You Can Bootstrap Your Start-Up: Tips from EventMobi
My company, Shyndyg, is a bootstrapped start-up, and we’ve always noticed when we tell people we’re bootstrapped, the reaction is almost one of pity. It’s not always an option for every company, but there are distinct advantages to being a bootstrapped start-up: freedom, the ability to easily pivot or test business models without asking permission, and being completely removed from the “House of Cards”-esque roller coaster of always fundraising.
This week, I spoke to Bob Vaez, Co-Founder and CTO of EventMobi, a software which helps organize large events for corporations.
Karen: Walk us through your discovery process of creating your product. How did EventMobi come to be.
EventMobi came about in early 2009 after four other previous startup failures, and at a time when we realized we were on the brink of what would become the “mobile revolution.”
I was previously working at Nvidia as a Product Engineer in the mobile chipset division when our CEO announced that our department — building chips for future cell phones — would be responsible for a significant portion of the company’s revenues in just a few years. Hearing this and having just bought the very first iPhone (pre-app store) I knew I needed to be a part of this revolution.
I was playing around with a few ideas at the time but EventMobi made the most sense and seemed like the simplest idea to validate. I used to attend quite a few trade shows and really loved being at conferences but it was a pain carrying around bulky show guides, tote bags full of useless paper, and the inability to view my schedule on my phone. Our idea was to simply turn paper brochures and guidebooks at events into an interactive mobile experience.
Karen: You bootstrapped your company for a long one (presumably taking the profits and reinvesting them.) why did you make that decision?
Bob: It’s easy to answer this question knowing things worked out for us bootstrapping, but at the time it was a really tough decision. Ultimately though, I truly believed my time was, and still is for that matter, better spent working with our clients than pitching to VCs. Raising money takes a lot of effort, time, and energy and it is almost impossible to raise funding at the idea stage of a company, especially if you are not going after the mass market. So we just focused on getting our basic product up and running, and we were lucky to have early paying customers to help keep us afloat.
We originally had a very humble vision for EventMobi. We thought we would stay as a small consulting company of 4-6 people in Silicon Valley and just churn out apps for clients. So raising money early on never really made sense. Being engineers, though, we quickly got tired of this repetitive and inefficient cycle of building a new app for each client.
We decided to automate this process and build a platform that would create these apps for us. We called it EventMobi. Another upside to this was that it created a much better experience for our clients, who were generally non-techie event planners, by giving them the power to create their own custom mobile event apps in a matter of minutes.
Building a product however is very different than consulting and we knew we had to staff up quickly and raise funding. And so to kick things off, I made the initial investment with my savings and by cashing in all of my RRSP and 401k retirement saving plans.
So we set clear milestones we needed to hit to keep going in terms of free trials, paid clients, and product development. Miraculously, as we neared every milestone and had pretty much run out of cash, we would get new paying clients to fund the next few months. So the question became, should we go out there and pitch to VCs, or spend that time focusing on our clients and growing the business? We chose the latter and I like to think our existence was decided by our clients’ satisfaction; they were the ones that were funding us! I also strongly believe that this organic growth defined our culture around customer service and made us a stronger company.
It was definitely a long and bumpy road but we stuck it out. You need to have some thick skin to run a bootstrapped company month after month! We (the founders) didn’t take salary for over two years and even now, we barely pay ourselves much. Every time we can do so, we always choose to grow the business instead of rewarding ourselves. We didn’t start the company with an exit plan in mind but rather, to create an awesome company we would love to work in for years to come. There’s a bigger picture here we’re trying to achieve and now we’re in complete control of our own destiny.
Karen: Did you follow Lean Startup principles? What did your first year look like?
Bob: Although we weren’t aware of the ‘Lean Startup’ at the time, we definitely learned from our previous startup failures and applied these principles heavily. In fact sometimes lack of resources nurtures ingenuity, risk taking, and discipline. To stay lean, we focused on simplicity and building the product fast, taking it out for a spin and bringing it back with feedback from the street to build the next iteration. Nothing was constant in our company and we learned a lot by failure and trying different approaches.
We didn’t make a single dollar in our first year and it was full of ups and downs, rejections, and hustling. Our first pitch was a simple PowerPoint presentation with screenshots. They loved the idea and we had just 30 days to build it and test the app live at their event! It was an amazingly intense period to get something running and while we missed the deadline, we developed a working prototype and ended up taking it to the event just to show people what we built and to gather feedback. We did this at two others events and got amazing feedback from attendees, event planners and their exhibitors. This gave me the validation I needed to quit my job, drop my MBA, and move from Silicon Valley back to Toronto to save money and ramp up the business.
Unfortunately as I decided to focus full time on EventMobi, one of our technical co-founders left us, as he wasn’t able to manage the risk of the startup life along with his family obligations. It was a huge risk and none of us knew what was going to happen and how fast the product would be adopted by customers. The next eight months were filled with weekend hackathons with my brother Bijan who became the lead technical co-founder and a buddy of his from university. The first year was filled with tons of rejections and the daily fear of failure followed by surges in excitement and an optimistic future; it went back and forth like that for a while.
Karen: How did you get your first big client? What lessons did you learn from that experience?
