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About the Episode
How do you know when it’s time to pivot from your original idea? Well today’s guest sold his previous company to AOL for $200 million and he talks about his current company and when they knew they had to change course and go after an even bigger idea. Also, listen to the part of the show where he shares how both his companies went through some tough times before finally pulling through.
Darkest Before the Dawn
Quack.com was a voice portal infrastructure company Alex and his team had originally founded in 1988 which answers voice queries over the phone upon dialing a 1-800 number, somewhat similar to Siri. It got the attention of AOL as it was something they were looking to provide to their customers and with its appeal,they were acquired by AOL — for $200 million — and became the platform for a number of telephony services.
Before that though, Quack went through a tough time wherein they were challenged with finances and just had enough to make one more payroll. There were no more additional investors they could get on board despite the fact that they were gaining momentum and getting more users and interest. They planned to work with the current invertors they have and shrink their company a bit, but greatenough, a few weeks after that, the AOL deal came through. They were through a rough 3-4 weeks before the acquisition but the saying, “It is darkest before the dawn”, rang true for their company.
When they moved on to working with YouMail, they went through another challenge wherein three investors promised them a term sheet but within an hour of the same day, all three pulled out. They were left pondering on their next steps and they ended updrastically cutting down on their expenses, re-assessing their company, refocusing on consumers, gradually building the revenue and growing the company slowly and evolve it to a more interesting vision. They are now up to 7 million+ downloads, are breaking-even, have grown the company back to 15 people and were able to scale the business successfully.
Pivoting and Knowing When To
When they signed YouMail with phone carriers, at first they thought they were on their way to success after landing the deals. They then realized that even small carriers had challenges executing and scaling the product and this is when they knew that they had actually failed as they needed the small carriers to execute successfully to be able to close deals with big ones. They have noticed though that there were aspects of YouMail that they were not giving attention to which are actually taking off. They were making no efforts on it and it was doing fine versus making tons of efforts in other areas and it is nowhere they wanted it to be. This is when they decided to pivot and pursue the vision wherein they are seeing some success.
What advice would you give to anyone looking to build a mobile app?
Never give up in getting your audience. Start with an idea that you think is important, build the app and if it doesn’t succeed right away, keep going. It’s not about building the app, it’s about making a difference.
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