Part of the growth strategy for our client, Reed Elsevier, was to build a subscription data business to complement the ad revenues of their entertainment division, Variety. We also recommended that they explore acquisitions to accelerate that plan. Mark Hoebich, founder and CEO of TVtracker, had suggested a similar strategy years before, and effective July of this year it all came together. Below is an excerpt from an interview with Mark that we felt speaks to the challenges of bootstrapping a company to success.
Mark is the classic entrepreneur who knew “there has to be a better way.” While at Fox Television, his task was to constantly track all the new projects across the other broadcast and cable networks. So in 1999, Mark set out to build a B2B solution to track the activity and players for the entertainment industry, and then charge a subscription to the networks, studios, and industry firms who all need accurate and current information as to what is going on in this ever-changing industry. Within the first year he was able to pay back his investor (his father), and a year later turn profitable. To date, he has acquired over 250 of the leading entertainment brands and owns the leadership position.
Altus: How did you fund the company to get started?
Mark: I took out a $20k loan from my dad and paid it all back with 8.5% interest six months later. We got traction pretty early, but I kept things very lean and did not really take a salary. I ended up selling the company [the first time] to iFilm in 2000, which enabled me to draw a salary and expand the company. But in 2001 I decided I wanted to buy the company back. So again, I did not take a salary but tried to pass everything I could through the company. I remember my bookkeeper once said, “Mark, you are paying all your employees more than you are paying yourself.” But I knew that is what had to be done, and knew nobody is going to work for free besides me.
Altus: Why didn’t you take on additional investors?
Mark: When I took the company back, we felt like we had been a little bit burned. We had seen how disorganized so-called ‘larger operations’ can be, and in 2001 there was no investment dollars in the market. I always knew if I brought in investors I would have to give something up. I felt like we had the right people and the right model and should just do it! In hindsight, it was a great way to do it actually. It really forced us to be smart, think lean, be clever with marketing, sales, and product – and really became our culture, which also aligned with the culture of our customers.
Altus: What have been your most proud sales or revenue accomplishments?
Mark: It became interesting to me how you realize you are your own biggest obstacle in terms of sales. Because it’s your baby you want acceptance, and I would end up pricing the product to ensure a win rather than its true value. You end up believing your own value system. And in my case, within a niche and fixed market size of entertainment, there are only so many customers. So l later discovered I needed to raise my prices to achieve our full potential. I found that the most difficult part was walking into those sales calls convincing myself of a premium price. The thing that changed our business most significantly was when I decided to tell companies that we charge based on the size of their company. That model ended up being very successful to increasing our revenues and nobody would challenge me on it.
Altus: What was the biggest mistake you made within Sales and Marketing?
Mark: Oh my god, every mistake…every mistake. Most were spending too much on glossy materials and premium marketing campaigns that would yield zero sales. Our guerrilla tactics were always the big revenue and brand generators.
Altus: What key measures do you use to track sales effectiveness?
Mark: I measure my salespersons’ effectiveness based on the number of sales meetings they setup. I believe if you are presenting to enough companies, then the product will ultimately sell itself. The salesperson, no matter how good or bad they are, can never get in the way of the product. Just get in there!
Altus: How would you define greatness in someone from your sales team?
Mark: I always tell my team that you are entitled. It’s a little like the book The Inner Game of Tennis which is about knowing and believing you are entitled, an equal member in that relationship. In our case, when we reach out to someone, we believe we have something that will really help [our prospects] and when you believe that they are not going to hear fear in your voice, they are going to hear that ‘gentle calm.’ It is that confidence and non-arrogance that will make a salesperson successful.
Altus: What advice would you give to entrepreneurs or division heads leading a new venture?
Mark: My dad gave me some advice when I started TVtracker and said you are going to have 150 things to do every day and you are going to get addicted to Things To-Do lists, where you add and cross off tasks, but to always remember the number one thing on the list should always be Sales. Sell it. Get the money in.