Tuesday, March 19, 2019
Interview with Ryan Disraeli And Stacy Stubblefield, Telesign
For this morning's interview, we thought we'd catch up with two of the co-founders of Marina Del Rey-based Telesign (www.telesign.com), Ryan Disraeli and Stacy Stubblefield. Telesign--which now has over 300 employees-- recently was acquired by BICS in a deal worth $230M. Disraeli also recently was appointed as CEO of the company. Ryan and Stacy co-founded Telesign over 15 years ago along with their co-founder, Darren Berkovitz.
Talk about Telesign and what you do?
Stacy Stubblefield: We do two factor authentication, which basically means we send text messages with the codes you get when you log into a web site or even when you're just registering for a website.
How did the company start?
Stacy Stubblefield: We actually started out of an incubator, based out of Beverly Hills. You would not have heard of it, because it was very small. We were working on a bunch of different projects when we first started at the incubator. Telesign was the first thing we were working on, but there were a bunch of different little businesses we started all about the same time. Telesign, slowly over the years, became the one that really took off. We got a relatively large client in 2008, after three years of chugging along, and that's when we knew that was the business we should be focusing on. We started focusing on that, and at the time we were doing only phone verification, but then we started adding in data analytics because of customer demand, we added in some other things like straight messaging rather than pin codes.
What were you doing before?
Ryan Disraeli: I was actually in school at the time. Stacy and Darren, our other co-founder who's not here right now, actually graduated from USC.
What were you majoring in?
Ryan Disraeli: I was studying business with an emphasis on entrepreneurship. I was about 19 at the time.
Talk about Telesign now, talk about your growth path?
Ryan Disraeli: It certainly wasn't an overnight success for us. Even though we've grown from three employees to over 300. It certainly didn't happen overnight. As Stacy mentioned, it took awhile for us to attract top-tier clients. Being a really small company going after a security and mission critical use cases, we'd often talk to customers, and they'd be interested in the technology and do due diligence and suddenly realize we were just three people operating in LA, and we struggled for awhile to acquire top tier clients. Our first summer we really struggled, but once we found our first major client we were able to accelerate the growth quite rapidly from there. Certainly, not an overnight success, it took us several years to hire our first full time employees for the company. We really started scaling the business in 2009 and 2010, to where we are now with 300 employees, hiring quite rapidly both here in LA as well as in our international offices.
What enabled you to get that first customer on board?
Ryan Disraeli: It was a little bit of luck, and perseverance. We were trying to acquire customers, and Darren and Stacy know I spent all of my time on customer acquisition, everything from cold calls and emails to sending things in the mail, going to conferences and walking around and trying to pitch people at their booth. We were really focused on customer acquisition. Our first major customer was a bit of luck, it was a major top 10 website at the time, and still is. Very interesting culture in that they were a small company, and blended with us culturally. Unlike these other major customers who would be looking at Telesign and be turned off by us being three people, that actually was a benefit to us, we were young, we could relate to them, and they didn't care we were a small company because we could relate to them. A little bit of luck because of the profile of the company. But we did spend a lot of time prospecting.
Stacy Stubblefield: There were even times when these guys got cease and desist letters from potential clients for being a little too persistent. The other thing, is we were extremely customer focused. We'd always go into client meetings asking: how can we help you? It's not about what product we are selling, is what are your problems and can our product solve those problems, or is there something else where we can augment what we already have.
You mentioned you were just three people, how did you develop what you did with just three people at the time?
Stacy Stubblefield: We were part of the incubator, so we had some other contracted employees who were working and helping us develop the product. They were actually part of the company for several years.
Did you take investment initially?
Ryan Disraeli: We had one big investor, which was the company running the incubator, so we did not raise money for quite some time. One of the interesting parts of our story, is we were so focused on customer acquisition, if you compare that to startups now who are focused on raising money right away and printing business cards with a flash logo on it, instead, we spent all of our time on customer acquisition. Fundraising was something we just weren't investing in. We did ultimately raise money, we raised money to acquire another company, but we didn't do so until we were profitable and we were able to raise that money at a much higher valuation that the early days.
So you were able to fund your growth just from customer?
Ryan Disraeli: Yes. We were quite profitable, quite quickly, which enabled us to self fund and grow. For us, that benefited Telesign as well, because the market was catching up to what we were offering. If we had raised a ton of money, I'm not sure the customers would have been ready.
I'm sure you heard, especially from large companies, potential customers saying they might just go build something like this themselves. How did you get over that?
Stacy Stubblefield: So, that's a really good question. For the first few years, we were really worried about that happening. But, it turns out, even if you do build it yourself, you still have a cost. You have to terminate the text message, you have to acquire the data, there's still a cost at the end. So, they don't save all that much, and they don't save all that much if they built it themselves. And the second thing, it's just a very difficult business. People don't just realize how difficult it is to send text messages internationally at scale. It got to the point, where if one of our clients was hey – we'll go build it ourselves – we'd say, good luck, and we'll see you in six months!
What is the biggest lesson you've learned building this company?
Ryan Disraeli: There are many. The one that stands out to me, is staying balanced. When there are moments that happen, where it feels like the company is going to go out of business—especially early on, and luckily for us, those don't happen anymore—for us at Telesign, all those moments, a year later, were transformative for us in a positive way. They forced us to do something different, they forced us to innovate, they forced us to create new products. I think staying balanced in those tough moments when it feels like everything is going wrong, but look at them as opportunity. Especially for us, every tough moment was such a positive force for doing something well.
Stacy Stubblefield: On my side, further along the lines of having a very strong customer focus, I think that's part of the reason we've been so successful over the years. When you are talking to someone, know your audience. When you're talking to a client, know what their main objectives are and what they need.
What have you enjoyed most about your entrepreneurial journey:
Stacy Stubblefield: I actually like the ups and the downs, and learning a lot. Every day it's problem solving, something new, something you have to learn, it's really expands your mind.
Ryan Disraeli: For me, it's similar things, all the learning and developing. But it's also the relationships you make. Darren, Stacy, and I have such a strong friendship and relationship beyond just being co-founders, that's pretty unique to our experience here. Stacy and I can still go into a meeting and debate things back and forth, and other people will look at us and wonder if everything's okay. But, we've built up enough trust and relationships that those kind of things can be very valuable.
Thanks for sharing your story!