Sramana Mitra: How big is the company now, revenue wise?
Momchil Michailov: We’re at $8 million right now. We’ve been selling the product commercially for just over three years at this point. This quarter we’re moving the product into additional markets. We’re very excited about some product releases that are coming up at the end of the quarter. We have about 15 people here in Boston and about 35 in Sofia, Bulgaria strictly in R&D.
Sramana Mitra: You self-financed the company?
Momchil Michailov: We were angel-funded. We’ve never taken institutional funding.
Sramana Mitra: At what time frame in this journey did you take angel money?
Momchil Michailov: We took the initial angel funding about two years into it. We’ve taken small chunks every year for the past nine years. We came to break-even at the end of last year. With the new release at the end of this quarter, we’ll either look at a strategic round or look at some other ways to help accelerate the growth of the company. It’s such a complex software task to do both storage and data management layers. It never really dawned on us how complex the marketing task is going to be. It is very challenging. It’s a difficult sale in the data center.
It certainly is a very crowded market. You’ve over a billion dollars in VC funding in that market last year. You’ve multiple multi-billion dollar established vendors. We underestimated quite a bit what it’s going to take in terms of sales and marketing efforts. The good news is that with the enterprise validation we’ve got at this point, we’re mostly going to focus on building out the sales team and partnering with the right storage partners for go-to market. That’s the area that we’re going to be looking to fund in the next 24 to 36 months and scale the company based on the customer adoption we already have.
Sramana Mitra: Last question. What’s happening in Bulgaria? How’s the startup scene in Bulgaria developing?
Momchil Michailov: It’s pretty awesome. Bulgaria has changed dramatically over the past 15 years in many different ways. It started with a little airport field. Now, it’s got a sophisticated airport. Bulgaria is now a member of the European Union, which is very important for development. One of the issues with offshore development teams and contractors is the lack of IP protection. So with Bulgaria being inside the European Union, there is now a very good level of IP protection and patent recognition. There is a reasonably sophisticated employment law that allows employers to help their employees grow and create education programs and retaining packages. It’s also very interesting to see the transition from a very stagnant job market after the changes in Eastern Europe to what is now, again, the second largest development office of VMware.
Bulgaria had, for a number of years, very significant immigration problems. Some 25 years after the changes, there are very talented young people that are coming out of universities. Actually, I’m more interested in staying in the country than leaving the country. You have a very good mix between people that are experienced enough with team management, team building, and building products and younger staff that are eager to work. Being able to have people participate in projects is something that people really enjoy. We’ve seen a very interesting growth.
Unfortunately, that growth comes with certain side effects. The cost of employment over the past 15 years has gone up over 10 times. We used to be able to retain PhDs at $300 to $350 a month. That is now a distant memory. The good news is that the standard has also risen. People make more money and they can have a higher standard of living. It’s very nice to be able to participate in that and see that change.
Sramana Mitra: Thank you very much. I appreciate your time.