How Appature Became Profitable Within A Year – with Kabir Shahani

How does a founder build a multi-million dollar health care tech company in 2 years?

Kabir Shahani is the CEO of the enterprise software company, Appature. Appature is a relationship marketing technology that aggregates sales and marketing data and provides marketers with the tools to mine that data, launch multi-channel campaigns, and get rapid analytics.

In this interview you’ll see the speedy way a company becomes profitable within a year. If you care about profitability, don’t miss it.

Watch the FULL program

Kabir Shahani, Appature

Kabir Shahani is the CEO at Appature. Appature Nexus is a relationship marketing technology platform that provides companies the tools to focus on their target customers.

 

Raw transcript

Mixergy's audio transcription is done by Speechpad

Andrew: In this interview, you’re going to see the speedy way that a

company becomes profitable. If you care about profits, pay attention to

that section of the interview. You’re going to hear the important advice

that helped launch a company and changed a life. Hopefully one day you’re

going to get a chance to give this kind of advice to someone who comes to

you for help. And you’ll learn how to get a customer to tell you to charge

them ten times more. That’s what happened to today’s entrepreneur. All that

and so much more. Catch it here.

Three messages before we get started. If you’re a tech entrepreneur, don’t

you have unique legal needs that the average lawyer can’t help you with?

That’s why you need Scott Edward Walker of Walker Corporate Law. If you

read his articles on VentureBeat, you know that he can help you with issues

like raising money, or issuing stock options, or even deciding whether to

form a corporation. Scott Edward Walker is the entrepreneurs’ lawyer. See

him at WalkerCorporateLaw.com.

Do you remember when I interviewed Sara Sutton Fell about how thousands of

people paid for her job site? Look at the biggest point that she made, she

said that she has a phone number on every page of her site because, and

here’s a stat, 95 percent of the people who call, end up buying. Most

people, though, don’t call her, but seeing a real number increases their

confidence in her and they buy. So try this. Go to Grasshopper.com and get

a phone number that will make your company sound professional. Add it to

your site and see what happens. Grasshopper.com.

Remember Patrick Buckley who I interviewed? He came up with an idea for an

iPad case. He built a store to sell it and in a few months, he generated

about a million dollars in sales. Well the platform he used is Shopify. If

you have an idea to sell anything, set up your store on Shopify.com because

Shopify stores are designed to increase sales. Plus, Shopify makes it easy

to set up a beautiful store and manage it. Shopify.com. Here’s the program.

Hey everyone. My name is Andrew Warner. I’m the founder of Mixergy.com,

home of the ambitious upstart. I think I’ve said that now over 700 times

because we’ve had over 700 entrepreneurs come here, be a part of this

project where they share with you how they built their businesses, tell you

their stories and teach you what they learned along the way, so that you

can go out there and build your own success story too. In this interview,

I’m going to answer this question, how does a founder build a multi million

dollar healthcare tech company in two years?

Kabir Shahani is the CEO of the enterprise software company, Appature,

which is a relationship marketing technology that aggregates sales and

marketing data and provides marketers with the tools to mine that data,

launch multi channel campaigns and get rapid analytics. It’s kinds of a

mouthful, but we’re going to understand exactly what this business does as

we go through the story of how he built it up. Kabir, welcome.

Kabir: Thanks, Andrew. Great to be here.

Andrew: When we talk about multi million this and money raised there, it’s

big numbers and sometimes people just feel like it’s overwhelming amount of

numbers. Let’s go simple. The first million dollars. What did you guys do

when you got to that point?

Kabir: It’s a great story in problem solving and I think that’s to your

point about lots of different numbers getting thrown around. The focus for

us when we got started in [??], Chris [??] gets a ton of credit for this,

it was, “Let’s go out and find real high quality problems that are people

are willing to pay real money for, to have solution to those problems.” We

were very fortunate to start to learn about some of the challenges

marketers were having in understanding the customer base, reaching their

customer base, driving relationships in a repeatable fashion and really

understanding what’s working and what’s not as they’re building their

programs and campaigns. We got into the market very quickly with some ideas

we had, got customers on the platform and very quickly, within about 18

months, found ourselves, it’s to your question, reaching about a million

dollars in sales.

Andrew: Within 18 months?

Kabir: Yeah. Right about the 18 month mark is when we started to hit that

trajectory and it was pretty interesting. Remember, Chris and I, and two of

our good friends had joined our company very early and really helped us

build this business. We’re sitting in a conference room trying to be

somewhat disciplined about how we were growing the business and measuring

the progress we were making and it was clear that we were going to build a

big company and start to build a big company. We still [??] built a big

company yet, but we’re working on it. And it was great to see that we had

been able to hit these important milestones and we were so focused on

driving forward that we almost forgot. At the end of the day we realized we

should celebrate this. This is kind of a big deal.

Andrew: I’m sorry. Kabir, the thing that you were going to celebrate, the

thing that you’re talking about that you hit within eighteen months was a

million dollars in sales?

Kabir: Correct.

Andrew: OK. So, you hit that million dollars and you almost missed the fact

that you hit the milestone because you’re so busy working to build a

business. When you finally realize it, what do you do?

Kabir: We went out and had a great night. We went out on the town here in

Seattle and had fun. It was funny because Chris Hahn, my co-founder, and

Matt Hallett and Derek Slager, who were on our team very early… we

realized that and we decided that we wanted to learn how to celebrate our

success a lot better. So, it’s really part of our culture now, celebrating

our success, insuring that we understand the mile markers and when we

achieve those.

Andrew: I’m sorry, tell me if this is a rude question but what specifically

did you guys do? Do you go out and get drunk? Did you go out and buy

yourselves each a Ferrari because you now were making it?

Kabir: Well, it wasn’t quite Ferrari territory. We certainly had a few

beers and didn’t get home until 2:00-2:30 but there were no lavish

celebrations quite yet.

Andrew: OK. And you built this business with how many thousands of dollars?

What was the initial investment?

Kabir: It was in the $4,000 range in terms of a couple machines that we had

to buy and get spun up. Chris and I were lucky to be in a situation where

we could fund ourselves for a few months and use our savings to get off the

ground. The guys who joined us early made a lot of sacrifices as well in

doing the same thing to really get us off the ground. So, it really didn’t

take a lot for us to be able to get out into market and get the customers

to be engaged with the platform.

Andrew: OK.

Kabir: It was just funded by customer revenue for almost three years when

we realized we had a big opportunity on our hands and we wanted to

commercialize, and we raised venture capital to do that.

Andrew: OK. And one of your investors, Neil Patel, is the guy who

introduced me to you and helped set up this interview. So, let’s find out

how you got here, but first, people need to understand what the software

is. I need to understand what the software does. I’ve been on your website

and I’ve been doing a lot of research on you, so, I’m wondering if there is

a case study that will make it really easy for us to understand what

Appature does.

