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Bootstrapping Using Services from Montreal, Canada: Silanis CEO Tommy Petrogiannis (Part 4)

Sramana: So you really focused on selling to clients who had a workflow or process improvement need? Was any of it regulatory based?

Tommy Petrogiannis: Yes. We got very lucky in 1996 when the Joint Chiefs of Staff at the Pentagon ended up buying an enterprise license from us and they standardized on our product. Back then there were no e-signature laws in place. There were no laws that would support legally binding agreements using e-signatures. This is also why we went after ISO 9000 shops. People would ask us if our signatures were safe and legal, to which we would reply that it was safe and that it was not illegal. Once the Joint Chiefs selected us it gave us a seal of approval.

Sramana: How did you get into that opportunity?

Tommy Petrogiannis: Dumb luck. It was a manufacturer of light pens that brought us into an opportunity. They asked us to be in DC in 2 days. They paid for our tickets to DC and we went straight to the Pentagon. That is not what we expected. It was initially for staff actions, which is anything that needed to go up to the President for approval. There were 30 Chiefs that would have to sign off on actions and that was a real big commitment for them. >>>

Bootstrapping Using Services from Montreal, Canada: Silanis CEO Tommy Petrogiannis (Part 3)

Sramana: It sounds like you found a niche working on digital signatures to enable paperless workflows well before it became a standardized business practice.

Tommy Petrogiannis: A lot of what we developed is commonplace today. In 1994, we were the first company to embed signatures into a PDF document. Adobe did it six years later. Today that is common. The concept of signing a document so that the signature is part of the document, independent of the storage and transfer medium, is something that we brought to the industry.

The ease of use of paper is fantastic. The drawbacks are that it is slow to route and very difficult to mine data from it. If we can keep the simplicity and ease of use that comes with paper in the electronic space then we have something that scales rapidly because the user does not have to change their behavior. It is process improvement simply by removing the friction of paper. >>>

Bootstrapping Using Services from Montreal, Canada: Silanis CEO Tommy Petrogiannis (Part 2)

Sramana: You started up a company with some friends around 1992 where you did consulting around pen-based computing. Is that the same company you have today?

Tommy Petrogiannis: Yes, it is. We took the original outcome of that first consulting engagement and realized it was an opportunity that we could build a business off of. Once we delivered it to them as a custom solution, we realized there was likely others who would need something similar.

Sramana: It sounds like you did contract work to get the first generation of the company going, right?

Tommy Petrogiannis: Absolutely. Back then, seed money or venture money for a software company was very rare. You had to do everything the old fashioned way. You had to bootstrap to pay the bills. We took that initial contract award and did that work in the evenings and over the weekends. >>>

Bootstrapping Using Services from Montreal, Canada: Silanis CEO Tommy Petrogiannis (Part 1)

If you haven’t read my Bootstrapping Using Services book, you must. Here’s yet another case study following the same methodology.

Sramana: Tommy, let’s start with your backstory. Where are you from?

Tommy Petrogiannis: I was born and raised in Montreal, Canada and I still live there. Both of my parents are first generation immigrants. Watching them as I grew up, I learned to value the work that goes into earning a buck. The difficulty of earning cash for your business really made an impression on me. I learned that you need to watch cash very carefully when you are building a business. I am an electrical engineer by education. I was always excited by how technology changes every day. >>>

Bootstrapping a Language Product Company Using Services from London, Then Taking it Public and Scaling It to $450M: SDL CEO Mark Lancaster (Part 7)

Sramana: You have made a lot of acquisitions building your business. When did your rollup strategy start?

Mark Lancaster: As soon as we floated. When you go public, you have to understand what the public wants. Most of our shares are held by large institutions. The London Stock Exchange is much different than NASDAQ. They don’t want to see growth as much as they want profit. You need to make use of the money you raise. >>>

Bootstrapping a Language Product Company Using Services from London, Then Taking it Public and Scaling It to $450M: SDL CEO Mark Lancaster (Part 6)

Sramana: Let’s move our discussion forward to the product era of your company. What were some of the milestones in building that phase of the business?

Mark Lancaster: We probably started very slowly on the software side. Over the first three years, in the 1999 timeframe, we were doing less than $3 million in software revenues. We then took the decision to float the company. Remember, we are on the London Stock Exchange. When you said there was not a lot of technology in the UK, I would reclassify that to say there is no technology in the UK. There are a few very good technology companies, but they are all specialized and mature. There is nothing like what you are going to find in Silicon Valley. We definitely consider ourselves cutting edge. We are leaders in innovation. However, analysts don’t understand us; the understanding of our business just does not exist. Generally speaking, it is not a good idea to start a tech company in the UK. >>>

Bootstrapping a Language Product Company Using Services from London, Then Taking it Public and Scaling It to $450M: SDL CEO Mark Lancaster (Part 5)

Sramana: The other side of that coin is that the UK does not have a lot of technology companies. VCs who want to invest in the UK are looking for strong companies and don’t have as many opportunities.

Mark Lancaster: At that particular time, the company was all services and was just starting to develop the product.

Sramana: How did you negotiate valuation if the company was primarily services and the product side of the business was just starting? >>>

Bootstrapping a Language Product Company Using Services from London, Then Taking it Public and Scaling It to $450M: SDL CEO Mark Lancaster (Part 4)

Sramana: What is the composition of your business? Are you selling these products to software companies who do translation work themselves, or are you selling it to competing services companies who compete with you using your own products?

Mark Lancaster: About 50% of our revenue is derived from technology. Since that very early translation technology, we now have leading web content management technology, campaign management technology, document management, social insights technology, and personalization. We wrap all of that into what we call a customer experience platform.

We sell that customer experience platform. Typically larger companies are our customers because they have more data and they tend to have more complexities. Typical customers come from retail, banking, agriculture, and similar verticals. >>>