Bob: It was around our one-year anniversary and we had a simple product page launched, a mention in an industry publication, and a few clients under our belt, our eventual first big client reached out to us with very specific needs. Not wanting to pass up on the opportunity, we worked closely with them to build out a product that would help solve their problems, knowing well that if we played this smartly, 90% of whatever we built was reusable for other clients in the future. Our dev team was feverishly trying to get as much built as we could to not disappoint them and this push would ultimately lead to us building out a majority of the base of what EventMobi is today.
And even though our growth and leads came primarily through online queries, our success early on was because we got in front of our clients and met them face-to-face at industry events. We talked to them about what their problems were, we discussed solutions, and through that, our team learned exactly what needed to be done. A good first big client is not the one you make a lot of money from, but one that turns into a collaborator to help define the product details, and respects you enough to become your biggest fan and advocate.
This was also how we got the word out. No marketing campaigns or pushy sales, we acted as a source of information, we built credibility, and always delivered more value than what our clients were expecting.
Karen: What was one thing you weren’t prepared for?
Bob: With my previous failing startups and a lack of funding, I was always very cautious of premature growth. Our revenue was unpredictable the first 2 years so I was never sure if we had made it or not. After 2 years, our growth stabilized and in retrospect, I grew the sales and marketing team too late to take advantage of the mobile rush in the events industry. I don’t regret any decisions though. Expanding a sales team too early can be disastrous, so it was better for us to stay on the safe side.
In hindsight this worked out beautifully. Having a small team of Account Managers who took the client from sales through support meant everyone at the company got valuable exposure to industry professionals. This way we were able to build quality relationships and expand our client base organically. We weren’t prepared for the growth to come but we definitely made it work to our advantage in the long run.
Karen: What was your biggest (positive) surprise?
Bob: You don’t need a seasoned sales pro or marketing guru to get your product into the hands of potential clients. We were a team of stereotypical engineers but we knew that if this project was going to turn into a business, we would have to hit the pavement and pick up the phone.
What counted most was passion for our product and devotion to our clients. We kept our product extremely lean. We didn’t have any nice-to-have features and to be honest we were missing a few must-haves but we compensated by going above and beyond to make sure our clients were successful. Passion shines through, and our customers could feel it.
Karen: Did you learn lessons about spending while you bootstrapped? What did you overspend/underspend on?
Bob: We were, to say the least, extremely frugal from day one. Spending money and time on the right things at the right time was a challenge and still is. Early on, we didn’t devote much on operations and our sales would have improved if we hired a bigger team in the second year. As well, a seasoned graphic designer would have helped build the company’s image early on. We ended up doing it ourselves and had to go through multiple revisions later on to refine our brand.
Early on, most of our resources went towards travel and events and while I look back at the amount of money spent, I don’t regret the investment. It built our brand and established us a real player in the industry. Could it have been done more effectively? Perhaps.
Karen: What’s the hardest part of your job now vs 3 years ago?
Bob: Hiring… I’m picky.
Three years ago, hiring was a challenge because we didn’t have any money. Now it’s difficult because we want to hire the best talent but at the same time, attitude and team fit are essential. As a growing startup, time becomes your most valuable resource and delegation becomes the best internal management strategy. So finding people who take initiative, add value, and are willing to learn every single day are the kind of people we look for. It’s difficult but when you put together the right team, it pays off quickly.
Karen: What advice would you give to those starting out now where you were 3 years ago?
Bob: Get out there and try it. Forget the books, startup events, and “serial entrepreneur” blogs and just get out there. Get in front of your customers, talk to them, and show them how you can solve their problems with your product. Don’t worry if your product is not perfect, after you talk to your customers, you’ll learn everything your product is missing. Also, everyone in the company should know how to sell and support clients. Above all else, in the early days nothing is more important than strong relationships and focusing on client satisfaction. Happy clientele and word of mouth has a much higher conversion rate than a pretty landing page, especially when you are a small startup and no one knows who you are.
What’s next for EventMobi?
Bob: We have options, all of which are being explored. We have a team nearing 25 now, and alongside our Toronto headquarters, we have opened offices in Berlin and Virginia to help aid our global expansion supporting 1500+ clients in 25 countries. Our approach to event technology is all about ease and simplicity for event planners. This strategy has worked brilliantly and we’ll continue to introduce new tools to make our customers’ lives easier when it comes to technology.
The world of online, mobile and cloud technology is also constantly advancing and we must continue to innovate to stay ahead of the game. As we become more profitable, we are dedicating a larger portion of our profits to engineering R&D and encouraging the whole team to question the status quo and take the same crazy risks we took three years ago that got us here.
We should talk in a year’s time to see where EventMobi is at that point. We don’t know where this ride will take us.
Karen: Any other advice to other founders?
Bob: There’s a lot of noise in the startup world when it comes to who has raised funding or how many users they have or how much their company is worth. It seems as though cashing out or raising financing is considered “success” these days, over building a strong base and focusing on long term organic growth.
Growing your company, the decision to bootstrap or to raise funding is not an easy one. Take it step by step and know that it will require persistence and hard work to succeed either way! You need to be aware of sacrifices you have to make if you decide to bootstrap your company. Sometimes getting financial backing is the best way to go if you are unable to execute your business plan quickly, other times you’re better off taking it slow and steady by bootstrapping your company. But if you are itching to make that idea in your head a reality, the worst thing you can do is think money will solve all your problems! Get out in front of clients, find passionate co-founders, and never compromise when hiring.
CORRECTION: A previous version of this blog stated that Bijan Vaez was interviewed for this piece. It was, in fact, his brother and co-founder, Bob.