Sramana Mitra: What is the segmentation? When you are looking for customers, where are you looking?
Adriaan van Wyck: That is a very challenging question for us to answer right now. If you think about what I just said, it applies to almost every organization out there. It is a discipline we have to think about within our own organization. How do we go to market and address the specific needs of organizations that we know we can service? Rather than taking our company and forcing it into a specific segmentation, we went for a partner model, where we built relationship with organizations – companies that understand their customers and provide services for them in different regions of the world.
We go to market working with companies such as KPMG or Accenture, but also all the way down to the regional players that provide niche capabilities. They take our technology, and they understand how to use it. They understand the problems of their customers, and they apply our technology to the areas they have expertise and skill in. For example, we are working with KPMG on some local government issues in the U.S. K2 are not experts in that area. We are experts in our software. But when we go to market in a specific vertical with a partner that understands that vertical, we find that this is the best way for us to scale the mechanism with which we get the technology into the customers’ hands.
SM: How many partners do you work with?
AW: With 500 companies around the world.
SM: What is the geographic distribution of your partner network?
AW: It is probably about 45% in the U.S., 35% through Europe and the UK, and another 25% throughout Asia Pacific. Markets are developing very rapidly for us.
SM: I would like to learn more about how you built this company out of South Africa. How did it start? How did you guys come together?
AW: I made two friends at the university I studied at in Johannesburg. They were two computer science graduates, and I had a degree in computer science and a business degree. These two guys were technically very bright. When I left university, I went to work for an IT company in South Africa for one day, but I decided that it was not what I wanted to do and resigned. I called up my friends and said, “I have this idea. Let´s see if we can make it work.” Back then we couldn’t define it or put it in a box as clearly as we can today. What we realized in early 2000 – this was a long time ago, XML barely existed – was that whenever we talked to people about what they were doing and how they saw the IT world, it seemed like there was a big opportunity for this vision we had of building a product that would allow you to automate a lot of what was being done manually within organizations.
The three of us got together, and we realized early that one of the keys to success when starting a company is to make sure that the partners who come together are very strong in their unique skill areas, that they complement each other, and that they respect each other, so that when you are a small team people can take initiative, bear responsibility, and take ownership for what they are responsible for and run with it. Of course, you do that with a single vision of what you want to accomplish.
We did that very early on. The two people I started the company with were technically very skilled, and I could be with customers and understanding what they were trying to accomplish and how that translated into the product and the software. Between that understanding of the problems we had to solve and their ability to turn our understanding into software we could sell, we had the core of our software.
We failed miserably. The first version of the software we never sold to a single person. With the second version, we made one sale. With the third version, I started realizing that it was very hard for me to sell to each individual company. Rather than doing that, I started going to the organizations that ultimately advise the customer. That is where the idea of creating a partner ecosystem started. I spent a lot of time selling, talking about, and evangelizing what we do to our potential partners rather than to customers. That worked. Within a short period we had 10 partners – all within South Africa. Microsoft had a big [bank], and they were building our system for us in those early days. They caught onto the technology, that there was nothing like that out there. [This was Microsoft in] Singapore, and Microsoft in New York found out about it internally. They asked us to get involved with some of their customers. That created the international springboard for our growing into Asia and the U.S.
We followed the same approach in those markets. Instead of engaging with customers directly, we worked with partners in those local ecosystems. I am a big believer in the concept of “people buy from people.” That is relationship driven. We need to build those personal relationships and trust, because ultimately that is the foundation of a healthy engagement.
Then we worked really hard. We were three guys each working 20-hour days. It was all behind the energy and excitement of what was happening with our little business. One of the most critical things for me was that whenever we hired, we were trying to hire people who were better than us in what we were doing. That was incredibly important for us, because we believed that if we could build a fantastic team, it would allow us to accelerate not only innovation but also the commercial side of the business.
Twelve years later, it is still something that is incredibly important for us within the company. When we hire people, we have to go out there and invest in people and their skills so that they constantly push the envelope of what is possible in our organization.