Bootstrap to $25 Million from Utah, Raise Money Later to Scale to $100 Million: John Pope, CEO of Jive (Part 4)

Sramana Mitra: Let’s got into the block-by-block journey of how you got to $25 million. What were some of the first strategic moves that you made that set you up for that journey? Just walk me through the strategic process of navigating through to $25 million.

John Pope: The first one was a lesson that I’ve already covered here. You have to keep your expenses to a minimum. We all did that at that time. The second piece was to reinvest heavily into growth. If we had wanted to wait and continue to work on our product endlessly until we were satisfied with every last bell and whistle, we would not have survived. The strategy was to reinvest into sales and into lead generation.

Sramana Mitra: Let’s talk a little bit about customer acquisition strategy. We are talking 2005 to 2006. What was the primary customer acquisition channel for your business? Was it Google PPC?

John Pope: We started it in 2006. That first phase, which was very painstaking, was Google PPC. It was generating local business starting with friends and family. Small businesses really benefit a ton from referrals. Online review sites also helped. A lot of it was coming from early online adopters. These are people who had a hobbyist interest in the technology. It began to spread from there.

Sramana Mitra: How long did it take you to hit the million dollar revenue mark or run rate?

John Pope: It took us three and a half years.

Sramana Mitra: That brings us to about 2010. What happens next? What’s the next major inflection point? What did you figure out that helped you grow faster?

John Pope: Perfect question. Two things. One of them was indirect sales. We started working with the reseller channel. We started bringing on groups that sold products and consulting and advised customers with the same profile as ours. We built that program in 2009. That has been a massive source of revenue for us ever since. It’s very appealing to those who are bootstrapping because you don’t pay a whole lot upfront. You’re paying resellers commissions to sell your product.

Sramana Mitra: This is actually a very good topic to double-click down on. Talk a little bit about what kind of resellers you looked for.

John Pope: We looked for groups who were selling to the same customers that we were targeting. We’ve moved up market and are selling to all shapes and sizes right now. In the early days, we targeted small businesses much more. Since telephony was moving from being hardware-based to being cloud-based and the actual call routing was moving from a public telephone network to IP, this set us up to have great partnerships with MSPs. Those who were helping small businesses understand and optimize their own LAN. That was a perfect marriage.

Even right now, most of our reseller community is made up of these IT consultants and MSPs. We also work with telephone system providers – those who have been selling the old hardware systems for decades. We’d start working with them and they selectively pick up groups that were interested in our product and gain some traction there.

We also sold through telecom consultants. These are groups who are advising small businesses which telephony vendors they should look at. There’re lots of people reselling products. With my satellite business and my insurance business, I was an indirect reseller. You just have to find the ones who have the expertise and who are able to bring your product into a consultative type of sale where it makes sense to add it to their suite. For us, that’s what really gave us traction.

Sramana Mitra: You introduced this in about 2010?

John Pope: It was in 2009 when we officially started the channel program.

This segment is part 4 in the series : Bootstrap to $25 Million from Utah, Raise Money Later to Scale to $100 Million: John Pope, CEO of Jive
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