How to Create a Monopoly in an Esoteric Niche: Steelcloud CEO Brian Hajost (Part 4)

Sramana Mitra: Are the system integrators required to install something like this?

Brian Hajost: No, nobody is required to install it. Systems integrators use it because they have a program that requires that they do this hardening work. They use the product in that work. The product takes two minutes to install and two hours to train. We build it because we deliver products all over the world. My product is used in India by a large US medical device companies.

How to Create a Monopoly in an Esoteric Niche: Steelcloud CEO Brian Hajost (Part 3)

Sramana Mitra: You mentioned that you started building the solution in 2012 and then launched it in 2014. Did I hear that correctly?

Brian Hajost: That is correct.

Sramana Mitra: This period between 2012 to 2014 and the five people that were working on this, how was that financed? Was it from the sale proceeds of the other two divisions of Steelcloud?

How to Create a Monopoly in an Esoteric Niche: SteelCloud CEO Brian Hajost (Part 2)

Sramana Mitra: In 2014, you had five people in SteelCloud?

Brian Hajost: Yes, I came back in 2009 to sell off two of our three divisions. It was a rescue mission. The market for the third product line had gone away in 2012. We had to do a complete reboot of the company in 2014. 

Sramana Mitra: What were the two product lines that you sold off? What was the left of the division where you built the company around?

How to Create a Monopoly in an Esoteric Niche: SteelCloud CEO Brian Hajost (Part 1)

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Everyone talks about BIG markets. Learn how to build a monopoly in a small market and, as a consequence, a strong defensible business.

Sramana Mitra: Let’s start at the beginning of your journey. Where were you born and raised? What kind of background did you have?

Surviving Covid with a Bootstrapped Venture: Kristi Herold, CEO of JAM (Part 6)

Sramana Mitra: Has your sports league business come to a complete standstill? 

Kristi Herold: Yes, it’s gone, but it will come back. 

Sramana Mitra: Yes, it will come back, but you will just have to survive this period. 

Surviving Covid with a Bootstrapped Venture: Kristi Herold, CEO of JAM (Part 5)

Sramana Mitra: It also depends on what you are trying to accomplish because cash acquisitions are easy to rationalize on your balance sheet. If it’s an equity acquisition joint venture with another player, then that is not so easy to value. That is why I was probing that issue. Let’s go back to what happened when the pandemic strikes. How did you orchestrate and move forward?

Kristi Herold: As I said, we had two deals that we were doing our due diligence on that would have doubled the size of our organization by May or June of 2020. We had to put a pause on both of those. We were anticipating that we were going to be shut down for a month or two. I wasn’t anticipating that we would be here 13 months later not being to operate our sports league.

Surviving Covid with a Bootstrapped Venture: Kristi Herold, CEO of JAM (Part 4)

Sramana Mitra: What was your revenue in 2016 when you decided to switch gears?

Kristi Herold: We were doing $6.5 million in revenue. 

Sramana Mitra: That is substantial for a word-of-mouth business. 

Surviving Covid with a Bootstrapped Venture: Kristi Herold, CEO of JAM (Part 3)

Sramana Mitra: Give me the highlights of your strategy in growing this thing to that level. How long did it take you to achieve $1 million in revenue? 

Kristi Herold: It took me 8 years to get to $1 million in revenue. 

Sramana Mitra: In 1996, you started the business and then in 2004, you were up to $1 million in revenue?