Bootstrap First, Raise Money Later: Ensighten CEO Josh Manion (Part 6)

Sramana Mitra: Interesting. I see what you’re doing. Did you start this company in 2012?

Josh Manion: 2009.

Sramana Mitra: At that point, you self-financed this company based on money from your consulting firm, right?

Josh Manion: That’s right. My wife and I decided that we would bootstrap it while we were building the technology. That started at the end of 2009. That mode persisted until September of 2012 when we closed our Series A.

Sramana Mitra: Were you doing all this in Chicago?

Josh Manion: For the first few months, we were. In September of 2010, we moved our family and Ensighten out to Silicon Valley.

Sramana Mitra: What happened to the consulting company?

Josh Manion: The consulting company was being run by my wife. The first person that we had hired back in 2004 has climbed the ranks. His name is Bill Bruno. He took my role in leading sales and my wife was representing our interest as the CFO. That continued in its own parallel track until 2013 when it was sold.

Sramana Mitra: But before that in 2012, you went ahead and raised money for Ensighten?

Josh Manion: That’s right.

Sramana Mitra: At the point at which you raised money for Ensighten, what milestones had you already achieved in terms of product, product/market fit, and customers? What was the status?

Josh Manion: We had about 40 customers and about 35 employees. We were probably trending to just under $5 million in revenue that year.

Sramana Mitra: So before Series A, you already had a significant amount of revenue.

Josh Manion: Yes. Because we bootstrapped for so long, it was probably more like a Series B for a lot of companies.

Sramana Mitra: No question about it. These 40 customers that you had acquired, what was the sweet spot? Was there any characteristic of those customers that was particularly striking?

Josh Manion: I think the trend was that most of them were very large. Customers at that time including companies like American Express, Capital One, Home Depot, and Sony Electronics. It was an interesting thing. If you think about the content management system for all the digital marketing technologies, the guys that adopted that first tended to be big complicated enterprises because their pain is worse than a small company.

If you’re a small company, you might not work with 50. You might work with five of those technologies. You just didn’t have the same level of pain. Eventually, you’ll benefit from it but you’ll be less likely to be the first one to act.

Sramana Mitra: On that point, who were you selling to? Were you selling to the CIO or the CMO?

Josh Manion: Generally, we were selling to the CMO’s office. There are very few cases where we actually sell to the CMO directly, but definitely someone in their organization.

Sramana Mitra: Anything else that you want to share for that period from starting the company to getting to the Series A milestone?

Josh Manion: The takeaway is you want to be very thoughtful about the timing of when you raise money. The company needs to be ready to grow and grow according to a plan.

Sramana Mitra: At a very fast pace. Venture capitals do not invest in companies for growing at 10%. That’s not their agenda.

Josh Manion: That’s right. We know that the expectations are there. It’s a good thing that we did not raise money earlier because the market wasn’t ready. If we had raised money in 2010, we would probably have a different and negative experience because I don’t think the market was ready at all for us to show that kind of massive growth. I could anticipate that venture firms wouldn’t have been so excited about the bumpy road between A and B.

This segment is part 6 in the series : Bootstrap First, Raise Money Later: Ensighten CEO Josh Manion
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