Sramana Mitra: The sales model at this point is still direct selling?
John Baker: Yes, still the same. It had expanded into going to conferences to figure out who to talk to. Now we were talking to Deans or Provosts.
Sramana Mitra: How was the average deal size moving?
John Baker: Up. In the early days, we would have been happy to get a few thousand dollars recurring revenue. All of a sudden, we’re bringing in contracts that were in the six figures. It was constantly getting bigger. We have built something that was substantially better than anything else in the market at that stage.
Sramana Mitra: At this point, are you still selling within the Canadian geography? What is your geographical footprint?
John Baker: Once we approached the one million mark, we started selling in the US too. We were just bringing in our first clients from the US including the University of Arizona.
Sramana Mitra: How were you deciding on what to go after? University of Arizona is far from Canada. Why Arizona?
John Baker: They approached us in an industry conference. We discovered people who were from University of Arizona. They really wanted to work with us. In those days, we’d set up a demo and then fax them a contract. They would sign it and send it back. It was that simple. We just kept snowballing from there.
Sramana Mitra: Talk about the other strategic moves you made as you were building the company that gave you levers to move to the next level.
John Baker: The big lever, if you will, was being able to roll up clients into bigger and bigger implementations. My competition at that time thought about providing a learning platform that was more of a course management system.
My vision was to provide a learning platform for an entire university or an entire state. That was key in terms of helping us propel our growth for the next five plus years – being able to have a modern technology that could run in the equivalent of the cloud at a much lower cost point and give them the ability to create a seamless environment across their institutions or states. We got leverage from being able to sell to a whole region versus one client at a time.
Sramana Mitra: You hit a million annual revenue run rate in about 2003, right?
John Baker: Somewhere in that range.
Sramana Mitra: How about $5 million? How long did it take you?
John Baker: I don’t actually know the dates, but it wasn’t too long afterwards. The business model didn’t really change too much till we got to 150 to 200 people in the company.
Sramana Mitra: You said that earlier on, you bootstrapped the company for about 12 years.
John Baker: Yes, 12 and a half.