Bootstrapping a RegTech Venture to $20M: PerformLine CEO Alex Baydin (Part 2)

Sramana Mitra: Once you decided that you wanted to own your own business, what were you going to do?

Alex Baydin: I was working at one of the internet companies that I mentioned. I actually got fired for the first time in my life. I’ve been working since I was 15. I took it really hard.

Sramana Mitra: Why were you fired?

Alex Baydin: The company was trying to get better performance out of a certain group. I was running the lead gen division there. I may have had a different communication style that my boss wasn’t a huge fan of. I just took it really hard. I ended up in the hospital that night. I felt literally sick to my stomach.

I decided after that that I didn’t want to have that feeling anymore. I wanted to be in control of my destiny. That was the impetus. The original vision for PerformLine was to build a better version of the company that I was fired from. They were a performance-based ad network.

It was a blind performance-based ad network. The advertiser never knew where the traffic was coming from. The network justified that by only charging the advertiser on performance. I could see that there were a lot of compliance and fraud issues with that model. I had a thesis that it was okay to show advertisers where the traffic was coming from because you’d still be adding value in aggregating that long tail of publishers.

The original idea for PerformLine was to launch a non-blind performance ad network. The way we were able to do that was we wrote a piece of JavaScript that would capture the referring URL from where the user came from when they filled out the lead form so we could say to our advertiser that this is a high-intent lead. This person responded to a Google paid ad or a blog. That was the original vision.

Sramana Mitra: You were charging on?

Alex Baydin: Cost per click. We did that for a couple of years. We were able to cash flow pretty quickly.

Sramana Mitra: Let’s talk about that. I’m most interested in the first couple of years.

Alex Baydin: We were able to raise a little bit of money. Serendipitously, we got connected with Josh at First Round Capital. We raised about $600,000 from them. That allowed us to make a couple of hires and invest more on the proof-of-concept technology and start building up that media business. I don’t know if we ever got to a million recurring revenue with that business. Probably pretty close before we started to think there may be a better opportunity for us.

We saw a few things happening. At that time, there were a lot of ad networks and there wasn’t a ton of differentiation. Even this one unique approach of being transparent still got lost in the noise. Every year, there are another 50 ad networks that would launch. You were a middleman matching advertisers and publishers.

Sramana Mitra: How were you getting the publishers? Were there certain verticals that you were going after?

Alex Baydin: In the early days, we weren’t too focused. We were able to leverage some of the relationships that I brought from my previous job. We were focused on bloggers and emailers. We had customers and different types of direct response industries like Lasik services, dating sites, and subscription businesses.

This segment is part 2 in the series : Bootstrapping a RegTech Venture to $20M: PerformLine CEO Alex Baydin
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