Ben Hodson, JobNimbus CEO: Serial Bootstrapper, $53M Growth Round After 8 Years

1Mby1M Research · 1Mby1M Case Study

Interviewer: Sramana Mitra

This interview is part of the case study-based research and entrepreneurship education work of 1Mby1M, the global virtual accelerator founded by Sramana Mitra.

Abstract

Ben Hodson is a serial entrepreneur whose path through several ventures – including Venafi (bootstrapped to a first customer and a $5.5M Series A, later sold for $1.15 billion), a bootstrapped acqui-hire (Auction Trust Network), and a failed venture-backed startup (Sound Crank) undone by investor fraud – led him to found JobNimbus in 2012 with co-founder Nick Wood. Built initially as a side project funded with $140,000 of the founders’ own consulting earnings, JobNimbus targeted the underserved roofing and home-exteriors CRM market with a low $25-per-user price point, growing through weekly customer feedback calls and a lean, self-funded operation in which founders sometimes lived on $1,000 a month.

The company reached profitability in 2015, became the market’s top roofing software provider by 2018, and scaled to roughly $5 million in ARR by the end of 2020 after hiring its first salespeople in 2019 to fix a stalled self-serve growth model. Fully bootstrapped and cash-reserved through COVID, JobNimbus closed a $53 million growth round from Mainsail Partners on December 31, 2020.

This case illustrates how founders can leverage capital and lessons from prior ventures – including failures – to bootstrap a focused, niche SaaS business to profitability and scale before raising outside capital, reflecting the 1Mby1M principle of validation before fundraising.

Transcript of the Interview

Sramana Mitra: Let’s start at the very beginning of your journey. Where are you from? Where were you born and raised? What kind of background did you have?

Ben Hodson:I say that I am from the Seattle area. I was born in Washington State on the east side of the state, but I moved to the west side when I was very young. I went to the University of Washington. I got a degree in business. Then I was interested in computers, so I did a second degree in computer science as well.

I am a guy that likes a lot of different things. I played in a band in high school and college. I played a lot of instruments. I started on piano. I got really good at guitar. Now, I play a bunch of other instruments. I ended up starting a bluegrass band. I learned the mandolin, dobro, and banjo. It is a lot of fun. I have a lot of interests like that. I love the outdoors. I do a lot of surfing and rock climbing and that sort of thing as well.

Sramana Mitra: Tell me a bit about your educational background. What did you do besides all these interests? What time frame are we talking about?

Ben Hodson: My first company called Venafi was hashed out of an idea. This was in 2000. I was in school finishing up my last college degree.I was recommended to go and be in an entrepreneur class. I did not think of myself as an entrepreneur at the time. I was working at the power company up in Seattle – Puget Sound Energy. I was a programmer there as I was finishing up my degree. I took this entrepreneur class from my professor, Allen Leong. He was my first mentor. He encouraged me to look at entrepreneurship because he saw my broad range of interests and my self-driven nature.

He thought that entrepreneurship might be something I would be interested in. I took up the class and one of the requirements of the class was to come up with a business idea and build a business plan from it. At the time, I’d finished my business degree and I was doing this class at the end of that degree. I realized that they haven’t taught me how to make a business plan, which is insane in hindsight. It was a great class. I learned how to do a business plan, financial modeling, marketing plan, and a lot of things that I took for granted.

We entered a business plan competition in 2000 that was held by the University of Washington. There were about 500 businesses that entered in their plans. Our plan got into the top 50 teams. This was stunning because this was our first effort at this type of thing.

I met a guy who worked at Verizon Wireless in their IT department that just said, “We just had another SSL certificate expire. That brought down several servers and cost us millions of dollars during that time.” I didn’t know a lot about SSL, so I started digging into it. I got a bunch of resources on encryption and got interested in that.

I realized that the whole system for issuing SSL certificates, keys, and certificate authorities was a brittle system with a lot of points of failure. I wrote some code that would go on a network that would basically crawl every apache and I would be able to see when their certificates were expiring.

Later, that code ended up evolving into something that could auto-rekey those servers without ever having any downtime. We dubbed it Encryption Management. We hadn’t come up with all of that at the time when we were doing this business plan competition, but that was the seed of that idea. The business plan competition was really fun. You would go into a giant auditorium at the University of Washington. You would have a little booth. They gave a bunch of people Monopoly money that was given by business leaders in the area. These were people from well-known companies. I remember the CTO of Chase bank was there. High-level people from Microsoft were there. They would walk around and you would get to your elevator pitch.

