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Bootstrapping with Services from Michigan: Amjad Hussain, CEO of Algo.ai (Part 3)

Posted on Thursday, Dec 6th 2018

Sramana Mitra: At the very beginning, when you got this customer, what did you do for them? What did you propose to them that you were going to do that got you that customer?

Amjad Hussain: They had a need for a very specific warehouse management application for complex product categories that had a lot of SKUs and a lot of seasonal demand. We had tremendous knowledge not only of that domain but how to forecast demand at an in-store, item location level, and how to do smart replenishment and many other associated functions.

I think it was a combination of very strong technical and B2B domain knowledge and that some of the people in this first client company knew of our work ethic. They knew that we would deliver what we were supposed to deliver. Our first set of projects were to develop solutions for this customer tailored to their needs. There was a lot of B2B integration involved and a lot of big data. You are talking about a very large combination of item and location combinations.

You need a certain skillset of methodology, especially going back to the 2008 timeframe when you were working with the computing power of 2008 and very limited budgets. In order for big data to happen, certain intelligence was needed. We had a lot of those lego blocks or ingredients that were needed that came very handy to architect a solution that this customer was looking for. Then we were just very engaged. We would work 24/7. We would exceed expectations.

Sramana Mitra: They started trusting you.

Amjad Hussain: Yes. A relationship started to develop. They started trusting us. That is how that relationship progressed.

Sramana Mitra: What was the size of that first check? It sounds like that got you going.

Amjad Hussain: The very first check was just a couple of hundred thousand. Very soon within six months or so, that relationship became a multi-million dollar or over a million dollar a year relationship.

Sramana Mitra: Fantastic.

Amjad Hussain: Within the first six to eight months, we went north of one million in ARR.

Sramana Mitra: Can you talk a bit about how that relationship worked? Was that a product-based relationship? Was it a service-based relationship?

Amjad Hussain: It was a service-based relationship. Over the years, it became a SaaS-based relationship. Tesco is a very big company. They have this inclination to own the application and implement that on their own hardware. It was a services-oriented relationship. Then we used this opportunity and this revenue to start building our own products and our own IP. After the first customer, all the other customers use our software. We then became a SaaS company. For the first customer, it was more a professional services-oriented relationship because of the nature of the opportunity and the fact that it was a large customer.

Sramana Mitra: Tesco got you going. Who was the next major customer that took you to the next level?

Amjad Hussain: The next big customer was a big distributor named Sony DADC. This is Sony’s manufacturing and distribution arm. We started working with them in Europe and North America for many of these inventory management solutions that we built. That was purely a software relationship where we implemented our software and hosted it for them as well. Then they were using our software.

As the relationship progressed, they wanted us to have our own business analysts operate a part of their business using our software. We then created a business analyst arm that brought about a lot of challenges, domain expertise, and good input that really helped shape our product strategy and our product roadmap.

This was happening in Detroit. Our motto was, “This is the community where we are. We are not going to offshore our work. We are going to hire very smart people. We are going to treat them very well.” We have stayed true to that value. In this day and age, we have a political connotation. Back in 2008 when we started our journey, that is just what we believed in.

This segment is part 3 in the series : Bootstrapping with Services from Michigan: Amjad Hussain, CEO of Algo.ai
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