Building a Robust Business in Australia: Investorist CEO Jon Ellis (Part 8)

Sramana Mitra: What is the minimum revenue threshold you think you need to get to achieve that?

Jon Ellis: My opinion is you need minimum revenues of about $50 million. However, plenty of companies especially in Australia, IPO at the level that we’re at now.

Sramana Mitra: I don’t think that’s a good idea necessarily.

Jon Ellis: It’s a disaster.

Sramana Mitra: Going public too soon is a bad idea. Based on the picture that you’re painting, $50 million run rate in the next three to four years is very doable. If you have a reasonably clean exit path into the public market in Australia, that sounds like a very interesting way to build a company.

Jon Ellis: I think it is. Our focus is really on delivering a vibrant marketplace. We’ve found that if we focus on revenue, then we’re chasing sales people’s targets.

Sramana Mitra: Much more measurable, much more fundamentals-oriented. You can control your unit economics.

Jon Ellis: We focus a little bit less on the unit economics, and a lot more on the metrics in the marketplace like number of users that we add on and stock value.

Sramana Mitra: Eventually if you want to go public, then you’ll need to focus on the unit economics as well.

Jon Ellis: Absolutely. We certainly know our metric. We have a good model. We have a clear pathway to profitability. We believe that we’ll profit in the middle of 2017 and we’ll hit consistent breakeven and consistent profit. We know what we need to do with all the metrics of our pricing to make sure that we get there.

Sramana Mitra: Interesting. These days in the US, the tech IPO market is not doing so well. Generally, the consensus is that going public at less than a hundred million in revenue is not a good idea. So it’s good that you have a path to go out in the Australian market and you’re not chasing after some crazy US unicorn dream.

Jon Ellis: I spoke to a VC firm when we were doing our journey. I decided to actively not pursue VC money in the last round.

Sramana Mitra: I think you’re doing a very wise navigation of your company. Your long-term prospects are much better if you don’t put yourself on a VC timeline. You’re just going to create a level of pressure on yourself which is unnecessary.

Jon Ellis: Exactly.

Sramana Mitra: It’s a pleasure talking to you. I’m glad that things are working out. I look forward to keeping in touch and following your journey.

This segment is part 8 in the series : Building a Robust Business in Australia: Investorist CEO Jon Ellis
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