Bootstrapping from Finland: Vainu CEO Mikko Honkanen (Part 3)

Sramana Mitra: You had a bunch of paying customers before building the product. How much were they paying for the annual upfront payment? How did you find these companies?

Mikko Honkanen: We used our own product. To find the first unaffiliated customer, you need to do sales and marketing. So, we focused on all the companies that bring in lots of sales people. If a company has a lot of job openings in the field of sales, that was a sign for us that they invest in sales. Typically sales people needed to do prospecting, so we went after those companies.

We also started content marketing early on. We were writing on a blog once a week and asked our network to share that. We got >>>

Bootstrapping from Finland: Vainu CEO Mikko Honkanen (Part 2)

Sramana Mitra: I would like to zero in on exactly that. I’ll give you some context. My second company was a lead generation and web research company, exactly solving the same problem, except that it was very early and the web didn’t have anywhere near the level of data that it has today. I’m talking end of 1997 through 1999. The web was much shallower.

I know a lot about your space. There were other companies that tried to do that. InsideView was one of the significant ones. We had done artificial intelligence-driven architecture, but because of the lack of data, it didn’t quite have the level of capabilities. When you say you did one or two things that you did really well, what were those things that you zeroed in on that allowed you to get advance payment?

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Bootstrapping from Finland: Vainu CEO Mikko Honkanen (Part 1)

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

Mikko has steadily built an excellent SaaS company from Finland and is now expanding into the US as well. Read on for more.

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

Mikko Honkanen: I was born in a small town in Finland 20 miles up north from Helsinki. I studied at Helsinki School of Economics. I also studied at Oxford. Then I spent the last 10 years in the SaaS business. I spent almost seven years at a Norwegian company called Meltwater. >>>

Entrepreneur Couple Bootstrapping to $10M from Colorado: AdCellerant Co-Founders Brock Berry and Shelby Carlson (Part 6)

Sramana Mitra: I can totally see that. The follow-on question from there though is that the wounds of the media industry are very deep. Their monetization problems are very deep. Their existential crisis is very deep. To what extent do you view that issue as a threat to your long-term sustenance?

Brock Berry: It’s an interesting question. We are continually diversifying our business. Today, we work with radio stations, TV stations, newspapers, and some small agencies. Beyond that, we work with companies that can be labeled as non-traditional. These are media channels that are not easy to define but they work with local business owners. We have, at least, the group of five. >>>

Entrepreneur Couple Bootstrapping to $10M from Colorado: AdCellerant Co-Founders Brock Berry and Shelby Carlson (Part 5)

Sramana Mitra: This relationship came along early in your evolution and that basically financed your bootstrapping.

Brock Berry: It did. That and a few other similarly large relationships. Because we had some wind underneath our wings, we didn’t have another sweat equity deal with anyone, but we did have very good partners that helped us with our business.

Sramana Mitra: With the same model?

Brock Berry: That’s correct. Our distribution model is kind of like a channel sales strategy >>>

Entrepreneur Couple Bootstrapping to $10M from Colorado: AdCellerant Co-Founders Brock Berry and Shelby Carlson (Part 4)

Sramana Mitra: Could you throw some light on what kind of revenue sharing you were doing? It sounds like that is the core of your business model.

Brock Berry: For the services part of what we do, the media company takes 70 cents out of every dollar they sell. That’s the revenue share so to speak. If you think about our business model from a manufacturing perspective, we’re more of a distributor in that relationship. These folks that we work with are more like retail locations. >>>

Entrepreneur Couple Bootstrapping to $10M from Colorado: AdCellerant Co-Founders Brock Berry and Shelby Carlson (Part 3)

Sramana Mitra: How much of what you are saying you do is done manually versus in software?

Brock Berry: The recommendation part of the software is completely automated via the technology software platform. The trafficking of all the campaigns that are sold is also automated right from the proposal to the ad-serving tools including the input into an order management system to keep track of the history and background changes to the campaign.

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Entrepreneur Couple Bootstrapping to $10M from Colorado: AdCellerant Co-Founders Brock Berry and Shelby Carlson (Part 2)

Sramana Mitra: What was that business doing that allowed it to grow that fast?

Brock Berry: That’s exactly why we started AdCellerant. The market was really ready for that type of traction and we were bringing these highly-sophisticated marketing strategies to local business owners. We were doing that through the media companies that we worked with, which had thousands of sales people.

Because of the massive sales force and the fact that we are able to leverage that sales force for free, we >>>