They gave you a minute. You have to pitch them your idea, your company, and why they should invest in you. They would then decide whether or not to give you some Monopoly money. We kept collecting money and pitching for the whole session. The competition ended and they counted all the team’s money. We ended up getting into the top ten teams, which then went into session in a closed-door room. It was scary.

You are walking in with all these business leaders that are way ahead of you in their career, and you are just a kid trying to figure things out. You had 10 minutes to do your presentation and then they had 10 minutes to ask you questions. They were grilling us pretty hard. They were treating us like they were venture capitalists. We had to have an interest. We ended up winning the third position in the competition. The cool thing was that we got $50,000 from that. We used that towards legal fees. We incorporated the company and we started writing some patents on this idea. We took some of that money to buy some computers. We also convinced a couple of students to work with us. We got a buddy to let us into the basement of his house that was near the University of Washington. We would do our schoolwork during the day and then we would go and spend almost all the night coding and building the product.

We built a prototype that was good enough to pitch to Verizon. I got a meeting with the C suite. It was amazing. We showed them what we had. Since the pain was so high around the expiring certificates, they were interested in our solution. They were our first customers. They ended up paying $250,000 for the first year. That got the company off to the races. Six months later, we ended up raising our first round from Utah Ventures who led the round of $5.5 million. That was from 2002 to 2003.

Sramana Mitra: You were based in Utah at this time?

Ben Hodson: Yes, we were still up in Seattle after we closed on Verizon. I wanted to get some higher-level developers. The students were good, but they didn’t know a lot of things. We tried to hire people in Seattle but everybody was saying, “I already work at Microsoft.” We would say, “Wow, we can’t pay you that much money.”

We just couldn’t give those options. We didn’t have health benefits and things of that nature. A buddy of mine lived in Utah and said, “Hey Ben. We are perfect for you. We went out of business recently. There are a lot of good developers that are out of work. I think they can fit in working for you guys.” We went out on a Saturday and spent the whole day interviewing 20 people.

People were saying, “Yes, I would come aboard.” They were experienced senior people. They were more senior than me. It was a risky move, but we said, “We are going to have to go to Utah to get this company moving. It’s the only way to get the talent that we need.” I told my wife, “Hey, we are moving to Utah.” She was, “Okay, I believe in you. Let’s do it.”

We moved into a little rental house. The rental was about two blocks away from the company. We only had one car, so I could walk to a little office that we rented for $250 a month. My partner, Rob Thornton, and I would sit at one desk. We had a phone line and Internet access. We would go over there and work. We got another desk. We put two developers there. We started having a real product to build over that year.

Sramana Mitra: Did you get the funding first before building the product or vice versa?

Ben Hodson: We built the product for the funding. It would not have gotten the funding if it weren’t for the product and the first customer. We had been raising money for a year and a half. I have probably done 30 to 40 pitches to venture capitalists and angels. No one was biting. They would say, “It sounds interesting, but I don’t understand encryption. Call me when you guys have something going on. I will be really interested.”

As soon as we closed that Verizon deal, that was when everything started to heat up. Everyone wanted to talk to us. It was easy to get meetings and we got much for favorable terms. We were able to pull a deal together about six months later.

Sramana Mitra: What year are we talking about?

Ben Hodson: 2002.

Sramana Mitra: What happens next? You got your funding. How does the customer situation evolve? You have Verizon under your belt. How do you go about getting the next set of customers?

Ben Hodson: We had to put together a go-to-market. That was a seed round in a lot of ways. We didn’t have a product-market fit yet. We just had a product and a couple of interested early adopters. We were able to close a bank and FBC communications within a few months. That gave us a few early adopter customers, but we were building the products in real-time.

I vividly remember that to get FBC to close, I had to live out of a hotel for a month and go into their data centers every day. At the time, it was not cloud-based. You had to have it running in your data center. We had hardware that we were installing. We bought the servers and branded them as our hardware and put the software on them. I was coding real-time updates to solve the problem and the bug so that we can deliver the outcome that we had promised within the timeline.

