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How To Build A Strong IP Portfolio: rPost CEO Zafar Khan (Part 3)

Posted on Saturday, Sep 24th 2011

Sramana: How did you deliver your product? Was it software that you sold or did you host it online?

Zafar Khan: That was before cloud computing, but that is essentially how we delivered our solution for people who did not have the ability to download it and install it. Back then we called ourselves an application service provider. We had an online service and we made it available to anyone to use the service.

Sramana: That was a very early timeframe for blogs.

Zafar Khan: It was very early. It might have been a newsletter. It was some sort of periodic publishing that he sent out to his readership which was a technical audience base.

Sramana: Did you pursue that guerilla PR strategy more proactively across the board?

Zafar Khan: We have always had a guerilla marketing mentality to some extent. We have never had the marketing dollars to compete with Microsoft to get exposure. You can say that however we spent money from a marketing perspective it was done with the intent to maximize every dollar spent. At that time we really had limited capital resources so it was particularly true.

The tech bubble had just burst and through May of 2004 there was a slump in the tech market. We had to make the decision to self fund it and look for private investors. We had to keep the train moving with our own capital until we were able to gain enough traction around the initiative to make private investors interested. From our standpoint we had a product that was positioned for one’s most critical correspondence where they wanted a record that would stand up in court.

For our business that was a bit challenging. While we had customers using our service in law firms and other industries, we had to focus on the most substantive and credible customers. Small business people do not want to be the first to test the product or find out if the registered receipt record we produce stands up to intense scrutiny. That led us to focus first on getting the US Government to become a customer to set the standard and credibility behind our platform, after which we focused on the commercial sector.

We felt that the markets would recognize that if the Government was buying it and using it then it would be a signal that Government regulators would look at the product differently. Once we had Government customers then our plan was to engage large enterprise customers, leveraging the credibility of our Government users. From there we then intended to work backwards into small and medium business customers.

Sramana: What was your business model?

Zafar Khan: People would think of the service as one that they would have available for use when they needed it, almost like an impulse purchase. We started focusing on a per-transaction business model. People were able to purchase a block of pre-paid use. As they used the product they would be able to charge against that block.

Sramana: What is the price range for the service?

Zafar Khan: It was sold on a pay for use basis of between 39 cents and 79 cents per use. For higher volumes we were able to offer larger discounts. In other scenarios we were able to offer a per-user, per month pricing structure. A lot of customers liked the idea of being able to purchase and deploy the software in their own architecture which amounts to unlimited use. That was essentially a pure pricing model.

This segment is part 3 in the series : How To Build A Strong IP Portfolio: rPost CEO Zafar Khan
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