Fossa LLC is dedicated to delivering the most comprehensive, up-to-date information on IT solution providers. Its database has more than 16,000 North American IT solution providers, and the data is published through its website: Channel Navigator. Launched in February 2012, the company has about 30 active customers and is on track to achieve revenue of $100,000 in 2013.
Clark Richter is the founder of Fossa LLC. His IT industry experience spans more than 20 years in channel development, sales management, and marketing roles at Check Point Software, Citrix Systems, Hitachi and Websense. He had used several sales intelligence tools that had good data on end users but little intelligence to segment beyond partner/non-partner and North American Industry Classification Systems (NAICS) with an employee or seat count for the end users. While emerging vendors such as RainKing and DiscoverOrg were focused on Fortune 2000 end users, the broader databases and new models like InsideView, NetProspex, and Jigsaw/Salesforce.com were crowdsourced, with a lot of contacts but little detail to profile the companies.
Seeing a gap in the market for data on channel companies, Clark started the business with a vision of building a comprehensive database to identify IT channel companies with IT relevant terminology and vendor relationships. He worked on the idea with his brother Brad, a database developer, for two years before launching it.
The business model is a monthly subscription fee for its Channel Navigator website. Channel Navigator enables IT vendors to identify and target channel partners based on detailed profiles via subscription-based search and filtering tools.
The main value proposition of Fossa LLC is that it will save customers time and money in executing their channel strategy by providing up-to-date IT, relevant business profiles, and contacts for IT channel companies. It deals with 25,000 companies, 80% of which have fewer than 20 employees. A smaller niche target and specialization in the channel allows it to provide superior and more detailed data, somewhere between the range of competitors like DiscoverOrg and Jigsaw.
Clark’s relationships in the channel and walking trade show floors helped in gaining initial traction. The main beachhead use case was competitive intelligence.
Currently, the company has 33 active customers, including Alcatel-Lucent and McAfee. Its customers are primarily channel marketing organizations that pay for licensing fees and channel sales organizations that use the online tools. The company also sells to earlier stage companies that primarily want the data or consulting services rather than access. Its top IT industry target segments are companies selling SMB solutions, security, cloud business models, and solutions targeted at managed service providers.
Its pricing depends on the user and the number of contacts or records that they are interested in for the year. It generates $66 to $100 per user for the monthly plans. Annual plans are priced at $1,000 for one user with 2000 records and up to $8,000 for 10 users and direct access to download unlimited data.
Using the bottom-up approach, Clark estimates the total available market (TAM) to be $12.8 million in North America and $38 million worldwide.
For 2014, Clark says the goal for Fossa LLC is to triple its revenue. The company has been 100% bootstrapped thus far. Clark says that he is not looking for financing from an investor. He would be more interested in exploring a partnership that can include equity with a more established sales intelligence company.
Clark says he started with the goal of building a business that has little overhead and a healthy cash flow. He hopes that the revenue over time would be sufficient to hire additional people to take care of some of his current responsibilities. Ultimately when it makes sense, he would like to sell the business to a larger sales intelligence player and/or build it under their umbrella.
This segment is a part in the series : The 1M/1M Incubation Radar 2013