Kabir: Sure. So, when we walk into an organization there are a number of

disconnected data sets that marketers care about. So, there is sales force

automation data living in something like Salesforce.com. There’s campaign

history, generally living in multiple spreadsheets, there’s enterprise data

warehouses, there’s anywhere from five to fifteen data sets. What we do is

make it really easy for the marketer to see all that data in one place and

use the insights when they look at that data to make quick decisions and

set up and launch campaigns.

So, we have customers that have databases set up that have tens of millions

of records that enable the marketer for the first time to be able to really

understand across these disparate data sets who they should be reaching,

how to create specific targeted segments, and go out and actually launch

those programs with the same experience. Historically, you’d need five or

six different technologies in order to traverse data, get access to it,

launch programs, analyze it, and we give you the opportunity to do that all

in one platform.

Andrew: OK. I think we’ll get an even deeper understanding when we hear how

you came up with the idea for this business, how it evolved, and how you

figured out what your customers were looking for, and we’ll do that

throughout this interview. Let’s go back, before you even ran this company,

there was a frustration that you had. You were working for a different

company. What was that frustration that eventually got you to stop working

there and to move on and create your own company? Do you remember that

frustration?

Kabir: Yeah. It’s interesting, and Chris Hahn, my business partner, gets a

ton of credit for this because I tend to be manically focused on what I’m

doing and it’s hard for me to look at other things when I’m focused on one

thing. We had both been working at a social book-marking startup for about

a year and a half. It was a great company, great product, and a great team.

I learned a tremendous amount about building businesses but it just wasn’t

seeming to go in the direction that we wanted. The corporate culture wasn’t

really what we had envisioned when we took the opportunity to join that

company. Chris gets the credit because he came to me and said he was going

to quit and start a business. Not sure what I want to do, but I want to

start that business with you.

Honestly, I wasn’t sure that I wanted to do that. I wasn’t sure I was ready

for that and I was very lucky to be able to take that experience that I

had, that company, take Chris’ drive and vision around getting out and

creating a business, to be able to really talk about if we were to build a

business together, what that would look like. Everything came together at

once, because I remember being in a state where I actually had taken a trip

to India. I was spending some time with family and thought to myself, “What

am I doing with my life?” I’m in a situation where I’m working hard, I see

the vision for where we could be, but we’re not getting there. It’s

frustrating when you know what’s possible and you can’t see it coming to

life. Almost within 45 days of me just having this, “What am I doing with

my life?” experience, it was incredible, because Chris approached me and

said, “Hey. Let’s start a business.” I was really lucky to have a mentor

that encouraged me to do that.

Andrew: Let’s talk about that. You went to your mentor and you said, “I

have this opportunity. I’m not sure what to do.” What was the uncertainty

that you were facing? What was this solid piece of advice that your mentor

laid on you?

Kabir: It was a very interesting conversation. I went, had coffee with one

of my mentors and good friend who’s built a very successful business here

in Seattle and has been growing even recently. This was five years ago now

and I sat down with him and I said, “I’ve got this guy that I work with.

Super smart engineer, really talented guy. I think we’re philosophically

aligned. He wants to start a company together and we’re not sure (A) what

we’re going to do, and (B) I’m not sure that I’m ready to jump in.” I was

24 at the time.

I wasn’t sure that jumping in and building a business was the right time

for me versus spending a few years in industry, working at a bigger

company, learning the ropes and what he told me was very much life

changing. He said, “Look. I’ll give you a job at my company today. I’ll go

back, I’ll write up an offer and it’s going to be a very healthy salary,

close to $500,000 a year, I think you can make in a job I put you in our

company at a senior level. But you shouldn’t take that. You should go do

this. You’ve got an engineer who’s ready to work with you and build a

business with you.” I was lucky to have the support of my father in helping

us and he has entrepreneurial experiences where he was willing to provide

us some guidance and help us get off the ground. He said, “Kabir,

everything is coming together. There’s no great time. Jump right in and you

can make this happen.” That meant a lot. To know that you had somebody who

was willing to support you even if you decided not to do this, but still

encourage you to do so. It made a huge difference.

He said, ‘I’d give you a job but I think you should go and start your own

company.’ At that point, you said, ‘All right. I’m in. I’m going to go and

launch some business.’ But you didn’t yet know what the business would be.

You and Chris were still going to try to figure things out. How did you

plan to figure out what the business was going to be?

The first part, the platform that Chris and I got comfortable with, was

what type of organization we wanted. The question that we asked ourselves

first and foremost was, “Where do we want to work everyday? What’s the type

of environment that would get us out of bed excited to show up every

morning and be there burning the midnight oil?”

Andrew: Before you even thought of the product, before you knew who the

customers would be, before you had a business model, what you kept saying

was, ‘We want a culture. The culture will come first and the product will

come later and the customers after that?’

Kabir: That’s right. It’s really culture, customers, product. That’s the

next step in the sequence.

Andrew: Something I noted as you were telling us about this company that

you used to work for was, you said, ‘The culture was bad.’ I wrote a note

to come back and ask you what that means. Tell me, what do you mean the

culture was bad? How did it impact you directly? What were you seeing?

Kabir: I wouldn’t go that far. I wouldn’t say it that way. I think the

culture, like many companies, is evolved. Especially when you’re trying to

get a product off the ground. It tends to be a lot about the idea. Tends to

be a lot about different people’s ideas and what they think are the right

ideas. They were as, not experienced, no shortage of phenomenal ideas.

Andrew: At this past company, there were just a lot of ideas coming at you

all the time.

Kabir: Yes. Generally as a team, the team was always talking about a lot of

different ideas.

Andrew: So, why is that a problem? Why is that something that would make

you seek out an alternative?

Kabir: Well, that’s not the problem. The problem is that when you let the

idea trump the problem that you’re trying to solve. I think what was

challenging for Chris and I was, it was less about the ideas we have and

more about how they’re solving a problem that’s really high-value.

Andrew: Kabir, I’m sorry to interrupt, but I want to spend a little bit

more time understanding that. I do feel, as you’re saying this, that I’ve

seen myself do that. I sit around with entrepreneurs or sit around

internally with people whom I work with and just come up with these

brilliant ideas. What’s the problem with that? I always sense at the end of

the day, “Hey, this feels great. All these ideas are terrific. I’m really

with creative, bright people.” But in the back of my mind, I’m like, ‘This

just doesn’t feel right.’ What’s my spidey sense picking up that my mind

isn’t yet able to understand?

Kabir: I think what that might be is for an idea to be a great idea, it

needs a problem to solve. So, an idea is just an idea until there’s a

problem it’s solving, and then it becomes a great idea. The bigger the

problem it solves, the greater the idea becomes. That’s a big piece of when

we got started. We were saying, “Let’s create a place where it’s less about

our ego, less about what we think matters and more about what customers

think matters; more about what we believe the right ideas are to solve a

customer’s problem.” Now, you don’t always want to do exactly what the

customer tells you.

