We are constantly asked about who are our biggest investors and our answer is always the same; our customers. This may sound like a trite phrase borrowed from a list of tired marketing platitudes, but it is a cold hard reality here that governs our every action. Let me explain...
While NetCommissions was still just a twinkle in our eye, we made a decision that - for better or worse - set us apart from many of our peers; we decided to self-fund, or bootstrap, our business rather than seek out more conventional funding sources such as 'Angel' or 'Venture Capital' to finance our business.
To understand why, you should know that before NetCommissions, Chris and I had worked together at Centive (aka Incentive Systems) and had experienced what work is like at a heavilly funded VC-backed firm. Centive raised 92 Million dollars in capital in over just a few short years. During our time there (2000 - 2003), we experienced both the joy as well as the pain of riding the 'dot-com' wave with this start-up. Rest assured there were many highs. Foremost is that we had the opportunity to work with tremendous colleagues who were second to none in terms of character and personality. We also had tremendous company funded holiday parties that can only be understood and appreciated in the context of the dot com era in addition to wonderful executive 'off-sites' and memorable sales & service meetings. Being involved in Strategic Marketing, I also saw firsthand how the the marketing dollars we could pour into events like tradeshows, analyst road shows, PR and Google Adwords could quickly build brand recognition and create "Buzz".
But nothing is perfect and as the business grew it struggled to get its arms around the emerging force the web was becoming. Investors grew impatient with the lack of return on business plans and the dream of hockey stick returns diminished. I saw firsthand founders get pushed aside as series A rounds turned into a B, C D, etc. Eventually early investors got washed out during an inevitable "recapitalization" that occurred and basically forced the original investors to take near complete losses. Many friends found themselves escorted to the elevator during what became commonplace "RIF's".
The reality that we saw was that when investors put significant capital into a business, they will have dominant control over that business until they 'exit'. To grow NetCommissions, we felt we needed investors whose goals would be better aligned with those of our customers as opposed to a population whose primary interest was getting out. We wanted our focus to be completely on our customers and refining our solution to keep them happy.
Luckily, we did find investors that met our criteria and shared the same set of values we did, plenty of them - our customers are our investors. These customers saw the value of working with a team whose sole focus was their success. Unlike companies whose financial backers are focused on walking out the door as soon as some "Liquidity Event', "Endgame" or "Exit" opportunity avails itself, NetCommissions is built on a foundation of tight goal alignment between our customers and the business.
Of course we realise that this meant slower growth rates, less focus on markletplace buzz and a comparitive overemphasis on customer satisfaction. Honestly, focusing our energy into a company whose growth would hinge soley on its abiltiy to turn happy customers into fanatics is just fine with us.
By linking our fate so directly with that of our customers, we decided early on that thier needs would always be our first and foremost priority and it remains so to this day. How has this worked out? Well .... 9 years later we are still here and the business continues to reflect our customers success and gets stronger with each passing day.
As 2011 closed, we are happy to report that NetCommissions closed another round of funding with some tremendous new customers. Thank you to all our investors/customers and Happy New Year to all !!