Matt Watson; Stackify and VinSolutions

Matt Wat­son; Stack­ify and VinSolutions

This week, KC Round­table wel­comed Matt Wat­son, founder and CEO of Stack­ify, the much antic­i­pated start-up due to launch in Novem­ber. But rather than gush about his excit­ing new ven­ture, Wat­son shared bat­tle sto­ries from his last multi-million dol­lar endeavor, the com­pany he claims should have failed 1,000 dif­fer­ent times: Vin­So­lu­tions.

With a fiercely com­pet­i­tive back­ground in soft­ware devel­op­ment**, Watson’s brief expe­ri­ence with the auto­mo­tive indus­try led him to real­ize a large oppor­tu­nity in stream­lin­ing its day-to-day processes, like inven­tory data and cus­tomer rela­tion­ship man­age­ment (CRM). Vin­So­lu­tions offered a com­plete turnkey solu­tion, solv­ing five dif­fer­ent prob­lems for its car deal­er­ship customers.

After a slow start of boot­strap­ping and pour­ing sweat equity into the cause, Vin­So­lu­tions even­tu­ally found lever­age and dou­bled in size every year, land­ing on the Inc 500 list as the 33rd fastest grow­ing soft­ware com­pany in 2010.

But get­ting there wasn’t easy.

Busi­ness part­ners came and went like the wind, one of whom sued Wat­son on his way out the door. An attempt to resell the soft­ware flopped. Har­vard MBAs laughed their way through the busi­ness plan.

Regard­less of exter­nal chal­lenges, Vin­So­lu­tions had a qual­ity prod­uct, and Wat­son knew it. Through a stre­nous sales cam­paign — reg­u­lated by an ex-drill sergeant, no less — cus­tomers took notice of Vin­So­lu­tions quickly.

The com­pany grew so fast, it couldn’t sup­port the high demand. Cash flow was chok­ing on its own breath. They owed all of their ven­dors money, and new cus­tomers sat in queue for 90 days before receiv­ing the product.

Even­tu­ally, 40 per­cent of the com­pany was sold to raise growth cap­i­tal and iron out revenue.

In 2011, Vin­So­lu­tions sold to Autotrader.com for nearly $150 mil­lion, mak­ing a few of its 300 employ­ees instant mil­lion­aires and allow­ing oth­ers to accept gigan­tic sign­ing bonuses dur­ing the acquisition.

Accord­ing to Wat­son, “One of the rea­sons we really suc­ceeded was (because) we had very strong tech­ni­cal and prod­uct exper­tise, and a really strong sales side. So often, you see com­pa­nies that have one or the other, and they often fail because they don’t have the other piece.”

 

**In mid­dle school, Wat­son pro­grammed his video games to play them­selves while he was at school to ensure he retained the top scores.

Eden Williams is president of Tether New Media, which helps B2B companies raise website traffic by 10 to 30 percent. Follow her @TetherNewMedia.

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  1. […] last session’s heart-racing story about Vin­So­lu­tions and Matt Watson’s cut-throat jour­ney to a 9-figure buy­out, KC […]

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