Conserving Cash: Veodia CEO Guillaume Cohen (Part 2)

SM: How big did Envivio become, and what was your evolution with them?

GC: I stayed with them for five years. They now have 120 employees; when I joined there were 15. At some point they were involved in too many markets and they had to focus. The investors had invested more for the telcom market versus the enterprise, and Envivio decided to focus more on the enterprise, as well as on the broadcaster and telecom markets.

At the time I saw it, I realized I could not continue to grow that market because most of the profits from my business unit were funding the other units. I could not scale it or explore better business models because that would take me too far from the core strategy, so I decided to leave and start my own company and address what I had heard and seen from my own customers about their needs and problems.

SM: Is that when you started Veodia?

GC: Yes. I started it two and a half years ago.

SM: Did you just quit one day and start? How did you fund it?

GC: First I had to work on my personal cost structure so I would be able to leave my job and go without a salary. Fortunately, my future in-laws live in Palo Alto so I moved in with them before even getting married. They were great and provided me with a room I could use for work. I would bring engineers to the house and use the living room for seminars, and they would provide food as well.

I lived with them for a year and a half, and funded it with my own money. I found a Stanford engineer who was working for NASA who helped me build the first prototype.

SM: How did you find him?

GC: I sent an email to the Stanford mailing list. We knew people in common and he responded. We got involved and built this prototype which helped us raise money from one angel.

SM: What was the prototype?

GC: It was almost a fully working product. It was a web-based service that allowed a user to sign up for an account. It was a hosted, software-as-a-service model. It allowed you to broadcast live video from your browser, as long as you had a camera connected to the computer, and stream it live to thousands of people. You could also record it, manage your library of content, and share it via multiple devices. Obviously we took a lot of shortcuts because it was a prototype.

SM: How long did it take to build?

GC: About six months.

SM: And you used the prototype to get angel funding? Who was the angel?

GC: The angel was an individual I knew as a friend. I was able to raise $200,000. He liked me and what I showed him, but I did not have to articulate a full business plan. It was based on faith in me and what he saw. That obviously helped, it allowed us to basically file some patents and pay for the lawyers to file those patents. We were also able to get a real office, even though it was small. We also hired a couple of people on very small salaries, and started to monetize the prototype.

That allowed us to sign a deal with Cisco WebEx. They selected us to be part of their WebEx Connect platform as their provider of video. That helped a lot. It was a new product to a great customer base, but was also got new customers such as universities based on the reputation.

SM: How were you selling?

GC: It was direct selling. People were finding us via the website. We had a free trial. People could start using it and then call us for an upgrade, a freemium SaaS model. That model allowed us to extend the angel round, and we were able to raise another $1 million from another angel group. At the time we were talking to Genentech, who was very interested in our product. The guy from Genentech talked to a friend of his over the weekend, and the friend contacted us after hearing about us from the Genentech rep. He said he heard good things and asked about our financing situation and pulled together a group of people to invest in our angel round.

I was also investing in PR. I hired a PR person very early on to create some buzz. That also really helps get traction with investors. Investors were my audience primarily. We then grew to 12 people and started getting more business from clients.

This segment is part 2 in the series : Conserving Cash: Veodia CEO Guillaume Cohen
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