Resilient Entrepreneurship: Inspire CEO Brian Loew (Part 7)

Sramana Mitra: This is actually a great story. I love stories like this. There’s another entrepreneur whose story I’ve covered. For the first four years, he had no revenue. In the fifth year, they had a million dollars in revenue, and in the sixth year, $100 million. If you’re interested, you can check out his story.

The company is Taboola. I’ve had him both in Entrepreneur Journeys Series and on my Roundtable. We’ve covered him extensively just because I love his story and the persistence. How did things turn out in 2011 to 2014? Did you get that kind of a hockey stick?

Brian Loew: Yes, we ramped up. Now, we’re doing over $5 million. We’re looking at 80% year-on-year growth. It’s really ramping up nicely. We just hired our 30th person. There’s one more funding event that I should mention. About a year and a half ago, we were approaching break even. Things were much more stable and solid. I felt like we could grow more quickly with more money.

I wasn’t formally looking for money. I met, through a friend, an investor. At the end of October 2014, he ended up investing. That was effectively our Series A round. I hadn’t really been sure that we wanted to do one, but it turned out to be a great thing. It helped our growth accelerate a whole lot. Now, we’re at a stage where we’re doing well and growing. The question is do we stick with that money or do we raise more?

Sramana Mitra: One thing that I’ll tell you, if you would permit me to give you a little bit of advise?

Brian Loew: Please, I would love that.

Sramana Mitra: Just listening to your business model, if you take too much money, I don’t think your business model is going to scale to the extent that you would be able to give return on investment on that much money.

Brian Loew: I think you might be right, but what signals are you hearing that makes you think that?

Sramana Mitra: Remember the story that I just told you about – Taboola. That was three years with no revenue. Fourth year, a million dollars. Fifth year, $100 million.

Brian Loew: That’s crazy. Yes.

Sramana Mitra: Those are the venture style companies. There are two things you need to worry about. One is you have to worry about TAM. Is there enough TAM in what you’re doing? Let’s say you took your venture money in 2014?

Brian Loew: Yes, end of 2014.

Sramana Mitra: In the second year, you’re over $5 million in revenue. If you can continue to deliver close to 100% growth, great. If you cannot and if you think that the TAM is such that this kind of trajectory cannot be sustained, then it’s going to take you a much longer time to scale this company. That’s where you’re going to have difficulty with taking in a lot of money.

Brian Loew: Right.

Sramana Mitra: It sounds like you got the hang of it. Things are working and you can grow from revenue. I have these roundtables. Today, I had a venture capitalist friend of mine who came as a guest. He said something which I really like and was completely consistent with my philosophy, he said, “Funding is like candy. In growing a company, you want to focus on proteins and whole wheat bread. Candy is addictive and is bad for you.”

Brian Loew: You don’t want to end up relying on it.

Sramana Mitra: You don’t want to rely on it and you don’t want to set the bar of success at a level where nobody makes any money. You’re running a successful business. You have some amount of funding. Giving a return on $60 million means delivering a much higher level of success and growth.

I spoke out of turn and gave you advise that you didn’t ask for. Pardon me.

Brian Loew: No, that’s good. I think entrepreneurs have to do a lot of listening. I appreciate it.

Sramana Mitra: It was very nice talking to you. Glad things are starting to find their stride. Stay in touch. Thank you.

This segment is part 7 in the series : Resilient Entrepreneurship: Inspire CEO Brian Loew
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