This is part of our “Bootstrapped, Profitable, & Proud” series which profiles companies that have over one million dollars in revenues, didn’t take VC, and are profitable. Note: Mitchell Harper will be answering reader questions in the comments.

screen“I was building online stores for a few years and the off-the-shelf options were horrible,” explains Mitchell Harper, Co-Founder and Co-CEO of BigCommerce. “There were a lot of open source offerings, but they were basic and you needed a developer to customize the code for you. We wanted to build shopping cart software that was innovative and would give you an online store with most of the functionality of or for a few hundred bucks.”

That desire led to BigCommerce, which is now approaching 10,000 paying customers. According to Harper, the company has grown 480% over the last 4 years and is the fastest growing ecommerce platform in the world. It was ranked the 14th fastest growing software company (#633 overall) on the Inc 5,000 list for 2010 and it now has 50 employees spread between its Sydney, Australia and Austin, Texas offices.

From chat room to company
Harper (right in photo below) and partner Eddie Machaalani (left) had each started a content management system already — Harper built SiteWorks, Machaalani created WebEdit — when they met in a programming chat room. They realized they were both in Sydney and eventually decided to join forces to build software together under the name Interspire.

bigcomm_foundersWhen they launched the Interspire Shopping Cart, it attracted thousands of businesses. Customers weren’t completely satisfied with the installable software though. Harper says, “We had so many people telling us how awesome it was, but that they didn’t want to have to deal with finding their own servers, installing it, upgrading it, etc. So that’s where the idea for BigCommerce came from.” BigCommerce lets customers create customized online stores via the web. These retailers can then access orders, products, inventory, and more without ever having to download any software.

According to Harper, ease of use (e.g. embedding help tips and links to knowledge base articles in the app) is a big reason for the shopping cart software’s success. “We really had to focus on building simple user interfaces and keeping the complex stuff in the background,” he says.

Constant iterations have also helped. “We release major new features every 6-8 weeks and we’re working on getting that down to once a week. We look at BigCommerce as part of a larger pie that business owners need to compete. The other parts of the pie are order management software, accounting software, and analytics software. So making these integrations simple means BigCommerce can be used by hundreds of different types of businesses.”

Growth without funding
The company’s early success with email marketing and knowledge management software meant they could launch BigCommerce without seeking funding. “We’ve had interest from at least two dozen VCs but so far we’ve decided that bootstrapping is better for us,” Harper says. “We don’t want to give up our decision making. And the idea of giving a stranger a piece of ownership in the company in return for cash still doesn’t sit right.”

Harper’s advice for starters
Just get something out there. Don’t try to launch the perfect product with the perfect website. Just put a beta out there, get people using your software and make changes as you go. If you worry about getting everything perfect then you’ll never launch.

When we launched BigCommerce last year we didn’t even have a proper logo. The website was hacked together in a few weeks and our billing software was a nightmare. But we got it out there and changed all that stuff later because it really didn’t matter. We knew we had a great product and wanted to share it with the world. We’ve fixed all that stuff up as we’ve gone along.

Harper fears venture capital would mean forcing growth merely for the sake of growth. “As boring as it sounds, you have to grow slowly and carefully. If we took a few million dollars of VC money and started advertising on TV for example, sure we’d probably bring on 1,000 new customers in the next week. But if our support team can’t handle them then they’ll leave and go somewhere else,” he explains.

Marketing by teaching
“The biggest thing we’ve done marketing-wise is build a great product,” says Harper. “You can throw all the money you want at marketing but if your software sucks, then it’ll just be a waste.”

That said, Harper does feel educational videos have been key to BigCommerce’s success. He has a YouTube guru channel with videos that teach marketing, business, and social media lessons. The channel began in mid-2009 and has attracted over 500,000 views so far.

