. We had a version that had a lot of technical problems. We were in crisis mode with some of our customers.

At the same time, the market was proving to be uninterested in buying. We had just a confluence of some difficult factors for a few years leading up to that. We had felt that we were spending all of our money being tactical and none of it to break out strategically. I think this was really the core problem. Our competitors were successful at forcing us to play against their strengths. They would have some features. They would all agree on it and build the same thing. They would convince the analyst that this was the feature you needed. This was the thing that they’d be talking about at conferences. >>>

Multiple Pivots, Taking on Giants, to Over $100 Million in Revenue: Matthew Calkins, CEO of Appian (Part 4)

Sramana Mitra: What year are we talking?

Matthew Calkins: 2003. There was a long transition and it was difficult for us. BPM naturally needs an interface in which you can consume all of the information that goes with it. You might need broad awareness and a portal interface would be good for that. You may need lots of pieces of information to synthesize a decision. Furthermore, that information needs to be targeted to you. So we said, “We’re going to get into BPM, but we’ll call our offering not just BPM but a BPM suite because these other things are synergistic enough for you to buy a suite around BPM and not just the core product itself.” We had to say that because all we had was the suite. We didn’t have the BPM in the middle. >>>

Successful Pivot to a High Growth Business: Ray Grainger, CEO of Mavenlink (Part 7)

Sramana Mitra: The money that you had in the convertible note and your own money, that was financing 2010 then?

Ray Grainger: It got us through 2010. It actually got us almost through 2011 as well.

Sramana Mitra: In 2011, you generated revenue?

Ray Grainger: Yes. We got up to a million dollars in 2011.

Sramana Mitra: What happens in 2012? >>>

Multiple Pivots, Taking on Giants, to Over $100 Million in Revenue: Matthew Calkins, CEO of Appian (Part 3)

Sramana Mitra: You’re talking 2001?

Matthew Calkins: The Army project started in 2001. It got going in earnest in late 2001. We were still a portal company in the 2002 to 2003 timeframe. We had to get out of it. The portal market was, in the end, just as disastrous as the personalization market for different reasons.

Sramana Mitra: Why was that?

Matthew Calkins: There were a couple of problems. The portal was a feature and not a complete product in the eyes of the market. The portal was a great way to gather users and acclimatize them to your system, but the way companies want to make money on it was to give the portal away and to make money on all the applications that went along with it. >>>