Big goals, big numbers, Bigcommerce
BigCommerce co-founders Mitchell Harper (left) and Eddie Machaalani. Photo: Supplied.
A chance meeting in an online chat room may lead to what Eddie Machaalani and Mitchell Harper both hope will one day become a billion dollar company. The pair are co-founders and co-CEOs of Bigcommerce, an online platform that helps small businesses create online stores.
It was 2002 when Machaalani and Harper met in a chat room about computer programming. Ten years later they are business partners of an organisation that powers nearly 30,000 online stores and has processed more than $1.2 billion worth of sales in its first two-and-a-half years.
For Machaalani, 34 and Harper, 30, the chat room meeting was serendipitous. Discovering they had common interests and similar desires to be their own boss, the pair founded Interspire in 2003. It offered different products for small businesses to create an online presence. According to Machaalani, they were able to double their revenue every year. By 2009, they had 15 staff.
But this success came at a price. Both co-founders were working 14 to 15-hour days, often seven days a week. They achieved this growth not only through sheer hard work but also by bootstrapping the business. However, they knew they wanted to grow bigger. Much bigger.
They wanted to pivot their offering to focus mainly on creating a software-as-a-service platform that small businesses can use to create online stores. That's how Bigcommerce was born.
"Biggest in the world"
In Machaalani's words, they wanted to be "the biggest in the world" in their industry. But to do this, they had to invest in technology, which meant finding investors.
"We got on a plane and did a tour, with meetings lined up with 10 potential investors," says Machaalani of their trip to the US. "By the middle of the trip we had a term sheet from General Catalyst Partners. It was an amazing feeling."
Harper adds: "I'll always remember the moment the term sheet was put in front of us and we had to keep a poker face."
Both Machaalani and Harper were quietly confident they would raise the money they needed. "Unlike most start-ups, we already had a track record," says Machaalini. "Our business with Interspire was turning over $5 to $8 million in revenue. We already had 10,000 regular paying clients."
Coping with fast growth
They achieved this growth [with Interspire] not only through sheer hard work but also by bootstrapping the business. However, they knew they wanted to grow bigger. Much bigger.
In order to handle fast growth, Machaalani and Harper had to get out of their own way. Machaalani says:
"We hired a rock solid executive team so that we could focus on our strengths."
Bigcommerce now employs around 200 people, a number they anticipate will double by the end of next year.
The pair raised $15 million in March, 2011 in their first round of funding. The second round of $20 million was raised this June. These are big numbers. But the partners have big plans for the business and look towards behemoths like Amazon and eBay for inspiration. Harper says: "We've grown three times faster than any of our competitors. We got to $1.2 billion in revenue quicker than Amazon or eBay did when they launched."
Now the Sydney-based business partners have offices in their home town (with about 65 staff) and Texas, USA (about 100 staff). The rest are contractors across the world.
Accepting investment of $35 million meant that both Machaalani and Harper had to dilute their ownership in the company. "Initially, when you think about your ownership being diluted, there is a hesitancy," says Machaalani. "But we wanted to build a billion dollar company. You just can't do that by bootstrapping. Ultimately, we were OK about owning a smaller part of a billion dollar company that's a global brand than holding a large chunk of a smaller company."
Letting go of control
Machaalani says that one of his challenges has been letting go. "There was a transition period where I felt a bit lost," he says. "I thought: 'What am I supposed to be doing now?' I had stepped back and brought on people who are way more talented than I am. I realised that my job is to make the people around me more successful."
Harper adds that it can be difficult to manage a workforce of people located in two cities on opposite sides of the world. "You can't just walk up to them and ask a questions," says Harper. "You have to send them an email or organise a time to chat or Skype."
The importance of mentors
Both Machaalani and Harper champion the value of mentors and believe that seeking the right mentors has been an integral part of their personal and business growth. Harper says: "One of the first things we did was to find role models or mentors at companies that had achieved what we wanted to do. We bribed them or annoyed them for long enough until they decided to mentor us."
In order to do this, the pair simply hustled. "We sent a lot of emails and we'd start off with one call," says Harper. "After that we'd ask when we could talk to them again. Entrepreneurs love sharing their knowledge with people who will execute what you teach them. We'd get off a call and spent the next week executing like crazy. By the time we'd get on another call, they were blown away."
These mentors included: Ryan Allis (co-founder iContact), business coach Casey Gollan and Adam Berry (serial entrepreneur). The pair also each have personal coaches from Tony Robbins' organisation. They speak with these coaches for a phone session at least once a week.
Apart from bouncing around ideas and strategy, Harper says these coaches have been instrumental in helping them create the right mindset to truly think big. When you're aiming to be "the biggest in the world", you need to believe you can get there. "Talking to these mentors really laid the foundations in our heads. You think to yourself: I'm not really too different from this guy. He's about the same age. The only thing that's different is that he's got a bigger mindset and a bigger belief in what's possible. It helped me get comfortable with the numbers we were trying to achieve."
Now that they have reached a certain level of success, Machaalani and Harper regularly mentor other start-up founders.
Learning and leading
Both partners are also avid readers, looking towards business books for inspiration and ideas. Machaalani's current pick is Extreme Revenue Growth: The Guide for Silicon Valley CEOs by Victor Cheng, while Harper is a fan of Your Inner CEO: Unleash the Executive Within by Allen Cox.
While it may seem like a dream run for Machaalani and Harper, they both concede that life as an entrepreneur is like being on a rollercoaster. Harper says: "One week you're up, the next week you're down. That's one of the gifts and curses of being an entrepreneur. When you're low, it's easier if you have a co-founder."
Machaalani agrees. "I don't know if I could do it without Mitch," he says. "Having a co-founder is like having a sanity check. You just can't buy that."