Sramana Mitra: The customers are pharmaceutical companies?
Janet Kosloff: Correct. They are brand managers, market researchers, and M&A specialists.
Sramana Mitra: Was your MVP an app? How did you structure the MVP?
Janet Kosloff: We did not have an app originally. We have an app now but our primary tool is a web application that self-sizes for any sized screen. Most of our surveys are answered on small screens whether it be through the app or accessing the survey maybe through a text message or email invitation.
Sramana Mitra: Can you put a time stamp on when you finished the MVP?
Janet Kosloff: It took us about eight months to get a fully functional application which also had to include some responders. Not only was it the software that we had to build, but we needed people to answer the questions once our clients started to ask those questions. We were lucky enough to get some early clients because I had been servicing this vertical at my last job and had pretty deep relationships with some existing clients and said, “We’re building this application that can get you data-on-demand from very targeted responders. It’s not built yet. I can show you how it’s going to work. I think you should sign up and be in our beta group.” Before it was even finished, we had a few clients signed up so we knew which sort of responders we needed to recruit to answer their questions.
Sramana Mitra: In terms of the chronological timeline, what year are we in now?
Janet Kosloff: We’re probably in 2011. We bootstrapped the company for the first year and a half well into 2011. In January of 2012, we raised about $350,000 from angels in the Boston area through Launchpad, which is one of the largest angel aggregators. They took the lead and did the due diligence and then brought in angels from their group as well as angels from other groups.
Sramana Mitra: By the time you got yourself on Launchpad, how many customers did you have signed on for the product? I imagine you had this product in the hands of customers already?
Janet Kosloff: We did. We had about five or six customers at that time.
Sramana Mitra: Were they paying customers?
Janet Kosloff: They were. We’ve never not had a paying customer. The nice thing about this industry is that clients are used to spending significant amounts of money on market research. We were able to get them to pay us something. It was certainly significantly less than what our clients pay now. They were able to give us some cash which really helped us be able to keep the company going for longer without raising capital.
Sramana Mitra: What were you charging at that point? What was the business model and the pricing model?
Janet Kosloff: The business model is the same as it is now but the prices were different. Our business model is a subscription-based model where our clients buy credits within that subscription. Then those credits are then utilized for answers. For example, if you want to ask one question to 50 doctors, it would cost you 50 credits. They would buy the credits. Those credits get deposited in their account. As they get utilized, they get debited from their account.
Just like minutes for a data plan, if you use them all up, you can buy more. If you don’t use them all up, they roll over to the next year if you resubscribe. The price per answer has gone up because we needed to get some people in the door to be guinea pigs, if you will. We were charging less than what would even give us any sort of profit. As we moved along, we started to figure what our costs are and what we needed to charge and what the market could bear. I can tell you that the average purchase price for an initial subscription is somewhere in the $50,000 range.