Bootstrapping to $20 Million in Charleston, South Carolina: eGroup CEO Mike Carter (Part 3)

Sramana Mitra: What is the target customer base?

Mike Carter: Our target customer base is what we call the commercial mid-market. That would be organizations between 500 to 5,000 users. They typically fall into regional healthcare providers and financial service organizations – certainly not the large global organizations but regional and national groups.

Sramana Mitra: This is a concept that you started in 1999. When you started, what were the circumstances of starting the company? Was it a bootstrapped company?

Mike Carter: Yes, it was bootstrapped. It was an idea that I had and it was all about being able to do a better job. I used credit cards and borrowed money from family members. That was a nerve-wracking experience to some degree. I’m descended from people who come from the Appalachian of the Southeastern United States. That demographic is known as the Scots Irish. One of the key characteristics of the Scots Irish is what they call the culture of honor, in that there is a deep, very embedded responsibility such that when you borrow money, you have every expectation in the world of bringing those dollars back to the people who lent them to you.

One of my proudest moments is that in borrowing those seed dollars, I was able to repay my investors within one year’s time with interest. At the time when we were doing that back in 1999 and in early 2000, with the dot com bubble bust, their investment in our business was the best investment they had that year. That source of responsibility became a source of pride.

Sramana Mitra: Tell me more about exactly how it all played out. How much money did you borrow and what form did this take in terms of getting customers to adopt your solution?

Mike Carter: The early days of eGroup was myself and two other people. We were providing a service. We were selling not only what we know but also what we could do – brainpower and horsepower. It was around these techniques and tools that would enable businesses to run smarter and a little bit more efficiently. All pooled, we probably borrowed $75,000 at that time. That was between dollars we borrowed from family members as well as what we’ve racked up on credit cards.

Those dollars were invested not only to pay our own bills as newly minted employees of eGroup, but also for incidental business expenses. We literally started with nothing. From day one, we had to prove to ourselves that we can deliver a service that is not only relevant but also valuable. The litmus test of value for us is every deal we do should be profitable. That is a hallmark characteristic of eGroup that we have maintained over that 15-year history.

This segment is part 3 in the series : Bootstrapping to $20 Million in Charleston, South Carolina: eGroup CEO Mike Carter
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