It’s the famous Henry Ford quote, “If I listened to my customers I would

have created a faster horse”‘ It’s not exactly what the customer is asking

for tactically, it’s the problem they’re trying to solve and how your ideas

can do that. We spend a lot of time talking about philosophy and the type

of culture we wanted and rewarding problem-solving, and putting the

customers’ needs right on the core focus of what we were doing versus the

technology of the concept. It’s just one of the challenges in building a

technology business. There’s so much creativity involved, they’re so many

great ideas. You’re always competing for the best idea.

Andrew: I get how the culture was important to you and why it was important

to the evolution of the business, and we’re going to hear more about that

as we go on. So, you get together, you lay this down, and what’s the next

step? Is it finding the customer? Is it finding a problem?

Kabir: It’s finding a problem. We went shopping for problems. We had a

bunch of different ideas of problems we wanted to solve, and one of the

things had been something that my dad, who has worked in marketing his

whole career, had been talking to me a lot about. He would say, “Gosh, in

all the jobs I’ve ever had, I’ve never been able to really get a view of my

customer that’s 360-degree, really comprehensive. I’ve never had tools to

reach customers across multiple channels. I’m using lots of different tools

and agencies to do that. I’ve never had a quick view of what’s working and

what’s not.”

Andrew: I know from your conversation with our producer, Jeremy Weisz, that

your dad was in marketing; he did marketing and health care. What

specifically was he marketing, and why would he need this 360-degree

understanding of his customer to do that?

Kabir: He worked in devices and pharmaceuticals, but this applies to all

industries and all products where every marketer needs to understand. Let’s

take a retail example where you’re buying different products from different

retail outlets around the country. Maybe, you really like Urban Outfitters

and you’re buying a lot of products from different Urban Outfitters when

you’re traveling or online. How do companies aggregate your behavior? The

products you’re looking at, the products you’re purchasing? How do they

aggregate the conversations you might be having calling into an 800 number?

There are lots of different touch points that an individual customer has

with the brand, regardless of product. We find marketers facing this

challenge of quickly needing to understand that. That data exists. All of

these companies have massive data warehouses to house all these pieces of

information, but no one’s ever connected it together in a way that

marketing can actually access it and use.

Andrew: I see. Let me bring this down to a really simple illustration. Tell

me if I understand this right. In my own world, I got a phone call from

someone, I think it was this guy Roy Story and we started talking. I said,

“I know Roy. Where did we talk?” I immediately went, and I did a search on

discuss, our commenting system on the site, and I said, “Oh, yeah. We

talked there.” I did a search on Twitter, and I realized we had this other

conversation where he helped me with this problem on Twitter. I bet if I

would have spent a little more time going through my email and Facebook, I

would have come up with even more interactions, and then I could have

talked to him as one person who I talked to over, over multiple

conversations.

And maybe, even if I went, know that I think of it, to Desk.com, I’d see

when he talked to Aria or Andrea with a customer service issue and I’d be

able to have all that background and have a good conversation with him.

That’s what you’re saying on a bigger level the companies who you’re

working with, that’s the problem that they were facing.

Kabir: That’s exactly right. So they need to be able to understand that for

each of these customers but then do it in a repeatable way. So how do I

traverse all that data to inform a message I want to send to drive a change

in behavior. Which is marketing’s fundamental purpose?

Andrew: OK. I called him Roy Story, I meant to say Ron Story. So the same

issues I was having with Ron in that one phone call, they’re having on a

bigger scale with many more people and they need to a solution for it. All

right. So now you understand the problem. You got the culture, you have a

problem that you went out shopping for, what’s the next step?

Kabir: Well, then it’s the fun part of actually trying to come up with

ideas and figure out what ideas we could pull together and butt them up

against really solving the problem. So, you know, Chris and I spent

probably three months around his kitchen table just wire framing,

researching, figuring out, and we’re talking three long, hard months of

very long days because, you know, we had the pressure of no money in the

bank, right? So we had to get to revenue as quickly as we possibly could.

So, we were rapidly trying to figure out, well, if we were to build a

software product, to be honest we weren’t even sure if the solution was a

software product to start it. We were hoping it was because that’s our

background and that’s the kind of company we wanted to build but, you know,

we started figuring out, if we were to solve this problem with a software

product, what would that look like, how would be structured. I started wire

framing it out. We were very lucky to have a friend whose an incredibly

talented designer also here in Seattle, and he was really kind to say, hey,

I’ll mock some stuff up for you guys and I’ll take your ideas and work with

you and get them into a visual presentation and what we were able to do at

that point is take that visual presentation that Sun Park is his name, that

helped us, he helped us build that out and we took our ideas into market

and we went to customers,

Unfortunately as I mentioned, my dad having seen these problems in his

career had peers of his that were willing to take a couple of meetings to

learn about what we were working on and we went in and said, hey look,

here’s a problem that we’re looking to solve, here’s our approach to how

we’re looking at solving it, would this be a value to your organization and

walk them through how the technology worked to help them solve these

customer data integration problems, these multi-channel marketing problems,

these analytics issues and one platform to run the business of marketing.

Andrew: And the product wasn’t built, it was basically designed but not

built at all.

Kabir: Correct. We started working on some core back end stuff that we knew

we were going to need regardless of which direction we went on the front

end, but it was very much screen shots at that point.

Andrew: Screen shots. So you’re sitting there with these guys, sales

people, and saying, hey look, if I build this would you want this? And if

you press this button over here, you’re going to go to this page over here

and this is how it would work but it’s not working there. Is this what you

want?

Kabir: That’s right and we were talking to Marketing Executives, but yes,

that’s right.

Andrew: OK. Now these guys were pretty high level people, weren’t they? And

they were friends of your father. Was there any concern, hey you know,

maybe I’ll look like an idiot showing them something that’s not built,

that’s like I’m showing them my art work? Your eyes just lit up as I said

that. What was going on?

Kabir: Well, yeah, you always have a little bit of anxiety about exposing

what you’re thinking and I think that that, you know, getting over that

early is one of the most important things and this kind of goes back to the

philosophy of, check your ego at the door. And I think the reason we

weren’t concerned about it was we didn’t care if they thought our ideas

were crap because we were willing to go, we were willing to iterate in a

different direction if we had to. You know, we went in to those discussions

fully aware that the feedback could be, this doesn’t make any sense, or,

this wouldn’t have any value to me. You know, we were prepared for that.

Fortunately that was not the answer, it was quite the opposite. But had

that been the answer, had that been the feedback, you know, I’m confident

that we would have gone back and started from ground zero and gone in a

different direction if that’s what it took.

