iBegin has been doing all the right things, right from the beginning. It wasn’t that iBegin had the perfect business model from the start, they didn’t. Very few startups do, but instead of getting stuck on one idea, they have transformed within their niche and have shot in to profitability.
iBegin started out as an experiment: a user generated local search site for Yorkville, a ritzy 4 block neighborhood in downtown Toronto. The number of visits to the hyper local site surprised Ahmed Farooq, the site’s founder, so he started exploring purchasing business listings to expand. Dealing with the data providers proved to be a big hassle. Worse still, the data providers used opaque variable pricing schemes and demanded princely sums. And so iBegin discovered a business opportunity, hassle-free fairly-priced business listings: iBegin Source.
iBegin charges $1000 per state or province, $40,000 for the entire US, and $8,000 for all of Canada. Customers love the transparent pricing. iBegin has already made over 50 sales, 80% of which required no interaction or hand holding. And it is not just customers that have noticed iBegin… this year Ahmed received (and turned down) a buyout offer in the low seven digits.
As a local search engine, iBegin used to compete with Toronto based and venture backed startup Ziplocal, which has undergone several redesigns and appear to be struggling with the local search business model.
It is worth reading iBegin’s philosophy. Notice what they didn’t have from the start: “iBegin was not created by a dozen people brought together to work on it. It didn’t have a CEO and CFO and other related positions. It didn’t have bankers and venture capitalists backing it with millions, helping finance user research groups, and hiring expensive and unneeded consultants and advisers.”
Ahmed is no one trick pony. He has a number of other ventures including: vB Skins, Is My Home, and the Bloggy Network. Building a stable of successful businesses and reinvesting those cash flows, instead of raising outside financing, has allowed allowed iBegin to experiment, iterate, and evolve. Getting to product/market fit is a significant achievement.
There are many opportunities for iBegin going forward. Next year we’ll see iBegin expanding into other English speaking countries and offering categories (e.g. health, legal) in addition to regions. How does Ahmed do do it? By listening to customers and bootstrapping his way to a big success.