Sramana: When did you make the pivot into the KVM market?
Eli Sasson: We did that in the mid-1990s. From 1995 on, we were active in both the educational market and the KVM [keyboard, video and mouse] market. The KVM market ultimately emerged as the primary market. By the time we took on funding, our stated market was the KVM market.
Sramana: When did you raise funds, and why did you raise funds so late into your company’s story?
Eli Sasson: We took our first round of financing in 2004. We acquired a startup in Israel that developed a technology that reproduced our KVM technology over the Internet. In essence, that acquisition allowed us to provide a KVM-like experience remotely. You can take control of the server remotely, and that has become our major application today.
Sramana: During the 16 years you operated in a bootstrapped mode, what were some of the core strategies you followed to acquire customers?
Eli Sasson: We went to the major exhibitions. By that time we had penetrated the U.S. market as well. We went to major shows around the world. We did very limited print advertising and a spent a lot of time in front of customers. We traveled a lot and we met with customers, distributors, and system integrators. Our travel was our main marketing expense. It takes a lot of money to put salespeople in front of customers.
Sramana: Would it be fair to say that the time during which you were doing this customer acquisition was expensive? Essentially, your customer acquisition strategies were expensive?
Eli Sasson: Yes, that is fair. When I say “customer,” it is not necessarily the end customer. We spent our time with channels. We worked with system integrators and distributors as well as OEM customers.
Sramana: I understand how you were acquiring OEM customers. How did you acquire end customers?
Eli Sasson: We relied on our distributors, and we offered them marketing programs where we would share their marketing expenses. We walked with them. They were the ones who targeted the end customer in most cases.
Sramana: You basically developed an indirect channel, which is what carried you through that period?
Eli Sasson: That is correct.
Sramana: How did things change once you raised money? The focus of the business shifted to data centers, but what was the operational of that shift?
Eli Sasson: The biggest change was our acquiring another company. They had new technology that we had to bring to the market as a product. At the same time, the market was very dynamic. The years after the crisis were very good years for us. We got into a very fast-growth business. As a company we had to make very rapid changes to keep up. It is very different going from zero to $5 million than it is going from $5 million to $25 million dollars. All of your infrastructure is different when you grow at that scale. That was the main experience for us.