Bootstrapping To 20 Million: Replicon Co-Founders Raj And Lakshmi Narayanaswamy (Part 4)

Sramana: What technique did you find was the most effective to sell to your customers?

Lakshmi  Narayanaswamy: We just tried to keep the buying process as clean and simple as it could be. We took a “what you see is what you get” approach. There were no hidden features and no hidden costs. Customers knew why they were buying or wanted to buy the product. We made it our job to make sure it was very easy for them to understand exactly what they were getting when they bought the product.

Raj  Narayanaswamy: Everything we are talking about is very common now. Everybody does it now. It was not that common then.

Sramana: Who were the primary buyers? Were they businesses or individuals?

Raj Narayanaswamy: Typically they were business buyers who needed it for a specific application.

Sramana: Would they purchase multiple copies?

Raj Narayanaswamy: Yes. They would purchase multiple licenses. A typical license would cover 10 to 20 employees. Our largest customer had 30,000 users.

Sramana: Did you sell the 30,000-user client the product online like everyone else?

Raj Narayanaswamy: That is how it happened. Philip Morris bought our product for 10,000 users. Of course, they called us first to do some investigations and due diligence. After that Kraft came along and wanted a 30,000-user license. They came to our office to talk to us. Even today our largest customer is someone we have not met face to face. Today we do field sales and we will meet customers face to face. However, 90% of our revenue comes through telesales.

Sramana: Telesales is one of the most efficient ways to sell at that price point. Today it has become Web lead generation followed by telesales to close. 

Raj Narayanaswamy: That is how we do it as well. We stumbled upon that approach and started doing it in 1998. It remains our business model today.

Sramana: How many customers do you have total?

Lakshmi Narayanaswamy: We have just over 7,300 customers.

Sramana: What are some of the key strategic decisions you have made that have helped you ramp to such a large customer base?

Raj Narayanaswamy: One of the big decisions we made early on was to get our other consulting business. The money there was good. I have seen that a lot of bootstrapped companies earned their money from a lot of different sources.

Kraft was also a big moment. While we received a very large deal from them, it was hard for us to support such a large implementation. While the product met their need, they had specific requirements and they wanted customization of the product. We had four or five really large deals in 1999 and 2000 where we were customizing our product for those users.

This segment is part 4 in the series : Bootstrapping To 20 Million: Replicon Co-Founders Raj And Lakshmi Narayanaswamy
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