If Bend’s newest wave of tech companies were a high school (mascot: The Skiing Geeks), then Manzama would be an upperclassman. The startup, which makes a business intelligence platform primarily for attorneys, won the Bend Venture Conference six years ago and raised $1.3 million in Series A funding in 2014. In the interim, the company has been growing, expanding its product line and experimenting with new verticals. Now CEO Peter Ozolin, who previously founded and sold a company called Legal Anywhere, is focused on profitability. We caught up with Ozolin to learn more about Manzama’s recent progress and future plans.
Founders: Peter Ozolin, Mark Hinkle, Randall Smith
You made some big changes last year. Can you tell us about that?
Sure. Yes, we’ve been thinking about this idea of bootstrapped-plus, where you raise some money in the early phases and then get off the venture capital bandwagon and never raise any more again. You don’t have to because you’re building a real business, one that is profitable and self-sustaining. So one of the decisions we made last year was that we wanted to make that happen. That said, there’s nothing to suggest this path can’t change: If opportunities arise we could go back into raising capital to grow more quickly. But it’s more about having more than one option as an outcome. Already, there’s evidence that financing for the mid/later stage is slowing down, which if you are not profitable, could mean changing valuations, etc.
How did you begin that process?
We focused on changing our compensation structure and growth objectives for our company to reflect our goal of becoming profitable on a quarterly basis. And we already achieved that in advance of our expectations. These changes have put us at a point where we can now think creatively about the business and take even more risks, without risking the business as much. It doesn’t change the fact we need to innovate to maintain an advantage in the marketplace and focus on growth, it just means that we can run the business from a different perspective at this stage.
You started off targeting the legal market, selling your platform to law firms. Is that still your focus?
We still have a lot of room to grow there. We’re seeing good traction with midsized firms domestically and large firms internationally, for example in the UK and Canada. In addition to those new client opportunities, we’re selling new product lines to existing customers where we already have an established brand, and we can leverage what we’ve done for them. Our renewals rate is past 90%. We have gone into new verticals such as PR agencies, financial services and professional service organizations. What we discovered is they want to use our product differently, so this year we want to do some more experimenting there, but we are seeing adoption and paying customers.
You started in 2010. How much has your product changed since then?
Our premise is still about content discovery, and we’ve never moved away from that. But then we’ve expanded into content management. Several million dollars invested over five or six years is going to get you a stronger product, but that shouldn’t mean that it’s harder to use. It should translate to a stickier client base, and that means continuing to find ways to deliver more value.
Is the push to profitability part of positioning the company for an acquisition?
I think if you take investment, you have always have to be cognizant of the fact that people want a return. However, you’ve heard the phrase “if you build to flip, you’ll flop.” So we don’t have a strict timeline (for acquisition). Instead our goal is to keep growing, adding value for our clients and doing it in a profitable way. We also want to make sure we have good culture that people enjoy working here.
Why is creating a culture important to you?
For me, that’s the thing that would motivate me to go to work every day. If I’m an employee, I want to be confident that if I develop a certain skill set, I’ll be able to realize my talents. As a startup, your first mission is finding product-market fit. But over time, our mission has evolved to help both our customers and employees reach their potential by creating opportunities to grow. So in addition to the fun stuff (river floats, kick ball teams, etc.) we spend time on goal setting and also being transparent about where we’re going and what we’re doing.
Manzama was one of the first tech companies here as part of this new wave of startups. What’s your take on our startup community?
I think it’s unbelievable. It’s great. Sure, you have the negatives, for instance it’s going to be hard to build a Twitter here and hire hundreds of people. But for startups like ours, I think Bend delivers on its promise. We’ve been able to find the right people, most of our first hires are still with us, and they’re committed to the cause and now know they can build something from nothing. And we’ve been able to grow and do it in this place that we love to live.