Bootstrapped a Product Using Services First

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Here is yet another case study of a services company successfully bootstrapping a product, then raising Venture Capital. Here is my conversation with Bill Moschella, Co-founder of Evariant, from 2015. Healthgrades acquired Evariant in 2020.

Sramana Mitra: Let’s begin at the beginning of your personal story. Where are you from? Where were you born and raised? What’s the back story of your entrepreneurial story?

Bill Moschella:?I was born and raised in Connecticut. I attended college at Berklee and eventually got my degree. What I was passionate about all of my life was music. I went to music school and graduated with a music degree. I left college playing music in a band and opened up a recording studio. I never really had a job. I was always playing music. I was running bands. I found that I had a passion for the engineering side of music so I opened up a recording studio. I took all the money that I saved up from gigs.

That was a big tipping point because that was when I came in contact with the digital space. My first recording studio was actually a digital recording studio. I had stitched together a bunch of gateway computers and daisy chained them together to create a 128-track virtual recording studio. It was all analog converted to digital. The computer programs were old school. There were a lot of issues. I had to figure out how to write patches and scripts. I would never call myself a developer or a software engineer but that’s what I was doing.

Getting into that space brought me to advertising agencies and folks coming to me saying, “Can you record a TV jingle? Could you take this music and digitize it?” That was the beginning to what became a digital advertising agency from a digital recording studio. That was probably the first real start to something that was more than just me working on behalf of myself. It was when I started hiring employees and growing a business.

Sramana Mitra: What years were these happening?

Bill Moschella:?That was probably around 1997 to 1998. From there, it took off. All the way to 2004, it was just running a digital advertising agency. It was building websites, running media placement, and Google pay-per-click.

Sramana Mitra: I assume it was a pure agency services business model?

Bill Moschella:?Correct. It was 100% services business.

Sramana Mitra: What kind of revenue level did you reach with that?

Bill Moschella:?Around the million mark. I remember breaking the million mark. That was a real milestone for myself.

Sramana Mitra: What happened in 2004?

Bill Moschella:?Between 2004 to 2006, it got very much into the recurring business. We started selling multi-year contracts. It was the beginnings of getting into SaaS but it was almost selling services as a service. We were running managed services shop for maintaining your digital campaign. You paid $100,000 and we will do everything that you need. It took away the hourly business model of an agency and started turning into an outsourced shop. Along the way, we started selling software components. If I’m going to be running all your digital marketing, I’m going to also resell Saleforce.com licenses to you or I’m going to refer. So we started selling software—Adobe, Dreamweaver, Salesforce.com, Eloqua. We started getting into reselling of software to increase our revenue. Every year, instead of starting from scratch, we would start from $400,000. Getting from $400,000 to a million was a lot easier than going from zero to a million. That was the major transition in the business model. At that point, it was all bootstrapped.

Our conversation continues here.

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