Bootstrap First, Raise Money Later from Utah: Hirevue CEO Mark Newman (Part 4)

Mark Newman: In 2009 to 2010, it was all about market validation around getting our first big customers in terms of big enterprise brands. These were brands like Red Bull, Hilton Worldwide. Second part was getting validation and integration with the big partners. We got partnerships with Taleo and Kenexa. Third was getting outside market validation. We won our first HR Product of the Year award at the HR Tech Show, which is a really big award for our industry. It helped build some credibility there. Things started taking off.

Sramana Mitra: How did the revenue ramp from 2009 onwards?

Mark Newman: For 2015, we’ll be $30 million plus.

Sramana Mitra: What other capital infusion have you done besides the $1 million round in 2009?

Mark Newman: In 2010, we raised $5 million from Granite Ventures. In 2012, we raised $17 million from Investor Growth Capital and Rose Park Advisors. Rose Park Advisors is Clayton Christensen and his son Matt Christensen’s disruptive innovation fund. We did that in 2012. Then in 2013, we ended up taking a round from Sequoia Capital for $25 million. Then a couple of weeks ago, we announced a $45 million round from Technology Crossover Ventures.

Sramana Mitra: Why are you raising so much money?

Mark Newman: The market opportunity is in front of us. We’re seeing big adoption in the enterprise space. 80% of our revenue comes from companies with a thousand employees and above. Specifically, 30,000 employees and above. To serve that market, we had to have enterprise grade technology as well as an enterprise grade team to be able to deploy million dollar plus contracts and services to large organizations. We’re growing just as fast as SuccessFactors and Cornerstone OnDemand.

The HR technology industry has really built great independent companies over the years through 10 to 15 year adoption cycles. We think we’re on to the dawn of the next era. We can built a great independent company and have a fantastic lifecycle. Once we validated the market and opportunity, we decided that we really want to own the enterprise space. If we did that, we can lock it up for 10 years.

Sramana Mitra: You’re selling direct? Is this your own sales force that’s selling the product?

Mark Newman: Primarily direct sales. We have some partners globally in specific regional markets but primarily, it’s direct sales.

Sramana Mitra: The bulk of your capital raises is to fund the full-fledged direct sales force?

Mark Newman: Our direct sales force isn’t that large. We only have about 20 sales reps. We focus on earning customer passion. That’s just a big core value for us. We’re still evangelical. We still have to be an ambassador for what we do. It isn’t just having people satisfied. We need people to be pounding the table saying, “We have to change the way we build and coach our teams.” We focus on developing this missionary zeal in our customer community. We invest heavily in support, customer success, and product.

This segment is part 4 in the series : Bootstrap First, Raise Money Later from Utah: Hirevue CEO Mark Newman
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