Sramana Mitra: Talk about the customer acquisition strategy and the scaling of revenue.
Rob Douglas: Customer acquisition is a three-step process. Step one is, BioConnect needs to be integrated into target software platforms. Step two is, we use that partner’s ecosystem to plant the flags of BioConnect. If we become integrated into that software platform, that platform’s partners and customer base consume our technology. An end user will now start consuming BioConnect as part of their platform.
Many times, what happens is that an end user finds out about BioConnect and realizes that it’s an enterprise platform. Then they contact us. Now we begin an enterprise sales effort to allow BioConnect to become the enterprise platform for the largest companies in the world.
Sramana Mitra: You go in through your partners. The partners realize that this is an enterprise-grade platform and go into a direct engagement with you subsequently. The partners are lead generation strategy and then you turn them into full-fledged enterprise installation afterwards.
Rob Douglas: That’s correct. When we’re doing the flight planting, it’s an application-specific version of BioConnect. When the end users sees BioConnect, we provide them the full enterprise version of the product which is across all kinds of applications.
Sramana Mitra: How well did this work when you came up with this strategy? How long before you got your first partner? How long before you started converting a lead from that partner into a full-fledged enterprise installation?
Rob Douglas: It’s like hitting a rock with a hammer. You just keep hitting it and nothing happens. All of a sudden, it cracks. When we chose that partner execution model, it’s always slow. In the 2012 to 2014 range, it was really slow. The amount of partners that we integrated with were slow. The amount of flags that were planted was really slow. I would say it took three years in that phase just to get the partner ecosystem off the ground.
If you look at where were are today, this partner ecosystem is planting flags for our technology all around the world all the time. It’s like a snow ball. It just keeps getting bigger. You have to be willing to invest very big in the beginning in order to get the network up and running. Once it’s up and running, it starts carrying you and pulling you forward. About two years ago, we could see the shift where we didn’t have to keep pushing so much on the partner network.
Sramana Mitra: Can you give me a couple of metrics to just understand this a little bit better. When you started doing these partnerships, what was the unit revenue from each of the clients that you were getting through the partnership? Once you started engaging with the end users directly, what were the average deal sizes thereof?
Rob Douglas: In the flag-planting phase, an order size would be in the $20,000 to $50,000 range. Then when you transition into an enterprise, it’s multi-millions.