Sramana Mitra: Each hospital would only be paying you a couple of thousand dollars? The hospital would pay in terms of the software subscription service per month?
Grant Kohler: That’s correct. That’s each hospital. Each of these networks would grow to be anywhere between 20 to 25. Some of them have 30 community hospitals attached to them. Each one of those hospital would have to pay that subscription fee.
Sramana Mitra: If you were to look at your 2007 situation, how many of these hospitals were part of your customer base?
Sramana Mitra: What trends do you see in the industry’s treatment of the users that are not going to be high-monetizing users. I have one observation about the industry in general. I’m not talking about just mobile. The Internet is really saddled with an incredibly high number of free riders.
Steve Wadsworth: I think that’s totally accurate, but it’s accurate largely because of the implementation paradigm for most advertising on the web and mobile. The reason I say that is because I think the Internet has done a bit of disservice to advertising by demonstrating to people that the content is free, and around the outside, there are these annoying things that are trying to get your attention. What is lost in that is the traditional model of advertising, >>>
The New York Times Magazine in its Innovations Issue presents a gallery of technologies that we lost or an invitation to consider alternate futures. Some of what might have been is fantastical: a subway powered by air, an engine run off the heat of your palm. Some of what we lost, on the other hand, is more subtle, like a better way to bowl or type. For this week’s posts, click on the paragraph links. >>>
Sramana Mitra: We’re with you. One thing you’ll find is that our audience is a sophisticated audience. We know the space. I got your point that you are trying to provide something that is more comprehensive to the mid-market that can give a lot of the functionalities that is available in the higher-end of the market at a fraction of the cost. My question is, given that is your positioning, are you telling me that there is no other player in that market? That’s hard to believe.
Sramana Mitra: During the bootstrap stage, what happened in terms of customers? What were you able to bring together and who were these customers? Who were your target customers to begin with and then how did you acquire those customers?
Grant Kohler: Being based out of an academic medical center, we were very fortunate that our physicians were very well-connected in the stroke community. What was happening was that it was their word-of-mouth publicity. Some of them even left the Medical College of Georgia to go to other institutions. For instance, the Medical University of South Carolina. That was another large institution that was taking our technology with them. Within that year and a half time frame, our primary customers were the
Sramana Mitra: With that overview, can you double-click down on some of the trends in each of those vectors? Let’s take acquisitions. What are the key trends in mobile app customer acquisition right now?
Steve Wadsworth: In the early days, the focus of the publishers was to just acquire as many users as they could. They were going after volume and would think, “Let me see how many users I can get to download my app and I’ll figure out how to get value once I get the app on their phones.” It varies depending on where you are. I’m primarily talking about game publishers who are ahead of the curve in mobile app sophistication and value creation. >>>
Suchit Bachalli: If you look at Grainger or Staples, they spend hundreds of millions of dollars in building that ecosystem. That ecosystem is built brick by brick, block by block with a wide variety of software products. Now, let’s look at the SMB space, say someone who has $600 million in revenue. They’re a B2B wholesale distribution company and the type of company you’ve never heard of because their idea of marketing is a barbecue Sunday. These are companies that have $600 million in revenue and 40 locations nationwide. They have city counters where you can buy anything from valves to gaskets to electrical wiring. They sell to other businesses.
Sramana Mitra: All these entities were equity partners as part of the licensing deal?
Grant Kohler: That is correct.
Sramana Mitra: In terms of getting the company off the ground, was there any funding involved? Did you bootstrap the business?
Grant Kohler: We bootstrapped the business to get things started. The first thing that we tried to do was go for a small business grant. We applied for, what is known as an SPIR grant through different research organizations to get some seed money to try and