From Friends and Family Funding to $30 Million Exit: Vertical Response Founder Janine Popick (Part 4)

Sramana Mitra: That’s perfectly fine. Let’s double-click down on some of the strategic moves as you were building the company. You talked about your financing strategy. You kept raising money till about $1.3 million at the same valuation for almost a year and a half. What about customer acquisition? What about the team? What strategies did you follow in each of those categories?

Janine Popick: Customer acquisition came about in two ways. One was to go after each and every small business owner. That needed to be part of the way we offset our business development because business development deals can either work great or they don’t pay off at all. To start with, we were doing things like co-branding all our products so that anybody could say that they had an email marketing company. Even a small agency that has a hundred clients can all of a sudden say that they are in the email marketing game. The problem is you go ahead and build these things for these agencies but they only use it when they need it. A lot of the business development deals on that level was really slow growth for us.

Some of the big business development deals were great—we were the first partner of Salesforce.com. We knew that Salesforce had a problem in their technology, which was email marketing. They didn’t want to be in the email marketing business from the start. So they said, “Here’s a little company. They can take a look at the headaches and take it away. If they do the integration properly, they could really help us out.” It was a great opportunity for us. We did get it right and it ended up accounting for, at the highest, around 13% of our overall revenue. That was a real success.

I have to say the reason it was a success was because we understood the real problem that Salesforce customers had and we addressed that need. It wasn’t just throw it up against the wall and see if it sticks. It was getting into the product, figuring out how people use Salesforce, and fixing the problems to the best of our abilities. I think a lot of companies out there that are doing integration are just doing the integration without really thinking about the real needs of the customer. Believe me, we’ve done that. With Salesforce, we really went above and beyond. That proved to be a huge success.

Sramana Mitra: What year did you do the Salesforce integration?

Janine Popick: We did it before the AppExchange launch. It was about 2003.

Sramana Mitra: That’s a great move to be that early in that market, which really became a significant market.

Janine Popick: That was huge for us. We thought of Salesforce as really growing. We can’t believe they took a chance on little Vertical Response. Our lead investor was good friends with someone on the Salesforce board. It was a who-you-know moment. We got the right meeting with the right people at the right time. That was sheer networking, getting in the door, and going after it.

Sramana Mitra: Terrific. Were they sending you leads then? You said that you were servicing something that they weren’t able to service. When leads came up who wanted to do that, were they sending them to you?

Janine Popick: Yes. Prior to the AppExchange launch, we were pretty much only as good as their salespeople knew about us. We were over at their offices all the time in front of the salespeople. At that time, they were limiting companies to sending only 500 emails a day. If you get a customer like Dell, that’s impossible. The Salesforce people were getting these questions all the time. Our solutions went like rapid fire through their sales team and the customer support team because it gave them the answer that they needed. It was great for us. When the AppExchange came out, that was just the greatest platform for us to showcase all of that without relying on salespeople and customer service people. They were a great channel for us but now you have this great website that anybody can go to and say, “Let me see who the players are.” For many years, we were the number one most downloaded app on the AppExchange.

Sramana Mitra: You said that around 13% of your revenue came from the Salesforce partnership. What were your other major customer acquisition channels?

Janine Popick: Our biggest channel was direct advertising. We were spending money on AdWords. We were advertising on targeted newsletters and targeted sites. We would find a niche agency newsletter and even though it only had 4,000 email addresses on it, we wanted to advertise in it for the next month and test it out. If it failed the first time, it wasn’t like we stopped. We gave everything a great shot.

This segment is part 4 in the series : From Friends and Family Funding to $30 Million Exit: Vertical Response Founder Janine Popick
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