Mashing Together A Job Search Engine: SimplyHired CEO Gautam Godhwani (Part 2)
Check other articles in the series...SM: Did you raise money to start this venture?
GG: We did, but we did it backwards. We poured in our life savings to start the company. We worked out of our house for 9 or 10 months and got the company to be profitable while taking minimal or no salaries.
SM: Between the time you started and the first time you raised institutional money, how did you get profitable? Was it by word of mouth?
GG: We started out with literally less than $100,000 of funding and we built that to a few hundred thousand dollars based on revenues and profit. We did not take any salary. We then raised a $500,000 round of funding from our chairman and which we never ended up using. We then raised $3M from Sequoia Capital, but 6 months after we raised it Netscape and America Online came in and bought the company. We never used approximately two-thirds of the money. We never used most of the money we raised because the company was profitable when we took in funding and we were about break even when we were acquired again.
SM: What kind of revenue level did you get to?
GG: I think we were going to be in the $7-$10M range. It was still relatively early for the company.
SM: Where did you get all of these customers?
GG: At that time, believe it or not, it was all mainly word of mouth and guerilla activity. The company did not have a big marketing department so we did not have big customer acquisition costs, nor did we have big fulfillment cost.
SM: Would people just download the software from your site?
GG: The software was used directly on the web. We used to get word of mouth and PR at a disproportionate level which fueled our growth. For example, we had launched a product line called Website Garage. It was a product where you typed in your website address into our online assessment tool and it would visibly tune it up for you. It was a mechanic garage type theme. We launched this product and within 30 days of launch we had 1 million tune-ups done, and within 90 days we had 10 million tune-ups done.
SM: How much did you charge for the assessments?
GG: That was free, but a percentage of those folks upgraded to a premium service. We had 10 million people try the service and over 1 million of those people turned into paying customers. The growth of the company was phenomenal.
SM: What was a tune-up, what did it do?
GG: It gave you back a report that told you the quality of your code, if you had dead links, and how optimized your site was. At that time you did not have those types of services available and it was a neat business model because we basically found problems with people’s websites for free and we sold them the solutions.
SM: How much did Netscape acquire it for?
GG: About $100M, but the value of the deal rose substantially afterwards because after the acquisition by AOL there was quite a run-up in the stock. It multiplied by 5-7, so we were able to deliver a nice return to the employees and investors.
SM: How many years did you work on that project?
GG: About three years prior to the acquisition. After the acquisition we were there for a year and some change.
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