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Getting Customers to Prepay to Start Up, Then Building a $300M Business: RMS CEO Hemant Shah (Part 1)

If you haven’t already, please study our Bootstrapping Course and Investor Introductions page. 

Hemant Shah is the co-founder, president and CEO of RMS, a leader in catastrophic risk modeling. He co-founded RMS in 1989 based on his research work at Stanford University. Twenty years later, RMS is a global leader in developing models for things such as hurricanes, terrorist activity, and earthquakes.

Sramana: Hemant, let’s start by reviewing your background. Where are you from? What is the backdrop to your entrepreneurial journey?

Hemant Shah: I grew up on the Stanford campus. I have been here all my life. I was born in Pennsylvania, where my father was a professor at the University of Pennsylvania. I went to school here at Gunn High in Palo Alto. I then went on to Stanford for my bachelor and masters degrees. I lived in Palo Alto and Menlo Park before I finally moved to San Francisco. Of course, my mother got upset when I moved to San Francisco because it was so far away! While I didn’t go far, that was the first time I had left the ZIP code. >>>

Building a Global Software Company from France: BonitaSoft CEO Miguel Valdés-Faura (Part 7)

Sramana: How many people do you have in San Francisco versus France?

Miguel Valdés-Faura: In France we have our headquarters and engineering based in one location, and our sales and marketing based in Paris. We have 70 people in our headquarters and 30 people in Paris. We have 25 people in the US, most of them in San Francisco. We also have some consultants that are based around the country. In total there are 125 people.

Sramana: When did you start generating revenues?

Miguel Valdés-Faura: We started in 2010. Our sales machine ramped up in 2010 and 2011 was our first full year of sales. We basically spent the first 10 months of 2010 preparing the funnel. We connected our website with analytic tools and we put all the processes in place. >>>

Building a Global Software Company from France: BonitaSoft CEO Miguel Valdés-Faura (Part 6)

Sramana: What is the profile of a good inside sales rep for selling your product?

Miguel Valdés-Faura: We have had good luck with recent MBA graduates and we have some good relationships with some MBA schools. Typically we are hiring people into their first or second job. These are typically young, smart people who have a real desire to start their careers.

Sramana: Where is your inside sales operations based?

Miguel Valdés-Faura: With the exception of the US, where we have our inside sales people based in San Francisco, we base our operations in France. From there they are selling into 59 other countries. We are not only hiring MBA graduates, but we also hire people who have the right local culture. The guy selling to Germany is from Germany. The guy calling Costa Rica is from Costa Rica. MBA schools are good options for us because they bring students in from all over the world. >>>

Building a Global Software Company from France: BonitaSoft CEO Miguel Valdés-Faura (Part 5)

Sramana: What is the profile of the customers who were willing to purchase subscriptions?

Miguel Valdés-Faura: We wanted to focus on technical people in medium and large organizations. We believe that those are the people who will influence a purchase. We have kept that target today because that is the market that will purchase subscriptions. We have 600 paying customers from over 60 countries, and of that group 75% are medium or large organizations.

Sramana: How much are they subscribing for?

Miguel Valdés-Faura: The subscriptions are sold for one year at a time. Our pricing is based on the numbers of CPUs on a server. Typically when companies deploy new projects they do not deploy them on the same servers so they come back and purchase additional subscriptions. >>>

Building a Global Software Company from France: BonitaSoft CEO Miguel Valdés-Faura (Part 4)

Sramana: As you were coming out of Bull and setting BonitaSoft up as a separate company, how did you handle branding? Was BonitaSoft the original brand, or was the brand originally Bonita?

Miguel Valdés-Faura: Bonita was the name of the project. Nobody had the Bonita trademark in the first eight years, so this brand is owned by BonitaSoft. The guys behind the Bonita project are now behind the company as well. That can be tricky in the open source community, but I think that we have messaged properly. We have positioned ourselves as adding value on top of the project with the same personnel. >>>

Building a Global Software Company from France: BonitaSoft CEO Miguel Valdés-Faura (Part 3)

Sramana: How did you make the transition from Bull to BonitaSoft?

Miguel Valdés-Faura: My role at Bull was not only to deploy Bonita. As the director of the BPM division, I was there to help Bull services worldwide. At times we implemented solutions that were competitors of Bonita. We have had projects in South America and in the US with Oracle and other systems. I helped with those implementations. We pushed Bonita, but the customer ultimately wanted a different solution. It was important that I was, first and foremost, an expert in the BMP space regardless of the technology used.

Sramana: What happened in 2009?

Miguel Valdés-Faura: To be honest, I was thinking about creating a company out of Bonita at the very beginning. I saw a good opportunity. I am from the generation that saw MySQL and other open source projects turn into companies. In 2009 I decided that the community was there, and the right team was in place. The other co-founders of BonitaSoft were working with me at Bull. We had the technology, we had the team, and we had knowledge of our competitors. >>>

Building a Global Software Company from France: BonitaSoft CEO Miguel Valdés-Faura (Part 2)

Sramana: At that time was Bonita owned by the research lab?

Miguel Valdés-Faura: Yes. Bonita was software that was owned by the lab, but it was using an open source licensing model. We would allow it to be embedded in commercial solutions as well.

Sramana: What happened next?

Miguel Valdés-Faura: After two years, I thought it was the right time to transfer the technology to industry. When you are working in a research facility, sometimes you can get a bit far away from industry requirements. We had different companies interested in implementing Bonita into real projects. >>>

Building a Global Software Company from France: BonitaSoft CEO Miguel Valdés-Faura (Part 1)

If you haven’t already, please study our Bootstrapping Course and Investor Introductions page.

Miguel Valdés-Faura is the CEO and co-founder of BonitaSoft, a software company with the mission of democratizing the Business Process Management. Miguel founded the Bonita project in 2001, with the vision that BPM would become mainstream in every company’s IT portfolio. Prior to Bonitasoft, Miguel led R&D, pre-sales and support for the BPM division of Bull Information Systems, a major European systems provider. Miguel holds a degree in computer science from the URV and a master’s degree from Nancy and Metz universities.

Sramana: Miguel, let’s start with your story. Where are you from? Where were you raised? What is the story of BonitaSoft?

Miguel Valdés-Faura: I am from Barcelona, Spain. Most of the story behind the company and the open source software that we push at BonitaSoft was initially built in France. Everything started in 2001 when I was moving from Barcelona to northern France. I was just finishing my degree in computer science, and I was working in a research center in Europe that is pretty well respected. I was working with people who were very specialized in building collaboration solutions. >>>