Why a focus on profits is critical

Hi5 CEO Ramu Yalamanchi made money with seed round

(Note: hi5, a popular social network, is laying off 10% to 15% of its staff, according to reports. Here's an interview I did with Ramu this summer. It was first published on Jun 5, 2008. It's very appropriate given that hi5 has always been focused on the bottom line.) 

Ramu Yalamanchi, CEO of the social network hi5, executed on his business plan in a way that makes angel investors drool.

Starting in 2003, he took a $250,000 seed round and within three years got the company profitable with just five employees.

"One of the things we did very early on was focus on getting to profitability," Yalamanchi says.

Today hi5 has 80 million registered users, three-quarters of whom are under age 24 and 80% of whom are outside the U.S. The company is especially popular with users who don't use other networks, in countries like Portugal, Romania and Thailand.

hi5 raised $20 million in venture funding last year, and another $15 million in January from Hercules Technology. 

In this interview with Vator.tv's Bambi Francisco, Yalamanchi says he learned persistence from his father, who "went through business after business after business" before finally finding success.

hi5 is finding success with Open Social, the common development platform for social networks, with one million new installs daily across 700 applications.