It was the night before our deadline that I finally made the breakthrough, and had all of their certificates rekeyed correctly. They were super excited about it. We still have them as long-term customers. It was very much an early-stage product. Once we had funding, we started scaling up. We hired a bunch of developers. We built out a C suite. This is where I went sideways for that company for a little while. We were so young. It was our first company. We just have been out of school for a year or two.

Although we were smart and energized, we didn’t have a lot of knowledge of how to scale a company. The venture capitalists asked if they could bring in a CEO. That made sense to us because we don’t know how to be a CEO right now. They left me as the CPO. I ran all the products and technology at the time. I had about 40 developers and some Q&A people. I also had support reporting to me at that time.

We hired a CEO. That demotivated Russ because he didn’t like the culture built around that new CEO. I lost the motivation as well. I felt that they didn’t care as much about the customers as we did. It was also probably because we weren’t good at communicating. In hindsight, we could have done a lot better with that. It ended up getting to the point that Russ decided to leave in 2003.

About six months later, I realized that I didn’t love the situation either, but I wanted the company to succeed. I helped to find my replacement and trained that person for the next year and exited the company in 2004. I am still a shareholder. Venafi just got bought for $1.15 billion last year. It was a 20-year journey to get to a $1 billion company.

It ended up being a great success. It defined the entire space of encryption management that did not exist. The company is still based in Salt Lake. They have several hundred employees. It really is a success story. I have learned a lot from it. I learned how I could work with investors better. I learned a lot about what to do differently in the next company. It was a great learning experience.

Sramana Mitra: Who bought that company?

Ben Hodson: A private equity firm bought it. They were looking to go public and then private equity firms ended up buying them instead to keep them private to grow organically that way.

Sramana Mitra: Let’s go back to the 2004 timeframe when you were leaving this company. When you left, what did you do?

Ben Hodson: I had the entrepreneur bug. I was saying, “Oh my gosh, I really want to do another company, but I need to find a problem that I believe in and care about.” I was doing some consulting while figuring things out. At the time, eBay was popular. My wife was really into eBay. I started looking at eBay and there were several times that fraud had happened. PayPal didn’t really solve it.

I thought, “Wouldn’t it be great if there was some way through social proof whether or not the seller was trustworthy?” If you could track every transaction that they have done with other buyers and rate them over time, you have social proof. I wrote a browser plugin called Auction Trust Network. Every time you want to buy an item on eBay, the plugin on the right side would show that seller’s rating and trustworthiness.

eBay got really interested in this. They had a subsidiary company that they bought here in Utah called MediaForge. That company ended up acquiring us after only 11 months since I left Venify. We ended up being acquired by Media Forge less than a year after we started that company. It was not for a particularly huge amount. We made some money on it. They were acquiring us more for the talent and the technology.

I went over to MediaForge. One of the rules of that acquisition was that I needed to work at MediaForge for 12 months. They made me their CEO. I ran their Dev team. They were struggling to get output and velocity. I helped them get in motion. I built a good process there and helped them hire a new CTO when I exited.

Sramana Mitra: How long did you have to stay?

Ben Hodson: I had to stay there for 12 months.

Sramana Mitra: Within 11 months, you sold and then you had to stay for another year. So the journey was a couple of years?

Ben Hodson: That is right.

Sramana Mitra: You didn’t raise money for this company?

Ben Hodson: We completely bootstrapped that company.

Sramana Mitra: Smaller exits are still lucrative because you have no investors involved. Do you want to disclose how much you made out of that acquisition?

Ben Hodson: I made about $85,000 or so. It wasn’t a huge amount of money. I think the total acquisition was around $300,000. It was somewhere around that ballpark. Some money went to other employees and the cost that we had in the company to pay off debt and things like that. When I moved to the new company, they gave me a huge salary. It was this golden handcuff situation. I felt that I was ahead. I sold the company and got an extra $85,000 in the bank and also still had a job in this new company making good money.

Sramana Mitra: When was this?

Ben Hodson: This was in 2006.

Sramana Mitra: What did you do next?

Ben Hodson: I love music so much. I have record label contacts. I have always wanted to do software that would enable you to listen to music in real-time. I would drive around my car and I would have books and books of CDs. Every time I would get into my car and listen to a specific album, I would need to look at my album and it would be the one CD that I didn’t bring with me. I don’t know why.

