RALEIGH — It’s safe to say that Jesse Lipson is a homegrown success story.
After graduating from Duke University in 2000, the self-taught engineer became a full-time entrepreneur at 23. Later, he launched Sharefile, a file transfer service that he grew to four million users in six years and sold to Citrix in 2011. Today, it’s ranked #80 on Forbes’ Just Companies list, with a market cap of $13 billion.
These days, the 41-year-old is working on a new venture, a software company called Real Magic, which recently launched Levitate, a product that helps small businesses grow. He’ was set to be the guest speaker at Raleigh Chamber’s C-Suite Perspectives on Friday morning.
WRAL TechWire’s Chantal Allam recently got the chance to talk with him about his journey, what’s it is like to have a successful exit, and some lessons he learned along the way. This is the first of a two-part interview.
- First off, you’ve been on quite the entrepreneurial journey. Tell us a little bit more about yourself, where you are from, when you first realized you wanted to be an entrepreneur.
I was born in Iowa and lived there until age 8, when my family moved to Baltimore. I did have an entrepreneurial streak as a child, investing in the stock market at a pretty young age and also inventing a couple of magic tricks and trying to market them. But once I entered high school, I became more academic and wanted to become a college professor. It wasn’t until the dotcom boom in 1999 my senior year of college [at Duke University] when my interest in entrepreneurship was reawakened. Within a year of graduating, I’d into entrepreneurship full-time with my first real company, novelProjects.
- What motivated you to launch ShareFile?
novelProjects was a web design and development company. After a couple of years building custom projects for a fee, I decided that I wanted to create software products rather than selling services. I loved the leverage I could have by building products. With one great idea some good design and execution, I could potentially reach thousands or millions of users. ShareFile was inspired by a pain point that I experienced in my web design business. Large or confidential files could not be sent as email attachments, and systems like FTP were simply too difficult to use for non-technical people. So I decided to build a web-based application to transfer large or confidential files. Most of the people I trusted told me not to build ShareFile because I had no special intellectual property or skills to help me compete in the market against much larger software companies. But I decided to build it anyway, because most small businesses I talked to were experiencing the pain point that I was trying to solve.
- And how were you able to grow the company from zero to four million in six years?
Part of it was being at the right place at the right time with the right idea. When I launched ShareFile, the term “Cloud” was not even being used to describe the type of apps that are ubiquitous today. We launched in the early days of software-as-a-service. At that time, most applications were hosted locally on a user’s desktop or in their office service closet. We also launched in the early days of Google’s advertising, so we were able to reach users in a very cost effective way and acquire them online.
Beyond timing, I think there were a couple of things we did really well that helped us succeed. First, we were extremely clear about our strategy, core values, and how we differentiated from our competitors. Second, we were incredibly data-driven in our decision making process. We were always testing, measuring, and optimizing our business.
- What did it feel like to finally sell ShareFile to Citrix in 2011? Why was that a good time to exit?
There’s a saying that the best companies are bought, not sold. That means that typically the best acquisitions happen when a company is not specifically looking to be acquired. That was the case with us and Citrix. We weren’t actively looking for buyers when Citrix approached us. But the file sharing space, which no one felt was particularly interesting back in 2005, became one of the hottest spaces in software by 2011. Dropbox was getting ready to raise $250M in VC funding and ShareFile had never raised a single dollar (we were totally bootstrapped). Given the changes in the competitive landscape, we felt that the best thing for our customers and employees was to join forces with Citrix.
It’s hard to put into words all of the mixed emotions that came with selling ShareFile to Citrix, but overall that time was one of the best in my life.
- More recently, you started a software company called Real Magic. Tell us about this new startup, and what your vision is.
After five amazing years at Citrix, I came to the realization that I wanted to go back to being the CEO and majority shareholder of a private company. I look at what SAS has done and want to emulate that. With Real Magic, my goal is to create a company that I can spend the rest of my career running, building on all of the knowledge I gained from ShareFile and Citrix.
- Among Real Magic’s subsidiaries is Levitate, which helps small businesses grow. Why did you decided to expand into this sector?
Entrepreneurship is a theme in my life and career. I really love working with growing businesses. They are the engine of our economy. The Kauffman Foundation once reported that all of the net new jobs in the US economy are created by businesses in their first five year. At Real Magic, our mission is to make the world a more entrepreneurial and creative place. At Citrix and ShareFile, I saw first-hand how much impact job creation can have on the local economy.
Levitate (www.levitate.ai) is a software tool that helps small relationship-based businesses grow by doing a better job keeping in touch with their clients, partners, and other referral sources. Small businesses are the engine that drives our economy and I’m very passionate about building software to help them succeed.
- Are you hiring? If so, for what?
Yes, we are hiring, primarily for inside sales roles right now. We expect to hire about 10-20 employees in 2019.
- And what about fundraising?
I have self-funded Real Magic so far. We are considering raising a friends and family round of financing in the first half of 2019. We are not currently considering Venture Capital investment.
PART TWO: His mission to help others and his life partner Brooks Bell.