Andrew: I’m going to get to the sales in a bit because I know that I’ve

been promising people that. By the way, if anyone’s wondering about the

audio lag, we’re doing this, I think this might be the very first Mixergy

interview on an iPad. You are on your iPad having this conversation with me

remotely and so far it’s working very well. But let’s just spend a little

but more time understanding these conversations. One of the problems that

people have when they’re talking to customers about a future product is the

potential customer goes off on all sorts of tangents.

Like you walk in there saying, what if I could build you this system that

tells you about your customers and by the end of the conversation, they’re

saying, yeah, you could give me a flying car I would totally be paying for

that. You know, they just go all over the place. How did you keep them

focused on this one problem and this one solution without having them so

focused that they were basically giving you the answers that you wanted

instead of the ones that they were really believing in?

Kabir: Yeah, that’s a great question and I think it’s a delicate dance. You

know, there’s not one methodology of doing that. I think one thing that

helped us early on was being able to have something that we could point to

with these mock-ups and screen shots we were using versus white boarding it

out. You know, we certainly had, as we evolved and developed the product,

there were certainly more white board sessions in some cases than having

big screen shots and, you know, we certainly exposed ourselves to a lot

more execution risk the less vague the ideas were to be able to iterate

through and get the feedback.

Andrew: OK. All right. Give me one piece of advice or knowledge that you

got from those conversation around the screen shots that you wouldn’t have

figured out on your own if you hadn’t talked to them.

Kabir: Oh gosh, we’re going back years now but I can tell you we’re

learning that everyday, so, when we build products in our company we use a

set of [??] to be able to determine what gets prioritized where on our road

map. And we give customer feedback the highest number of points.

Andrew: Mm-hmm.

Kabir: So we really, we really value what our customers say that they need

to be successful and, you know, certainly customer data integration was one

of them. You know, there was probably of the 15 channels of data that our

technology ingests on average, we probably only really envisioned three or

four of those when we started. And, you know, to your question about

examples, there was certainly and there continues to be new data sets that

our customers highlight and say, gosh, I’d love to have that data set and

add it to our nexus so that it’s integrated with the other data sets I have

in there and I can actually access and use them.

Andrew: So, it’s specific kind of data sets that they would like to have

access to that you wouldn’t have imagined otherwise.

Kabir: Correct. Especially because, you can imagine, we were learning about

this business so both Chris and I come out of the enterprise software world

but I think one of the advantages we’ve had is we’ve driven a lot of

innovation at this industry is being able to come at these problems in a

really pure way. We don’t have, you know the baggage of 15 years at another

company of the way things were done. We come with the clean slate that

says, well, what’s the right way to approach this for a customer.

Andrew: OK. All right. Let’s now go on to what the first version of the

product, by the way, the reason I’m hesitating so much is because it’s so

easy to think that you know the answer already, especially if you got a

father whose had this problem, whose now been telling you about the

problem, you’ve had some time to think about it, more time to think about

the problem and possible solution than your customers and it’s easy for us

entrepreneurs, isn’t it, to fall into this trap of thinking, I got this,

don’t worry, I’ll put it together, you’ll love it when you see it?

Kabir: Yeah, that’s right. And I think the word you used there, the

operative word is trap. You know, I think that is a trap and the method

that you articulated in terms of the trap we fall into, like, I got this.

It buys you some advantages. You buy speed, you can get into market very

quickly. You know, we’ve taken three plus years to put our product into

market but we have taken that time because we knew we wanted to go and

build the right solution and we knew building the right solution involved

in getting customers engaged in how that solution evolves, not just going

into a conference room and figuring it out ourselves.

Andrew: OK. All right. And by the way, no judgment call on my part towards

the audience if they’re going through this, I wrestle with this too myself.

I’ve done interviews here, like I said, over 700 of them. I keep hearing

over and over the need to talk to customers, how they’re going to blow your

mind with that they need and what they expect and how different it is from

what you thought they needed and what you thought they wanted you to create

and still we could do more here at Mixergy to get feedback from people. We

could do much more to check in with the audience to see if what we built is

right and if what we’re thinking of building is also correct and what

they’re looking for. All right, so, you now have all this feedback, what’s

the first thing that you launch? What did that look like?

Kabir: It was a fairly basic tool set that really enabled the multi-mode or

multi-channel marketing campaigns. Let a marketer load some flat data into

the system, you know, do some surveys, do some email. Some pretty basic

stuff. But the key in what it had and what we’ve really built upon is that

it had a data layer. It had a campaign management or multi-channel

marketing layer and it had an analytics layer.

So, what we’ve done over time is really built out each of those components

in that integrated fashion. So instead of running a complex set of

enterprise data warehouses and MDM infrastructure and having to have

different campaign management tools and different analytics tools, our

customers get all of that in one seamless package. Because since B1, we’ve

thought about how those pieces connect.

Andrew: OK. So, when you launched it, well, how long did it take you to

launch that, to build that first version?

Kabir: We got a version out within five months that had some functionality.

And then, of course, as you know, this is a fast business. We were shipping

every three to four weeks. We’re now shipping every 10 to 12 weeks.

Andrew: Every 10 weeks, changing the software, improving it.

Kabir: Yup.

Andrew: And you bill people on an annual basis?

Kabir: Correct.

Andrew: All right. How did you know what to charge people?

Kabir: You know that was definitely an exercise of customer feedback. So,

you look at a lot of different things. You look at what it would cost to

replicate this for the customer. I can provide it at a lower cost and have

some value in terms of the cost savings. We certainly look at the amount of

incremental revenue the customer can attract using a platform like ours and

what that means. So, we were able to get out in the market and frankly, I

think, got feedback early on that the product was worth a lot more than we

had even thought, which was certainly a defining moment for us.

You know, I remember coming out of one of these first meetings with a

customer, being almost beside ourselves at the fact that they were willing

to pay so much more than we had even originally envisioned and charging for

the product. Now we find ourselves in market, where a lot of feedback we

get from third parties and analysts say, “You guys aren’t charging enough,

even now,” as more of an enterprise sale, where we’re positioned today.

Andrew: You went in to a customer and you said, “Would you pay?” and you

said, “Well you know what? What number do we give them? We have this number

in mind that we’d like them to pay. How about if we just multiply it by

ten” and we say, “Would you pay this number?”‘ And you threw that out and

their response was “Yeah. That sounds totally reasonable.” And that’s how

you priced it. You weren’t afraid that maybe they would be shocked at the

price and low ball you. You weren’t afraid that maybe by coming up with the

price there with them that they might get the sense that you don’t even

know what to charge and that there’s more price flexibility than there

should be?

Kabir: Sure. I think its transparency, right? You earn credibility with

transparency and people, especially experienced customers have good

instincts. They know when you don’t know exactly what you should do, and

the best thing to do is just tell them that, you know? The [??] to that,

throwing a price out is, “Hey we’re not sure what to charge for this. We’re

not sure, the value to your organization. Help us quantify that, and let’s

have that conversation.”

