Sramana: I like the way you positioned your sales force as commission-only independent contractors. That allowed you to use contractors who already had relationships and could augment their own offering with your software. That seems to be a very effective way to scale in the early stages of a business.
Rod Brown: Getting out of our backyard and moving sales into other states was huge. There was some legislative change in North Carolina that was detrimental to our business because it drove a lot of our clients out of business. The demands and requirements were too much for them to meet. We saw 50% of our North Carolina clients go out of business.
Fortunately for us, by the time that happened in North Carolina we had Georgia to back us up. We then started to market in South Carolina, Maryland, D.C., Virginia, and we are now moving into Louisiana as well.
Sramana: How long did it take you to hit a million dollars of revenue?
Rod Brown: We hit a million dollars in revenue around 2009.
Sramana: How did the business ramp from that point on?
Rod Brown: From that point on it was a matter of adding to our base.
Sramana: So by 2009, you had the business model down? You knew how to sell and what the equation of the sale, correct?
Rod Brown: Yes, we knew all of that as well as the pain point that our clients faced. When you have a SaaS product, you have to do three things. You have to deliver that product, you have to keep innovating on that product, and you have to prevent people from leaving you.
There is now a lot more competition in the market. We were the first in a lot of markets, but we were not first in many other markets. Now we have to innovate and have a better story. A lot of times, providers just need a better story in order to use a new software product. Our revenue ramped up primarily because of word of mouth and our entrance into other markets.
Sramana: You said that you knew your clients pain points. How did you leverage that in your strategy?
Rod Brown: We knew their pain points. When we walked into a new potential client, we knew the potential pain points because we had seen it so many times before. There is one particular company in Georgia that was failing miserably and we were asked to come in and help out. We basically came in and bought that company and it is now a part of our portfolio. That was a result of them knowing the type of work that we did and them having access to companies like that.
Sramana: Does that mean you have started taking ownership of behavioral health centers?
Rod Brown: Correct. That is absolutely what is happening. We have them in Georgia and Louisiana. We own three at this point.