Sramana Mitra: Have you started seeing revenues escalate from that yet?
Vaclav Muchna: In the United States, this year we are going to be close to $3 million. Our business has a very long sales cycle. We expect that the bigger revenue growth is going to happen next year.
Sramana Mitra: You said you did $30 million in 2016, right?
Vaclav Muchna: Our fiscal year is from July to June. In the fiscal year that ended in June 2016, revenue was $30 million.
Sramana Mitra: This is all business that you’ve built organically. There is no outside funding?
Sramana Mitra: You have a tremendous revenue stream. Where are you now? How far along are you?
Nilay Banker: We are getting into the tens of millions of dollars. We are doubling every year in revenue.
Sramana Mitra: How many people?
Nilay Banker: Now, we are close to 50 people. Almost everybody is in the US. We are focusing on international expansion. Right now, most of our customers have their headquarters in the US. We are focusing on expansion to Europe and then Asia-Pacific, as well as Australia and New Zealand. >>>
Sramana Mitra: What do you do with the venture capital fund? Do you invest in companies in the Czech Republic or in eastern Europe? What is the scope?
Vaclav Muchna: I suggest we take it chronologically.
Sramana Mitra: Sure.
Vaclav Muchna: Today, we are doing a lot of things, but the biggest pie of revenue is from the print management product. Back in 2006, we had another big milestone that opened the German market for us. I mentioned in the beginning of the interview that we have these external control units that were basically terminals that we use for user interaction. >>>
Sramana Mitra: How long did it take you to be able to know that you could actually save money and for you to make money on that gain share model? How long was that process of fully validating the business model?
Nilay Banker: Typically, it takes from 6 to 12 months by the time the customers start seeing benefits. The benefits are multi-fold. There are soft benefits which are in terms of process efficiency and just reduction in head count. We consider those as soft benefits. Then there are the hard benefits which is the draw dollar cost savings through discount management.
It also takes some time for the hard dollar savings to ramp up adoption not only by our customers but, more importantly, by their suppliers who get on to the discount management program and slowly start taking advantage of early payment discounts. In most cases, they start realizing about 75% of the benefits >>>
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Sramana Mitra: It must have been very helpful for you to recruit a bunch of channel partners who would then go and sell that same solution to other major players.
Vaclav Muchna: Exactly. Once they started with us, there was another deal with the headquarters of a central European bank. That helped us to build the relationship through the channel. We took the decision that we would be 100% indirect. Later on, we developed that model where the vast majority of our partners not only sell our product, but they also support it. We only support our partners and they go and support the end customers. If something goes wrong, the customer would call the channel partners. >>>
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Sramana Mitra: When did you start selling the product in this whole gain share model? You said that 2008 is when you started two and a half years of services mode while you got the handle of what the problem was and what product to develop. Was 2011 your first year of selling the product?
Nilay Banker: Yes, 2011 was when our first product came out. We started with invoice automation. Then in 2014, we came out with total discounting. It took two to three years for the base product to mature. We got a healthy base of happy and large customers. We focused on the large customers.
Sramana Mitra: How much did you do in 2011, for instance? >>>