Now, as a company with almost 50 brands on our platform, we have the

benefit of talking to lots of customers and third party analysts where we

can have the same types of conversations about all types of issues and say

“Hey, we’re not exactly sure, but here’s what we think.” That’s innovation.

As you know, interviewing hundreds of entrepreneurs in technology, it’s

about iterating. It’s about always getting better and always improving.

Andrew: Let me suggest this, I’ve sold to both enterprise, to companies and

I’ve sold to consumers, regular people. What I’ve found is that if you ask

consumers, they will give you answers that are all over the place. If you

say, “Would you pay 25 bucks, 50 bucks a month?” If they like you and they

want to feel like they’re supporting and they want you to feel supported,

they say, “Yeah. I’d pay a hundred bucks. You’re terrific.” You know? If I

go out to dinner with entrepreneurs, and I ask, “Should I charge a hundred

bucks for [??]?” They say, “Yeah. You’re terrific. You should.”

But I don’t think there’s as much basis in that. I mean, I don’t think

that’s very reliable. But with companies, it is more reliable, because when

you say, “Would you pay $900 a month,” they’re thinking to themselves, “You

know what, I know I can make more than this back. I know that I have

authorization to pay $900 a month without asking anyone for permission.’

So, yes, they have all these data points that give you a rational answer.

When you are having a conversation with someone in the company they are

your informant on the business. They are your supporter and your champion.

It’s a much different process because you are talking to enterprise. Any

truth in what I said?

Kabir: You are absolutely right. You are 100% right on. At the end of the

day, that customer is giving you that feedback they know the next

conversation is, “Great, so will you buy it?” They can’t tell you on one

hand to pay ‘X’ and then the next day tell you that’s too expensive.

Everything you said is right on.

Andrew: This is why so many people in the audience are asking for

interviews with companies that sell to other companies because inherently

all sales are similar. There are similarities with all tech entrepreneurs.

But, your business is (?) Enterprises are different from a business that

sells or gives free stuff to consumers. This is a clear example of it.

Also, in my business, people who buy ads at the beginning at the interview.

If I talk to someone who works at Grasshopper, they will give me an

understanding of what someone is willing to pay versus the audience which

pays for the courses which could give me different bit of information.

Sorry, you were going to say something, and I interrupted you.

Kabir: What I was going to say is that, when you make the comment about

your audience asking for more interviews with entrepreneurs in enterprise

software and the differences in enterprise and consumer. I think this is an

important point, Andrew. We are at the beginning of the most disruptive

revolution in software that I think we have ever seen. I have only been in

the business for a handful of years, but from what we can tell, we are

seeing a fundamental shift in data architecture that is the most

fundamental evolution that’s occurred in the last 20 years.

Companies like ours, that started 5 years ago, have a platform in

infrastructure that we built on versus companies that started 10 to 20

years ago, that completely changes the way in which we can drive solutions

for our customers. We are starting to see this revolution that guys like

Phil Linslow (SP) and (?) write all about. There is a new generation of

enterprise software companies that is going to start to run the businesses

for enterprises and create these platforms which we are lucky to be in.

Andrew: Can I ask you a personal question? You are in your 20’s right?

Kabir: Yes, almost 30.

Andrew: Almost 30, in days?

Kabir: A few months.

Andrew: You have got gray hair. I’ve got gray hair. How much a pain in the

butt is it that you have got gray hair now?

Kabir: The joke used to be people thought I used Touch of Gray just to look

a little older in the enterprise software world.

Andrew: I kept looking at you. Everything about is young. Every story about

you is about this new young hotshot. I think I saw a picture of you when

you were 14 years old, and you had gray hair.

Kabir: Yes, not at 14.

Andrew: Not at 14, but yes.

Kabir: I mean, certainly in these jobs the stress and the pace takes its

toll. Gray hair is one of the ways it shows.

Andrew: In enterprise it might actually be an asset where you are building

an iPhone app for consumers in Silicon Valley as opposed to Seattle maybe

it wouldn’t help you. Maybe it would be a hindrance? What do you think?

Kabir: I think that’s changing. I can’t speak to consumers and the high

consumer technology companies, but I can say that in the enterprise I think

buyers in the enterprise are actually looking for new ideas. This is a

great analogy. There was a reference call, where customers will say tell me

about your experience with this company and this product. One of our

customers told another customer in a reference call, imagine the Facebook

and Google generation of engineers building your marketing platform. That’s

the experience you get when you use (?).

Andrew: I see.

Kabir: I think customers have an appetite for that. You have got an entire

generation of users that use Facebook. They buy products on Amazon. They

are very comfortable with technology in the consumer world, but that

experience doesn’t translate in the enterprise. We look at our job as

helping create those uneasy experiences around enterprise software so those

customers get the same value when they use software at work that they get

when they use software in their personal lives.

Andrew: All right, I get that. I get so frustrated on behalf of employees

at companies that I walk into when I see them using them using old black

screens with green text on them. I’m like, oh, you know how much better

technology is, why shouldn’t it be a little more fun than that, why

shouldn’t it be a little more intuitive than that?

Kabir: That’s right.

Andrew: All right. We understand how you got the first product, we

understand how you got your pricing. Tell me about your first customer and

who you beat out to get that customer.

Kabir: So the first set of customers, you know, we went in, this was in

2007/2008, very green field. So, we were competing with Cebol, you know,

old Legacy systems, which we still see in market, but it wasn’t a formal

product. You know, there wasn’t an A in the sense that customers, oh like

we’re using Cebol to do some of our data integration and we’re using some

of these other tools to do our campaign management, you know, in some cases

they didn’t have tools at all so it was a pretty green field for us, the

first four or five customers on the platform. What’s changed over time is

the idea that there’s never been a platform to run the business of

marketing is now predominant, you’ve got analysts covering it, you have

acquisitions and mash ups, IBM, Terra Data, WPP, companies that cross

software and agencies are on a tear here trying to figure out how to

deliver and end to end marketing platform. You know, you’re probably

familiar Gardner has gone out and put a stake in the ground and said, in

2017, the CMO’s going to spend more money on technology than even the CIO.

And…

Andrew: The Chief Marketing Officer is going to spend more money than the

Chief Information Officer of a company?

Kabir: On technology. That’s right. That’s right. Because we’ve gone

decades with no platform to run the business of marketing and there’s a

huge catch up that has to happen because now you have a generation of users

in the CMO’s office that want a tool set. You know, they want their version

of Salesforce.com, they want their version of SAP to help them run their

business.

Andrew: OK. So they want software to help them to market the products that

the rest of the company is putting together but you’re still a company that

has no background, that has no experience, that’s now walking in the door

and saying, hey, you guys should be spending money on us and we’re not just

talking about ten bucks a month, or only twenty-five bucks a month, we’re

talking about some serious money, some serious investment in time, some

serious investment in trust. How do you win them over? That’s one of the

challenges that a lot of people in the audience who are building enterprise

companies are facing when they even think about…

Kabir: That’s right. That’s right. And I think that’s why you take the time

to build the product the right way. So, we didn’t get here in a year or 18

months. As I mentioned, you know, we took over three years to get the

product into market. But at this point, when we walk in, the product speaks

for itself. You know, we don’t have to dance around, well no, the product

doesn’t do that, or, oh, yeah, you know, we want to do that some other day.

