Sramana Mitra: Where were you positioning this? Was this for small businesses? Was this for mid-sized businesses? Where was the sweet spot?
Justin Moore: In the early days, the sweet spot was sub-20-employee companies. We had this concept of trying to empower small businesses to run with the resilience of an enterprise. How do we empower the little guys to have the same level of IT confidence as the big guys?
Sramana Mitra: What was the customer acquisition strategy to get to these sub-20 customers?
Justin Moore: First, it was direct. Then we realized that it was going to be far too expensive. As we approached small businesses directly, we found out that a lot of them were working with Managed Service Providers. These are outsourced IT professionals who are effectively the IT department for small companies that can’t afford to have a dedicated IT team.
We figured out that it would be a more effective channel rather than trying to acquire small businesses one at a time. If we can acquire a managed service provider, there will be a one-to-many relationship and we can, effectively, grow much more quickly. We rapidly moved from trying to sell direct to selling through these managed service providers.
Sramana Mitra: Could you talk about how you recruited these managed service providers and what was their response to your offering?
Justin Moore: The original response was extremely positive. People saw the need. They felt that it was one of the biggest pain points that their customers had because when things went wrong, it was their people that was on-call 24/7 to get their servers back up and running as quickly as possible.
It allowed them to solve a pain point for their customers. It also allowed them to provide a unique value proposition to their customers where they could go in and be the source of confidence, protection, and stability for that IT environment. In many cases, we saw our service provider partners use Ancient as they wedge into a new client to solve that client’s pain and be able to upsell that client on other services.
Sramana Mitra: What was your strategy in recruiting these providers? Catering to the zero to 20 employee shops, that market is very fragmented. The managed service provider market is quite fragmented. What was your strategy? Whom did you go after and how did you find them?
Justin Moore: We really wanted to go after businesses whose majority of revenues came from managed services. We found our first MSP target list by going to the websites of solutions that were either similar or competitive. If someone was selling anti-virus appliances to SMBs or things that naturally went through a channel ecosystem, that would have been a synergistic offering to what we were doing.
We were going to their websites, looking at their regional partner list, and then calling those partners. When you have no funding and no marketing team, you’re more grass roots and scrappy. You just call the service providers up and ask them a few qualification questions around how much of their revenues are derived from services, what types of offerings they offer, how they currently protect people’s data, and what they would do in the case of a server failure or data loss.
As we scaled and grew, our go-to market strategy shifted. As we got credibility, we started to look for big partners that could give us credibility. As we grew beyond that, we started investing in online marketing and marketing automation.
Sramana Mitra: Your primary customer acquisition strategy is through these managed service providers. Is that an accurate observation?
Justin Moore: Historically, that’s correct.