Entrepreneurship in Utah: Blackrock CEO Andy Gotshalk (Part 1)

We have covered quite a few Utah companies already like Pluralsight, InsideSales, and Steals.com. Here is another interesting entrepreneurial story out of the mini tech startup hub in Utah.

Sramana Mitra: Let’s start at the very beginning of your story. Where are you from? Where were you born, raised, and in what kind of background?

Andy Gotshalk: I’m originally from Boston. I was born and raised there and also finished high school there. I went on to college at Georgia Tech in Atlanta. What I really wanted was Biomedical Engineering but at that time, there weren’t that many schools that offered a Bachelors in Biomedical Engineering. At Georgia Tech, I could pick either Mechanical or Electrical Engineering and then get a certificate in Bioengineering. I officially had a degree in Mechanical Engineering and a Certificate in Bioengineering. >>>

Building a Founding Team Financed Business from Omaha, Nebraska: InfoFree CEO Rakesh Gupta (Part 7)

Sramana Mitra: Internet marketing is your primary channel?

Rakesh Gupta: Yes.

Sramana Mitra: In terms of segments and where you found the most adoption, what segments are you seeing the maximum revenue from?

Rakesh Gupta: After that initial journey into financial services and insurance, what we are finding is that we have a very broad set of customers. Anybody who is a little savvy or who wants to be a little savvy about their sales and marketing is a potential customer for us. Now, we are not limited to any one or two verticals but we have a very broad base of customers. We are selling something that has a fairly wide application as I can’t imagine any business that doesn’t want to grow. We think around 5 million business owners will be a good prospect for us. That’s the market size we want to go after. >>>

Building a Founding Team Financed Business from Omaha, Nebraska: InfoFree CEO Rakesh Gupta (Part 6)

Sramana Mitra: In terms of customer acquisition, what customer base did you go after? There’s a bit of a subtlety in that question. Typically, in data services like yours, you tend to have richer data in one particular area or a few particular areas. What was that segmentation that you went with at the beginning?

Rakesh Gupta: At the beginning, we went after the insurance and financial services segment. They had the paying capacity and they had a serious need. A lot of them belonged to larger companies but they had local authorization to spend money. The price of our product was such that they didn’t even have to get approval in any way. They can just pay it from their own pocket. We used every form of marketing that you can think of to get to them, including direct mail. That worked really well for us. That’s where the early success came from.

Sramana Mitra: Were your customers looking for B2B or B2C sales leads? >>>

Bootstrapping Using Services: eMazzanti CEO Carl Mazzanti (Part 6)

Sramana Mitra: What scale are you at now?

Carl Mazzanti: We’ve been in the middle of the pack of the Inc. 5000 fastest growing companies for the last five years. We hit $7 million in 2014 and we’re on track for revenue between $9 and $10 million this year. If we continue this for the next 15 years as we have for the last 15 years, we’ll reach $100 million in revenue.

Sramana Mitra: When you think about what you want to do with this company that you’ve created, what’s your aspiration?

Carl Mazzanti: You’re talking to someone who gets votes from our customers on a daily basis for their confidence in our ability to deliver. I would like to see our firm get to a 100 million votes on an annual basis. The next thing is I do see us expanding into more offices that are geographically close to the offices that are important for our customer base. >>>

Building a Founding Team Financed Business from Omaha, Nebraska: InfoFree CEO Rakesh Gupta (Part 5)

Sramana Mitra: Your thesis on it was that it had to be manually kept up to speed?

Rakesh Gupta: No, not manually. It has to be efficiently collected but certainly not in the fashion of crowdsourcing. It’s about collecting it in the right way and verifying it independently.

Sramana Mitra: So you verify it other than manually?

Rakesh Gupta: We can do it in multiple different ways. Every information coming in electronically is not equally accurate. If you get information from a highly reliable source that is collecting information only for that purpose, that is highly reliable. If somebody has a directory of doctors and that’s all they do for a living, that’s high-quality information. That’s very different from uploading business cards. >>>

Bootstrapping Using Services: eMazzanti CEO Carl Mazzanti (Part 5)

Sramana Mitra: In terms of your current business, what percentage of that is selling your own product versus selling other people’s products?

Carl Mazzanti: 60% to 70% is our own.

Sramana Mitra: But Infrastructure-as-a-Service, right?

Carl Mazzanti: Let me answer your first question. Your first question is what percentage of it is selling your own service that’s unique to yourself. Somewhere between 60% and 70% is our own intellectual property. The remaining 40% is when someone comes up to us and says, “I don’t want your black box, but I know you’re the best. Can you do this for us?” >>>

Bootstrapping Using Services: eMazzanti CEO Carl Mazzanti (Part 4)

Sramana Mitra: Does that mean that you were building more like a toolkit as opposed to a full blown architected product? You have a toolkit that you apply wherever similar problems crop up again. Does that describe the scenario better?

Carl Mazzanti: If you look at where we are 15 years from now, the primary verticals have changed. What problems we’re solving for customers today is different than it was 10 years ago but the email filtering company will most certainly run for a long time. But that is not the current growth story of the organization. That was the growth story for maybe our eighth year in business. In the technology space, your cheese moves around.

Sramana Mitra: I understand that at year five, you came up with this email filtering product. That was one of the major moves that you made in a product direction. It sounds like you’ve made more shifts in your strategy naturally because you’ve been in business for 15 years. At the five year point when you brought the email filtering product into market, what did that do to your business in terms of scaling? Did it double the business? >>>

Bootstrapping Using Services: eMazzanti CEO Carl Mazzanti (Part 3)

Sramana Mitra: Then what’s the next milestone after moving to that Microsoft strategy or becoming a more general plumbing support beyond security?

Carl Mazzanti: Shared services. Our first level shared services was email filtering. Instead of selling someone a hardware appliance, we moved that to what everyone now calls the cloud. Back then, it was called the shared service.

Sramana Mitra: Whose product were you supporting in that space?

Carl Mazzanti: It’s our own. We filter million plus messages a day.

Sramana Mitra: You actually went into starting your own product at this point?

Carl Mazzanti: We did.

Sramana Mitra: Let’s talk about that. That’s a strategy that we see a lot of services companies use to move to products once they get into a market and develop a customer base. We call it Bootstrapping Using Services. >>>