Bootstrapping a Two-Sided Marketplace: Mort Fertel, CEO of SudShare (Part 4)

Sramana Mitra: I’ve got two nuggets out of your initial story. One is using Indeed to get some of the sell side going. Then really building in virality into the app. On the buy side, laundry services Google keyword search. I take it you were self-funding this company. 

Mort Fertel: Yes.

Sramana Mitra: The business model is a commission on the transaction size?

Mort Fertel: Yes, the customers pay us a dollar per pound. We pay the sudsters 75 cents per pound. The sudsters also earn tips. SudShare makes 25 cents per pound.

Sramana Mitra: Marketplaces always start slowly. You can infuse a bunch of capital to make it run faster. Maybe you can run more Google Ads, but marketplaces take time to organically reach an inflection point where it bloats out. It takes time. How long did it take you to reach the million dollar point? Not the gross revenue.

Mort Fertel: It took three years. 

Sramana Mitra: How did you fund the company during that period?

Mort Fertel: It was self-funded.

Sramana Mitra: How much of self-funding did it take you to get to that million dollars?

Mort Fertel: It was hundreds of thousands dollars.

Sramana Mitra: So you self-funded hundreds of thousands of dollars to get to the first million. Was it a profitable first million or were you still needing to put money in to the company when you got to that first million?

Mort Fertel: Still needing to put money into the company.

Sramana Mitra: Can you talk about the team besides you, your son, and wife?

Mort Fertel: The zero to one million phase was just me and my son. We had maybe one customer service person that was helping us. Then we also had another developer. We tried to stay as small as possible and do as much of the work ourselves as possible. We did that for multiple reasons. One is to keep costs down. Also because we wanted to be really close to the people on both sides of the platform. It relates back to what I was saying before. The key is the product. I’m 56 years old and have had a number of businesses in my life. I personally would handle customer service for SudShare for a long time. 

Sramana Mitra: That’s important because that’s how you learn who these customers are. I’m very much in that camp. Founders need to be close to customers. 

Mort Fertel: That was really important. When we grew and scaled, the reason why we were able to do that was because of how close we were to both sides of the platform during those initial stages. We weren’t relying on other people to understand that. We knew both sides of the platform. We continued for years to tweak and optimize the experience. That’s what enabled us to scale.

This segment is part 4 in the series : Bootstrapping a Two-Sided Marketplace: Mort Fertel, CEO of SudShare
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