SM: What are your pricing guidelines now? SS: We actually don’t share that publicly, but it is not too different than payroll processing costs. The core point is if you look at the paper model, and you go to companies and ask them how much it costs to process an expense report via paper, it is about $45 – $50 per transaction.
SM: When you say that, is it because people have to manually write it down, and place it into the computer, is that what you are quantifying? SS: No, in fact our buyer is the CFO or controller of a company. They do not look at soft-dollar savings, so your time and my time are not factored in. What they do look at is how many people in the accounting department who receive your paper expenses, enter them into the general ledger system. What does it cost to do paper-based checks? How much do you save in supplier contracts? What benefits can you get in reducing the transaction processing costs? We can take that from $45 – $50 down to well south of $10.
SM: You said you went public in 1998, correct? SS: Yes, that is correct.
SM: What was the revenue of the company at the time? SS: We were a lot like every other dot com. We had a modest amount of revenues, we were probably doing about $6M a quarter back then, all licensed revenues.
SM: Were you profitable? SS: No, we were not. A lot has changed in the years. Keep in mind this is right before the bubble.
SM: How did you fund the company? Was it your money and you just bootstrapped it? SS: No, like a lot of companies, after we got it off the ground with our own money we took some venture capital money. We were fortunate to have some incredible venture capitalists, Brentwood Venture Capital, which is now a part of Redpoint. Institutional Venture Partners, Mayfield Fund, RRE … those are some of the venture capitalists that we worked with.