I mean, I certainly things on our, we have a road map for the next two

years and there’s tons of stuff we’re really excited about building but the

product is very rich and functional and so it doesn’t matter about me or

our team or the experience, of course we’re a company now with almost 50

people.

We’ve certainly evolved the experience set in the organization but what

matters is the product and the ability of the product to really stand up on

it’s own two feet. So regardless of any other ancillary factors, the

customer can look at the product and say, yep, this thing will get the job

done for me.

Andrew: So, Kabir, is it, tell me if my understanding of you, correct me,

I’m sure I’ve got this wrong, but here’s what I’m imagining you’re telling

me. You’re saying, Andrew we had this idea, we walked into a potential

client, we said what do you think, they gave us some clear guidance, we

went back and worked on it then we came back to the same potential client

and we said, this is where we are right now, what do you think and we went

through iterations like this over months and then when it was time to sell

we had this relationship with a client who kept asking us for this specific

product that we specifically created essentially for him and people like

him and that’s why we’re able to close the sale. Is that what you’re

saying?

Kabir: Yep, that’s right on.

Andrew: That’s the thing. So, you’re first customer, how long did you know

him or her before you closed the sale?

Kabir: About four to five months.

Andrew: Four to five months of iteration before you sold to them?

Kabir: Correct.

Andrew: So, the first customer essentially is like a consulting client,

where you walk in and say what’s my problem and they say, here’s my

problem, and you say, I could solve it this way and they say, go prove it.

Kabir: Yep, that’s right on, that’s right on. But it involves, and I’ll

give Chris Connell a lot of credit here as well, making sure you build that

in a generalizable way, right?

Andrew: So you do what?

Kabir: You know, you’ve got to build the product in a way that it can scale

out across not just that A) are the needs specific to that customer or is

there enough of a market where, you know, thousands or hundreds of

thousands of other customers have that same problem. OK, well that’s good

so you got to check that box. But then when you actually build the product

are you building it in a repeatable way where it doesn’t involve you having

this sort of custom thing that you built for one person.

Andrew: OK. All right. So you close out the deal, you get, actually, let me

ask you this. You said it took years to build it. The 18 months from start

to first million in sales, what do you mean, where was that start taking

place? Was that when you guys conceived of the idea? Does that start of the

18 months go back to when you tried selling your first version? Does it

come…

Kabir: When we started the company, when we started the company.

Andrew: So when you started the company. Was the software built by that

point?

Kabir: No.

Andrew: No, it wasn’t. How long after you launched the company was the

software built?

Kabir: About 5 months.

Andrew: 5 months?

Kabir: Correct. That’s when we had the first regular product.

Andrew: So within 13 months, a little over a year of having the first

version of the product out, you did a million in sales?

Kabir: Yep.

Andrew: Committed sales or actual sales?

Kabir: That was actual sales on the product and a bunch of, you know, we

did a lot of, in our early days, boot strapping to fund the product

development. So we had other ancillary projects we were doing to fund

development of our product.

Andrew: Such as?

Kabir: Oh, everything from web development to, you know, other products

that we thought might fit in to our platform. Some of them did, some of

them didn’t. So, there was a lot of experimentation going on those first

couple years.

Andrew: OK. And how much of the million dollars in revenue came from the

actual product and how much came from things like web development work?

Kabir: Oh, you know, I’d have to go back and look at it. I mean it was…

Andrew: Roughly.

Kabir: I mean it was predominantly from other types of projects, I’d say

maybe 40% of it was from our core product.

Andrew: OK. So, 60% from other projects, 40% from this. The other answer to

how does a company go from zero to a million dollars is by doing anything

it takes in the beginning, by being willing and willing to lose focus a

little bit and do some consulting work. Is that true?

Kabir: Yep. That’s right and I think that, you know, I wouldn’t necessarily

do it all the same way. You know, again but…

Andrew: What would you do that same way?

Kabir: Pardon.

Andrew: What wouldn’t you do the same?

Kabir: Well I’m not sure we would, you know, I think we in an effort to

staff development of the platform aggressively we took on more of these

ancillary services projects that were great cash flow then we probably

should have. You talk about distraction, it can definitely distract you. So

I think in some ways we extended our time horizon a little bit longer than

we would be otherwise in getting to the certain milestones that we know

we’re capable of. But at the same time, you know, the market conditions are

all lining up pretty well. Hindsight is always 20/20 and if we had gotten

into market a year sooner, you know, who knows what the dynamics would have

been at that point.

Andrew: You launched and shut down Chatterfly, a Twitter search engine.

Why’d you launch it and why’d you shut it?

Kabir: Great example of a project, right? Something that we’ve gone, you

know, it was something that a customer wanted, we thought there’d be some

value to it. We launched it because we thought that social media was going

to be an important part of the mix. You know, right now we sell our product

at the Health Care Life Science customers where social media is still a

challenge, understanding how to engage in social media is still something

our customers are trying to figure out and, you know, we decided at some

point that customers just weren’t getting the utility from it and as you

know, when you launch software products they involve an ongoing investment

in maintaining those products and continuing to innovate those products and

it just wasn’t one we were willing to continue to resource.

Andrew: And it’s because, and at the time it’s Chris, your co-founder, who

built Chatterfly, right?

Kabir: It was some guys on our engineering team. Chris was involved with it

for sure, he had a big role to play but yeah, he didn’t build it.

Andrew: OK. And you had an engineering team because you were able to pay

their salaries because you were taking on other jobs and getting paid

commitments from clients.

Kabir: That’s right.

Andrew: OK. Alright, let me see. You ever have any trouble making payroll

or any financial issues because you were boot strapped, because you didn’t

have the investors for a long time, not…

Kabir: You know, knock on wood, a lot of close calls but never missed a

paycheck, never cut staff, you know due to cash flow. I think we were

honestly just very lucky and very focused in how we managed our cash.

Andrew: You told Jeremy, Matt gets a lot of credit and he stepped up. He

spent 90 minutes with a customer and if we couldn’t get this much to do

then we’d build it out. So basically, Matt is the guy who sold one of your

customers, he’s a salesperson?

Kabir: No, he runs products for us now. One of the guys who joined our

company early and, you know, I remember this particular instance where we

were definitely running up against a cash wall and we knew that we had a

customer with a big problem we were excited about solving to build out our

analytics capabilities and it was a great way for us to get customer

feedback and input, as we tended to do, as we were building that. And we

basically said, hey, look, you know, we can solve this problem for you and

we went through the exercise of talking through it and we said, hey, look,

you know, this is what it’s going to take for us to solve it. Because we

knew we needed to keep the team staffed for, you know, enough time to

really deliver that solution for the customer. And, you know, they were

willing to step up and support us there.

