#111: Bootstrapped Then Raised VC Funding Before Selling to Salesforce for $250 Million
Sep 20, 2024
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John Stewart, a tech entrepreneur known for creating and selling an engineering services business, shares his transformative journey in building MapAnything, a Salesforce integration services company. He discusses the shift from bootstrapping to securing VC funding, the rapid growth to over $2 million ARR, and the eventual $250 million sale to Salesforce. John emphasizes the vital role of sales and distribution in a startup’s success and reveals insights from launching his new venture, Fastbreak.ai, focused on optimizing sports schedules.
John Stewart's transition from a services-focused model to a software-driven approach was essential for scaling MapAnything's growth.
Strategic venture capital funding played a crucial role in accelerating revenue growth at the right time, emphasizing financial timing's importance.
Stewart's ongoing journey with Fastbreak highlights the necessity of adaptability and leveraging past experiences to build scalable technology solutions.
Deep dives
Bootstrapping to Success
Jon Stewart's journey with Map Anything illustrates the potential of bootstrapping a business before eventually seeking venture capital. Initially starting as a Salesforce services company in 2009, Map Anything pivoted towards creating a software product after identifying a market need for mapping solutions within the Salesforce ecosystem. Early on, a key customer prompted the development of a mapping tool, which initiated the company’s path toward software as a service (SaaS). By the time of acquisition by Salesforce in 2019, Map Anything had grown to $25 million in recurring revenue and boasted a peak employee count of 225.
The Shift from Services to Software
Stewart highlights the crucial transition from a services-oriented business model to a software-focused one, which is a common challenge for many founders. The early services revenue enabled the company to invest in software development, leading to a product that resonated with the market. Their initial offerings evolved as customer feedback shaped the product direction, leading to the eventual discontinuation of less successful products. This agile approach to product development not only secured initial traction but also laid the foundation for scalable growth in the SaaS sector.
Navigating VC Funding
Securing venture capital funding was a strategic decision made only after achieving significant recurring revenue, demonstrating the importance of timing in financing. The early revenue growth, aided by a revenue loan that provided necessary capital without diluting equity, validated the team’s market assumptions and product fit. When it was the right time, the Series A funding was channeled into sales and marketing efforts, leading to substantial revenue growth. This strategic use of funding allowed the company to effectively escalate its operations and market presence, resulting in a successful Series B round just over a year later.
The Salesforce Acquisition
The acquisition by Salesforce in 2019 not only provided a lucrative exit for the founders and investors but also positioned Map Anything as a valuable asset in Salesforce's expanding product ecosystem. Stewart's close alignment with Salesforce through previous funding rounds and board participation laid the groundwork for a streamlined acquisition process. The integration experience highlighted the differences between managing a startup and operating within a large corporate structure, emphasizing the need for consensus-driven decision-making. The transition was beneficial for both parties, as Salesforce leveraged Map Anything for its Field Service Lightning product, showcasing its strategic value.
Lessons for Future Founders
Now, as the founder of Fastbreak, Stewart emphasizes the ongoing importance of building scalable technology and leveraging previous lessons learned from his earlier ventures. He advocates for a focus on sales and distribution as the most critical elements for SaaS founders, noting that revenue growth resolves many challenges faced by startups. Drawing from his experiences, he stresses the importance of designing technology with foresight to accommodate growth and market demands. Ultimately, the journey from building Map Anything to creating Fastbreak underscores the necessity of adaptability, effective use of capital, and strategic foresight in navigating the startup landscape.
John Stewart created and sold an engineering services business, then grew a Salesforce integration services company before building some early software products. One of their software experiments allowed Salesforce customers to see and interact with their customer data on a map. When customers paid for it and revenue grew, he and his co-founder wound down services and focused on their mapping product.
MapAnything grew quickly to over $2M ARR as a bootstrapped software company, with some revenue-based financing from Lighter Capital to help test their growth plans. When they focused on field service route optimization and grew quickly, MapAnything raised several rounds of venture capital to grow even faster by focusing its sales and marketing efforts within the Salesforce ecosystem.
MapAnything reached $22 million in ARR before Salesforce acquired the company for $250 million. John stayed on with Salesforce for six months before moving on. John and a co-founder launched Fastbreak.ai three years later, a sports schedule optimization platform for professional and amateur sports leagues.
Quote from John Stewart, former CEO of MapAnything
“I tell founders most often that you really need to focus on sales and distribution. As a CEO of a startup in the tech space or SaaS, the only thing that really matters is revenue growth. Technology is technology. Even if you have unique IP right now, it won’t be unique soon enough.
“So you need to figure out your go-to-market motion. That’s the single most important thing. Revenue cures all ills. It doesn’t matter what’s going on in the company as long as revenue is growing. It’s all about revenue growth more than anything.”
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