Bootstrap First, Raise Money Later: Ben Hodson, CEO of JobNimbus (Part 5)

Sramana Mitra: What period of time did you do that mode of existence of doing consulting to pay down your debt? 

Ben Hodson: That was from about 2008 to 2012. During that time, I started a bunch of smaller companies that tried different things, but I made most of my money off of consulting. None of them went anyplace. They were ideas that weren’t to fruition. I think the big mistake that I made there was trying to run three or four different things at the same time.

Navigating Multiple Product Pivots: Jebbit CEO Tom Coburn (Part 5)

Sramana Mitra: That means that you now had to work with customer who had physical locations.

Tom Coburn: No, a lot of these were still digital brands. A lot of our customers do have physical locations too, but these were digital experiences you could do no matter where you were.

Sramana Mitra: What did that do to your business?

Bootstrap First, Raise Money Later: Ben Hodson, CEO of JobNimbus (Part 4)

Sramana Mitra: Let’s go back to the 2004 timeframe when you were leaving this company. When you left, what did you do?

Ben Hodson: I had the entrepreneur bug. I was saying, “Oh my gosh, I really want to do another company, but I need to find a problem that I believe in and care about.” I was doing some consulting while figuring things out. At the time, eBay was popular. My wife was really into eBay. I started looking at eBay and there were several times that fraud had happened. PayPal didn’t really solve it.

Navigating Multiple Product Pivots: Jebbit CEO Tom Coburn (Part 4)

Sramana Mitra: What did you do after the pivot?

Tom Coburn: We try to not talk about 2014 to 2015 because they were very hard years. I remember the Board meeting at the end of 2013 where I said, “We have $1.7 million in the bank. We need to pivot this idea to something different.” Their first question was, “What should we pivot to?” I haven’t figured that out yet. Thankfully their answer was, “We invested in you and your co-founders more than we invested in a specific product.”

Bootstrap First, Raise Money Later: Ben Hodson, CEO of JobNimbus (Part 3)

Sramana Mitra: Did you get the funding first before building the product or vice versa?

Ben Hodson: We built the product for the funding. It would not have gotten the funding if it weren’t for the product and the first customer. We had been raising money for a year and a half. I have probably done 30 to 40 pitches to venture capitalists and angels. No one was biting. They would say, “It sounds interesting, but I don’t understand encryption. Call me when you guys have something going on. I will be really interested.”

As soon as we closed that Verizon deal, that was when everything started to heat up. Everyone wanted to talk to us. It was easy to get meetings and we got much for favorable terms. We were able to pull a deal together about six months later. 

Navigating Multiple Product Pivots: Jebbit CEO Tom Coburn (Part 3)

Sramana Mitra: You were recruiting college students. When a brand wanted to do market research, they’d come to your site and you would not only provide them with software to run their surveys but also provide the focus groups.

Tom Coburn: Yes. When Dharmesh invested, we were a couple of thousand dollars in revenue. We probably had 50,000 students around the country. It was all US-based at that time. They were logging into our website. Half of our marketing team was focused on students.

Bootstrap First, Raise Money Later: Ben Hodson, CEO of JobNimbus (Part 2)

Ben Hodson: Later, that code ended up evolving into something that could auto-rekey those servers without ever having any downtime. We dubbed it Encryption Management. We hadn’t come up with all of that at the time when we were doing this business plan competition, but that was the seed of that idea. The business plan competition was really fun. You would go into a giant auditorium at the University of Washington. You would have a little booth. They gave a bunch of people Monopoly money that was given by business leaders in the area. These were people from well-known companies. I remember the CTO of Chase bank was there. High-level people from Microsoft were there. They would walk around and you would get to your elevator pitch.

Navigating Multiple Product Pivots: Jebbit CEO Tom Coburn (Part 2)

Sramana Mitra: Where did the $250,000 capital come from?

Tom Coburn: Our first investor was Dharmesh who’s the co-founder and CTO of HubSpot. 

Sramana Mitra: I just spoke with Dharmesh this morning. You met Dharmesh through Highland?

Tom Coburn: No. We’re very thankful to Dharmesh for being our first investor. That spurred a lot of other people to invest. Our story of meeting Dharmesh is very funny. I saw that there was a marketing conference in Boston. They were doing a mini Shark Tank competition. Dharmesh was one of the judges. He agreed to invest on just seeing the pitch.