Sramana Mitra: That’s your experience. We work with a very large number of entrepreneurs. Not everybody comes from a company where they’ve already seen a problem unsolved and then they go after that. You had a lot of your validation and probing done while you were already at Siperian and Informatica. You built upon that to go after a very similar customer base.
The process of finding the right solution is not always such a direct path for entrepreneurs. There’s more experimentation involved in a lot of cases than you have experienced because your path was more direct. The general methodology of bootstrapping using services worked for you and that’s something that we recommend heavily to entrepreneurs. Generally, it works the best for enterprise clients.
Let’s come back to where you got traction. Where was the initial traction coming from?
Manish Sood: There was a reason why we picked life sciences. Some of it was tied to the benefit of our hindsight based on our past experience. We started reaching out to our potential customers in life sciences in the pharma and medical device verticals. That’s where we started seeing the transaction or the engagement.
We signed up our first commercial customer in the early part of 2013. It was one of the fastest growing specialty pharma companies based out of Palo Alto. Right after that, we also signed up one of the largest pharma companies in the Midwest. That gave us a good solid footing to start with in terms of customers who were now starting to buy our product and use it. Some of the lighthouse accounts, where we were solving a problem that they had not been able to solve before, were also starting to help us evolve the product. They were providing us insights into what else could be done in order to further expand the capabilities that we were bringing to the table.
Sramana Mitra: When you were doing these early lighthouse customer deals, what kind of contracts did you have with them? Were they traditional SaaS contracts or did they have more of an upfront payment? What was the structure?
Manish Sood: We were at a point where we had created the product and were taking it to market, especially in the enterprise software space. These were deals where we were structuring them as a regular commercial contracts that the customers would have with any other SaaS vendors. These were multi-year contract with annual upfront payments, which led to the fact that it would allow us to generate cash flow and use that to fuel our growth.
Sramana Mitra: What was your pricing model?
Manish Sood: The pricing model was based on two vectors. The primary vector was the volume of information that we were bringing together and consolidating into a unique set of data across multiple sources. The second vector was the number of end users who get access to the application that we create on top.
Sramana Mitra: When you say you were getting annual upfront payments on multi-year contracts, can you give me a ballpark on how much each client was paying you annually?
Manish Sood: On the lower end of the spectrum, one client was paying $100,000 per year. One the higher end, it was about $400,000 a year.
Sramana Mitra: What were the economics of the business in 2012? You said you really started to sell at the end of 2011.
Manish Sood: That gave us some amount of runway for 2012. In 2012, we generated a very small amount of revenue because we were working on building an ecosystem where, to our customers, we would be able to present our solution with data from some of the partners baked into that solution. We were going out and recruiting data partners that we could work with. Some of the solution partners or system integrators who had a good understanding of the customer’s ecosystem who would be able to come in and integrate with the rest of the enterprise landscape.
With that combination, we generated a small amount of revenue, but not enough to take us to profitability. The customer deals that we signed in 2013 were the first signs of the commercial engagement and the commercial success. From 2013 to 2014, we had about 700% growth in revenue.
Sramana Mitra: In 2011, you covered with the financial services contract. The gap that you had in 2012, how did you bridge that?
Manish Sood: We raised some family and friends investment along with some of the investment that I put into it. The total amount of capital that we raised from some of the friends and family, including my own, was about $1.1 million. That $1.1 million gave us the early customers in 2013. Then it took us to profitability at the end of 2014. The first round of institutional investment that we raised was in 2015.
Sramana Mitra: What revenue level were you at in 2014?
Manish Sood: More than $5 million.