One of the key things I ask when I’m interviewing an entrepreneur on the Startup50K podcast is; what was the first step they took in growing their company. This is by far my favourite question and where the magic sauce is.
In the life of a business, there are very often different engines of growth and the engine that grew the startup in the beginning isn’t always the same engine that powers the company once it’s mature. An engine of growth is what gives an entrepreneur their break and the resources they need to capitalize on an opportunity.
I want to understand what was the first break-through in getting from no money, no cashflow to a multi-million dollar company. Was it a step-by-step process building on smaller previous successes, was it a large capital raise and selling off equity or did the founder build a business outside their current business and use that company’s cashflow to fuel and kickstart their new business.
In the early stages entrepreneurs are vulnerable and when the cash stops, the business stops. So to understand the engine of growth of these hyper-growth companies is one of the most important things I (and listeners of the podcast) want to understand.
When I ask questions around this, a few entrepreneurs have tried to side-step the question and circle around to another topic, often about the issues they were facing – instead of discussing how they got their start or how the business works.
However some entrepreneurs are completely transparent about how they created their business and when they are, it’s incredible to sit there and listen. So I thought it was worth sharing a few stories from my interviews with successful entrepreneurs. The entrepreneurs below provided a completely transparent look at how they built their companies, so many thanks to these show guests for sharing the full story of their business.
(in interview order)
SpotJobs – 850,000 users, 3rd largest jobs board in Australia
Jake Williams and Lewis Romano came up with the idea to create SpotJobs – a casual / non-career focused jobs board. They were 22 and 24 when they started their company. They spent 12 months pitching their idea to investors before securing $2.5 million to build the company and grow it into a $9million+ company (at the time of interview)
However what was unique about this raise is that Jake and Lewis didn’t have a working product, (obviously) no sales or a website prototype and still managed to raise $2.5 million. The key things they did have; a “really good slideshow”, a unique and well researched market opportunity and the drive to see the business created and an introduction to a wealthy Melbourne family that was a majority shareholder / funder.
These two guys were real gentlemen to work with. Many thanks to them for sharing their stories. Their interview is on the podcast under episode #1.
Vinomofo – $40million in wine sales in 4 years
Andre Eikmeier co-founded Vinomofo – a group buying / discount wine online retailer after a failed acting career, a job in phone sales selling wine and a failed business with his father (“failed” was Andre’s term). Vinomofo went through several pivots and Andre himself went through hard times financially before he and his co-founder Justin came up with the group-buying / discounted wine sales approach that caught fire.
Despite Andre’s previous wine-related business ideas (a wine-review platform) not working, he had built a large community that responded strongly to the cheap wine pivot and the company grew quickly. I’d put this one down to a good / desired product and a listening community.
Andre was another super honest guy that I have personal respect for and I think everyone in the room got a sense of the personal struggles he went through on the way to building his company. See episode #2 of the podcast for more info.
[Part 2 coming soon]