Bootstrapping a RegTech Venture to $20M: PerformLine CEO Alex Baydin (Part 5)

Alex Baydin: They had the same compliance constraints that they had in terms of not being deceptive or misleading. There was a lot more probability that something would go wrong in a free-form phone call. We decided to build a speech analytics module and that’s where we started thinking about our product vision. However, our customers are interacting with their prospects, and we wanted to be able to offer this layer of protection so they can move fast.

We set upon a roadmap of launching a new channel every 18 months or so. We added a call center. Now we had a nice cross-sell engine play. If we’re doing a good job, we could get introduced to the call center compliance team and sell them capacity as well. Then we launched email compliance, followed by messaging, and then social more recently.

Sramana Mitra: Still within the online education space?

Alex Baydin: We launched a call center compliance module, still in education. Then a few years later, we had a chance to pitch a large mortgage lender. We did this meeting where there were probably 20 people. We met the full team that was responsible for marketing compliance which we’d never had the chance to meet in education. We were educating them about these concerns and how they can solve them.

The mortgage lender was already working with other partners to get better insights on how they could better protect consumers and stay compliant. They had a procurement person in the room who was in charge of doing the deals to acquire software to solve this problem.

We walked out of that meeting saying, “That felt totally different in a good way.” In the early days of online education, we had customers tell us they thought they were better off not knowing about lingering compliance issues. That whole plausible deniability thing.

Sramana Mitra: Not so in mortgage.

Alex Baydin: Not so in mortgage and not so in the broader consumer finance space. These were bigger companies generally speaking. The CFPB had been formed in the wake of the financial crisis. That regulator had a lot of teeth and energy. In the news, there were a lot of headlines about companies having to pay significant fines and settlements. We liked all those dynamics. We started focusing more on consumer finance. Not just mortgages because the technology is agnostic, but credit cards, personal loans, and business loans.

Sramana Mitra: How did that first mortgage lead come to you?

Alex Baydin: If I remember correctly, that was an outbound that we had done with one of our early members of our sales team. He was very good.

Sramana Mitra: He just basically thought that you should go into finance.

Alex Baydin: I don’t think he had the strategy. He had the plate appearance. He convinced me to go with him on the meeting. It didn’t take long in that meeting to realize that there was something there. There was also the fact that the education space had problems that were bigger than we could help with. Schools were getting shut down. We needed to pivot. Because we were very lean, we redeployed all of our sales and marketing efforts into the finance vertical. That was pivotal.

Sramana Mitra: How did that evolve? As you started getting into finance, what was the growth you were encountering? Did you remain bootstrapped?

Alex Baydin: We did. We funded ourselves primarily through sales. We developed a really good sales cadence and go-to-market energy. We did a couple of things that are fun. We started a user conference. After a year or two, we realized that there was an opportunity to turn it into an industry conference around regulatory technology. RegTech hadn’t really taken off in the US. It was a green space. We already had this small user conference.

That became Comply, which was an industry-leading compliance and regulatory technology conference. It was a great lead generator. That was where we were able to be the expert in a fun way. We started tracking it. If a prospect came to Comply, they were twice as likely to convert. If they’re already in the pipeline, the deal closes twice as fast. We got really good at metrics around sales and marketing.

This segment is part 5 in the series : Bootstrapping a RegTech Venture to $20M: PerformLine CEO Alex Baydin
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