On The Way To 100 Million Dollars In SaaS Revenue: Vocus CEO Rick Rudman (Part 7)

SM: I talk to a lot of SaaS companies and have noticed that there is a big trend in terms of near-shoring. A lot of companies are moving to affordable areas such as Montana, Wyoming, and Tennessee. You can get good labor arbitrage within the United States.

RR: We do have a second sales center in Virginia. Most people do not inherently think that provides us a savings; however, in Virginia you can move further west and get into low-cost areas.

I was not aware there were over 1,000 SaaS companies out there, but I would be willing to bet that there are not more than a couple of dozen which have over $100 million in revenue. I think most of them are probably smaller companies.

SM: There are a lot in the $25 million to $75 million range.

RR: I find that to be very interesting. Other than the really big companies like Salesforce, a lot of us smaller companies are experimenting. Vocus is getting to the point where we are just starting to look at these scale issues. I imagine other companies like us are starting to do the same. I think it will be interesting to see the dynamics of the market over the next couple of years as various companies such as ours continue to grow and look at the equation.

We have to keep the direct inside sales force to support our corporate models. Not only that, but we have to keep expanding our direct inside sales force. Out of necessity, cost will become a part of that equation. If we can do it less expensively, that just means that we can accelerate growth. I am not sure if that happens through near-shore or offshore operations. I am not sure many of the SaaS companies in our situation are sure of that, either.

SM: In terms of labor arbitrage, customer service and support has been very successfully near-shored or offshored. Conceivably, the inside sales piece could also be done. It is going to require fine-tuning, but I can’t see why it can’t be done.

RR: I don’t disagree at all. I think it will take a lot more work than most people realize. It is not a trivial matter to set up a great direct inside sales force.

SM: The support piece took a lot of work as well. Building up the customer support and customer service operations took at lot of effort and time. It only became noticed in the mainstream after the troubles had been worked out.

RR: That would make sense. The evidence of success is readily visible. I think it will be very interesting to see how SaaS companies handle that transition.

SM: I am delighted to hear your story and I look forward to keeping an eye on it. Congratulations on your success to date.

This segment is part 7 in the series : On The Way To 100 Million Dollars In SaaS Revenue: Vocus CEO Rick Rudman
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