Bootstrapping to $80 Million from Canada: Rob Purdy, CEO of Power2Motivate (Part 3)

Sramana Mitra: How long did it take you to get a first version of this product out?

Rob Purdy: We started development for the Power2Motivate platform in late 2005. It took all of 2006 to complete the first phase. Phase one was the employee engagement component. That was enough to allow us to take that to market in April of 2007. By the end of 2007, we had probably 30 customers on the platform.

Sramana Mitra: What were you charging them?

Rob Purdy: Great question. Typically, we were charging them around $15,000 to $25,000 as a one-time access fee. The user fee model wasn’t very well-defined in those days. We had a flat monthly service fee that typically ranged around $2,500.

Sramana Mitra: 2007 was your first full year of selling the product?

Rob Purdy: Yes. The first client came on board in May of 2007.

Sramana Mitra: By the end of that year, you had 30 clients.

Rob Purdy: That’s right. A couple of good-sized companies.

Sramana Mitra: What was your customer acquisition strategy at this point for this product?

Rob Purdy: We had two inside sales reps with a target list of people that we felt fit the model of employee engagement. They were pretty successful at bringing on clients. I can’t remember how many people came into the pipeline versus how many closures we had. There is one side to this discussion that we have to take into consideration.

In 2007, employee engagement was just emerging as a category. For a lot of companies that we spoke to, they weren’t necessarily thinking of employee engagement. It took a little bit more time to close a client because a fair bit of education was involved. Today, we don’t have to have those dialogues because it’s such an ingrained category.

Sramana Mitra: How much revenue did you do for this product in 2007?

Rob Purdy: In 2007, I would say we probably generated around $2 million. We had some decently-sized clients in there, and we also had a lot of small to medium clients. We had two or three big customers that were up and running at that point.

Sramana Mitra: Was there anything you were learning about this customer base that was adopting your technology? Is there a particular vertical? Was there anything that you could repeat in your customer acquisition strategy?

Rob Purdy: What we really learned the hard way is because the category was new, the small to medium customers couldn’t really embrace it. It wasn’t something that was relevant to them. The larger companies that had dedicated HR people and budgets looked at engagement more seriously and were more leading edge in terms of knowledge in the industry.

We had to shift from small to medium to the bigger customers. What we thought was a small to medium product turned out to be an enterprise product. Once we made the shift, we grew the business significantly faster.

This segment is part 3 in the series : Bootstrapping to $80 Million from Canada: Rob Purdy, CEO of Power2Motivate
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