From Free To Premium With Ease: YouSendIt Cofounder Ranjith Kumaran (Part 6)

SM: What was your revenue like when you first raised money?

RK: It was getting close to $1M. We were three people but we had a very bandwidth intensive service. We had a substantial infrastructure that we were building out.

SM: Talk to me about that. How did you build your infrastructure?

RK: Back then it was a data center that we maintained a presence in. We had a couple of cabinets there. We built our own servers and tuned them for big files. We drilled out posts inside of servers so we could fit more hard drives in them. We then wrote out own software to manage those drives. We had a contractor with a similar setup in Virginia to handle all the European traffic coming through because latency was a bit of an issue.

We now have a presence in London which is managed by Rackspace. It is all storage. The brains of the application is all in California in the data centers there. All other data centers are used only for file storage.

SM: What is the algorithm for managing the transfer process?

RK: When we started we looked at the geographic location of the sender and we then pointed them to the closest data center. We were seeing a lot of transactions where people sent files to people, roughly in the same geography. Within the data center we look at storage optimization, and we make two copies of everything in each data center. We also look at optimal I/O because it is a complex, multi-minute transaction. We have to shape the traffic so that one server does not become overloaded.

SM: What percentage of your P&L is infrastructure cost?

RK: It is substantial, definitely more than the average SaaS provider. They are just maintaining a big database and several web servers. I think this is the most expensive service we will ever offer. I am glad we have the hard stuff behind us.

SM: In 2005 you had $1M in revenue. How did it ramp from there?

RK: We just recently started talking about how we have 180,000 subscribers, and the cheapest thing we sell is $10 a month. We have grown substantially. We have had more than 70% growth in the last year.

SM: Has that been steady or was there a hockey stick?

RK: It was, but it is easy to get 70% off of $1M. There are strong signs that we will keep growing next year as well.

SM: What further financing have you raised?

RK: We have raised three rounds totaling $34M. Our C round was two years ago and most of that is in the bank. We raised money to build infrastructure and platforms. We are starting to go after enterprises so we have started a sales team and product marketing. Historically we have only done things like trade shows.

SM: Who were your investors?

RK: Our A round was led by Alloy Ventures and they were joined by Sevin Rosen Funds. Our B round was with Sigma Partners and our C round was with Emergence Partners.

This segment is part 6 in the series : From Free To Premium With Ease: YouSendIt Cofounder Ranjith Kumaran
1 2 3 4 5 6 7