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GotVMail: Making a connection
When Siamak Taghaddos and David Hauser got together at Babson College to launch a startup aimed at providing very small businesses and entrepreneurs with a voice-mail service, they knew their chosen market had traditionally proven an elusive target.
“We’re going after the consultant, the solo guy who might work within a larger company,” says GotVMail CEO Taghaddos. “They’re inherently difficult to reach.”
Those far-flung small-business owners are also notoriously shrewd about how they spend their technology dollars, and by the time GotVMail launched in 2003, they had a slew of choices—everything from cable and telephone companies to Web-services providers—to handle their communications services.
Against that backdrop, Taghaddos and Hauser, now chief technology officer, to traditional offices and home offices. The $9.95 monthly charge helped the company achieve profitability by the end of its second month of operation.
Second, they decided to largely bootstrap the business with the help of around $1 million from friends, family and angel investors, and they eschewed traditional venture capital. The two believe the financial discipline has paid off.
“We wanted to grow at our own pace,” Taghaddos said. “The fact that we were profitable quickly has meant we could go about tweaking and perfecting as we grew.”
GotVMail posted revenue of $8.8 million in 2006, three years after launching and recently moved into new facilities in Needham to accommodate its growing payroll of 40 employees.
Anita Campbell, the CEO and editor of Small Business Trends, said GotVMail broke through the clutter by mastering the Web as a cost-effective marketing tool and building word-of-mouth branding from day one. Positive referrals helped the business grow while also keeping customer-acquisition costs in check.
Above all, though, Campbell said GotVMail used a “solid business model” from the outset. “They understood they would need to invest in customer service and research and development,” Campbell said. Because they started out with a “sustainable business model, they could afford to keep improving their products and services.
“Too many startups today start out by offering a technology service for free. If you aren’t profitable in your own business, how will you stay in business to serve your customers? If we have a financial downturn, I suspect we will see a lot of today’s free services close up shop. And then where will that leave customers?”
Hauser said the fact that the co-founders are themselves entrepreneurs has helped connect to their target audience of small businesses. The heavily entrepreneurial culture at Babson also helped the duo hone their go-to-market approach.
“We realized in talking to our fellow students that there is no telecom solution designed for entrepreneurs. Everything that’s out there is designed for large companies,” Hauser said. “It’s a large market but a niche market. There’s no one way to talk to them, and some of them don’t even identify themselves as small businesses.”
The GotVMail solution also enables users to continue to do things the way they always have, while instantly projecting a more professional and larger image, said Taghaddos. “As entrepreneurs, people use a lot of tools already, and we don’t want to make them change the way they work. A lot of companies want you to buy their phones, but we built our technology to be agnostic.”
Partnerships are another key part of the market strategy.
For instance, FedEx customers get a discount on GotVMail, a partnership that exposes thousands of small businesses to the service. After noticing a strong early interest from real estate agents, the firm struck a deal with the National Association of Realtors as well.
“We’ve never had a sales team,” added Hauser. “We’ve always let the customer decide on their own.”
For GotVMail, that also means adding value whenever it can—it offers its customers a monthly newsletter on issues that entrepreneurs face—and by constantly communicating with its customers.
Customer feedback led to the creation of the Web-based myGotVMail interface.
The attention to detail has generated word-of-mouth sales, with 20 percent of new customers now saying they first heard of the service from a friend or fellow business owner.
“With this market, you have to find ways to add value,” Hauser said. “You can’t just send them a bill at the end of the month and forget about them in between.”