Kevin Eigelbach

Business First

Backupify Inc., a technology firm co-founded in Louisville about five years ago by Rob May and Vik Chadha, is a good example of how to build a startup company, said Ben Yoskovitz, the co-author of “Lean Analytics: Use Data to Build a Better Startup Faster.”

Yoskovitz is scheduled to be the keynote speaker tonight for Celebration of Entrepreneurship, an event hosted by Enterprise Corp., the division of Greater Louisville Inc., the metro chamber of commerce that supports the area’s fast-growing companies.

I spoke with him Monday at 21c Museum Hotel, where the Calgary native is staying while he’s in town.

Backupify uses Web-based software to help clients back up and archive information from online sites such as Flickr, Facebook, Twitter and Gmail. In his book, Yoskovitz cited the company as an example of how to do things right.

He told me that May started by creating a simple landing page on the Internet to see if anyone cared about backing up information online.

“It turns out that they did,” Yoskovitz said.

Backupify’s management realized that they had a product that customers liked, and now they had to figure out how to make money from it, Yoskovitz said. But as they began marketing it, he said, they determined that it was costing them, on average, more than $200 to gain a customer who would return only about $40 in revenue.

So management decided to target corporate customers rather than individuals, Yoskovitz said, which made for a significant increase in revenue and made the economics work out.

Because management understood its customers really well, he said, it knew how to fix the revenue model.

Backupify is also a good example of the fact that it takes awhile for a startup business to really take off, Yoskovitz said.

“You have to invest years to learn about your business,” he said.

Now based in Cambridge, Mass., Backupify had raised at least $20 million in investment dollars as of July 2012, as Business First previously reported.