Bootstrapping with Services: 2600Hz CEO Patrick Sullivan (Part 7)

Sramana Mitra: How much of your leads come from open source customers who have bought your core platform and then you get in and sell them applications?

Patrick Sullivan: A lot of our leads come from word of mouth. It woulld usually be an engineer who works at one company and then transfers to another company. Early on, we had a hard time because when customers heard open source, they’d assume it’s inferior. It’s interesting how over the last couple of years, that mindset has drastically changed. Open source means they can build anything they want on top of it. >>>

Bootstrapping with Services: 2600Hz CEO Patrick Sullivan (Part 6)

Sramana Mitra: They take over the product roadmap and they don’t pay enough. You lose control of the process and become their outsourced development shop.

Patrick Sullivan: That’s exactly what happens. When you’re stuck in the middle of it, you still get swayed by the brand recognition. That was the hard part. I remember five stories of these big companies trying to push our roadmap in a different direction. We finally had to pull back. That is between 2012 to about 2015.

Around 2016 is when we finally got the platform to a place where it can scale worldwide and it can be distributed in multiple data >>>

Bootstrapping with Services: 2600Hz CEO Patrick Sullivan (Part 5)

Patrick Sullivan: It turns out our billing system was turned off. We couldn’t have figured that out because it was so complex at that time. It was one of those things where it was just an eye-opener. You were working on so many different projects at the same time that you always have to fundamentally make sure that the key pieces are there, no matter what. Now we have these test suites that we’ve made.

It’s funny because when I tell the story, people are like, “How are you still in business? You guys seem to make every mistake possible.” A lot of entrepreneurs never started companies before. >>>

Bootstrapping with Services: 2600Hz CEO Patrick Sullivan (Part 4)

Sramana Mitra: What year are we talking now?

Patrick Sullivan: That was between 2009 and 2011. Around 2012, we had our first real working platform. We open sourced it. The reason for open sourcing it is, we thought, “If we try to push this out to the world, let’s give this out for free. If we give away the base layer for free, people will still want to pay for support on top of the platform. Eventually, we can start adding paid applications that sit on top of the platform.”

In 2012, we started to change the company from consulting to support. In 2011, 90% of our revenue was from consulting. In 2012, >>>

Bootstrapping with Services: 2600Hz CEO Patrick Sullivan (Part 3)

Patrick Sullivan: We started going to a bunch of conferences and then we started explaining our vision on platforms. People started to listen. The next thing we know we started getting calls from people around the world. The problem was it was really hard to determine people who had money and interested versus people who wanted us to hire them. After a while, we ended up talking to this person who was working for a large telecom company.

Long story short, he wanted to come to our office. The problem is we didn’t have an office. If you get hired as a consultant, you >>>

Navigating Through Multiple Pivots: Convercent CEO Patrick Quinlan (Part 7)

Sramana Mitra: What else have you done that is an interesting strategic move, whether it’s accelerators or inflection points in your business?

Patrick Quinlan: You always learn from your failures more than your successes. The beginning of 2013 was really solid. We were able to raise capital from Sapphire. We had a go-to market plan. We had a product plan. Our product plan is utterly consistent with the first diagram we drew. It’s deeper and we know more. We understand it better, but I could still use that PowerPoint to sell that product. >>>

Bootstrapping with Services: 2600Hz CEO Patrick Sullivan (Part 2)

Patrick Sullivan: I worked in sales at Xerox. They have a world-class sales program. At the end of the day, I learned a ton about the business side. You get quite an education on how companies are built. You work with so many companies that you start to see how companies operate. I did that for seven years. A long time ago, I still remember my dad telling me, “At some point in your life, you should never work for someone.” That stuck with me.

After seven years at Xerox, I did pretty well. I was at a bar with a buddy and I’ve known this guy for a couple of years. He looked at me and said, “I heard you’re good at business. I’m trying to start a company. I’ll deal with the product stuff and you deal with the >>>

Navigating Through Multiple Pivots: Convercent CEO Patrick Quinlan (Part 6)

Sramana Mitra: What happens in 2012?

Patrick Quinlan: Going all the way back to Delta and to Rivet, there was this trend of finding something that existed. It didn’t need momentum. We were very good at extending at. We wanted to find a company where there’s no majority shareholder, but had a huge addressable market.

We had a list of six things that it had to be or could not be – had to be SaaS, no majority owner. We found this small company in Denver called Business Controls. This was the one we settled on. We had a solid reputation coming out of Rivet. We went into that, took over ownership, and then very quickly raised $10 million. >>>