Buying Control Back from VCs: Jason Robbins, CEO of ePromos (Part 5)

Sramana Mitra: On the website, you would provide the designs that your suppliers were able to build against. You would provide that catalog and fulfill through that supplier network.

Jason Robbins: Exactly right. You would come to my website and you’d say I like that. You would upload your logo. I would send your logo to my supplier. They would blind-ship and drop-ship it to you. Then I would pay them. That’s the whole industry and that’s the industry today. We have hundreds of suppliers to choose from that have high-end and low-end items that follow retail trends. If you do the math and look at the revenue stream, we would have needed another round which we subsequently got in order to feed the burn rate.

We had the dot-com crash. The bubble burst right after we got our $5 million round which was a year and a half after we got our $1.2 million. The $1.2 million is from angel investors and family. Literally, these were high-end people. They were throwing $25,000 and $50,000 without actually thinking what this company is going to do. From there, I have tons of lessons for entrepreneurs. Today, I own 100% of the company.

Sramana Mitra: That’s the story I want to capture. You had $1.2 million from angel investors and then you raised a second round.

Jason Robbins: $5 million from a venture capital firm that was ran by two guys that I don’t think were even 30 years old.

Sramana Mitra: We are talking 1999 to 2000 time frame?

Jason Robbins: Yes.

Sramana Mitra: What milestones had you achieved at this point? When this $5 million was coming in, did you have actual milestones?

Jason Robbins: We had revenue. I think we were profitable too. We were showing a nice growth rate. A portion of the sales was coming in from our reputation in the dot-com community as a result of attending conferences. We would partner with Silicon Alley Reporter and we would give them bags at a very low cost to get our logo inside. People would know, “That’s the company we go to when we need stuff.” We built ourselves a little reputation in that segment. We made revenue that way.

Also as Google was becoming popular, because we were around early and because I was able to be on the cutting-edge on whatever information there was out there with regards to Google, we were able to stay ahead of the game. We were number one or two for the word promotional products for many, many years. The big lesson was I’m getting this almost free marketing because everyone who wants to use the web is using Google. I’ve done whatever I’ve done to stay on top of Google. It was wonderful.

Sramana Mitra: Organic search is incredibly effective.

Jason Robbins: The big mistake I made with organic search was I underfunded the resources to handle the leads. We cherry-picked our leads. We said, “We have a hundred people that registered today.” I always make it akin to dating. If a girl pays attention to a boy, that’s the one he goes after. The same thing happens with our business. Any client that was paying a little bit of attention, we would pursue. The sales people that worked for me started getting really good at selling. We were so busy with all the free Google leads. The big lesson I learned was, if we had staffed up and told them not to cherry pick, we would have a bigger customer base buying earlier.

Just recently in the last four or five years, we’ve spent a tremendous amount and effort on retention and thinking about how to segment our customers and how to compensate sales people differently for different levels of customers. Some of our sales people don’t get any new leads anymore. They just hang out with their customers that have had relationships with them. Our new people need to get new ones. Except our new people aren’t as good as our old ones. How do we make sure the new people are giving the right services so they can convert? We’re a $50 plus million company now.

This segment is part 5 in the series : Buying Control Back from VCs: Jason Robbins, CEO of ePromos
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