Student Entrepreneur to $10M Revenue Run Rate: Extrabux CEO Jeff Nobbs (Part 6)

Sramana: When you had just five employees, were you all getting paid? Did you and your co-founder get paid?

Jeff Nobbs: My co-founder and I were barely getting paid. We were making minimum wage. We paid everyone else in equity and cash. Their salaries were a little under market, but not drastically. We made up for that with equity in the company.

Sramana: Once you became profitable in the middle of 2011, you were able to hire people with the profits you were generating. You have now hit an inflection point that gives you a nice, stable team.

Jeff Nobbs: Yes. There was one funny story that happened in early 2011. That was a time when we really needed money and we had a $300,000 check that we had to rip up. We had an investor who desperately wanted to invest, and we wanted her to invest because she wanted to invest $300,000. After talking to her more and learning a bit more about her, we decided that it was not a good fit. That was very hard to do.

Through all of that, she had sent us a $300,000 check and threatened to sue us if we did not accept it. Long story short, we got out of that. Ripping up a $300,000 and leaving it on the table was one of the hardest things that we had to do.

In terms of hiring, we have a different view now. At that time we were making $50,000 a month. if we brought someone on who increased our revenue by 3% to 5%, they would not pay for themselves. Today if we bring someone on who can increase their revenue by 0.5%, then they will pay for themselves. It makes justifying the hires a lot easier.

Sramana: Now that you are on a $10 million run rate, are you looking at raising money?

Jeff Nobbs: We are always considering raising money but right now we are growing so fast that we do not want to over hire. We don’t really need money. I’m sure we could spend it, but we are just focused on building the best site possible. We are not focusing all of our resources on paid advertising. A big marketing budget and a sales team is what you typically have to spend money on. Our customer origination is entirely organic.

This segment is part 6 in the series : Student Entrepreneur to $10M Revenue Run Rate: Extrabux CEO Jeff Nobbs
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