Start with Nothing

It's not surprising, then, that when Gianforte made his first three hires, in March 1998, he hired salespeople -- and only salespeople. Unlike so many entrepreneurs starting Internet companies at roughly the same time, Gianforte decided not to hire any marketing executives or to look for someone to forge strategic alliances. Not that those functions weren't important. They just weren't as important as making sales now. Gianforte relied on his wife, a former consultant, to handle accounting and operations. "She was my safety net," he says. "One of the challenges for an entrepreneur is, Can you really trust someone with the books? Someone writes some checks or approves some purchase orders that shouldn't have been approved, and then you're dead because you're out of money."

Gianforte couldn't afford to send his salespeople on sales calls. So he had them work the phones. He's firmly convinced that telesales is the better system. "It costs over $200 for a salesperson to do an on-site visit, on average, and it's highly inefficient," he says. "You can do two, maybe three customer visits a day. In telesales, you can visit 30 people a day."

That tactic turned RightNow into a high-pressure environment. There were high fives and parties at Gianforte's house if the salespeople met their monthly quotas, and there was glum tension if they didn't. Few of Gianforte's early hires had telesales experience. Andrea Smith, who joined RightNow as a salesperson in 1998, says, "I learned pretty quickly that I didn't know what I was doing." It took six painful months before she got the hang of selling over the phone.

The lack of marketing materials didn't help. The concept behind RightNow -- that companies could use software to help reduce E-mail inquiries -- was a new one to most potential customers. "We had no marketing or advertising at all," recalls Janice Taylor, one of the first salespeople that Gianforte hired. "We didn't have any hot-leads program. It was tough." Early on, Gianforte had a few brochures printed up for a trade show, but he didn't believe that sending literature was an effective way to sell. Once that first batch was gone, the sales force had nothing -- a big fat zero -- to send to interested prospects.

HIGHER CALLING: "Sales is really the most noble part of the business."

On the other hand, Gianforte came up with an alternative to expensive marketing brochures -- a concept that remains a key part of RightNow's selling strategy. It's a demo Web site that copies the look and feel of a potential customer's Web site, with RightNow software loaded in. Over the phone, a salesperson walks the prospect through the site, showing how RightNow's software works.

Andrew Field, president of PrintingForLess.com, in Livingston, Mont., says he was bowled over when a RightNow salesperson called and showed him the software on his mock site. "It's the difference between seeing a car and taking it for a test drive," says Field.

Even better, the demos cost almost nothing to build. Students from Montana State University can turn out one demo in an hour for $8. That's just smart bootstrapping. Says Gianforte, "There's always a better way."

Gianforte also replaced marketing dollars with social capital. From his Brightwork experience, he knew a lot of technical writers and software reviewers. In late 1998 he hired a public-relations agency -- trading equity for a reduced retainer of about $4,000 a month, with the first two months free -- and spent a big chunk of his time doing PR. As company spokesman, Gianforte was RightNow's PR program. "I would talk to three to five editors a day, every day," he says.

All that penny-pinching wasn't just to be cheap, Gianforte insists. A big part of successful bootstrapping is knowing where to spend money. "We knew that if we could save a dollar, we could use it to hire more salespeople," he says. "What is the core job here? Two jobs: selling and building product. We were myopic about it. For the first year and a half, all we did was build product and sell product."

It'll Cost You

Building a product presents another problem for a bootstrapper. How will you pay for it? Funding the development process was simple enough in RightNow's early days, when Gianforte was writing all the software and taking no salary. But in August 1998, when the founder made his first technical hire (vice-president of product development Michael Myer), he was adding overhead. Sales hires bring in cash. Technical hires don't.

Normally, they don't, that is. But all along Gianforte had been listening hard to customer feedback and using it to refine his company's product. It wasn't a huge step to begin asking customers to pay for additional features that they requested. Getting customers to pay for improvements used to be common in the software industry, says analyst Rider of Patricia Seybold Group. But in the late 1990s, he says, when venture capital was flowing freely, the practice fell out of favor -- except among stalwart bootstrappers like Gianforte. Throughout 1999, 80% of RightNow's development was underwritten by customers, says Gianforte.

"I used to get on the phone with Greg and say, 'You're killing me. You're breaking my wallet!'" says one of those customers, Rick Lowe, who was then vice-president of customer service at ClickRebates.com. On the other hand, Lowe says that he appreciated the attention that RightNow was paying to his company's needs. "Not many software companies do a good job with that," he says. "They always try to build something in a vacuum."

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