Bootstrapping to $12M+, Getting Ready to Raise Money: MindTouch CEO Aaron Fulkerson (Part 6)

Sramana: There is also a difference between B2B and B2C oriented companies. In B2B there is only one metric: are customers willing to pay for what you are offering or not? In B2C it is a bit more complicated. There is free stuff flowing around, and you have to monetize through a variety of methods.

Aaron Fulkerson: The result is that people give you money. They do that because you create generative value. Everybody focuses on the result, which may be customer engagement. The bottom line is the focus should be on generative value.

Sramana: If you focus on generative value, then you will always focus on your revenue-generating customer.

Aaron Fulkerson: I think it is important to invest in the customer. I have seen customers like ours take a very serious focus on ensuring that their customers are successful. That is why they are using our product in the first place. I notice that companies that are obsessive about that customer care take off. I get every single support survey from my customers, and I spot check them. I look at those metrics. I know what our customer satisfaction metrics are.

Looking at our own open source roots, you will see that our initial strategy was to lower the cost of customer acquisition by giving away stuff for free. We are a bootstrapped company and we needed to be unique. I loved the idea that people would only give us money when they valued it enough to make it mission critical. I have kept those philosophies as we moved our product to the cloud.

Sramana: How do you assess your total available market size?

Aaron Fulkerson: I could sit here and build a bull shit answer for this by making it the percentage of CRM deployments or something like that, but the truth is that I don’t care about that metric. I want to build a product that is so good that people tell others to use it. Let’s build a company that people love to work at.

Sramana: There is a reason I am asking that question. You have made the choice to bootstrap. I would like to understand why you elected to bootstrap. Entrepreneurs always have to create a reasonable model to capture investors. Did you make a conscious decision to bootstrap because you have a niche opportunity or was there another reason such as a desire for autonomy?

Aaron Fulkerson: We chose to bootstrap because we felt we could carve out a sizable space without outside investment. In our minds, we thought open source was that disruptive model. We believed that a massive open source community would create a pull on the product, which we did indeed see happen. We felt doing that would enable us to have a massive market opportunity. It is now 2013, and we realize that what we initially thought was somewhat of a niche area is indeed quite big. There are a lot of 100-year-old companies that are involved in manufacturing.

Now we are growing quickly. My concern is that it is only a matter of time before a competitor realizes that we are able to close a multimillion dollar, multi-year deal with an old stodgy manufacturer in 90 days. When the see that, they are going to come after us. We need to go fundraise now. We have had luck, a good product, and great customers. If we don’t go out and fundraise, then we are going to get pushed out of a large market that we essentially created.

This segment is part 6 in the series : Bootstrapping to $12M+, Getting Ready to Raise Money: MindTouch CEO Aaron Fulkerson
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