On The Way To 100 Million Dollars In SaaS Revenue: Vocus CEO Rick Rudman (Part 2)

SM: Why did the deal fall through? Sounds as though they had commitment issues.

RR: We never got a good answer regarding their rationale for cancelling the deal.

SM: Did the funding not come through for them to complete the deal?

RR: We did not even get a phone call directly from the buyer. It was very interesting. We sat back and realized that it was a great idea to move the software from government relations into public relations. We decided not to let the idea go to waste. We waited for a conference that was being held by the National Public Relations Society. That conference was held three months later.

We basically designed, wrote, and launched the public relations portion of the software in three months. We arrived at the show with our new product, and that was the genesis and entrance into public relations software. That was the beginning of who we are today. That was the launch of our first PR product which happened in 1997, over ten years ago.

SM: Tell me a little bit about the PR product. What did you help PR agencies to do?

RR: Our target market is really much more corporations and associations. We do have some PR agencies. We have about 30,000 customers in total. We have 4,000 customers who are more traditional PR and marketing customers. Of those 4,000, I would say that 95% are corporations and associations.

SM: You are basically helping in-house corporate groups.

RR: We do have a couple hundred agencies out of our 4,000. We help customers of all sizes, but the bulk of our revenue is from the in-house corporate groups and associations. We help them to do three things: distribute news in the form of online news releases; monitor and analyze news and social media; and build and manage relationships with the media. Those are the three things that we help companies of all sizes do.

SM: Are your customers subscribing to a service?

RR: We have 4,000 companies who have an annual subscription with us. We have another 25,000 customers that use our online press release service.

SM: Is your subscription product a software-as-a-service product?

RR: Everything we sell is really software-as-a-service. Our 4,000 customers who maintain an annual subscription pre-pay that. Our remaining customers pay on a per-transaction basis. Everything is offered on-demand.

SM: One example of a transaction on-demand offering is a service where a customer can pay to release one particular press release, is that right?

RR: Exactly. They do not need to have an annual subscription to do something like that. We handle that on a transaction basis.

SM: In 1997 when you launched this at the PR show, did you get a favorable response? Did people find you interesting?

RR: Sure. Our first year of that product we did $400,000 in revenue. That is for the PR product in particular. We were doing $2 million in revenue when the other company attempted to acquire us.

This segment is part 2 in the series : On The Way To 100 Million Dollars In SaaS Revenue: Vocus CEO Rick Rudman
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