Andrew: I see. So, when you got hungry, you went to clients and you

basically said, what’s your biggest, baddest problem? Let us take it on for

you.

Kabir: Yep. That’s right. As long as it was related to our core product.

Andrew: Right. I see. My problem is I can’t get my kids to school on time

because I keep having to go to work. You can’t solve that for them.

Kabir: Yeah.

Andrew: What am I trying to figure out next? Why did you raise money? You

were profitable, you were growing and you were boot strapped? Why raise

money?

Kabir: So, lots of reasons. Primarily, we were doing a lot of these

services projects, right? That, you know, the percentage of revenue that

came from the core product, you know, sort of stayed below 50% and so you

have this scope of these non-core product projects starting to just

increase and take more bandwidth and we said, look, the market is ready for

us to launch this. At the time, we had nobody in sales, nobody in

marketing, it was a bunch of us just working on product and what we decided

to do was to raise the money to ramp down all those service projects,

completely focus on our stats platform and actually build out the

commercial team for sales and marketing, professional services to implement

the product. All those things that have to happen to really build a SAPs

business. So, many ways we talk about our company as really just being two

years old, like cause that’s the only amount of time we’ve had to really

focus on our platform and get out product onto the market.

Andrew: The lowest point that you had, you told your wife, gosh, I’m beat

down, I’m beat and worn down. What got you to feel beat and worn down?

Kabir: You know, it happens, you know, this is something that, you know,

I’m sure lots of people you interview talk about. It happens all the time.

You’re always dealing with adversity, you’re always dealing with a hundred

reasons why it can’t work or you can’t go to the next stage and it’s so

important to remember that your job as one of the people building a

business is to keep plowing forward, no matter what. And, you know, I can’t

remember a specific instance, but it’s something that, you know, I think

every entrepreneur deals with and finds their own ways to cope with that

and stay focused on the mission and continuing to execute.

Andrew: What did your wife say? What was her reaction?

Kabir: Well, it’s the one, the one we always laugh about is, oh, well

you’ll figure it out. And it’s kind of the whole, you know, she’s not

really sure what to say but she also knows that, you know, you will march

forward no matter what.

Andrew: That’s a tough thing to hear, but I think you’re the second

entrepreneur to say that within the last week. Wife said, you’ll figure it

out. At the time it might have been frustrating but you knew she had

confidence. I’ll tell you, it’s way better than what I see other people’s

wives say which is, that’s why I told you, you shouldn’t be an

entrepreneur. You know?

Kabir: Yeah.

Andrew: A hard thing to hear at that point.

Kabir: Yeah.

Andrew: Let me see what else. Gee, how the enterprise…so…OK. Jeremy

asked you, what question should we ask you because what we were recognizing

is sometimes at the end of an interview a guest says, oh, that’s great but

I wish you would have asked me about this other thing, that’s really what

you should be asking me. So, what did we miss asking you?

Kabir: You know, I think the part that we were able to touch on anyway is,

I want everybody whose watching this interview, and especially those that

were asking you about more enterprise software companies being featured, to

really recognize the revolution of brand and you know, we had a chance to

talk about it a little. But I think we are just literally at the beginning

stages of seeing a whole new generation of enterprise software companies

that are going to be the platforms that are running the Fortune 1000 and

more, Fortune 10,000 (?). We’re really excited about it because it’s a

responsibility we have as technologists to create that next generation of

tools and there are more and more companies everyday that are excited about

doing it. It’s going to be a really fun next decade.

Andrew: Let me read a comment or actually an email from one of my viewers

and then I want to ask you about the one non-tech, non-business thing that

you did that helped your tech business succeed. It’s something we don’t

talk about, maybe we talked about it once or twice on Mixergy interviews,

but we don’t talk about it enough. The email that I want to read to the

audience comes from Kane Mar and Kane had this issue. Kane wanted to rank

higher, not in search engines necessarily, but in LinkedIn. He said, “Hey,

you know, a lot of my customers are finding me and finding my competitors

through LinkedIn. I don’t want to be. . .”

Let’s see where he was. He says, “For one search, my profile was on page

five. In another search, my profile was on page two or three and if you

guys have ever searched on LinkedIn, you know that being on page five,

being on two or three basically means you don’t come up for your potential

customers.” He says, “During the course that you did at mixergypremium.com

with Lewis, you asked for feedback on how the tactics in the course

worked.” When he started out, he was page five and he goes, “Here’s what I

did. I performed the actions as Lewis described them in the course,

frequently stopping the video when I needed more time.

I updated the five sections that Lewis mentioned, Headline, Summary, etc.,

and when I had completed all the work for the same searches, I ranked seven

at the bottom of the first page and third at the top of the first page. It

took me two hours to refine the language and write my new content and yes,

I was late for dinner also. Many thanks to both you and Lewis for a

fantastic material.”

Basically, what he’s saying is he had this problem. He started watching the

course. He didn’t just watch and sit back, but he took action, he paused,

took action, came back and watched, learned some more, paused, took action,

etc., and within two hours, he got the results that he signed up to the

course to take. That course and so many others taught by real

entrepreneurs, sometimes whose Internet connection isn’t all that great,

but whose experience is always perfectly, perfectly matched to teach that

course.

If you sign up for mixergypremium.com, you get all of those courses. Lewis,

of course, wrote the book on LinkedIn and has taught it for years before

anyone even recognized the power of LinkedIn, back when people thought

Facebook is going to kill LinkedIn. That’s what we’re doing, getting real

entrepreneurs to teach how they built their businesses, to teach the core

tactics that got that them. If you sign up to mixergypremium.com, you get

that and all the other courses. I absolutely guarantee that you’ll get

results. If you take that course, for example, and in two hours you don’t

see any results, come back to me. I’ll give you 100% of your money back.

Thousands of people have not only said I don’t want my money back, but

continue to be happy members of mixergypremium.com. If you’re watching,

then I hope you go to mixergypremium.com and join also.

Kabir, the thing that you did was exercise. Why is exercise something that

you thought so important? In the pre-interview notes, you said, “That’s

what helped me get through some of the tough points.”

Kabir: I think it’s just a tactic, right? Everybody, every human being has

their own tools they use in their toolbox to help them manage through

stressful times. For me, exercise and the frequency I can do it. Everyday

is the ideal and unfortunately, I’m not quite at the schedule where I’ve

gotten that into my daily routine, but as closely as possible and really

just for me it helps manage the stress. I think everybody is going to find

what that is for themselves.

