Few names in the Austin technology landscape are as recognizable as Bob Fabbio. And he's what you might call an original tech entrepreneur, having branched out from IBM in 1989 with three fellow employees to found the software startup Tivoli.
That company went on to become a rising star in Austin's emerging tech sector, going public in 1995 before being acquired by IBM for $743 million a year later.
Meanwhile, in 1991, Fabbio founded the electronic document delivery startup Dazel. That got scooped up by Hewlett-Packard Co. in 1999 for an estimated $180 million. And he has also become an active angel investor in companies like Austin's data.world; he's a Capital Factory mentor; and he sits on the board of several Austin tech companies. And that's just some of the high points on his resume.
"I’ve watched Austin evolve from a town with a handful of startups to a truly interconnected network of companies, individuals and investors intentionally and successfully supporting each other."
So, when Fabbio founded eRelevance in 2013, expectations were high. The company offers small- to medium-sized businesses customized marketing automation services. They're focused on elective healthcare services, such as plastic surgeons, and their software helps those businesses reach customers easily through email, text, social media and other channels.
Four years later, the company is highly ranked by respected business intelligence firms like Red Herring, it doubled employee headcount this year and posted big revenue gains and it is a 2017 Austin Inno 50 on Fire company.
Austin Inno connected with Fabbio for an e-mail Q&A to get his insights on Austin's startup ecosystem and what's next for eRelevance Corporation.
AI: From founding Tivoli to working at Austin Ventures and founding eRelevance Corporation, you have one of the most extensive and impressive resumes in Austin. How does Austin’s tech startup ecosystem today compare to what you experienced in the past?
Bob Fabbio: I started Tivoli in 1989. It was the first venture-backed, enterprise software company in Austin — at a time when there really wasn’t a startup ecosystem. So, as a young, first-time CEO, I often felt like I was “banging around in the dark” with no one to turn to for advice. Since then, I’ve watched Austin evolve from a town with a handful of startups to a truly interconnected network of companies, individuals and investors intentionally and successfully supporting each other. As a result, we have become a true innovation hub.
AI: eRelevance reported 275 percent revenue growth in the past four quarters. Can you share actual revenue figures? And please give us a sense of what those figures really mean to you as a founder/CEO – and how it compares to your expectations/goals?
Fabbio: While we don’t disclose revenue numbers, our growth from inception has met our very aggressive goals. Our mission is to empower our clients’ growth with a game-changing customer marketing service that increases the lifetime value of their customers. Our continued momentum and success proves we’re succeeding in fulfilling that mission for the small- and medium-size businesses we serve.
For a recurring revenue startup business, the significant revenue milestone is to find a way to go from $100,000 in MRR to $1 million in MRR to $10 million in MRR. We have enjoyed triple-digit growth every quarter we’ve been selling, putting us well on this path in only three years. And for me, as a CEO, it is very gratifying to work with such a driven, talented team that is making it happen!
AI: Along with revenue growth, you’ve also doubled the company’s headcount. What type of positions did you have to fill – and did Austin have the talent you needed?
Fabbio: We are aggressively hiring the best of the best in roles across the organization, including software developers, marketing experts, client success managers, sales and marketing talent, and operations people. We are extremely selective about who joins our team, but Austin has consistently delivered the level of talent we’re seeking.
AI: The aesthetic healthcare space, which includes plastic surgeons and other niche professions, isn’t one many of us are familiar with. How is working with such specialized organizations different – and what challenges and opportunities does that present for your company?
Fabbio: Before we enter a vertical, we do our homework to understand our prospective customers as well as their customers. In the case of elective healthcare, we have also hired a leadership team with long and deep experience serving that market. And the truth is that if we stayed solely focused on this vertical in just the U.S., at our current price point, we are chasing $6B per year in recurring revenue. Ultimately though, elective healthcare will be one of many markets we pursue.
For any vertical we attack, there must be certain conditions that make it very attractive. However, across all small-business verticals, the need for sophisticated marketing that’s simple and affordable is universal because they largely lack the resources and expertise to do it themselves. So, we’re very bullish on the expansion potential.
AI: It looks like eRelevance has raised $13.7 million to date and is generating solid revenue. So, what’s next for the company? What type of investments, acquisitions and products are you focused on in the next year or two?
Fabbio: Fortunately, the business is growing at a pace where we don’t need additional outside capital now, but I expect we’ll be looking to raise additional funding next year. We have been fortunate to attract capital relatively easily, so it is our intention to hold off until we’ve hit certain significant recurring revenue milestones before we go back into the market. Our focus in the year ahead will be to continue to satisfy our clients and help them grow, as well as evolve our solution to a position that makes it a de facto customer marketing service for the markets we serve.
