From Solo Entrepreneur to Serial Exits: Shane Neman, CEO of EZ Texting (Part 3)

Sramana Mitra: You started as a solo entrepreneur, and it scaled. How long did you do it as a solo entrepreneur?

Shane Neman: The first year was solo, but then my girlfriend became my partner in it. She had a lot of experience in events in particular and that is how we came to doing our own events. She would do the events portion and I would do the digital online portion. I started it and once it started building, she came in a little bit later.

I will never forget this. We had a database of all these people and I had been working to get us into the liquor companies. I remember going to them and saying, “Look we have this email list. We can do an email blast for your events.” They were like, “Okay, that sounds really great.” I said, “I can get 100 people to your event exactly the way you want it.” They asked me, “How much do you want for that?” I replied, “ I want $5,000.”

I thought that it was a lot of money at that time. They were like, “Okay.” They wrote a check for $5,000. I just couldn’t believe it, because I just thought that it was an enormous amount of money at that time.

As you know, CPM is high for those things. I didn’t really understand how it worked. As we matured, we figured it out. We had a digital ad component to our website and our emails. We had salespeople as well. 

Sramana Mitra: What was the business that scaled to $40 million? You did a bunch of this and that in the beginning and experimented in many directions but, obviously, you hit a point where you found some form of repeatability in all these experiments that got you to scale. What was that repeatable business for JoonBug?

Shane Neman: The initial thing that put us on the map was doing the photos. That was what got us the data that we needed. I figured out a way to monetize the photos and this was to sell them online and print them. I did drop shipping then. That word didn’t exist then.

I found a printer that would dropship. We would programmatically FTP them our orders and they would print them and ship them for us. People would see their photos and they would buy prints of them. That wasn’t a lot of money.

We tried to experiment with how we could monetize the database and the web traffic that we were getting. We went into digital ad sales, selling email blasts, and traditional banner ads on our website. A lot of times what would happen is, we would get cues from other people on what we should be doing.

What would happen is a venue owner or brand would call us and ask us if we could do something for them. We would be like, “Wow, that makes sense. Yes, let’s do that. I will call you back. I don’t know how much that is going to cost, but let’s do that.”

From there, it was a lot of experimentation. There were a few things that we did that were total flops. We thought that we could do a dating site. It probably detracted us from ticketing, the main moneymaker that came later on.

We found that the biggest way to monetize our database was through digital ad sales, but later on it was through e-ticketing. We started to offer these venues a way to ticket their events and we would take a cut from the tickets that we sold. When you started to sell lots and lots of tickets, it starts to ramp up large amounts of revenue. 

Sramana Mitra: It was like a precursor to Eventbrite, was that the business model?

Shane Neman: It was, but we weren’t as smart as them. We were just niching into nightclubs, lounges, and raves whereas Eventbrite allows you to come to their system to create and ticket your own event. It’s almost like a website builder for an event. It is a do-yourself kind of thing. We were like, “No, give us your event and we will put it on our site. We will market it.”

It was sort of Eventbrite. They got it a lot more right than we did. That was when the idea came in and we were seeing how much revenue our clients were making, so we thought, “Well, we could do our own events. What is stopping us from doing that.”

We did a few events, and we saw that it was profitable and lucrative. We started scaling it and not only sold events for other people but ourselves as well. The more events that we sold tickets for, the more data we would get and the better we would get at marketing.

Sramana Mitra: This was the business that scaled to $40 million?

Shane Neman: Correct. 

Sramana Mitra: What did you do with it?

Shane Neman: I sold that company to a competitor. That must have been in 2007 or 2008. I sold the company during the time, but what had happened was, in 2005, we saw that the efficacy of email had dropped a lot because we were not the only name in your inbox. Everybody and their mother at that point had a Mailchimp account. The venue had its own email list. The concert promoter had their own email list. The brands had their own email list. With this, you were getting 50 emails into your inbox and you are just deleting all of them.

The efficacy dropped dramatically for us. I was sitting there and thinking to myself and saying, “How do I get to people without doing something really expensive by doing something digitally and circumventing the inbox?”

At that time, texting had started to become popular in the United States. In Europe, it was a lot more in 2005. With more and more people getting Blackberrys, it was easier to text. It became a lot more popular. I started Googling around and doing research if there was a Mailchimp-like product for SMS, and there wasn’t.

I was really surprised. I was doing some homework to try to figure this out. I came to the realization that there just wasn’t a platform for this. There were platforms in other countries like the UK, and Ireland. It was mainly in Europe and Asia but there wasn’t anything here.

It is country-specific because you have to get connections into the telecoms. It doesn’t run off the internet. It runs off the telecom systems. This is again pre-Twilio. I decided to create a platform for ourselves. 

This segment is part 3 in the series : From Solo Entrepreneur to Serial Exits: Shane Neman, CEO of EZ Texting
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