Interview with Mitch Free
1. How did you tell your employees about your $26 million round of venture funding? What was your key message?
We are quickly becoming the platform by which the world’s manufacturing economy does business and that comes with huge implications and responsibility to our customers, shareholders and team members. We allow companies to bring products to market less expensively and ultimately enable consumers of those products to increase their standard of living by making their dollar go further. Manufacturing is arguably the world’s largest economy. Just look around you, everything is manufactured. We are building one of the most complex and valuable web based businesses that has ever been built. We should all be very proud of what we have accomplished but realize that we are still in the embryonic stages and can’t take our eye off the ball for a moment. And of course time is of the essence.
I announced the funding at our annual holiday party in December. The party was at The Compound in Atlanta complete with a live band and food stations with food from all around the world to reinforce the global nature of our business. In relation to the funding, I also handed out $1million in bonuses to the employees as a way of thanking them for working so hard and for loving our customers.
2. With offices in China and Europe, where do you see MFG.com’s next global expansion? What will be the greatest challenge?
The world’s manufacturing economy is a very globally interconnected ecosystem and it tends to be broken down into regions that are primarily “buy” regions such as the U.S. and Europe and “supply” regions such as China, Eastern Europe and India. These regions shift over time for a number of factors and we will morph our digital and physical footprint accordingly to make sure we are properly servicing the manufacturing ecosystem. High on our list are Japan and India.
The greatest challenge is finding the right local management team in a particular country. It is important for us to find people who are native to the country we want to enter yet understand western culture and how to bridge their native culture with western culture. They are able to take what works for us in the U.S. and localize it for their country. For example, several of the members of our management team in China attended University in the U.S. and lived in the U.S. for a number of years before returning to China.
3. Is MFG.com the last company in Atlanta with “dot-com” in its company name?
Great question. We may very well may be the last company in Atlanta with “dot com” in it’s name. After the “dot com” bust in 2000 where investors lost massive amounts of capital everyone rushed to take “dot com” off their name because it had a bad connotation. I have always felt that by having it as part of our name it helps to quickly convey who we are and what we do. I’m not one that changes directions with the business trend or fad “du jour”, we are a “dot com” and dropping “dot com” from the name wouldn’t fool anyone.
4. As a seasoned entrepreneur, what advice would you give to early stage start-ups looking for venture backing?
I always tell new entrepreneurs to get as far along as you can before seeking funding, bootstrap as long as you can. Taking money too early is very costly in terms of equity and limits the freedom of the entrepreneur to zig and zag as they perfect the offering and business model. No one gets the business model right at the beginning and the offering typically morphs substantially as well. The entrepreneur needs the freedom to try different things to find out what works and what doesn’t without investors breathing down his neck.
The ideal time to take an investment is once you have developed your offering and proven that customers see value in it and are willing to pay for it. My experience is that once you have demonstrated that customers value your product and that you are in a big market space, the investment money will find you. As a general rule the investment should be for scaling up the business or entering new markets. You will find that venture investors have little appetite for pre-revenue companies.
Once you decide it is the right time to seek funding, do so in a very strategic way. Pick firms that you think are strategic because they have had success funding similar businesses and/or partners with domain expertise and connections that would be valuable to you. Those firms will “get it” quickly are require little education on the fantastic opportunity you are bringing them.
5. Being a native of Atlanta, what do you enjoy most about the city?
One of my favorite things about Atlanta is that we have an airport from where you can fly almost anywhere in the world non-stop, except of course Geneva and Shanghai where we have operations. However, Delta is adding non-stop service to Shanghai very soon.
6. What hobbies do you enjoy in your spare time?
I enjoy music, I’m a big Kid Rock fan. I’d love to play guitar but can’t seem to find the time to practice as much I need in order to learn more that two