My brain always wants to listen to one thing that I didn’t have with me. That frustrated me. I bet that a lot of people had the same frustration of wanting to listen to a song and not being able to get access to it quickly. This later became Spotify, Apple Music, and others, but this was way earlier than that. We had a similar concept. I called the company Sound Crank. I spent about a year building a product. I built a plugin.

Everybody was using iTunes at the time and they were taking all the music they were pirating and putting on iTunes. They were buying a lot of music from iTunes directly. I said, “Wouldn’t it be great if you could see the artwork and lyrics of the album, see who the producer was, who played the guitar, and all the metadata? Secondly, why not make it a social network where I could follow friends and they could follow me and they could get music recommendations?”

I coded all these things and built a platform. I put it out there just for free. By 2008, this had over 400,000 users on it. This was just through organic growth. It was becoming quite popular. I was like, “Oh man, I really want to do this company.” I was still living off of savings and it was starting to cost a lot of money to host it all, so I said, “Let’s go and raise some money.” I went out and talked with equity firms and venture capitalists. I ended finding a private equity firm in Utah, and they offered $10 million on really good terms.

I said, “I want to establish this company in Seattle. It is a much more hip area. It had record labels up there. There was a lot of music industry in Seattle that I knew as well. I moved back to Seattle. I convinced a bunch of other people to come and move up there as well. We raised the money. We had the term sheet signed. The close was going to happen and I had office space set up. I was doing all of this on myself because I knew we had money raised, so I was just going to pay it off.

I already talked to the investors about it. You probably see what is coming here. The day that we were supposed to fund the round, no money came in. I am calling up the investors and nobody is answering. This was very strange. They had an incubator with several other companies and nobody was answering there either. I had a friend here in Utah and I just asked him, “Hey, can you go over to their office to find out what is going on? It’s been a day and no one has contacted me. “

I started to get really stressed because I was in debt. I spent $400,000 on all the stuff that I set up. I also convinced a bunch of people to move and quit their job. My friend went over there and said, “Hey, the security administration of Utah is in the office right now. The two owners of the private equity fund have been arrested and charged with securities fraud. It looked like they were running a giant Ponzi scheme.”

This was all on me. I was just naïve. I should have done more vetting. I didn’t even think that fraud was an option considering how many companies they were working with. I talked with their financial people and other venture capitalists who knew them. I should have tried to vet them more. Long story short, we didn’t get any money. When I went out to raise a different round, everybody was saying, “Oh, that is a bad situation that you were in.”

It tainted the whole deal. No one wanted to touch it once this fraud had happened even though we didn’t do anything wrong. Now, I had 400,000 users and was incurring a lot of costs. I was in huge debt. I paid out of my own pocket to help some of those employees move back to Utah. I tried to help them find new jobs and try to make it right.

After about a year of continuing to try to raise money, I had to abandon it because I had no more money. I didn’t even have anything to live off of. It was my dream and I believed in it but I had to stop and just do consulting work. I started a consulting company because I had so many consulting projects that I could go after. I needed to generate money and start paying down the debt.

Sramana Mitra: What period of time did you do that mode of existence of doing consulting to pay down your debt?

Ben Hodson: That was from about 2008 to 2012. During that time, I started a bunch of smaller companies that tried different things, but I made most of my money off of consulting. None of them went anyplace. They were ideas that weren’t to fruition. I think the big mistake that I made there was trying to run three or four different things at the same time.

I realized now that the only way to have a great company is to be 100% focused on it. That was my learning through that period. I was thinking, “Maybe I could run a couple of different things, and then one of these will hit and add iron to the fire.” That doesn’t work for me and I don’t know a lot of people that it works for.

Sramana Mitra: I would push back on that because we are using this method of Bootstrapping with a Paycheck constantly to build companies. We have case study after case study of people doing that. You have to pay the bills.

Ben Hodson: Yes, I totally agree with that. That is how JobNimbus came about. I consider consulting as not really a focus. When I say focus, I mean I was running two startups at the same time while doing consulting. That didn’t work for me. I should have just focused on one startup and my consulting.

Sramana Mitra: That makes sense. Let’s go back to where you are. What year are you in now?

Ben Hodson: That was from the period from 2008 to 2012. The company is called Repeatsys. It made good money. We did some big projects. We built the IT management system for the University of Utah. It was some high-level stuff. A lot of Venify contacts called me up and said, “You are so good at solving complex problems. Can you come over and do this project?”

