April 18, 2013

Marketing at Stackify: Acquiring customers for startup #2 when startup #1 sold for $150m

Matt Watson’s first startup, VinSolutions, sold for $150 million—not bad for something he says was “completely bootstrapped.”

Now he’s taking lessons learned from his first company and funneling them into his latest venture, Stackify. In fact, the idea for the company grew out of frustrations Watson encountered at VinSolutions. Stackify provides tools for software developers to monitor their applications using a mix of server monitoring and remote access.

At VinSolutions, 40 software developers worked for Watson. “We literally had people lined up at our door for half the day who needed help doing things because we were the only ones who could do them,” says Watson, Stackify’s founder and CEO. “Other people didn’t have access to all the production servers because we didn’t trust them. So our solution allows us to give them a certain amount of access that they can’t cause any harm, but is the amount of access they need to do the troubleshooting they need to do.”

The Kansas City-based startup was founded in January 2012 and now employs about 15 people. Since the product’s launch in January 2013, about 300 users have signed up for the service, including a “handful” of paying customers, Watson says.

Although there a few differences between VinSolutions and Stackify (namely, the former’s initial lack of funding), Watson still prizes the ability to execute innovative marketing stunts with a quick turnaround to draw in potential users.

“The biggest difference is just having the funding,” he says. “The original company was completely bootstrapped, so we never had the money to do anything the right way.”

Stackify, which is funded by Watson, has been able to do more advertising, hire a salesperson, and funnel more resources into R&D than VinSolutions, which didn’t have an advertising budget until four or five years in, he says. “We cut every corner we could before and struggled forever because we didn’t have the money to do anything the right way. But ultimately we ended up being successful. It’s just a very different road.”

And while this time around Watson can afford to try different approaches to advertising (specific websites have been great; print mags, not so great, he says), it’s some of his reactive and spur-of-the-moment marketing techniques that have garnered Stackify positive attention.

Recently, Watson seized Valentine’s Day as an opportunity for playful outreach: He crafted a tale of forbidden love between Dev and Ops. (“Relationships are always hard, and they know they can solve most of their problems with a reboot, hotfix, or patch cable.”) The short post attracted 3,500 visitors to the site.

“We’re just trying to take advantage of things we can take advantage of and get our name out there,” Watson says.

Watson is big on looking for opportunities and then running with them, which he says is an advatage of working with a smaller company. For example, when Microsoft Windows Azure’s SSL certificate expired, it took down a handful of services, including Stackify’s. “We circled around and realized that there weren’t really good ways to get notified that SSL certificates expire, so we actually, over the weekend, created a free service,” he says.

Stackify put out press releases, and Watson did a few subsequent interviews. “Being very agile is really important,” Watson says. About three hundred people signed up for the service, CertAlert.me, within the first week.

“The other big difference was when we started (VinSolutions), we never had a salesperson for the first probably two or three years because all of our customers were a referral or people who found us on the Internet, kind of more organically,” Watson says. “It’s nice to actually have salespeople and a marketing budget.”

For now Watson is focusing on building more functionality into Stackify’s service. He says it’ll take three or four years to achieve his “grand vision.”

In the meantime, the startup veteran recommends reaching out to and networking with others who can act as mentors.

“My advice for most people is to do everything they can not to actually take the money,” Watson says. “We’re in a different place because I’m funding it. So I’m not dealing with other business partners or things like that, I’m not chasing money around. A lot of these guys spend all their time chasing money and not focusing on the product. You’re better off just focusing on the product and building a product that creates revenue instead of chasing money. If a product can’t create revenue, then it’s not typically a worthwhile business.”

<a href="https://blog.perfectaudience.com/author/scottdanielson/" target="_self">Scott Danielson</a>

Scott Danielson

Scott is the Customer Success Manager at Perfect Audience. He holds a degree from Illinois State University and has over 13 years experience working in the customer service/tech support field.
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