Sramana: How much of a market opportunity remains in France? If you did not make investments to expand outside of France, how big could you grow?
Jocelyn Denis: I did an assessment of only the French market. There are 12 market segments we pursue there, and there are 200,000 potential customers in those markets. Currently we have 2,000 customers, so we have 1% of that available market.
Sramana: Why are you looking to go international? If your TAM is $200 million, why not just focus on that?
Jocelyn Denis: We will invest more and focus on the French market. We can reach 50 million euros in four years. To do that, we must raise capital in order to invest in sales.
Sramana: You can raise capital with $8 million in revenue.
Jocelyn Denis: If we wait another four years to become an international company, the market opportunity will have passed us by. The market is moving now.
Sramana: I am not sure you can handle that type of growth in multiple regions. You have to place bets. You have a business that you know how to do well. If you just scale that business, you know that you will reach 50 million euros in revenue in four years. You don’t know Asia. If you put a $2 million to $3 million investment in Asia, there is no telling what is going to happen. If I were an investor who was going to write you a 3 million euro check, I would do it only if you agreed to focus on France. I want a return on my money.
Jocelyn Denis: My concern is that if I wait four years to start international sales, then it will be too late.
Sramana: That may be the case. In the process, you lose the French opportunity, credibility with investors, and maybe the future of the company. Investors always want less risk. Investors like you because you are showing $8 million of revenue based on a strategy that is working. If you change that dramatically in an area where you have no core competency, it shows a lot of risk.
Jocelyn Denis: That is a good assessment. This is good feedback to have. My idea was to put the biggest part of the investment in the French market and then put a significant investment in one other country to show that we can sell outside of France.
Sramana: That is an experiment. I would not advise you to come to the U.S. because it would be a waste of money. You can discuss this with other investors, but if I were looking at this as an investment, this is how I would think of it. What does your return on investment look like in France?
Jocelyn Denis: A telesales person in my company has a 13% percentage of securing a demo. When he makes a demo, he has a 45% chance of closing that demo. If we add 50 new salespeople, we will reach income of $50 million in four years, which would give us a 10% market share. To do that, we want to raise capital for the first time, say 3 million euro. We are also investing in online sales to target very small companies.
Sramana: If in four years you are at a $50 million run rate, your valuation will be $250 million, if not more. You can then use that currency to acquire companies internationally. That gives you a better opportunity for success in those markets.
Jocelyn Denis: I have heard that same strategy from others as well. I appreciate your feedback. There are a lot of opportunities here, but there is always the need to balance risk. I need this type of feedback to develop my strategy.
Sramana: How is the entrepreneurship scene in Brittany?
Jocelyn Denis: Brittany is in the western part of France, and there are a lot of engineers out there. There is a strong presence in mobile technologies and startups. There are clusters of engineers and a good engineering school. I am an entrepreneur, so I decided to become an angel investor. I made small investments in three startups in Brittany. It is very interesting, and I hope to do this more in the future. There are hundreds of entrepreneurs in Brittany now. There are probably 400 companies in the city [of Bruz] alone.
Sramana: This is a fascinating story. Thank you for sharing it with us, and good luck as you go forward.