What it takes to be a mobile hit: Five friends, zero VC dollars and lots of chutzpah

Remember back to 2009, when the iTunes App Store (s aapl) was just over a year old and the iPad hadn’t even hit our hot little hands? At that time corporate spending on mobile was mainly about advertising to consumers — give me an app! — or freaking out about employees bringing in their own devices. But five college seniors looked at the burgeoning mobile environment and saw an opportunity.

Not the same opportunity as the creators of Angry Birds, or any number of design shops that popped up to help stores, online publications and everyone else build apps. No, these five founders — who met in a an aviation club at the University of Texas at Austin — saw in mobile the chance to make substantive changes in how enterprises do business. So they founded a company — Mutual Mobile — to do it.

The bootstrapped startup has built a successful business developing mobile apps for companies as varied as Google and Adidas. Companies such as this one, a quiet success that has gone relatively unheralded in the press, are defining our shift to mobile, as much as the obvious hits are. Here’s how it did it.

Lesson 1: Find your passion, then follow it

Mutual Mobile made its debut in April 2009 in Austin and two months later signed PeopleFinders.com as its first client. It wasn’t an enterprise company, but it was money in the bank, and the resulting app (Are They Really Single?) was more than just porting that company’s website to a mobile platform. Instead it took the premise behind the site — doing background checks and lookups on people — and packaged that expertise into a single purpose mobile app for checking out if that person you just met at the bar was really single.

It took one month for PeopleFinders.com to recoup the cost of developing the app. “That’s how powerful a mobile experience done right can be for a business,” says John Arrow, the CEO of Mutual Mobile.

Several other clients soon followed until the firm was doing well, with about 75 employees by the end of 2010 and 100 revenue-generating clients. But with the launch of the iPad that year, and some self reflection from Arrow, the team realized that the consumer business might be big, but it wasn’t what they cared about. So Mutual Mobile started firing its clients.


The result was those two dips in revenue as it ditched lucrative consumer-facing customers, including its last holdout Adidas, so it could focus on the enterprise and what they needed. “It was a tough decision to make, but it was the right one for us,” Arrow said. “And while it was hard to see those dips in revenue, we knew where we wanted to go.”

Today the firm only has 48 clients and $26 million in revenue — all from enterprise companies — at the end of 2012. Plus, it has 375 people who are thinking about mobile computing as more than just apps, but as an overall trend toward computing everywhere.

Identify the real trend

What does Arrow find so compelling about developing mobile products for enterprise customers? It’s not the devices.

“Apple isn’t going to make an iPhone 15,” Arrow says. “If you think that, you’re not thinking about mobile in the right way.” For him mobile is shorthand for adapting the computing to our daily lives and habits as opposed to expecting us to adapt to them. Sure, we may still need desktop computers, but Arrow is confident that computing will be everywhere.

The Briggo coffee-making robot lives inside that cube.
The Briggo coffee-making robot lives inside that cube.

For example, his firm last year built an application for a robotic coffee kiosk on the University of Texas campus for a company called Briggo. Students and professors can order their coffee through their phones or at the kiosk and pick up a made-to-order beverage on the way to their class. The app tracks their location and gives the wait time for their coffees based on where they are as well as how busy the machine making the coffee is.

Other examples are further out there, such as the research Mutual Mobile is doing on haptics — the vibrations your phone makes are an example of haptics — as a source of ambient information. Arrow wonders if it might become a type of code for conveying information, akin to Braille. He sees it having potential in places like airplane cockpits or other information-dense environments, but stresses that its use in an actual product is at least six months out.

No VC means no one to break your fall

In the meantime, Arrow’s staying focused on the business, which he said he wants to grow to $100 million in revenue by 2015. This is a big number for a company that is entirely bootstrapped and has no venture capital investment. Arrow says he’s well on his way to achieving that goal. But to get to this point he’s had to do some detective work in the early days trying to find enterprise customers — or partners with enterprise customers — that were ready to change the way they did business with regard to mobile computing.

His first enterprise client came really early on, and is still with Mutual Mobile. The customer, Greenway Medical wants to help doctors use mobile devices when completing rounds and to access patient records. But getting Greenway as a client was more about Greenway seeing the iPod touch as a potential solution and seeking someone — anyone — who might be able to help, and stumbling on the young Mutual Mobile.

The Greenway Medical iPad app.
The Greenway Medical iPad app.

It was also important that they would trust an unnamed startup headed by a 20-something CEO. When Arrow co-founded Mutual Mobile he was 21. This week he had his 26th birthday. That was one reason that Mutual Mobile veered into serving consumer clients such as PeopleFinder.com or Gowalla. Those clients were eager for mobile apps and trusted startups.

“Back in 2009 there weren’t enterprises betting on mobility and we had to figure out how to bootstrap this company when there wasn’t even an addressable market yet,” Arrow said. “We knew consumer was our only option … and when Philips and Google and Verizon came around later we were able to apply all that we had learned. If we had started this company in the early part of 2011 or late 2010 we would have lacked credibility and had no infrastructure and no skillset to help, and clients would have been right to avoid this immature company.”

Arrow also thinks that if he had VC backing he wouldn’t have been able to pass up the lure of easy dollars from more consumer-facing clients. Those dips in revenue may never have happened. He probably would have also been asked to move his company from Austin to the Bay Area. So far he’s content to stay VC free, but given the appetite VCs have for putting dollars into older companies with big sales in hot markets, someone may convince him.

In the meantime, Arrow and Mutual Mobile are content to ride a massive wave of interest in enterprise mobile. One of the strongest signals for Mutual Mobile may have come last month when IBM announced its mobile first initiative, validating the type of experience and work that Mutual Mobile has been pushing on its clients since 2009.