Bootstrapping with Angel Money: Josh Levy, CEO of BeenVerified (Part 5)

Sramana Mitra: You started finding these use cases and segments as you launched in 2010. What did you learn about the business model and the pricing model? How did those decisions evolve and how did that turn into revenue?

Josh Levy: It’s a good question. Subscription models have been around forever, but they’ve also gotten much popular. We were on the earlier side, but probably still part of the trend of subscription models picking up. I would say, for a long time, we were committed to the subscription model because we wanted to stand out in the market in saying, “Maybe subscription isn’t for everybody. But for the people it is, we think you’re going to get more value.” >>>

Bootstrapping with Angel Money: Josh Levy, CEO of BeenVerified (Part 4)

Sramana Mitra: I’m interested in more granular information.

Josh Levy: I think TV is a great example. In 2007 to 2010, television was cheap. The market and the economy were down. It was a great time for us to step in and grow the brand through television. At that time, we had been trying Facebook as an acquisition strategy for a long time. We were just never able to get it to work. Now Facebook has become more of a specific opportunity to focus on.

For us, it’s about, “How do we get Twitter to work now? What about Instagram? What’s our strategy now that TV is expensive?” We still believe in not just direct marketing. We believe in investing in brand marketing as well. Another strategy we’ve always looked at Ancestry, which is in the genealogy space. Are you familiar with Ancestry?

Sramana Mitra: Yes, very much. >>>

Bootstrapping Using Services: Manish Sood, CEO of Reltio (Part 7)

Sramana Mitra: Why did you raise money? What was the thinking behind raising money?

Manish Sood: The thinking behind raising money was that we had validated the opportunity and had substantial revenue was being generated, how do we accelerate? We are still dealing with enterprise customers. Some of these sales cycles can be long. At the same time, we wanted to make sure that the enterprise customers do not have any questions about the viability or the longevity of the organization. We are here for the longer term to work with them.

Sramana Mitra: If you have a balance sheet and P&L like that, you can always share that with enterprise customers. They would be fine with that. I don’t think that’s a reasonable justification. You wanted to raise money seems like a better justification. My point is it’s not to convince your customers that you’re huge. They’re not going to question your viability and longevity if you tell them you’re earning more than $5 million. >>>

Building Significant Revenue with Inbound Marketing from Israel: Pepperi CEO Ofer Yourvexel (Part 7)

Sramana Mitra: You have a lot of customers. You said you have customers in 50 countries. Does that mean that you also have customers in accounts that could become much larger because you already had started penetrating these accounts? You have small footprints in those accounts that can be grown to much larger value accounts.

Ofer Yourvexel: Sure. I have several examples for that actually. A good example is Brammer. It’s a company with 750 users around Europe. They started in the UK. They moved over to Germany with almost 100 users. They have plenty to continue on.

Sramana Mitra: When you got this company, they came in to you through this inbound marketing process? >>>

Bootstrapping with Angel Money: Josh Levy, CEO of BeenVerified (Part 3)

Sramana Mitra: What are the use cases? What are the drivers to want to subscribe to something like this? In my life, for instance, if I need to check somebody out, I go to LinkedIn and look at their profiles.

Josh Levy: If I have to pick the hardest problem for BeenVerified, it’s that we have too many different segments of users. It’s a gift and a curse. We have individuals who are just curious about what’s out there. Obviously, you have one type of service, which is a credit report. That only tells so much information. You have family members who are interested in things like, “Who are my kids dating? Who moved into my neighborhood?” We have people who are looking to reconnect. Obviously for a very large portion of people, Facebook and LinkedIn will solve that. >>>

Bootstrapping Using Services: Manish Sood, CEO of Reltio (Part 6)

Sramana Mitra: That’s your experience. We work with a very large number of entrepreneurs. Not everybody comes from a company where they’ve already seen a problem unsolved and then they go after that. You had a lot of your validation and probing done while you were already at Siperian and Informatica. You built upon that to go after a very similar customer base.

The process of finding the right solution is not always such a direct path for entrepreneurs. There’s more experimentation involved in a lot of cases than you have experienced because your path was more direct. The general methodology of bootstrapping using services worked for you and that’s something that we recommend heavily to entrepreneurs. Generally, it works the best for enterprise clients.

Let’s come back to where you got traction. Where was the initial traction coming from? >>>

Building Significant Revenue with Inbound Marketing from Israel: Pepperi CEO Ofer Yourvexel (Part 6)

Sramana Mitra: The total you’ve raised is $10 million and from the same investors?

Ofer Yourvexel: Yes.

Sramana Mitra: Where are you now in terms of ramp and scale? What have you built it up to?

Ofer Yourvexel: Acutally, I’m in a transition point. Because of my background of coming from large companies, we built the product to the enterprise. We knew that we cannot sell from day one to the enterprise because the product was not mature enough. The company was not mature enough to sell to the enterprise. We are now in a transition and we already have some enterprise customers. >>>

Building Significant Revenue with Inbound Marketing from Israel: Pepperi CEO Ofer Yourvexel (Part 5)

Sramana Mitra: Tell me more about the pricing. How did you price this?

Ofer Yourvexel: It was trial and error it the beginning. We started with one price and we simply said, “We’ll look at how much ERPs cost.” We looked at prices of roducts like ours that were not cloud-based. We made the price significantly higher than theirs. We found out that people were willing to pay more if you show them that you have something different. We are still priced higher than most of the competitors.

Sramana Mitra: Can you give me a benchmark of how much it could cost a company to buy your product?

Ofer Yourvexel: It’s modular. If you’re talking about a sales rep, it starts from $600 a year.

Sramana Mitra: For one user? >>>