SM: Earlier you explained how you made a transition from your core business to a much wider variety of businesses. One area that seems like an obvious opportunity for you is in the software-as-a-service business. SaaS does carter to a lot of small businesses with various solutions, including email marketing and CRMs. Have you considered that from a strategic perspective?
RK: You are absolutely right. The company that is the market leader in email marketing solutions for small businesses touts themselves as a software-as-a-service company. We have a product which is functionally equivalent. They may say they are better, and we may say we are better, but they are the same type of product. We charge on the exact same model which is a monthly subscription basis.
SM: Are you referring to iContact?
RK: I know of iContact, but they are a smaller company. I was referring to ConstantContact, which is the market leader. They are both in the same market. If you go to our website and look under our email marketing section, you will see it is the same product. We do not tout it as a software-as-a-service, but it really is the same as Salesforce, iContact, or anyone else in the SaaS arena.
SM: What is the name of your product?
RK: Email Marketing. We operate under the VistaPrint brand name, so we just call our services what they are.
SM: You are going to go from a $500 million company to a $1 billion company on something more than just the strength of your current business model and geographical expansion. You are also going to introduce different products, and it seems like SaaS is a logical expansion.
RK: We totally agree. Recently we announced our first SaaS product, which is email marketing, and it is sold on a subscription basis. It is a software product hosted on our servers. I think SaaS for small businesses is a big growth area. I don’t think that is the last product you will see from VistaPrint in that space.
SM: This is a very good time to make acquisitions in that space. There are 600 SaaS companies out there, and you are in a perfect position to at least cherry-pick a few that make sense for your portfolio.
RK: We are not adverse to doing acquisitions. We have looked at them in the past. We have introduced 12 new products including SaaS and websites in the past 12 months at a very rapid clip. We look at internal development and acquisition as methods to obtain those new products. In the past we have chosen internal development but I fully agree that SaaS for small business is very exciting. There are a lot of companies in there. Most of them have had valuations which we feel are extremely rich and unwarranted, but that is because it is a hot market.
SM: There has been a bit of a shift. Right now it’s a buyer’s market.
RK: We like product lines that are out there, and we have millions of loyal small business customers. We are very happy with the results of our first SaaS product and I think that there are opportunities there.
SM: Is there something I should have asked that I did not ask?
RK: This has been a good summary.
SM: Congratulations and good luck!