Three Co-founders Bootstrapped with a Paycheck, Now at Over $50M Revenue: Ganesh Shankar, CEO and Co-Founder of Responsive (Part 6)

Sramana Mitra: This is something we reinforce all the time in 1Mby1M. Do not chase investors, chase customers. If you get customers, investors will chase you.

Ganesh Shankar: Exactly. We’re the live example. There’s no chicken and egg story. Customers should be the number one priority.

Number two priority is building the team including your co-founding team. You may say, “Oh, I don’t have money. How do I build a team?”

If you’re a smart, scrappy founder, you find ways to bring them on. As a CEO or a founder, you’re always on the lookout for money. It’s OK, but don’t spend majority of your energy on wasting money.

Sramana Mitra: About 60%-70% of startup founders’ time goes into fundraising and that’s a complete waste of time.

Ganesh Shankar: I think that is also because of the times we live in.

Sramana Mitra: The media is constantly touting fundraising. It’s a complete misleading of the startup ecosystem.

Ganesh Shankar: That’s what I feel like. There’s a lot of media spotlight on companies that raise a ton of money. They also portray bootstrapped companies.

I did not have the luxury to bootstrap, Sramana, but I would say what we are missing are these thoughtful, sustainable companies that are doing a meaningful job. They might not bootstrap but are sustaining by raising not too much capital.

Look at us – nine years in, 600 employees, 2,000 plus customers and did not raise much capital. We will qualify neither under big capital raisers nor bootstrappers. So, we get ignored most of the time. We’ve been profitable since 2018 onwards. We built the whole business with a very small capital raise. That’s never been on the news.

Sramana Mitra: We are very focused on capital efficient business building. Whether it’s bootstrapped or general bootstrapping type of business with small capital raised, that is really our preferred way of building businesses. So, you’re absolutely in the sweet spot of the way we like to build businesses.

What revenue level does that correspond to these metrics that you’re giving?

Ganesh Shankar: We have been mandated by my investors not to disclose.

Sramana Mitra: You can give a range, whatever you’re comfortable with is fine. Are we talking $50 million plus or $100 million plus?

Ganesh Shankar: Almost there.

Sramana Mitra: Okay. $50-$100 million dollars. Great. That’s excellent.

Sramana Mitra: So that actually tells me something very interesting. You’ve been in business for about nine years and you’ve hit over $50 million in revenue.

Ganesh Shankar: Correct.

Sramana Mitra: That is almost venture scale growth, which is remarkable. With $2 million of funding, if you have achieved almost venture scale growth, that is a remarkably good execution.

Ganesh Shankar: And we have been profitable since 2018 onwards. We’ve been profitable even in 2020. We’ve never gone into the red zone since 2018.

Sramana Mitra: Fantastic. That’s really fabulous. I love the story. On the go-to-market side, are there strategies that you follow that gave you that kind of velocity?

Ganesh Shankar: Yes. Another important decision in our journey was not giving up. We did not give up the C-level titles too quickly and easily. In fact, our CMO and CRO joined just last year. These are our first-time CMO and CRO, but they have proven experience. Our CMO comes from large-scale businesses  like DocuSign and Seismic. Our CRO comes from Conga, which is a $300-$400 million plus business. Our CFO joined from PowerSchool about two months ago, transitioning from public to private in a $6 billion transaction.

We’ve been very thoughtful when it comes to giving out these titles. Too early, and it can sometimes prevent you from making necessary changes. I was the acting CMO and CRO, my co-founder was the acting CFO, and my other co-founder was the acting CIO. Now, we have people to fill those roles.

This approach has kept us going. In fact, you’d be amazed to know that we have over 150 private equity and venture capital companies as customers. They know our business inside and out. They pay us even though they don’t have an RFP use case. Companies like Thoma Bravo, General Atlantic, TCV, and Khosla Ventures are all our customers today.

Sramana Mitra: Why?

Ganesh Shankar: When they raise funds from their LPs, they have to constantly respond to due diligence questionnaires. They don’t respond to RFPs, but they’ve very similar use cases. Non-profit organizations use the application for grant writing. Our original idea was to respond to RFPs; but more than push, it kind of got pulled by customers to use the platform for many use cases.

This segment is part 6 in the series : Three Co-founders Bootstrapped with a Paycheck, Now at Over $50M Revenue: Ganesh Shankar, CEO and Co-Founder of Responsive
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