Non-Technical Founder Scaling SaaS Venture to Exit: Velocify Founder Jeff Solomon (Part 5)

Sramana Mitra: What is the next major milestone in the history of the company?

Jeff Solomon: Two things. We started to get heavy in insurance. At that time, the secondary education market was growing fast. It’s a very similar model to mortgage in the sense that the money was coming from the government. There was a backlash in that category as well, but we were more careful.

We diversified into those categories which protected us. We found that the categories were anticyclical. When mortgage was up, insurance was down. When insurance was up, mortgage was down. We were able to ride waves and handle the downturnts pretty well.

The other big thing that happened was that at that time, our clients were largely from elesales. We didn’t have any telephony at that time. There were a few companies that were integrating with our product. I was really pushing that we needed to build some dialer and telephony functionality into the product. It was a challenge getting the board to see that. It was an area that we weren’t familiar with. It wasn’t nearly as mature as it is now.

There is a great story in the history of Twilio. I met with Jeff Lawson in San Francisco. They had two or three clients. He was explaining the vision to me. We were looking for a partner to handle the calling element. We were going to build the frontend, but we didn’t want to build our telephony engine. We chose Twilio. For a good year and a half, we were by far the largest client on Twilio.

At our peak, we were spending several million dollars with them. They’ve grown significantly since. We were fairly responsible in those early days for their product roadmap. A lot of the stuff they built was based on feedback that we gave them. That opened up the door for new clients and almost doubled the revenue for our clients.

Sramana Mitra: The calling functionality gave you lots of leverage from an upsell point of view.

Jeff Solomon: It did. It was stickier too.

Sramana Mitra: What year does this bring us up to?

Jeff Solomon: Probably in 2010 now – late 2009 and early 2010.

Sramana Mitra: Have you raised more money?

Jeff Solomon: We had really great cash flow and profitable. We didn’t need a heavy influx. We were starting to spend more money on sales and marketing and grow the enterprise sales team because we were starting to sell to actual banks and bigger companies. We started to do some outreach. We ultimately closed a $13 million round in 2011.

Sramana Mitra: Do you remember what your revenue level was at that point?

Jeff Solomon: Somewhere between $10 million and $15 million.

Sramana Mitra: What happens next?

Jeff Solomon: That was the time we were pushing towards 70 to 80 people. I started to wonder if this was the right fit for me. When we grew and started getting more specialized people, I became somewhat disruptive. I would be in the way. I was hurting the business in a way and also not having fun. I was being forced into specialization. I started to question whether or not I should stay. A lot of entrepreneurs struggle with this.

This segment is part 5 in the series : Non-Technical Founder Scaling SaaS Venture to Exit: Velocify Founder Jeff Solomon
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