Bootstrapping to $7 Million: Constellix CEO Steven Job (Part 5)

Sramana Mitra: What is the next step in turning this into a real business? 

Steven Job: Are you asking me how I took it from there to a million? My way of doing it probably wasn’t the smartest way. My way was to rinse, wash, and repeat. It was doing it over and over again and doing it better.

Sramana Mitra: Answer a simple question for me – 40 cents a month seems like a low price point on which to build a business. What did you do to move that to where each customer is generating more money? What was the strategy to move that? 

Steven Job: Amazon charges 26 cents a month right now.

Sramana Mitra: Yes, but they are operating at a vast scale. 

Steven Job: We grew fast. Today, we have over a million domains using us. That 40 cents is the one piece. That is the service that makes people say, “Okay, we need to use you guys for this.” If you are, for instance, a large brand and you have a lot of traffic, we charge on the traffic volume as well.

As the larger brands would start using us, they would then pay us more to compensate for the cost of putting on our services. If you are getting a billion DNS lookups a day, that costs a lot more to our service than someone that gets 50 lookups. Both of them are still paying the same price for the basic DNS Failover.

The biggest difference that we did is that we never said, “Here is our pricing. You can also call us for a quote”. That is what all our competitors do. They don’t list their pricing because the pricing is completely dependent upon which salesperson you speak to.

Our pricing is online. We never had a sales staff. Users would just refer to us from other users that people knew in the community. They find out that our services were out competing with these large crowd providers. 

Sramana Mitra: What was the average account of the large brands?

Steven Job: I would say that until 2015, the largest accounts that we had would pay $2,000 a year. They’re not massive accounts, but if you get enough accounts paying $1,000 or $1,500 a year, that is enough to help you grow. 

Sramana Mitra: What is the trajectory of your business. You said that, in 2006, it’s about $200,000. How did you grow?

Steven Job: I think we hit our first million of revenue in 2009. It just kept growing from there. 

Sramana Mitra: Where are you now?

Steven Job: We are safely above $7 million. 

Sramana Mitra: What is the business now? Is it still the same business? 

Steven Job: We developed other services on top of the basic idea of trying to increase the performance of websites. We took that basic model of DNS Failover, monitoring servers, and moving traffic around to now making traffic decisions based upon the network, internet connection, and outages.

It is a good thing for us when Amazon, Cloudflare, or Microsoft has an outage. When large cloud providers have outages, people start thinking, “Okay, what is the cost of that outage.” The biggest thing that we do is we don’t go out and say, “Hey, you guys were down. Come over to us.”

The cycle reliability engineers and the network engineers of these companies are eventually going to be told that the outage has cost this company so much. Sometimes, a half-hour outage of a particular service affects not only that half-hour of unproductivity, but also hours of support and maintenance.

If we ever have an issue, it’s not just the 10 minutes’ worth of issue. It includes seven weeks of answering why there was an issue.

This segment is part 5 in the series : Bootstrapping to $7 Million: Constellix CEO Steven Job
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