Bootstrapping to $40 Million: iCIMS CEO Colin Day (Part 4)

Sramana: What product were you really trying to sell during that time?

Colin Day: We have three products today: Connect for passive candidates, Recruit for active candidates, and Onboard for new hires. Back then, our initial product was an applicant tracking system. It was a front-end, back-end system. On the front end we would manage their career site. We would host a company’s jobs list and let applicants apply for jobs. On the back end we would give them a database to let companies manage it all, which included offer letters and communications between the company and a candidate.

Sramana: How many clients were you able to get in the first few years bought into your vision?

Colin Day: Our renewal rate is in the 90% range right now. Not a single customer from our first three years is with us now because we were a completely different company.

Sramana: Is that because you were being scrappy doing any related revenue-generating project?

Colin Day: That is exactly it. None of them are with us today. Ironically, a few that have left have come back recently and don’t even realize that they used us 10 years ago. They love us for what we do today. In the early days we knew we were building a product from scratch, and that we would lose customers along the way as we transitioned closer to our vision.

Sramana: How much revenue did you do in your first three years?

Colin Day: I would guess that we were below a million dollars of revenue total. I think in our first year we were less than $100,000 in revenue. It took a while to get going. There were probably hundreds of competitors when we got started because everybody was trying to do SaaS recruiting.

We had a moment when we addressed our board and told them that it was very cutthroat. We knew that we needed to be profitable, and we knew we could not survive a price war. In order to break even, we were going to need 300 of these customers. The board told me we needed to differentiate ourselves and triple our prices. I thought they were crazy, but we did survive. It was one of the biggest lessons I have learned. People found that it was worth paying more for a company that gives great customer service and differentiated value. The nice thing about that is when you triple your price, you need a third of your previous customer base to break even.

Sramana: In that time when you were trying to survive, how much effort did you put into building the product that ultimately became your real product?

Colin Day: A significant amount. There were a couple of things I had to learn fast. I started the company when I was 23. I read business books, but I had no experience to draw on. One lesson that I learned, and it is a critical lesson, is that if you start a company and you are the CEO, you can’t be just a business person sitting in a office trying to run the company. You have to be the sales person, you have to talk to every prospect and gather info from prospects. I needed to be the one who brought that info back to R&D and help incorporate it. The CEO is the ultimate head of sales and head of product.

This segment is part 4 in the series : Bootstrapping to $40 Million: iCIMS CEO Colin Day
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