Sramana Mitra: Were you still in Gent?
Bruno Lowagie: I was still in Gent and we’re still in Gent. In 2009, the list was finished and we didn’t find any new customers. We then made a bold move. We changed the old version of iText from the LGPL/MGPL to the AGPL. That’s a more viral license. With LGPL, if you have engine and you build and distribute a car, the car can be commercial. With GPL, you have to distribute the car as GPL too. There was one problem with GPL. For instance, if you build a bus instead of a car, you don’t distribute the bus. You sell tickets for people to use the bus. That’s my analogy with SaaS.
What we saw was Google didn’t distribute software but they built a service and charge for the service. That wasn’t distribution in the context of the GPL. That’s how Google got big because they used all of these GPL software and they didn’t distribute it. They didn’t have to pay for it. I changed iText to AGPL. In AGPL, putting the software on the server is also seen as distribution. If you have software that uses iText under the AGPL, you need to disclose your complete code base as AGPL.
That’s something that many companies didn’t want. That was like our way to sell licenses. If you don’t want to distribute your code, buy a license. At first, there wasn’t that much reason for people to move from the old iText to the AGPL iText. In 2009, we had $300,000 revenue and $700,000 in 2010. I finally quit my job at Gent University in 2010. I started adding more features and functionality. Then sometime in May we saw that we already had $1 million.
Sramana Mitra: This is recurring revenue?
Bruno Lowagie: Part of it is recurring. In our license system, if you have the traditional server license, you buy a server license once and then you have 20% maintenance every year. Sometimes, you can’t count the number of servers you have in a SaaS context. One day, you have zero servers. Another day, you have 100 servers. For that, we have capacity rental where we consider the number of PDFs you are processing. Based on this metric, you pay a yearly fee.
Up until 2011, we didn’t have employees on payroll. We had Andrew Binstock who was the Managing Director. We had sales people on commission. We noticed that because we were working with sales people on commission, we didn’t know much about our customers. That’s when I decided to create a company in Belgium with sales people on payroll.
Sramana Mitra: On the phone?
Bruno Lowagie: Yes, but most of the sales are inbound sales. People know iText. We have a very active mailing list. In two and a half years, I have a 27,000 reputation on Stack Overflow, which brings me almost to the top 2,000. People fill out the sales form and then sales people reply.
Sramana Mitra: The inside sales team is in Gent?
Bruno Lowagie: Yes. Our first sales people were in Gent. We started hiring people. We were five in Gent. In 2013, we switched from sales people on commission in California to a company in Boston. Why Boston? Leading a company from Belgium is difficult. There was a 9-hour time difference. We moved offices to Boston and today, we have five people there.
Sramana Mitra: They’re also inside sales?
Bruno Lowagie: Yes. In Boston, we have three people in sales, one in sales and marketing, and one technical person. In Belgium, we have 50/50 sales and development. A lot of our development is done in Belarus. The technical roadmap is done in Belgium and all the architecture is decided upon in Belgium. We create these small packages of assignments and it goes to Belarus.