A Serial Entrepreneur’s Journey into FinTech: Felix Rodriguez, Founder and CEO of finally (Part 2)

Sramana Mitra: Okay. What were the other startups that you were working on at this point?

Felix Rodriguez: Immediately after that, we were thinking that for this company that has over 50 people, what could I and a couple of other engineers build that’s more automated. We were really passionate about automation. I think people call it AI now. But we were thinking about how could we automate the publishing business. We had a website business where we had a bunch of web designers. So, in order to get traffic on the web, you have to put content, right? And Google was starting to really take off.

So, we wanted to start a Yellow Pages directory. We had this concept of, everything on the web, if it’s in a database, it’s invisible, and Google and other search engines and spiders can’t crawl it. So, what if we made a robot that would be similar to a bunch of web designers that would create content that you could actually see on the web?

That was a breakthrough for us because we, in the course of a month, created a robot that was able to publish over 20 million pages of content. We were able to do a deal with Google to monetize the traffic. So this website called Yellow Pages LTD that we created grew from zero visitors to over 2 million visitors a month in less than six months. We’d amazing gross margin with just three engineers.

Sramana Mitra: You put Google AdSense on this traffic?

Felix Rodriguez: Yes, we had Google AdSense, and then we also had some monetization for performing a search from Yellow Page publishers. That would also pay us per call, per click. There were two or three different ways of monetizing the traffic.

Sramana Mitra: So, what kind of numbers are we talking with three engineers? What kind of numbers are we talking revenue wise?

Felix Rodriguez: I think at its peak, the site was probably doing $3-$5 million dollars a year in revenue.

Sramana Mitra: How long did you do this?

Felix Rodriguez: Well, it didn’t last very long because we got an offer from a company called iRead, which was buying up web properties. We got a great offer and we ended up selling it after six-seven months.

Sramana Mitra: What kind of multiple did you get on this one?

Felix Rodriguez: Yeah, that was a great multiple for a pretty new, just tech-driven web property.

Sramana Mitra: So, this did not require you to go with the company either.

Felix Rodriguez: No, because they were collecting properties. I think they had 150 million monthly visitors to all their web properties.

Sramana Mitra: Okay. So, you said you were doing two businesses. Is this one of the two, or is this the one that you pursued?

Felix Rodriguez: Yeah. Around the time that we were selling Web Image, we already were working on this one. After we sold this one, we thought we’re onto something here. We’re obviously good at driving traffic via SEO, and we understand how to use automation to build scale, to take content, and build a product.

Next, we created a company called Shop Hopper, a shopping comparison engine. We did a deal with eBay. At that time, they owned Shopping.com. We ended up creating a shopping comparison site with an additional 10K sister sites that together were pulling in millions and millions of visitors.

But this time around, we weren’t monetizing with AdSense. We were monetizing with folks that were buying products on our shopping comparison engine.

Sramana Mitra: So affiliate commissions.

Felix Rodriguez: Yes, we ended up selling that to Named Media. They were a public company and similar to that private company that was just acquiring web properties. We decided to sell that as well.

Sramana Mitra: What kind of numbers did that do?

Felix Rodriguez: I would say at two million with shopping data, it was probably on pace to do over $1 million in revenue.

Sramana Mitra: In the first year?

Felix Rodriguez: Yes. In the first few months of launch.

Sramana Mitra: And you sold it right away?

Felix Rodriguez: Yes.

Sramana Mitra: Okay. So what year are we talking when all these exits are happening? You have two companies that you exited within six to twelve months. What timeframe are we talking?

Felix Rodriguez: 2007. I was in my young learning years where I felt that as a founder, as a creator, as a builder, I could start anything, and exit. So, I just learned that very early on during that first run that I had. I’m still in my non-compete clause for the first business, so I started exploring things that I could potentially work on. My core strength has always been SMB – knowing how to talk to SMBs, how to drive value for SMBs, and how to build sales teams and products that SMBs can embrace.

So from there, we got an idea to start an agency. We started an agency helping businesses drive traffic online and buy ads on Google. That was like a paper call model, but they would pay us a monthly fee to get access to the platform. We quickly realized that the agency wasn’t much for us. We did that for about a year.

While we’re doing this agency, we got the idea that small businesses were doing a great job at answering the phone. But if they were out performing a service, there was no one there to answer the phone and book the the demo. So, we said we should just do this for them. It was like an Uber moment for us. I don’t know what came first. Was it us? Was it Uber?

I know I picked the wrong segment, though. From the agency level, we saw that we were really good at driving demand for appliance repair companies, home services companies, car service, and maid service. But I made a mistake. I picked appliance repair.

I said to myself, we can book the demos, take the credit card, book the payment, get a partner, and give them a cut of the revenue, but the customer would be ours. So that was very exciting. I still remember being in New York and going and meeting with some VCs. One was High Peak Venture Partners and the other Village Venture Partners. So the minute I told them the idea and what we were doing, they said, “No one’s doing this booking stuff. Can we see the stats, the metrics?”

After a few weeks of looking at the stats, they wanted to do our Series A. So we didn’t do a seed round. It was literally like I funded it. That was the first time I was able to fund my own startup and got it to the point where we raised a Series A in four months.

This segment is part 2 in the series : A Serial Entrepreneur's Journey into FinTech: Felix Rodriguez, Founder and CEO of finally
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