We had a steady stream of work, but I realized that I don’t love consulting because of two things. One, you are only as good as your next deal. Two, cash flow was brutal. It was either feast or famine. Sometimes you have tons of money in the bank, and at other times you don’t. You end up stretching until the next deal. You are also doing sales and coding. You feel that you are split a lot. It was a lot of pressure and I felt that I wasn’t getting ahead.

Sramana Mitra: What did you do?

Ben Hodson: SaaS was becoming popular by then. We have been hosting on the side. We built a cloud-based system for a customer. The customer said, “I loved what you guys built. Who do you recommend as a host?” My partner, Nick Wood, who was in the Repeatsys company with me was just leaving as the CTO of Pro Hosting. I just said, “Hey, come over here and let’s work at this business together.”

We worked great together. He is super smart. When we had customers asking questions about hosting, Nick said, “We can host this ourselves. I know everything there is to know about hosting.” We had built a pretty good source of recurring revenue from hosting our consulting projects. It’s counterintuitive to what we thought we were in the beginning, but it ended up being fortuitous.

That got us thinking about other SaaS revenue. This is where the JobNimbus story starts. A guy named David Hickey invited us down to Colorado. He was an insurance adjuster working in the Colorado area. He was working with roofing companies. I didn’t know anything about roofing. I didn’t know about the insurance industry at the time either. He wanted us to build him a system to track his project file.

We were introduced to him through a friend of a friend. We went down there and scoped out the project. That was the first time I met roofers. We had lunch with them. I remember thinking, “Man, these roofers are interesting people. They are super transparent. They are straight-shooting people. They are also entrepreneurs like me.” I felt a kinship with them.

I loved that they were the no-nonsense blue-collar mentality people. They were the complete opposite of the Silicon Valley mentality that I was getting tired of. We got interested in this. The subject of software in the roofing industry came out. It turns out that the software in the industry was very poor. The best developers in the world were not trying to solve the problem of roofers or construction in general.

This was in 2012. They were working on problems about how to load Twitter faster. Here we were – a set of really good developers that have done a lot of projects, and we had the opportunity to help the people that nobody else is helping. All of the software in roofing was built by other roofers. They either have an outsourced dev team or they would have somebody in their company that would try to learn how to program and build a tool.

As you can imagine, the user experience wasn’t great. Most of the hosting wasn’t cloud-based. You had to install your own servers to run it. Nothing was mobile-based at the time and yet these are people out in the field all the time. Smartphones were finally catching up in terms of what capabilities to do cool experiences like this. We went back to Utah after meeting with Dave and we just kept on thinking about this roofing problem.

The problem was around CRM. They didn’t have any tools to track their customer list or their jobs. We built the first version of JobNimbus that did basic things. You can track contacts, tasks, and it would do some reminders. It was very stripped down. Nick and I just coded it a few months on the side while we were doing our consulting business. We gave it to the roofers and we said, “Hey what do you think about it?” They said, “We really like this.”

We then told them, “You can use this for free. All we ask is that you call us every week and tell us what you like and don’t like and we will improve it every week.” We would carve out time every week to code on that app. We would have our Monday 10 AM call with our roofers. There were about five of them. We started learning about the industry, the terms, and their problems. We became obsessed with their specific problem set and how we could solve it. The software started to get really good.

By the end of 2013, we were in a position where these guys would say, “Hey, we would pay for this. This is better than a lot of stuff out in the market.” We decided to take the money that we earned on our latest project RepeatSys. We had about $50,000 each. We were going to put it in JobNimbus to feed it with our own money and then sell off RepeatSys, which we basically sold at cost.

We were able to close our debt. All in, we had $140,000 that we had put into JobNimbus. We launched JobNimbus and went full-time on JobNimbus. We weren’t getting any money or getting paid, but we believed in what we were doing and we had very engaged customers. At the time, the average selling price per user was $85 per month. We decided to do a predatory pricing strategy of $25.

This was unheard of. Even though we didn’t have as many features as the other guys, we had something better, and since our price point was so low, we were able to start getting those early adopters. By the end of 2014, we had over 200 customers that were paying us an average of three users. We were making enough money to live off of.

