Surviving Near-Death Experiences and Going Public in London: Michael Hughes, co-CEO of LoopUp (Part 7)

Sramana Mitra: Where are you now? What are the metrics of 2016?

Michael Hughes: We went public in the summer of 2016 on the London Stock Exchange. Our revenue for 2016 is about £12.8 million. We will actually be releasing our 2016 results in a couple of weeks. We have to do an announcement that our revenue is going to be above market expectations. We have a little bit over 2,200 enterprise customers. We sell to small and medium enterprises and a lot to private equity. We have a comical number of venture capital funds who are our customers.

In general business, we sell to everybody from Hooters to Subaru. It’s all over the place. We have big offices in London and here in San Francisco, and smaller offices in Boston and New York. We have a still smaller office in Hong Kong and we’ve got one guy in Barbados. One thing that I’d like to highlight is that we’ve followed a very different path. We have avoided doing anything to go down the Unicorn route. We’ve invested heavily in building a lot of processes which is quite unusual for a company of our size to drive efficiency to the core of the business. Internally, our mantra is we’re trying to build a thoroughbred and not a unicorn.

Sramana Mitra: The truth is that unicorn companies have certain characteristics and I don’t see those characteristics in your company. That’s not to take away anything from what you have done in terms of execution and surviving some precarious precipices that could have killed you. All that is very interesting from an entrepreneur journeys’ point of view. This is not that highly differentiated, ultra fast growth company that turns out to be a unicorn.

Michael Hughes: In our space, there are a couple of companies that do have those unicorn valuations like Zoom and Fuse. That’s based off a lot of video. We could have made the choice.

Sramana Mitra: But video conferencing and audio are very different ball games right? The order of magnitude of complexity in doing video in a conference format is a very different level of complexity from a technology point of view.

Michael Hughes: Yes. In our case, our backend platform is that. We actually do have those capabilities. Particularly in the world of web RTC, it’s a lot less complex than it used to be. There’s a very clear path that we could have gone down. It’s probably because we are a bunch of ex-strategy consultants. We made the bet that the contrarian positioning in the market is the smarter one to follow. That line is very much an important part of the big lesson for us as a company. If you have the option to raise a whole ton of money, should you do it? That’s a big question.

Sramana Mitra: I’m not quite convinced that you have that option is where I would leave it. Just by the nature of your business and the kinds of growth rates that you’ve described, this is not the kind of company that VCs are falling all over themselves to invest in. That’s fine. From our point of view, we are very interested in the capital efficient, robust, profitability stories.

Most of the entrepreneurs out there would serve themselves much better if they focused on that strategy as opposed to chasing some ridiculous hype of trying to build unicorns. Unicorns are few and far between and the conditions that breed unicorns are fewer and far between. As far as I’m concerned, you have my full respect. It was nice talking with you. Good luck!

This segment is part 7 in the series : Surviving Near-Death Experiences and Going Public in London: Michael Hughes, co-CEO of LoopUp
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