Bootstrapping with a Paycheck: DudaMobile CEO Itai Sadan (Part 6)

Sramana: What do your premium functions offer?

Itai Sadan: Our premium features help you drive more traffic to your site and grow your business. We have a widget that is called “click to call” that lets users visiting the mobile website click a button and call the business. We have another widget called “click to maps” that helps people navigate to the business establishment. These are the things that small businesses care about. They don’t understand page views and unique visitors. They understand what it means when their phone rings and more people walk in their store. That is what we help them do for $9 a month.

Sramana: What is your business model for the affiliate relationships?

Itai Sadan: What we have developed is a long-tail reseller channel. There are a lot of groups that cater to small businesses that think that DudaMobile is a great tool for their tool set. These are companies who are web designers and digital marketers. They run agencies. We have a special group today inside of DudaMobile that caters to those partners. We have thousands of those partner relationships today. The great news is that once you establish a relationship like that, you have essentially created a virtual sales force. They evangelize mobile sites and sell multiple sites.

We also make a lot of changes in our product based on what that group of users needs. We have special materials to help them sell and market the mobile sites. Whenever we release a new product or feature, they are the first ones to know and they give us feedback about those features.

Sramana: Let’s talk more about the financial engineering that went into building this company. You took on $800,000 in 2010. What has been the financing since then?

Itai Sadan: A year later we raised $1.5 million from the same group of angel investors. The year after that, in 2012, we raised our first institutional round from Pitango Venture Capital, which is an Israeli firm. We raised $6 million from them. Earlier this year we raised another round led by Pitango for $10 million dollars. We have raised $18.6 million of total financing.

Sramana: Is your growth matching your investments?

Itai Sadan: We have grown this year by 300%.

Sramana: How many websites are powered by DudaMobile today?

Itai Sadan: There are over 5 million mobile sites today.

Sramana: There have been a lot of attempts to crack this problem and there are typically issues scaling the solution. Obviously you have been able to scale your solution.

Itai Sadan: In the SMB space it is not just about technology. You have to crack the market fragmentation. It is hard to scale to a large size when your primary customer base are SMBs because the market has so many verticals. You can’t hire a sales team to go after small businesses. The economics of that won’t work.

Sramana: At $9 a month you can’t afford a sales force.

Itai Sadan: Exactly. We have to rely on marketing. There are a not a lot of companies in our space that have managed to build a brand and become a large company that caters to the SMB space. Google and Intuit are good examples of companies that have been able to make that work.

This segment is part 6 in the series : Bootstrapping with a Paycheck: DudaMobile CEO Itai Sadan
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