Bootstrapping Using Services to $40 Million: ActiveCampaign CEO Jason VandeBoom (Part 2)

Sramana Mitra: This is an entrepreneur’s journey that we are trying to capture. When you started, what did you start with?

Jason VandeBoom: I started with the bare bones of just communicating with customers. Think of a system that brings in customer names and email addresses and you can send a campaign to them. I got that out there and then a couple of people started buying it, which was surprising. Using that customer feedback, I was able to iterate and add on different features and different functionalities.

When you do that, you start to take all the feedback and try to push it in and solve everything. I had to learn throughout all that process that simplifying things down and not accomplishing everything provides a better experience for the base as a whole. It was a little bit of pushing something one way as far as I can and then realizing to bring it back a little bit.

Sramana Mitra: How did you sustain? What was the revenue source at that point?

Jason VandeBoom: A couple of thousand dollars in the bank. Prior to this, I was doing some consulting and that’s a good way to get a business going. Consulting is about that upfront cash and you have your projects. You can use that to ride through that early stage.

Sramana Mitra: We have lots of case studies of what we call ‘Bootstrapping Using Services’.

Jason VandeBoom: It’s sometimes the only option for people, right? It’s not a bad way to start. You have to make that decision too regarding when to go out of services and just focus on the product. For me, I just had to get some people to buy it. Luckily at that time, I didn’t have some giant set of expenses. It was just early on in college. I was able to make that transition from services and doing that consulting to just focusing on the product a little faster than others may be able to.

Sramana Mitra: What was the next strategic inflection point?

Jason VandeBoom: For the first decade, I was building out these different products. I had these different points of inflection. The biggest one was fast forward into 2012. I was looking at the business as a whole, which was running really well. We were growing every year. We’re profitable the entire time.

Why change something that’s working for you? But I saw this opportunity that if I switch this over from on-premise to more of a self-serve SaaS model, that customer experience would be so much better. From a revenue standpoint, I would actually take a hit for a while because I’m asking for a much smaller dollar amount, but the fact that it’s monthly gives me a little bit more stability over time.

That was a defining moment. If I didn’t make that decision at that time, it would be a completely different outcome now. It wasn’t an easy decision. Another thing I would add is, there wasn’t necessarily a ton of data that would prove it to be a great idea. It was probably going to be a very rough year. I knew that going in. Given all the potential upsides for our customer base and for just the sustainability of the revenue by being a recurring revenue system, I determined it was the right thing to do. That was just a very challenging time to say the least.

This segment is part 2 in the series : Bootstrapping Using Services to $40 Million: ActiveCampaign CEO Jason VandeBoom
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