Sramana Mitra: Can you anchor this for us with some of your business metrics? How many customers do you have now?
Farnaz Ronaghi: I think we have around 50.
Sramana Mitra: What is the average deal size that you have now stabilized on?
Farnaz Ronaghi: It varies quite a bit. We still get into conversations with initiatives. We call a software license if it’s for around $100,000.
Sramana Mitra: Is this annual recurring revenue?
Farnaz Ronaghi: Yes, we have quite a few customers who are way more than that and quite a few that are in the pilot project mode.
Sramana Mitra: Have you raised more money since that Series A?
Farnaz Ronaghi: No, we haven’t. We’ve raised the Series A and after that, we’ve been using the cash that we’ve been producing to scale. We now have 35 employees. Hopefully, six months or so down the road, we will be raising another series.
Sramana Mitra: You are running profitably now then?
Farnaz Ronaghi: Yes, we have been cash positive for many quarters but not that much. We are making enough money to be able to spend it on growth but not exponential growth. That’s another difference with enterprise. In enterprise, there should be certain revenue targets for you to say that you have a case for scaling.
Sramana Mitra: That’s great. How much total money have you spent to get to this level of customers and revenues now?
Farnaz Ronaghi: I don’t know about that.
Sramana Mitra: What is the total amount of financing have you raised?
Farnaz Ronaghi: The seed and Series A comes to around $8 million.
Sramana Mitra: You said you have a CEO running the company. Tell me a little bit about that. Did you hire an external CEO right from the beginning.
Farnaz Ronaghi: For the first two years, my co-founder and I were the CEO. After two years, my co-founder had this question of going into business or going back to what he loves to do which is teaching. We hired one CEO at that point. Unfortunately, our hire was a first-time CEO and it didn’t really work out. We needed someone with more experience. After three quarters, we had to change CEOs.
That was a hard process because we basically had two quarters without a CEO in place. At that point, I was running the company back in the office. We looked for a new CEO. Our new CEO knows the enterprise game and it has been helpful having him around here. One of the challenges of startups is attracting good CEO talent. You have to have the proof point that there is a product-market fit.
Sramana Mitra: Without that fit, it’s very hard to hire a good CEO.
Farnaz Ronaghi: Exactly. We hit that point when we hired Ed. I always thought that we should have done this sooner, but that was not possible.
Sramana Mitra: For a first venture, you’ve done very well. You’re working with good people, and I’m sure it has been a tremendous experience for you. Thank you for your time.