This is part of our “Bootstrapped, Profitable, & Proud” series which profiles profitable companies with over $1 million in revenues that never took VC.

“Our outfit Envato was started by myself, my big brother, my wife and my best friend,” says Collis Ta’eed (pictured below on the cover of Nett magazine). “We put in a bit of money we each had and mostly just worked hard.” In this Q&A, Ta’eed answers questions about Envato and its path to success. He will also be answering reader questions today (Oct 7) in the comment thread so feel free to ask a question!

What does your company do?
We do two main things: First we run sites that help people earn an income. These are our biggest sites in revenue and include ThemeForest which is the largest marketplace for buying and selling website templates and WordPress themes. In the early days selling with us would just be a sort of hobby income. Then after a while there were a few people who actually could manage to earn a living. These days there are guys earning, quite literally, tens of thousands of dollars a month. These sites are called the Envato Marketplaces, and there are 7 of them, with an eighth launching three days from the time I am writing this :-)

nettThe second part of what we do is a set of sites to help people learn professional creative skills. These are our biggest sites in traffic and include Psdtuts+ which is the largest Photoshop tutorial site online. We also have tutorials published on a variety of other subjects including audio production, motion graphics, illustration, photography, mobile development and web development. The full network is called Tuts+ and there are nine sites with a tenth launching in a couple of months.

So learning and earning is what we do chiefly.

But we also operate a few other sites and services including Creattica which is one of the biggest design galleries online, FreelanceSwitch which is the biggest and oldest blog dedicated to freelancing, and AppStorm which is a very rapidly growing set of app review blogs that includes Mac.AppStorm, the largest blog dedicated to Mac Apps.

So basically, we do a lot of stuff :-) As you might imagine it’s difficult explaining to someone at a dinner party who casually asks what we do for a living.


How did the business get started?
Back in 2006, our plans were much more modest. We actually just wanted to build a marketplace for buying and selling Adobe Flash. At that time I used to sell my files on iStockPhoto, but as you would assume from the name, they didn’t give a lot of attention to Flash guys.

So we planned out a marketplace called FlashDen, and I put up a job ad for a PHP developer. But instead we got an email from a developer I had briefly known at an old job whose email text was quite literally “Pick me, pick me!” When I called him he told me that PHP was really not what we should use, rather we should build the project in this thing called Ruby on Rails which he’d gotten into. Back in February of 2006, Rails was still pretty new, but I trusted Ryan and we went for it.

Using Ruby was one of the best cultural decisions we made as it brought us to using test driven development, version control, and a lot of agile techniques. These days here in Melbourne, Australia we operate one of the largest, most respected Ruby outfits.

How much cash did you need to get up and running?
So to get started we spent about $40,000 or so, plus a lot of sweat and hard work. The money came from the cofounders’ savings and was pretty much the sum total of those savings!

Early on the project didn’t go as we’d hoped. By July we’d burned through all the money, exhausted our credit cards, and were busy working our freelance design jobs as well as trying to build and work on FlashDen at night time. For a little while there I recall wondering if the whole thing was going to flop.

But happily by August we chopped out a lot of the ‘nice to have’ features, cleaned it all up a bit and managed to launch.

Ta’eed: “Back in late 2009 after we’d moved to the new office in Melbourne.” Back row, L to R: James, Naysan, Oz, Justine, Lucas, Stu, Rod, John, Skellie, Erin, Jordan. Front row seated, L to R: Collis, Fred, Cyan, Vahid, Ryan.”

How successful is the business?
The best testament to our success isn’t really in numbers, but in people. On our marketplaces we have forums where on occasion users spontaneously start threads about their experiences with us. You can read the biggest thread here.

Still I understand why you’d want numbers! I generally prefer not to share outright revenue, but I can tell you the following things:

  • Our total network traffic each month is north of 50,000,000 pageviews.
  • Our top seller on the marketplaces has sold $500,000 in gross sales in under two years – that’s just ONE guy!
  • The top sellers on every one of our marketplaces earns four figures a month, and on the larger marketplaces there are quite a few in the five figures.
  • Our educational blogs, which aren’t really built for outright profit, are self sustaining and have seven figure revenues themselves.

So things are going well! Well enough that this week we were able to announce a dramatic improvement to our author rates to ensure they get the best possible earnings we can offer.

