Long Road to Product-Market Fit: Allan Wille, CEO of KlipFolio (Part 4)

Sramana Mitra: Absolutely. Serendipity and luck are very big drivers in entrepreneurial success. People who don’t acknowledge that are basically fooling themselves and aggrandizing themselves in undeserved ways.

Allan Wille: That was an easy lesson. I’ll give you another example. The lesson there was, “we were not making any money, and here was an opportunity to make money.” It was very black and white. Making that change was fairly obvious.

Sramana Mitra: How much did you make off that deal?

Allan Wille: That was our very first real deal. I think we made $35,000 on an annual basis.

Sramana Mitra: Yes. What year was this that you were doing this annual recurring revenue model?

Allan Wille: It was 2004.

Sramana Mitra: Before the cloud model stuck.

Allan Wille: Yes. It was certainly not mainstream. That was good for the business. The business grew a little bit. We grew to 10 employees but it wasn’t a runaway success. We were still struggling. The sale was long.

Sramana Mitra: Did that model replicate itself where there were a bunch of users in enterprises?

Allan Wille: It did. At our peak, we had about 150 enterprise customers. It wasn’t a runaway success. It had long sales cycles. We were selling it through IT and procurement. It was a difficult sale. It was hard because we were taking very small salaries. In the early days, we were taking $20,000. For several months, we did not take any salary. It was difficult. As an employer, you have an obligation to the employees.

We had these discussions where we contemplated going out and raising money. In every case, we always came back to the reality that we didn’t have the growth and success. We couldn’t look ourselves in the mirror and say, “If we put some money in, it will truly result in accelerated growth. This was also around the time where we made mistakes. Whereas moving from a consumer model to an enterprise model was very cut and dry, here we had a time where our business was moderately successful, but it wasn’t where we wanted it to be. This is where entrepreneurs really struggle.

Sramana Mitra: What was the revenue level?

Allan Wille: Sub-million. I think it was more like $700,000 on an annual basis.

Sramana Mitra: We’re talking around 2006.

Allan Wille: Yes. There was some growth, but it was difficult. Salaries was still tight. This is where it’s difficult. I remember having these conversations. You say, “We need to stick to the plan. We have a hundred customers. Obviously, they see value in what we’re doing.” On the other hand, you knew that there’s something wrong and that the business wasn’t growing as quickly. It’s too difficult. There wasn’t that flywheel effect that was happening.

This is where a lot of entrepreneurs struggle when things are sort of working. Do I continue on this path or is this exactly when I need to make a choice? I think this is where talking with other entrepreneurs and really opening up is very healthy. You need an outside perspective.

This segment is part 4 in the series : Long Road to Product-Market Fit: Allan Wille, CEO of KlipFolio
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