A Serial Entrepreneur Who Understands ‘Work’: WorkMarket CEO Jeff Leventhal (Part 4)

Sramana: Did you build it beyond the $12 million that you hit in year two or did you sell the business?

Jeff Leventhal: In 1998, we had the opportunity to sell the business to a public communications company and they are still running the business today.

Sramana: How much did you sell that business for?

Jeff Leventhal: We sold it for $6.5 million. I was 28 years old, living in New York City. That was real money for me. I did not have partners in that business. I did not do things like stock options. I did give 23% of the money that I received from selling the company to the employees of the company.

Sramana: What did you do after selling that company in 1998?

Jeff Leventhal: The week after selling that company I met my wife to be. We ended up spending 5 years dating and courting. We did some traveling as well. I really took some time off, although I did consulting work in the interim. I did some advising and I also helped someone sell their business, all around the IT and infrastructure space.

I did sign a 5 year non-compete and I knew that I wanted to stay in the same area of work. I decided to take a break for 5 years and do some really great things for my personal life.

Sramana: That brings us up to 2003. What happened in 2003?

Jeff Leventhal: In 2003, the non-compete expired so I started a business called OnForce. In 1998, I sold the company and then, in 1999, eBay came online. I saw that they were matching buyers and sellers and I wondered if I could do the same for IT work —take someone who needed IT work and match them to somebody who could do that work, kind of like eBay was doing for items.

I started to sketch out a business plan for that concept, and I laid out the theoretical software design to make it all work. That concept became OnForce, which stood for onsite workforce.

Sramana: Was that also bootstrapped?

Jeff Leventhal: I put in the first $1 million into the business. Two other people put in $1.8 million into the business. I funded the business on day 1 and a few months later, other people came into the business.

Sramana: How did you build that business? What was your customer acquisition strategy?

Jeff Leventhal: The first thing I did was put together a minimum viable product. I built out a sample of what this business could do and what I wanted it to do. Of course I called up my old customers and had a conversation with them. They used to pay me $125 and I would get them somebody onsite for $55. I was now offering them a system to get somebody for the direct cost and I would charge them just a transaction fee. I was now going to build a marketplace of IT workers and let them tap into it.

I learned a big lesson here. All of my customers told me they would not use that service. My customers told me that with my old company, I was taking care of the problem. I managed it, they knew it was solved. Now I was asking them to manage the problem and that is not what they wanted. They wanted to focus on their business.

I was shocked. I was really excited about the business and now my customers were teaching me a lesson. One of my clients asked me to talk to their service company thinking that they might like what I was offering. I met with the service company and they got incredibly excited. They wanted to know when they could have it because it was addressing a big need.

This segment is part 4 in the series : A Serial Entrepreneur Who Understands ‘Work’: WorkMarket CEO Jeff Leventhal
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