What is your work environment like?
We have a very flexible work culture that is focused on putting good, smart people in positions where they have responsibility and trusting them to do a great job. What the ‘work’ actually looks like is much less important to us.

This attitude is in no small part derived from the fact that over half our staff are remote, so frankly who knows how and when they work. What is important then is that they do a stellar job. If that’s accomplished in an hour a day while wearing their underwear on their head, well who am I to say that’s not an awesome way to work?

Over half our staff are remote, so frankly who knows how and when they work. What is important then is that they do a stellar job.

I also think we have a very happy team, who are very capable and talented. Frankly I’m quite amazed we managed to get so many great people. Luckily I think good people build good culture which brings more good people. It’s one of those virtuous cycles.

group shot
Ta’eed: “Chicago September 2010, most of our remote team with a few Australian’s thrown in the mix, at Chicago’s awesome Catalyst Ranch on day one of the first ever team meetup.”

What’s your goal with the company?
My personal goal? To build products and sites that are genuinely useful for people. So with our marketplaces I hope that we can build the best marketplaces for our authors to sell on. They won’t ever be the only marketplaces, but I want them to be the best for authors, so that means good rates, lots of community to be a part of, a friendly team to interact with and who listen to the community, features that help authors, and just generally a place you’d be proud to sell through.

For our educational sites, I want us to build a platform that offers professional grade skills in an environment where it costs very little, or better yet, nothing to learn them. I’d like to see us expand the variety of things we teach continuously further and further, to broaden our reach, and to get more involvement from our community in helping educate each other.

Any examples of a time you ignored the advice of others and went your own way?
I suppose you might say that most people would tell you not to start so many different sites. Generally speaking lack of focus is meant to be the kiss of death for entrepreneurs. Certainly at times I have been told, rightly or wrongly, that we need to focus on what we have, not build new sites. To be honest I love creating new things enough that I’m not sure I had much of a choice in the matter :-)

What’s been the biggest challenge you’ve had to overcome as a company?
For us I think the biggest challenge has been levelling up into a company. Early on we were a bit of a tin-pot organization and that worked because we were small and we could play things somewhat fast and loose. But in the last couple of years we’ve had to come a very long way in things like how rigourous our accounting practices are, how secure and sustainable our infrastructure is, how our staff structure works, and how much risk we can take or expose the business to.

I think with growth has come a lot of responsibility on the company. When there are thousands of people who earn an income, and potentially their entire living, through your websites, it’s very important to take that responsibility seriously.

There’s also only so far unstructured group dynamics can take you. As you get larger you have a continual battle between adding more structure and process, and keeping things as organic, dynamic and fluid as they were early on. You need the strucure and the process to scale, but you need the fluidity because that’s what makes you successful and exciting. So if the army is on one end of the spectrum as the ultimate rigid, structured and sprawling monster of an organization, and early stage startups are on the other end as the quintessential anything goes environment that are suited to small groups of people – well you have to figure out where your organization is going to sit, and then get it there. This is a continual challenge that I think every growing organization faces.

As you get larger you have a continual battle between adding more structure and process, and keeping things as organic, dynamic and fluid as they were early on.

What else is interesting about your story?
I think it’s interesting that we started with absolutely zero business experience. Three of us were designers, and my big brother was a physicist. This was good because we weren’t risk-averse, we didn’t really know just how much work we were in for, and sometimes we did things that someone with more experience simply might not have thought of doing. On the other hand it wasn’t so good when it came to building strong foundations for the company. Consequently over the course of Envato’s life, we’ve spent a considerable amount of time going back and laying better foundations for things which we simply didn’t know about. If we ever start another company in the future, we’ll know all about how to set it up right to begin with, but on the other hand I’m sure we’ll be a lot more wary of risk.

What advice do you have for someone considering starting a business?
I think if you love what you do, and are willing to work hard, then it’s a really fantastic thing to do. It can be a bit all consuming, but it can also be incredibly rewarding. For me, certainly it’s the best decision I ever made.

Visit Envato
More “Bootstrapped, Profitable, & Proud” posts [Signal vs. Noise]

A few of the Envato Marketplaces:

A few of the Tuts blogs:
Nettuts+ (aimed at web developers and designers)
Audiotuts+ (for musicians, producers and audio junkies)