We had hired two employees. My brother was one of them. He was working for almost nothing. We also hired a developer that was a long-time friend of ours out of India. Now we come to 2014. Now, we go into trying to figure out product-market fit and getting past the early adopter stage. We had a lot of problems with support. We were automating the entire onboarding for customers and so they were watching videos.

We added a lot of complexity to the product. It was much more advanced and harder to learn. We ended up spending a lot of time creating videos. I was doing support and sales. We identified our roles in 2014. I became the business side of the company. One of the nice things about having a degree in business and computer science is the ability to play on the side and/or the business side.

At this time, Nick was more on the tech side, so he took over as our CTO. I took over as the CEO. We didn’t use those terms at the time, but that was what our roles were. We started scaling the company. A typical day for me was to talk to customers on the phone. I was taking support calls and sales calls.

This is a funny story. We didn’t have enough money for a phone system, and there weren’t a lot of good cloud-based phone systems in 2015. We ended up having a message play on a phone number that would say, “Press one for support and two for sales. Welcome to JobNimbus.” Whatever button you pressed, it still goes to the same person. It would always ring me first, then it would my brother Brad. If no one answered, it would go to a message and say, “We will call you back.” We had several hundred customers at this time.

It was very nice in 2016 when we were finally able to have enough money to hire some support people. Some of the first support people were hired in 2016 to help. I was able to get off the phone and work more on the business daily. It was so valuable because by then I knew the entire problem that the customers had. I knew everything there was to know about roofing and how it worked.

We realized that we expanded to more home exteriors. We were working with companies that were working on the outsides of homes. We are talking about roofing, siding, and gutters. Even solar companies were joining JobNimbus. We were adding a lot of capabilities to the software.

Sramana Mitra: I was just checking where we are timeline-wise.

Ben Hodson: This is at the end of 2017. In 2018, we finally could start scaling. We had about five employees. Remember, we’re still bootstrapped, so money was very tight. The way we were running the finances, we were reconciling every month, and whatever money is leftover, Nick and I split it to live off of. A lot of months, the money might have been $1,000 each. You just made it work. Maybe you don’t pay your house payment that much.

We were having creditors going after us, but we really believed in the company. We knew that the worst time to raise money is when you need it. If we could just get through this product-market fit phase and get the engine going and scaling, then we can raise money at a good valuation. We just kept suffering through the times, especially in 2016. That was a hard year for us in terms of our personal finance.

There was one thing that happened in 2017 that was really neat. There were three competitors in the market when we came in. We were one of the three. The number one was really big. The number two competitor in the market was a little bit smaller. We targeted those customers because they had a poor product experience. By late 2017, we had brought them down to having only 20 customers left from over 1,000 when we started competing with them.

Some people switched to our other competitors and some switched to us. They went out of business at the beginning of 2018. That left us free to target the main competitor. Now, we have a strong feature set and a better product. Our price point was hurting them because they just couldn’t drop their margin low enough to compete with our $25 per user price point. We were winning on the volume.

In 2018, we crossed the mark to have more customers than the number one competitor. We became the number one software for roofers in the US. This was a huge celebratory moment for us. That year, we also went heavy on a product integration strategy. We realized that the future of the industry was consolidation. We took all these different software that people were using and we built a sophisticated API and started integrating and building a marketplace. Today, we have over 60 integrations. Our next closest competitor has five. We are just way ahead.

What we realized is that customers coming to us were for customization and choice. Because we’d built the software to be so customizable with all these integrations, we now had a full product solution that we could start scaling. We saw tremendous growth in 2018. We did over 100% in our growth. In 2019, we were just skyrocketing.

In June, we hit a wall and had three months of negative growth. That was scary because it had never happened. We had become profitable back in 2015 and we were running the company at a good clip without outside investment. It was scary to have negative growth numbers. We didn’t know what was going on.

As we started looking at it, we realized that we added so much customization and capability to the product that our no-touch buying experience had been broken. Customers couldn’t self on-board anymore. They needed help. We had no customer success team. We had a very small support team frankly. It looked like we were heading for a plateau or negative growth as a company.

The other option was that we were going to have to change a lot of things in the business, go for high growth, and hire a sales team. It was a tough time for me and my partners. We all decided that we wanted to go for high growth. We hired our first salespeople in the summer of 2019. We switched around from the no-touch onboarding to build a funnel and start working on an MQL lead pipeline.

