Capital Efficient Entrepreneurship: Ranker CEO Clark Benson (Part 6)

Sramana Mitra: Where to from here? You are profitable already. Is this a company that now stops raising money and goes to some sort of exit in the near term?

Clark Benson: That’s a great question. We don’t have to raise money which is a great position to be in. I’m terrible at raising money, and I don’t like doing it. We turned profitable about 18 months ago. I’ve been so much more relaxed. I’m only working 55 hours a week now. We had occasional conversations with strategic partners who are interested in the data.

We may raise money only if there’s a strategic partner that will help us grow that side of the business a lot quicker. Obviously, I would think an exit is more likely than an IPO. We’re at a very strong growth phase of the company. We had $97 million visits in October and we will definitely hit a million visits unless something goes drastically wrong. Our brand profile has been raising a lot more. We’re in no hurry. It’s great to be profitable.

Sramana Mitra: Our philosophy in the 1M1M program is “Entrepreneurship equals customers, revenues, and profits. Financing and exit are optional.” If you have raised financing, you’re going to have to, sooner or later, give some exit to your investors. Being profitable is absolutely what every entrepreneurs should be striving for. It’s mind-boggling to me that they don’t.

Clark Benson: I couldn’t agree with you more. I’ve built smaller businesses before, so I know how to run a real business. When you start a small business with your own money, you have no choice but to get to profitability very quickly or you’re dead. I find that a lot of the hype around tech that you read is almost damaging to your average entrepreneur, because the real world isn’t like that.

Sramana Mitra: Extremely so. The press is doing an absolutely terrible job of parroting these big financing stories and these pseudo-companies.

Clark Benson: I like your concept. I like people that use one million instead of one billion. I’ve probably had 10 venture capitalists in the Bay Area say to my face, “I think you’re building a great company here. I love what you’re doing but I don’t see a billion dollar exit so we’re going to pass.”

Sramana Mitra: That’s the venture capital model. Most of these VCs are looking at 9 out of 10 portfolio companies to fail and one to produce a billion dollar exit. It’s not exactly aligned with the interest of the entrepreneurs. It’s a bit of a casino. As entrepreneurs, we don’t get to play this game. We get to play once.

Clark Benson: I totally agree with you. There’s that Silicon Valley creed of “Fail early and fail often.” I hate that because I like to build real businesses. The other thing I wanted to say was one of the things that we’ve had that’s been really good for me and Ranker is we’ve never taken a big investment round because all of our investors are seed investors.

We have some high-profile investors but most of our investors are smaller funds. Instead of it being 9 out of 10 failing, they will have a lot of companies that will succeed and will give them a 3 to 10 times return. That’s more realistic. That’s healthier for businesses in general. I’m fascinated that there aren’t more venture funds that are going out with that as their model.

Sramana Mitra: There are 500 or so micro-VCs. The majority of them all want to find unicorns. Unicorns are rare. The mathematics doesn’t work out. It’s a complete mess. It was great talking with you. Thank you for your time.

This segment is part 6 in the series : Capital Efficient Entrepreneurship: Ranker CEO Clark Benson
1 2 3 4 5 6