Thought Leaders in Mobile and Social: Not Just Wine in Bordeaux – Interview with Benjamin Mestrallet, Founder and CEO of eXo (Part 3)

Sramana Mitra: What you are describing is standard nowadays. I run my entire company with a virtual team.

Benjamin Mestrallet: That is how we used to do it, too. In September 2009, however, I moved with the entire family and got the visa in February 2010.

SM: What kind of visa are you on?

BM: I have an E-2 investor visa.

SM: What did you have to do to get an E-2, and what did you do to the structure of the company?

BM: Here it is just a subsidiary of the French company, and you have to prove that you are going to invest $150,000 and that you commit to employ people. It takes time, and I had to go back to France to get the visa, but it was straightforward. So it is a French company with a U.S. subsidiary. At the time we had Tunisian, Vietnamese and Ukrainian subsidiaries as well.

SM: How much money did Red Hat bring in upfront when you did the deal?

BM: It was more than one million dollars.

SM: I imagine that [deal] has been producing systematically over the past few years – that you have been working with them in terms of royalties as well.

BM: It is not their core product. Their portfolio consists of Linux stuff and their application server. The portal is doing well revenue wise, but it is not their main focus. They could do more, I think. I always wanted them to do more. But it is convenient because we leverage their network. We made sure the partnership works well and we have a lot of friends there, but we also wanted to do it with our own brand.

When I moved to the U.S., I also realized that the way we were doing business or went to market in Europe could not work in the U.S. unless we raised tens of millions of dollars to build a large sales force. That is not what I wanted to do. So we raised $5 million in France through French VCs – Auriga and XAnge. We raised that money mainly to re-architect the product, to be able to have an inside sales force compar[able] to having a large enterprise sales force. What I wanted first was to find the SIs [systems integrators] like Accenture and try to use them to go to market, but it doesn’t work like that in the U.S.

SM: It is much more competitive to get into SIs in the U.S.

BM: I realized that. There are also a lot of local SIs. So we decided to re-architect the platform to have a cloud version that could be used as a lead end tool for people to easily test the platform. Then, when they are qualified, we can have internal salespeople call them.

SM: What is the customer base?

BM: It is enterprise customers. We tried to get smaller deals with the new version, but the existing customer we have are large enterprises. We have a lot of European, Latin American, and U.S. customers. The telesales is for everywhere, but most of our deals until last April were mainly for Europe and Latin America.

SM: But you were selling them from here, from California.

BM: The telesales is in Europe. The markets we are in right now are mainly telco, governments and banks. Our largest customer is Caixa in Brazil.

SM: So you sold that over telesales?

BM: Over telesales and with the help of a partner.

This segment is part 3 in the series : Thought Leaders in Mobile and Social: Not Just Wine in Bordeaux - Interview with Benjamin Mestrallet, Founder and CEO of eXo
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