Bootstrap First, Raise Money Later: Criteria CEO Josh Millet (Part 2)

Sramana Mitra: Let’s double-click down on the starting of Criteria. What did you start with? How was the journey? Who was involved? What was the bootstrapping process?

Josh Millet: When I was working at that other company, I started participating in interviews with applicants. We weren’t good at hiring sometimes. A lot of companies struggle with that.

There was this one interview that it was clear to me that it was not a fit on either side. It made me start thinking about ways in which companies could use data and assessments to prevent some of those terrible interviews. I didn’t have any funding.

My co-founder, David Sherman, and I wrote a business plan and started shopping for funding. We decided to bootstrap although we did raise a small amount of angel funding to get going.

The goal for us was to take a field that has been around for a long time like pre-employment assessment and make it more technology-driven. We wanted to make it accessible to companies of all sizes.

We launched the product in 2007. That time ended up being uniquely terrible for launching a hiring software because, within six months, the global financial crisis hit. We were forced to bootstrap out of necessity for the first years.

It took a while to find a product-market fit. We have a great CTO in Wayne Twine who built our product in those early years. We ended up bootstrapping the business for nine years before we took any other outside money. 

Sramana Mitra: How did you bootstrap your company? Was it customers buying your products or did you have to do other creative things?

Josh Millet: We got the customer to pay for it. When you are bootstrapping, you have to manage for cash flow and not for growth. There were four of us when we started the company in a tiny office. It was three years before we hired our fifth employee.

We were conservative with the small amount of money that we raised. Eventually, we broke even and that is when we hired another employee. We were always managing cash flow in those early years. 

Sramana Mitra: What was the revenue level you reached with bootstrapping before you switched gears?

Josh Millet: We first raised venture capital in 2015. At that point, we had about 16 employees and between $4 million and $5 million in revenue. 

Sramana Mitra: How many customers did you have at this level of revenue?

Josh Millet: It would have been about 2,000 customers. We specialized in small businesses. Since then, we have moved upmarket. We now serve customers of all sizes. We have a lot of enterprise customers now as well but, at that point, mostly small businesses were using the product. The SMB market is hard work, but the customers are great to have. 

This segment is part 2 in the series : Bootstrap First, Raise Money Later: Criteria CEO Josh Millet
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