This week’s episode of Exit Stories features Bronto co-founder Chaz Felix, who built the Durham-based email marketing startup alongside co-founder and GrepBeat Godfather Joe Colopy until Bronto’s $200 million exit to Netsuite in 2015. Felix is a frequent presence in Colopy Ventures World HQ these days since he works alongside Exit Stories host Kevin Mosley (and the GrepBeat Godfather) as an Operating Partner with Jurassic Capital.
Tune in next week to hear the second part of this episode, in which Chaz and Kevin reminisce on the good old days at Bronto and speak more about the company’s unique work culture. This two-parter will wrap up the season, which makes this a great time to thank our season sponsor, Vaco.
Here are some key takeaways from this episode:
- Sometimes, you’ve just got to be gritty: Felix and Colopy invested a grand total of $10,000 to start Bronto and never took outside funds, so the startup hustle was real. They started the company with desks and chairs from Durham Surplus and a desktop computer in Joe’s living room, then moved into a Brightleaf Square office that didn’t have phone service. How did they continue to grow their business during this time? They started out local and put users first. “We really were focused on users: ‘Let’s take users, and turn them into customers, and then let’s start getting customers,’” Felix said.
- Never overlook the importance of “the hustle”: As Felix puts it, “We did the hustle. It was Chamber of Commerce meetings, it was speaking to marketing associations, it was referrals, it was door to door, it was taking the big Bronto inflatable to bars and restaurants and just sitting there and waiting for people to start talking to us. It was whatever we had to do to get the word out and just start moving.” (18:12)
- Here’s what to do when you get from “Zero to One”: Flash forward a couple years and Bronto has moved from Brightlead to Meridian Parkway and finally to the American Tobacco campus, while the founders are able to start paying their own bills and not just the company’s. Their first key step to the rapid growth was building out their management team by hiring vital positions like directors of marketing and sales. Secondly, the co-founders got a handle on their margins by finding more predictable sources of income than local customers could offer. Their newly hired sales and marketing directors teamed up to test putting money into potential sales channels, like Google AdWords. Thirdly, they found their “secret sauce” for growing a sales team: hire people with a couple of years of sales experience and develop them organically. All the while, they kept an eye on their key metrics. “We just started to play with these things and slowly put more money into them and then execute, and obviously take care of our customers,” Felix said. (28:41)
- A multi-dimensional scale: As Felix notes, software companies can often level out at a certain amount of sales, be it $10 million or $50 million. Bronto didn’t want to do that. In order to avoid plateauing, Bronto created new, innovative leadership roles—like that of host Kevin Mosley, a Bronto alumnus. It also created new offices beyond North Carolina and even beyond the U.S. to reach different markets. Bronto’s final “dimension of scale” was changing what it provided customers, moving from product to platform in order to transition alongside the market. “So, moving from product to platform, and from whatever you’re operating into a more global view of the markets, geographically or by industry that you’re selling into—that’s how you scale from $10 [million] to $50M,” Felix said, “And you need people along the way. You need, certainly on the leadership team, some people that have been there, and you also need new roles.” (41:00)
You can listen (and subscribe!) below to this episode. And don’t forget to come back next week for Part II, which will also be the season finale.