“Education marketing works in my opinion because people don’t want to buy from companies,” he explains. “They want to learn some cool stuff from someone who has been there, done that — and then they might consider using your product. If you try to sell to them, they’ll see right through it — people aren’t stupid. If you have a great product and you share a lot of educational content, then you can have a $0 marketing budget and still grow to at least a few thousand customers in your first 12 months.”

Tips from Harper on profit, churn, and conversion rates
Profit: Give your customers a reason to move to a bigger plan. BigCommerce plans are dictated by the number of products you sell, so if you want to expand your catalog, you upgrade.

Churn: For every single customer that cancels, ask them to fill out a survey. Then use that feedback to improve your product, support, sales, etc. Then measure survey responses against those areas of improvement over time.

Conversion rate: Have a motivated sales team who outbound every lead. Sales teams aren’t “sexy,” but if used properly they’ll help grow your business faster than any internet marketing can. If a team is too expensive for your bootstrapped startup, tons of companies out there can outbound your leads for you.

The idea for the videos came to Harper after he kept hearing similar feedback from customers. “They said it’s pretty easy to setup their online store with BigCommerce, but they didn’t know what to do after that,” Harper says. “They didn’t know if they should hire an SEO consultant, or start advertising on Facebook, or start a blog to get traffic. We’ve built our business using primarily Internet marketing and I’ve tested different techniques. Some work and some don’t, but there are the core set of activities you need to do to get the traffic flowing, which in my opinion are search engine optimization, Google AdWords and blogging. So that’s where I started with the videos.

“I wanted to make these marketing concepts easy to understand and I wanted to teach by example which is really important for me. There are too many ‘teachers’ that teach concepts they’ve never used themselves. I’m teaching from experience, not from a text book — so when I talk about a marketing idea I give a real life example of how we’ve used it to grow our business. And I’m not trying to sell anything in the videos — I’m not hawking an eBook or trying to sell a $10,000 course like most other people who record videos.”

Bringing enterprise-type features to small businesses
Though the founders want to grow organically, they still have a lofty goal: to make BigCommerce “the standard e-commerce solution.” Harper points to ConstantContact for email marketing and Quickbooks for accounting as examples of products that have become industry standards in a way they’d like to emulate.

Harper’s keys to a good business partnership
Focus on what you’re good at: It’s tempting as a manager to poke your nose into different departments, but if you’re good at sales then stick to that. If you’re good at development then don’t do the accounting. Stick to what you know and hire for your weaknesses.

Complimentary strengths: It’s harder for two engineers to build a successful company than say one engineer and one marketer, so it’s important to work together so your skills compliment each other’s.

Common goals: If one partner wants to sell out and the other wants to grow a business over 10 years then they’ll have different goals and outcomes, so it’s important to make sure they want the same goals and are clear on their goals from day one.

Harper also wants to shake up the e-commerce space. “It’s been so stagnant and so boring for such a long time,” he explains. “We’re trying to get enterprise-type features into shopping cart software that any small business owner can use. For example, BigCommerce has a CRM system and automated inventory management. A few years ago you’d have to spend $50,000 on Netsuite or $500,000 on GSI Commerce to get these seemingly basic features.

“Also, the marketing component is huge and is often overlooked by other platforms. Why make your customers go elsewhere to market their online stores when you can just build the marketing tools right into your own platform? BigCommerce has about 28 built-in marketing tools at the moment and they’re made available free on all plans because we know that without traffic our customers don’t make orders — and without orders they won’t stick around for long.”

Part of this effort means redefining the way people think of e-commerce. Harper explains, “When most people think e-commerce, they think about a basic online store with a few hundred products. They don’t think about selling on eBay and Facebook and Shopzilla and following up with customers using autoresponders and automatic upselling. We want to change that. We’ve always been about helping the little guy get a leg up on his larger competitors.”

“If you have a great product and you share a lot of educational content, then you can have a $0 marketing budget and still grow to at least a few thousand customers in your first 12 months.”

Halloween costume contest at the BigCommerce office.

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