We started learning how to demo and convert those demos to win deals. We recreated a contract system. We revved our billing database. We built a bunch more self-help videos. We also hired our first customer success people. With massive change and a lot of risks, a lot of expenditure was concerning. We signed our signed customer on a contract on November 19. That was the first deal that we sold with a salesperson. We had a strong December.

By this time, we were about $5 million in ARR by the end of 2020. Going into 2020, we set a goal that we were going to get to $10 million. This was unheard of for a bootstrapped company to have that kind of growth. We had an amazing 2020 start. We were hitting records almost every week. Our sales motion was getting dialed in and then, of course, COVID hit. This industry got hit pretty hard. We didn’t know what to do, but we saw that our competition was pulling back.

A lot of them were laying off people as well. We didn’t want to do any of that. We’d been saving up money in our savings account. A lot of investors fuss over this because they say, “Why are you saving so much money? You should be using it to spend ahead.” We had about $600,000 to $700,000 saved up in our savings account because we had no investors. We had no one to fall back on.

If we couldn’t make payroll, we were out of business. We had to make sure that we had a cushion. We ended up deciding to use that during COVID to help customers stretch their bills. We gave a lot of forgiveness in months. We would help them out. We kept hiring. We spent more on marketing and we just kept exploding even through COVID. It was amazing. The construction market ended up doing well.

Towards the end of 2020, we got to $11 million. By the end of the year, we decided to take the entire company out to Hawaii. We took all 89 of our employees to Hawaii to celebrate such a big win. We ended up working with a private equity firm. We ran a big surge over that whole 2020 and closed the round on December 31st for $53 million from Mainsail Partners out of the Bay area.

Sramana Mitra: What product did you settle on when all this growth was coming?

Ben Hodson: It was the CRM product that we built everything around. It is our core system today.

Sramana Mitra: How did you position this vis-a-vis your competition? That’s a very crowded market, right?

Ben Hodson: For sure. We had three unique things that set us apart. There are four, but you don’t want price to be a differentiator, but it was for several years. One, we were easier to use by far because we have been built on a mobile platform. We were the first ones to have a mobile app. We were the first one to have mobile-friendly web pages in the market. That set us apart.

The second thing was flexibility. We had all the integration and customization. Customers can come to us and dial in their process better than they could with anybody else. The third thing is, we focused on growing their business. We had ROI metrics to show that if you set up JobNimbus, your revenues would grow an average of 43% in the first month.

That is an insane number, but it’s because our systems are implemented with business practices and organization. Our average customer doesn’t know how to run their business very well. JobNimbus helps them to be professional and be the best businesses that they can be.

Sramana Mitra: Where do you find traction from a customer segmentation point of view?

Ben Hodson: We are very focused on the home exteriors market. We are talking about outside of residential homes. It’s contractors who do that type of work. Roofing, siding, gutters, windows, doors, and solar companies use people who do project-based work. They need our estimating tools and CRM tools. It’s all targeted to that specific use case. Being so focused is the secret to our success. The only way to win at CRM or anything is to be super focused on a niche. If you are very good at that niche then nobody can compete with you.

Sramana Mitra: Got it.

Ben Hodson: Our goal is to get to $100 million and we are well on our way to that path.

Sramana Mitra: Good luck. Great story!

Key Takeaways

• Ben Hodson bootstrapped JobNimbus starting in 2012 using $140,000 of his and co-founder Nick Wood’s own consulting earnings, building the product initially as an unpaid side project validated through weekly calls with five early roofing-industry customers.
• JobNimbus grew by focusing narrowly on the underserved home-exteriors contractor niche (roofing, siding, gutters, solar) and undercutting competitors with a $25-per-user price point, reaching over 200 paying customers by the end of 2014 and becoming the market’s leading roofing CRM by 2018.
• The company operated profitably without outside investment from 2015 through 2020, deliberately maintaining a $600,000-$700,000 cash reserve that let it support customers and keep hiring through the COVID downturn rather than laying off staff.
• After stalling with three months of negative growth in 2019 due to a broken self-serve onboarding funnel, JobNimbus hired its first salespeople and customer success staff, scaled to roughly $5 million in ARR by the end of 2020, and then raised a $53 million growth round from Mainsail Partners in December 2020 – its first outside capital after eight years of bootstrapping.