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Bootstrapping Using Services: InRule COO Rik Chomko (Part 7)

Posted on Tuesday, Oct 7th 2014

Sramana: What does the business look like today? Where are you now?

Rik Chomko: Last year, we had one of the biggest revenue growth we’ve ever had. We grew revenues by about 45%. We’re feeling very good about our business in Europe and North America. We have good traction in the market. We’ve done a great job this year of raising awareness and that was really a struggle for us. I can’t tell you the number of times that we had someone say, “I wish I knew about your product three years ago.” So this year, our goal was to make sure that we don’t hear that again.

Sramana: What threshold are you at right now? Is it organic or have you raised more money? What are the financials of the company?

Rik Chomko: Our revenues for 2013 were $8.2 million and we feel like we’re tracking to grow that again by another 15% to 20% this year.

Sramana: Have you raised more money since that $1 million angel financing back in the 2003-2004 timeframe?

Rik Chomko: In 2006, we did a very small round of about $300,000 to $400,000. In total, we raised about $1.5 in million in investment money.

Sramana: What are your strategies? How are you when you’re looking at the company? At this point you have a reasonable handle on 15-20% organic growth based on your valid proposition. Based on your premise and the channels that you’ve created, what would you like to do in the next two to three years?

Rik Chomko: I think there’s a really good chance that we get acquired, you never know. Ultimately, that would probably be the smartest exit strategy for us. We are continuing to grow organically but a bigger company could just come in and decide that they want to get into our market. With that being said, I think our goal is to expand ourselves beyond where we’re at to getting to more, I guess, applications.

So from the mobile perspective, a lot of people now use us for mobile applications. We’re working on a couple of products that allow them to leverage our technology a lot more from mobile applications. We are also considering the cloud as strategic bet. We think that that’s going to allow us to get into a lower end of the market because right now we sell enterprise software license at a high cost. If we can provide a subscription license, small to mid-size companies would want to buy and use the product.

Sramana: Do you have any validation on that hypothesis?

Rik Chomko: Yes. We’ve had a number of people say that they can’t afford our product with all the payment upfront. They would prefer to pay a subscription first.

Sramana: But there are people who are interested in the product in the mid-market?

Rik Chomko: Yes, definitely. And we’ve had companies that have 30 people buy our product too. But most of our business comes from the larger size enterprises.

Sramana: Well, I think the software industry has made a definitive shift to the cloud at this point. If you want to be relevant in the long run, you are going to need to make that shift. That’s for sure.

Rik Chomko: Yes.

Sramana: Does that broaden your term outside of the large enterprise and into the mid-market, which would be a very welcome opportunity?

Rik Chomko: Yes. I think one of the things that we are also pretty afraid of is that someone is going to come along on that subscription side and start eating our business. And so for both reasons, we would like to pick up the lower end of the market but also keep the competitors at bay.

Sramana: Right. And whom do you compete with today? What’s the primary competitive landscape look-like?

Rik Chomko: We still compete against the likes of IBM and Oracle. We do a lot of public sector work. Governments are very rule intensive with lots of laws, so they require products like ours to help with things like integrated eligibility for welfare programs. For that reason, our competitors—IBM, Oracle, and Progress Software, which purchased the company Corticon—all have a business rule engine product in addition to their credit scoring service.

Sramana: Okay.

Rik Chomko: So, largely the same players and in some cases purchased by larger entities.

Sramana: Okay. All right. I think we have the picture more or less. Thank you for your time.

This segment is part 7 in the series : Bootstrapping Using Services: InRule COO Rik Chomko
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