Student Entrepreneur to $10M Revenue Run Rate: Extrabux CEO Jeff Nobbs (Part 5)

Sramana: You said you raised a million dollars of funding. When did you raise that funding?

Jeff Nobbs: We raised money every few months for a couple of years. We have not raised money since 2011. Our valuation grew every time we raised money. We have a lot of shareholders now. Looking back, it would have been a lot easier if we had just raised one round. We were begging for money.

Sramana: Who was it that was giving you tranches of money? Was it still friends and family?

Jeff Nobbs: Yes. That is why we had such small chunks of money. They could not afford to give us a million-dollar check. It felt like we were raising money every day. It was almost like raising money was a part-time job. The amount of work we would do for a single $10,000 check was substantial. I can’t even imagine doing that now because we make that much money in a couple of hours.

Sramana: What is your revenue threshold now?

Jeff Nobbs: We did about $5 million last year. Right now we are on a run rate of $10 million.

Sramana: It sounds like you have hit a point where the business is doubling.

Jeff Nobbs: Yes. We have been growing 20% month over month. It is a big world out there. Once we expanded into Asia, we really saw growth. China will have twice as many online shoppers as the entire U.S. population in a few years.

Sramana: Talk to me about your team size. How big is your company?

Jeff Nobbs: We have 23 people total. We have always had a focus on engineering. Most of our initial employees were engineers. That is still the biggest group. Of the 23, 14 are in the San Diego office and 9 are in Shanghai. In China we focus mostly on customer services and marketing. In the U.S. we have our engineering and merchant relations.

Sramana: You hit $5 million last year. At what point did you become profitable?

Jeff Nobbs: We would dip in and out of profitability. We had some profitable months in 2011. We are not trying to run a lifestyle business or just skate buy, so we have no problem being unprofitable.

Sramana: When were you able to stop raising money every month?

Jeff Nobbs: That was in 2011, probably around June or July.

Sramana: So, you have now had a year and a half of organic growth that have been driven through your revenues. How many employees did you have in early 2011?

Jeff Nobbs: We only had five employees then.

Sramana: You can’t make a lot of money if you have to hire a lot of people every month. What I am pointing out with all of my questions is that you have to run an incredibly tight ship to support organic growth.

Jeff Nobbs: Definitely. Everyone on the team will have a plate that is overflowing. You can only hire if you know that there is a huge need for a person. You don’t get any “nice to have” hires.

This segment is part 5 in the series : Student Entrepreneur to $10M Revenue Run Rate: Extrabux CEO Jeff Nobbs
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