Raising a Series A with $10M in the Bank: Dean Stoecker, CEO of Alteryx (Part 2)

Sramana: When you started off as system integrators, what were the systems you provided services for?

Dean Stoecker: Our offering focused on cloud-based analytics applications ranging from media optimization to real estate site analytics. That was all based in the cloud. We were doing cloud services before the term was coined. Interestingly enough, we had been in business for only about eight months, and we had a service on the web called FreeDemographics.com. It was a simple service to generate leads to show people the power of analytics around Big Data.

We had a very successful engine that allowed people to manipulate data. A company called Thomson Newspapers wanted us to build a circulation management system for their 53 daily newspapers. That is a challenge because the company serviced disparate communities across North America, and they had millions of subscribers and tens of millions of potential subscribers. They also had millions of advertisers.

They wanted to run this circulation management system in a browser. They saw and loved the demographic application and paid us to build a circulation system in the cloud. They also gave us $1.8 million in angle investor financing.

Sramana: Was it just financing, or was there revenue tied to the product you developed for them?

Dean Stoecker: There was a considerable amount of revenue tied to the project. It was a multi-year contract, which is what all of our contracts are.

Sramana: When did this all happen?

Dean Stoecker: This puts us in January 1998. In our first year in business, we did $700,000 and had been in operations for eight months. We were still largely a services business although we had developed one component of our modern-day platform.

We did not have a ton of money to invest, and I was not excited about the VC world. We were in a space that very few people understood, so I decided not to raise any money. We decided to be conservative and grow in an organic way, which was very prescribed. We knew that we would eventually get to where we are today, but that it would take discipline and conservative spending to get here.

Sramana: After your first year, you had solid revenue and a strong first customer. How did you go about acquiring customers from that point? What did you go after in terms of clients and company positioning?

Dean Stoecker: In those days, we acquired customers who were closely aligned with the capabilities of our tools. The tools were very specific to geographic analytics or geographic business intelligence. If it had a geographic intelligence [component] to it, then we latched onto it and tried not to venture out of our core competency. Our sweet spots were media and real estate.

I think a lot of entrepreneurs chase anything that is shiny and might have revenue. We did that one time, and we knew we would never do it again. It was not repeatable and it would not add to the development of our core IP. It was a mistake that we never repeated.

This segment is part 2 in the series : Raising a Series A with $10M in the Bank: Dean Stoecker, CEO of Alteryx
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