Andrew: Yeah. I could see how that is tremendous. I keep saying that Tim

Ferriss, when he was here, he’s one of the few entrepreneurs, few writers

who talk about health, I asked him, “Why would you want entrepreneurs to

invest into exercise? Why is it important?” He said, “Look, there are going

to be times in business when you’re at your low emotionally, when you’re at

low maybe financially and at those points, I know for myself I tend to

doubt myself, but if I go out for a run and I do really well in the run or

if I do something else like cycle and I do really well there, then I feel

like, hey, no, I’m not a big loser. I’ve got something going on. I can’t

control my own success. If I did it there, then I could bring it into the

office.” For someone who like you, you told Jeremy, that you’re not a huge

workout person, that if you can conquer a workout, then maybe it might make

you feel like you can conquer anything.

Kabir: Yup, yup, that’s right on.

Andrew: All right. First of all, Kabir, thank you for doing this interview.

I always say to the audience if they got as much out of the interview as I

did, that they find a way to say thank you to you. I recently got an email

from Tim Sykes. He goes, “I’m down in the Bahamas meeting with my new

favorite broker, SureTrader. One of their newest employees listened to my

interview on Mixergy and saw that SureTrader is in the Bahamas and so he

applied for a job there and got it. Funny story, just a young, ambitious

kid.” I would say this guys, if you hear anything in these interviews, go

take action. If you see someone who you’ve gotten something out of like I

did from Kabir and like you probably did if you’ve listened this far, find

a way to say thank you and connect with them. Hopefully, you’ll get to work

with them, but at the very least, say thank you like I’m doing right now.

Kabir, thanks for doing this interview.

Kabir: Sounds great, Andrew. Thanks for the opportunity.

Andrew: You bet and thank you all for being part of it.

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  • http://www.JiansNet.com/ Jian

    Yes, exercise is so important. Everyday I walk at least 2 miles, being doing this for 3 years now. Feeling much better physically and also mentally, in addition to keep body weight in check ;-)

    I feel like enterprise market is difficult to crack without a big crew, but for personal startups, consumer market is easier to make a living…

  • http://www.facebook.com/ben.wolff.54 Ben Wolff

    Andrew, I’m really glad that you’ll be interviewing more CEO’s and companies with Enterprise Software offerings!!  Thanks

  • Anonymous

    “If you care about profitability, don’t miss it.”  Lol, very nice sales copy Andrew.

  • http://www.mycurls.co.uk/ vicky

    Great interview Andrew. Off-topic suggestion but it would be nice to see a more balanced range of male/female interviews 

  • http://mixergy.com Andrew Warner

    :)

    How have those intros been sounding?

    I took Lewis Howes’ feedback to heart. In his interview he said I should promo what’s coming up.

  • http://mixergy.com Andrew Warner

    Thanks. I should be doing more of it.

  • http://mixergy.com Andrew Warner

    I agree.

    I have a hart time finding proven female founders. I could use some help with that, but every time I ask for help, I get intros to women who run get-rich-quick sites. What I really want are women who run successful tech companies,  like Appature or Weebly.

  • Anonymous

     In general they’ve been very effective, you’ve got me to click through many times,

    That one was just funny because it is so blatantly obvious that everyone cares about profitability I had to comment. 

  • http://www.salesprocessengineering.net Justin Roff-Marsh

    Enterprise doesn’t have to mean Fortune-500. 
    In the US (unlike Australia, where I emigrated from) there’s a huge mid-market (companies with revenues in the $100m-$500m range). These are pretty easy to sell to — partly because the founder still tends to be the CEO.

    In my view, as a start-up, it’s much easier to play here. This is because you can charge enough money to fund development. The challenge is not to get addicted to consulting!

  • http://www.JiansNet.com/ Jian

    Hi Justin,

    Thanks for the insight, that’s very helpful. I have a software service to get into, as worked in the eCommerce area for a long time. So I will seriously look into the mid to small business market and try it out.

  • http://www.ipyxel.com/ Tom Fang

    I think the difficulty in joining this enterprise revolution (and part of the reason why enterprise is so behind consumer) is not understanding the problems associated with different businesses and industries out there that are not consumer focused.  If you don’t work in that industry, it’s very difficult to understand what they need, or even know the industry exists!  I think this is precisely the reason why there are fewer entrepreneurs tackling enterprise.  Enterprise intrinsically breeds less entrepreneurs within its industries (it’s corporate).  Entrepreneurs may leave their industry to become entrepreneurs but there isn’t a buffet of problems available to them that they solve in other industries.  Appature seemed to have started due to close link with Kabir’s father being in the industry, who has his own network.  I wonder if there is a good way to really shop for problems.

  • http://www.salesprocessengineering.net Justin Roff-Marsh

    I think Kabir hinted at a method for this (shopping for problems).

    He talked about a coming technological revolution in enterprise. I think you can research all the existing enterprise technologies and look for areas where the incumbents are wedded to old architectures.

    We have a client in Australia who recently told me they built their own ERP. I almost laughed-aloud at the thought of this, so the owner took me downstairs to their distribution center and gave me a tour. Their operations — and the software that reports them — are world class.

    He explained that ERP software has become so complex that it was easier for him (with s/ware experience) to build a team and write his own than it was to buy a system and pay tens of consultants to configure and customize it.

    I think there are many opportunities to do what salesforce has done and reinvent existing solutions. The challenge is to reason from the existing solution, back to the underlying problem and then back to a radical new solution.

  • http://twitter.com/ThompsonAder Thompson Aderinkomi

    I second that.

  • http://mixergy.com Andrew Warner

    Thanks.

    I’ll keep looking.

    Let me know about anyone you think I should interview.

  • http://mixergy.com Andrew Warner

    Yeah. That’s why I tried it.

    The other thing I’m trying is tying the message back to the audience. So instead of, “how he did xyz,” I’ve been trying, “if you care about xyz.”

  • http://twitter.com/CameraBooru CameraBooru

    Try the founder of ShopLocket. She’s based in Toronto and her business is basically a stripped down version of Shopify for shoestring businesses with only one or two products to sell. I don’t know her persoanlly, but  from what I’ve read about her she has a pretty interesting story.

    https://www.shoplocket.com/

    Richard

  • http://mixergy.com Andrew Warner

    That would be excellent, but do you know how big the company is? I want to keep within our focus.

  • http://www.salesprocessengineering.net Justin Roff-Marsh

    Awesome product idea!

  • http://twitter.com/CameraBooru CameraBooru

    I’m not sure. According to TechCrunch the company got over 100 thousand signups in its first month and that was a few months Try emailing her.

  • http://collaborable.com/ Eric Ingram

    I’m working on a platform to address this: ”
    ERP software has become so complex that it was easier for him (with s/ware experience) to build a team and write his own than it was to buy a system and pay tens of consultants to configure and customize it.” — The goal is to create a system that makes custom software like this much more efficient than it is now.

  • http://collaborable.com/ Eric Ingram

    Great interview — The early part of this story sounds a lot like what I’m going through now. Bootstrapping with early customers, building software, dreaming about where it will all end up.