Bootstrap First, Raise Money Later to $120M from Colorado: Madwire CEO JB Kellogg (Part 3)

Sramana Mitra: How long did you continue in this services mode?

JB Kellogg: From 2009 to 2012.

Sramana Mitra: What revenue level did you reach in this mode?

JB Kellogg: I think that in 2012, our revenue was somewhere around $5 million. 

Sramana Mitra: ARR?

JB Kellogg: Yes.

Sramana Mitra: How many people did you have at this point?

JB Kellogg: We had roughly 100.

Sramana Mitra: All local?

JB Kellogg: Right.

Sramana Mitra: In this process, what insight did you gather on what might be a software product to build?

JB Kellogg: We understood what the customer wanted. We also knew what our team needed to execute their day more efficiently from managing ad campaigns, designing, and creating websites.

Websites are a good example because websites are very cumbersome. It took quite a few people. It took a lot of time and hours. There was a designer, a project manager, a developer. We understood what it needed to be from a technology standpoint. We built a website platform.

Sramana Mitra: Why build a new website platform when there are Wix and Shopify? What is the case for starting another website platform?

JB Kellogg: Multiple things. One of them is to improve churn. If somebody is using somebody else’s product, they’ll just cancel with you and go with them at some point.

Sramana Mitra: If I’m a customer, why would I want to not go with an off-the-shelf product for a custom thing that ties me to you? I’m trying to understand how you sold that.

JB Kellogg: We built a nice product. It was competing well. Small businesses want the easy button. They don’t want to work with multiple vendors. They just want to work with one. That was our focus. If we could provide them everything they needed and checked all the boxes, then that was a win. Plus it increased the valuation of our company because the technology was ours.

Sramana Mitra: At this point, you’re still bootstrapped?

JB Kellogg: Still bootstrapped.

Sramana Mitra: In 2012, you now have built a website development platform and what else?

JB Kellogg: We started the development of our marketing platform – Marketing 360.

Sramana Mitra: Marketing 360 included ad campaign management?

JB Kellogg: At that time, it was ad campaign management and reporting. We continued to build on it. We started building that in 2012. It took a while to build. We launched it in 2014. 

Sramana Mitra: What happened in 2013 by way of product revenue? How did the revenue move between product and services?

JB Kellogg: It was still pretty heavy on services from 2012 to 2014, but more and more customers started to adopt the technology. The biggest building of technology was between 2014 and today. It has been a steady transition for sure.

This segment is part 3 in the series : Bootstrap First, Raise Money Later to $120M from Colorado: Madwire CEO JB Kellogg
1 2 3 4 5