Sramana: You said Cycorp was profitable from the very beginning. How long did it take you to reach $1 million in revenue?
Michael Seifert: I think we had about $500,000 our first year. We reached a million dollars the year after.
Sramana: Was Cycorp a pure product company, with services left to the sister company?
Michael Seifert: We are very religious about having a pure product company. Even today, 90% of our revenue comes from licensing and maintenance. The services component is really not existent.
Sramana: When services are required, does your sister company do that?
Michael Seifert: No, we are really quite religious about that as well. The model was to get a partner network. It was difficult initially in Denmark. We had a sister company that was a systems integrator, so everyone suspected that we would hire our own company over other partners. What really happened is that we disfavored our sister company in favor of other partners, which created some problems internal problems with our sister company from time to time. We are very careful about treating all of our partners equally.
When you look at where we are today, we are still very rigid about the partner model. To make the model work, you really need to have a few things in order. You need to have training materials, so your partners can learn to use your product. You also need to have a quality product, so that when partners start to use it, you don’t drown in problems.
Sramana: You have had a 12-year-run to date. What are some of the big milestones in that journey? What are some of the strategic moves you made in that journey?
Michael Seifert: One of the first key decisions arose from our decision not to take financing. We essentially created a franchise model. When the US site started, they could use the Cycorp brand, but they were really an independent subsidiary. That was a key decision to our internationalization strategy. If we had not done that, we would not be where we are today. It is unusual for European companies to go straight to the US. Normally, you go to other geographies before you go to the US.
In 2007, I focused on the strategy of the company. I believed the long-term proposition of the traditional Web CMS would be challenged. Web content management was born around editing and publishing documents. The business value of text processing in CMS is very limited. In 2007, we began designing the web experience management product that we released in 2009.
We had a difficult time describing what we were doing back then because web experience management was not a category. We started to collect detailed information about the website visitors and we paired that with our ability to create dynamic experiences online. By pairing those two, we created our first web experience platform that also had capabilities beyond just serving websites.