Build Your Product without Raising a Dime of Outside Investment
Innovate Pasadena is a great organization run by local thought leaders in the areas of technology and design to create a community of entrepreneurs, innovators and investors in Pasadena.
Every Friday morning, we have a local guest speaker talk about his/her experience. This summer Allen Rodriguez and Eva Hibnick, the co-founders of One400, spoke about how they are developing a product without outside investment.
Their product is a marketing dashboard for attorneys that allows them to see what they are spending their money on and the return on investment of their expenditures.
Eva and Allen talked about the pros and cons of raising money and why they decided against it. Developing a product is expensive and requires the right team of talent, neither of which they had. Neither of them was a designer or developer, nor did they have the funds to attract the right people. Given the industry that they were going after (the legal industry), they also didn’t feel like there were many angels that had enough experience in the industry to be of use. Additionally, Allen had recently become a father and Eva still had law school debt; neither were willing to go without salaries for much longer than a couple months.
Given all of this, they knew that they had to come up with a better plan of action. They both knew they wanted to work together and pursue the legal industry. Eva was a Harvard Law graduate and practicing attorney, and Allen had worked previously at the LA County Bar and Legalzoom, so they knew that together they had the right experience and the right connections in the legal industry to succeed. They decided that the best route for them was to open up an agency and sell their own experience and services to others.
Within one month, Allen and Eva had both signed on one client each on monthly retainers. Within two months they had doubled their revenue which allowed them to bring on a designer full-time and a developer part-time. They knew that they were heading in the right direction, as they had predictable recurring revenue. One400 was real and Allen and Eva were the owners of a full service digital agency that helped law firms and legal tech startups with client acquisition.
The challenge then became dedicating enough time each week to developing their product while still meeting client deadlines and continually closing new clients on the agency side.
Allen and Eva talk through strategies they would use to overcome these challenges. They are frank with the crowd, as what they are doing is not easy. They are working around the clock and enjoying every minute of it. They are helping their clients build their businesses, while also building two of their own, the product and the agency.
In order to make sure they keep everything in line and that nothing falls through the cracks, they dedicate one full day a week to work on the product; to do this, they have daily standups with the team, weekly calls with each of their clients and Eva dedicates a significant amount of time on project management.
The idea of an agency developing products in-house has been done before. Huge Inc. has Huge Labs, which allows employees to build products which Huge, then found their own companies and spin off. Design agency 37 Signals produced Basecamp, a popular project management software. Agencies develop these products to solve the inefficiencies of their clients and streamline their communications.
Did One400 make the right decision to bypass outside investment in favor of funding their own product? Their product is still in the works, so only time will tell. I am excited to follow One400 company’s success.