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Bootstrapping in Pennsylvania: OnSIP CEO Mike Oeth (Part 5)

Posted on Friday, Jan 30th 2015

Sramana Mitra: Let me understand the open source strategy a little bit better. You offer a portion of your technology as open source, right?

Mike Oeth: Correct.

Sramana Mitra: It’s a freemium open source model. You have other functionalities and features. It’s a classical commercial open source model.

Mike Oeth: Right. On top of that, we can provide a behind-the-scenes-service. You can use this software on your servers and it would work. You may need some consulting. At a certain point, if you want to scale this and get to a million users, you’re going to need a much more scalable platform. That’s where we would come in for the SIP.js.

Sramana Mitra: The other question I have is what about ramp? In terms of scaling the company, what have you seen in your experience as a bootstrapped company from 2004 all the way to the beginning of 2015?

Mike Oeth: If you average out over the entire time, we’ve had a nice 35% growth rate. That continues to this day. At certain times, it’s been much higher. Looking at that entire span, we’ve had 35% growth rate. Especially for companies who are just starting to look at the beginning of that ramping curve, the important thing is to have smart technology people and smart finance people who can keep track of where that ramp is going and get you just a little bit ahead of that curve. If you’re overspending on technology, then you don’t have the cash flow that you need to hire the next developer. If you’re underspending, then you’re going to have system issues and you’re going to have attrition. It’s a very fine line of hiring developers.

I see the job of an owner to be a smart investor. Where do I spend my next dollar? Do I need more sales people? Do I need more technology? Do I need more marketing or tech support? You have the interplay of all of those variables so that you have a service that’s ready for the future, that’s not going to crash, that would still sell as you develop for the future, and support it. That would be my biggest advice – have really smart people and really understand the interaction of all of those players.

Sramana Mitra: In terms of revenue scaling, what have you been able to achieve in this mode?

Mike Oeth: Unfortunately, we don’t talk about our revenue.

Sramana Mitra: You can give us a revenue range or whatever you’re comfortable with.

Mike Oeth: The revenue range is in the double-digit millions. For OnSIP, we have over 30,000 business customers.

Sramana Mitra: As far as we are concerned, it’s been pitched as a company that does over $5 million in revenue.

Mike Oeth: Yes, it is.

Sramana Mitra: All right. Thank you.

This segment is part 5 in the series : Bootstrapping in Pennsylvania: OnSIP CEO Mike Oeth
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