SEA interviews Jeff Stewart
Doing well. So, you’re our guinea pig for this, all right?
For our listeners here, tell us a little bit about the history of your business. I know you’ve sold several companies, so which one are we talking about today?
Went in one day and saw almost 800 companies listed in Yahoo! Came back the next day, and there were 1,600. So, realized something big was happening. Meanwhile, my co-founder David had – he was actually deploying web-based systems on Wall Street with Solomon Brothers. So, we had known each other from college and decided to dig in with the idea that this new medium was going to be so important that it would make up for our lack of experience.
A lot of people involved back then in the World Wide Web came out of multimedia or design, and we were able to go in and talk to very large corporations about their strategy and address very adult concerns like data security and business process re-engineering and business objectives. We were able to get a following with companies like Citi Bank and AIG. Pfizer, Merrill Lynch and Microsoft were some of our clients. And really grew that organically through revenue and tight management of cash.
So, we looked at – about three years into it, we looked at an acquisition of a design company which we thought could be expanded and really re-purposed into a much more internet oriented business. We were very tech heavy and business heavy, and they were very design heavy. So, we thought that combining would really take us to a new level. We ended up not doing that deal, but got approached by a company called Proxicom instead.
They were venture-backed, and they were growing very quickly, also. We ended up merging with them, and then went and acquired a third company called Ibis out on the West Coast. And that gave us the scale to move into the public market, and eventually, we were about 1,200 consultants and about a $2 billion market cap e-commerce consulting company.
He had been a CFO. And a CEO. He had run a public company. And he helped us better understand the inner workings of M&A and financing. And that was important to have a trusted adviser at the table, especially as first time entrepreneurs.
It’s ’cause we didn’t take any outside financing or governance or how we described ourselves, our pitch. It wasn’t rock solid. And our diligence, what we looked like – we were focused on growing the business and serving customers, not being able to perform due diligence at the drop of a hat. So, we learned a lot from that first attempt, and at the end of the day, we ended up not doing it, the offer wasn’t economically interesting for us. And maybe that’s because we weren’t as tight as we needed to be in the sale process.
But we got approached a couple other times, and each time we got better at it and we were more prepared and it became less of an issue. And by the time the Proxicom opportunity came along, it wasn’t that disruptive, and we were prepared to walk away. And I think everybody was pleased with the terms ’cause it allowed us – it allowed them – to accelerate their technical capabilities.
It allowed them to really accelerate their presence in New York and their customer base in New York. It brought in an important relationship with Microsoft that we had developed over the years. And it brought in great management expertise into the company, and it was part of – I’d like to think – part of why we were able to go into the public markets before all hell broke with the bubble popping.
And the plan was the analyst was gonna spend the summer researching and present his findings in the Fall, and then we would figure out what we wanted to do. And about three weeks into it, he’s like, “you need to drop everything; you need to start Mimeo.” You know, this was when stamps.com was 18 months old and a billion dollar company, and the opportunity space that Mimeo.com plays in, still to this day, is much, much bigger: billions and billions of dollars spent on the management and distribution of digital and hard copy documents.
Upon seeing this research, we felt compelled to jump in and start another company. And so we did and raised $21 million for Mimeo.com. Back then, it was a major effort to develop software, so we had dozens of software developers, spent almost 18 months building out the product, setting up a factory, integrating the software with the factory, integrating the factory with the FedEx system, and then launch that right as the bubble was popping.
So, fortunately, the business model and the team was strong enough to weather that, but that was an exciting adventure. And that company today is – we have almost 1,000 employees – over 1,000 depending on the time of year – who help thousands of businesses produce and distribute their documents, often in the training and development space.
Jeff Stewart, my favorite serial entrepreneur in New York City, thank you so much for being here, a part of Strategic Exit Advisers, E’s with X’s Series. I appreciate it. It was good to talk to you.