Bootstrapping to $30 Million from Florida: SproutLoud CEO Jared Shusterman (Part 5)

Sramana Mitra: Very interesting. Can you sketch for us a bit of the progression of the business? How many brands did you book as customers in 2006? How many in 2007 and so on?

Jared Shusterman: I don’t know the exact number. Today, we’re a little over 60 brands that are powering over 60,000 or 70,000 channel partners. Early on in 2006, we learned a lot under the new model. In 2009, we decided to launch again. This time, we reused a lot of the data tables and structures.

In 2011, we launched it with all the learnings and made sure that the architecture was modeled correctly. From a client standpoint, we’d moved into serving the Fortune 1000. We had a lot of smaller franchises where they were helping their franchisees advertise the products or services. As we’ve grown and become more sophisticated, we built one of the leading platforms for what’s now called channel marketing automation.

Sramana Mitra: You work with fashion designers and national brands basically.

Jared Shusterman: Yes.

Sramana Mitra: Give us an idea about the sectors. In the beginning, it was jewelry. What segments are dominant today?

Jared Shusterman: We are really diverse in the verticals that we’re in. We’re in travel, medical devices, consumer products, insurance, and financial services. When you think about all these verticals, there’re usually companies that have built their distribution model through an indirect sales channel.

Our target clientele is really a clientele that has an indirect sales channel where the actual channel partners are obviously independent, where discretion of market spend is decentralized down to the channel partner, and where there’s a diverse array of marketing tactics that make up the advertising strategy of that local partner. What we found is that that type of footprint really exists in a lot of different industries.

Sramana Mitra: How long did it take you to get this business to hit a million dollars’ annual revenue run rate?

Jared Shusterman: By year two, we were there.

Sramana Mitra: In terms of strategic maneuvers, you also described the fact that you went from a particular type of business and you shifted gears to the more bigger brands. Is there any other major strategic move through the progression of the company that helped you reach the next inflection point?

Jared Shusterman: That’s a good question. The first one was repositioning what we wanted to focus on, both from a product and capability standpoint to meet the needs of a larger customer. As a result, we had a lot of fallout of some of our smaller brands because we were focused on a much larger market.

As we repositioned, the other very big strategic move was that we started focusing on the actual funding flows of how a brand co-pays for the marketing tactics of their channel partners. These are not insignificant amounts. You have to build a lot of functionality and accounting controls to meet the needs of this type of marketing.

Funding form the brand to the local partner is the number one driver of getting the partner to advertise in a cooperative way. All these guys are entrepreneurs. They all had tremendous success building their businesses. A lot of them are independent in terms of decision making.

This segment is part 5 in the series : Bootstrapping to $30 Million from Florida: SproutLoud CEO Jared Shusterman
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