Sramana Mitra: By the time you started to identify the opportunity for productization, it was still just the two of you? Were there other people involved?
Jawad Shaikh: No, we started hiring people much early on. I used to say that in my first business, it took us ten years to get to 30 employees. In Avelead, we reached 20 employees in less than three years.
Sramana Mitra: The point at which you started developing these products, was it just the two of you?
Jawad Shaikh: We had other people. We had some who did some consulting work, and we had a couple of technical people as well who were helping with the programming.
Sramana Mitra: Having identified the first product opportunity, how long did it take you to market?
Jawad Shaikh: Getting it to market was somewhat immediate because we were working with our existing customer base. We almost had a partnership. It took us three to six months to develop version 0.5. We were lucky that we were able to get our first version to our customer fairly quickly. It took many years to get it to a full solid product. It had many iterations to get to a perfect it.
Sramana Mitra: How much did the first client pay for that version?
Jawad Shaikh: At that time, we did a licensing type model. We were Software-as-a-Service subscription, but now we changed it to licensing. I think it was $80,000 for that first version.
Sramana Mitra: That is substantial. You got $80,000 from the first customers within three or four months of starting the project. What happens next? Did you go and sell it to other customers?
Jawad Shaikh: In the first six months of rolling it out, we got feedback on how the product is working. We took to our second customer more as a referral. One of our existing customers knew another person who said, “Hey, this is a solution that worked for us. You have to try it.”
Getting it to our second customer is what really took us off because we were able to solve the initial data synchronization issues. We shifted and got to our second product which was a revenue reconciliation tool for looking at the patient transaction.
Our second customer got us to our second product. After that, it started spreading like wildfire because people heard about our product and told others. Relationships and referrals was what helped us grow fast initially.
Sramana Mitra: These are all hospital systems that you are selling to?
Jawad Shaikh: Correct.
Sramana Mitra: What was the average deal size?
Jawad Shaikh: From a hospital’s perspective, it’s roughly $150,000 to $200,000.
Sramana Mitra: Take me through the trajectory of how the revenue was building up from 2016 to 2018.
Jawad Shaikh: The way we built our business was through doing consulting work as well. Consulting was in parallel with the product. We were doing consulting on technical services, product management, and clinical services.
Any revenue that came in from that, we reinvested back into the company and spent on R&D. We didn’t put the money in our pockets, we put it back into the business. We hired a true development team and productized the services and solutions. This was right in that 2015 to 2016 time frame.
Once we had that complete, we took it to market which led to our revenue growth. Our consulting started going down a little bit at this point because we were focusing on our software.