Bootstrapping to 8 Million from Brittany – Digitaleo CEO Jocelyn Denis (Part 4)

Sramana: Once you had established a profitable business in the text messaging area, what did you establish as your strategy for growth?

Jocelyn Denis: In 2009 and 2010 I decided to invest more in multichannel platforms. We looked at things like customer satisfaction surveys over mobile phones. Retailers knew that customers were going on blogs, forums, and social networks to talk about products. They wanted tools to identify those customers in real time. I did not see any other platform doing this, so we decided to invest in research and development to build real-time tools on multiple channels. We expanded from texting into emails, voice mails, and pretty much anything else you want to do on a smartphone, such as sending coupons or customer mailings.

We can send a user a survey via text message that includes a link to a website. The idea is to bring traditional mailings onto digital mailing platforms. We can do mailings on smartphones by email, text, twitter or Facebook. We send links on those messages to our mobile site platform, which is optimized to deliver content to smartphones. Our platform is similar to Constant Contact in that it is very simple to use. The key is that our platform is optimized for smartphone use, and we send links to mobile sites. We offer all statistics on a single platform.

Sramana: Did you finance all of the R&D work from profits?

Jocelyn Denis: Yes. We bootstrapped everything. Our gross margin is around 60% because we have to buy the text messaging from the carriers. Our margins allowed us to invest in this development work. We were also helped by a French administration that helps companies do R&D with zero percent interest. It is like a bank for innovation.

Sramana: How much money can you get from them?

Jocelyn Denis: I got 600,000 euros at 0% over eight years. There were no payments required for the first three years. Today I have 10 developers and five administrators to manager servers and partners. I have a five-person marketing team. We have self-financed our way to the point that we will bring in 6 million euros this year. We will have more growth this year than we had last year. Our growth the first quarter of this year was 85%.

Sramana: What is driving that growth?

Jocelyn Denis: Our new products. Smartphones are changing everything. The credit crisis is helping us because marketing managers want to invest in digital marketing because it costs less than print marketing. The other thing that is interesting is that the weather is unpredictable in Europe. Stores might put goods up for sale, but then they have a hard time selling them because it is not sunny weather. They use our platform to send coupons and drive people into stores. They are not only competing against retailers but also against online stores. They need platforms like ours to make digital direct marketing occur in real time.

Sramana: What portion of your business is in France today?

Jocelyn Denis: We are still a French company, I would say 95%. We know that our market is everywhere and we have a lot of opportunities in places like China. Our business is mobile and we understand smartphones. In Europe it is even more advanced than in the U.S. because everybody uses smartphones for Internet. More than 50% of Internet access is done through phones. Retailers need to organize everything. We have big customers in France who are investing a lot in Asia, and they are looking for us to help them out.

Sramana: How much localization do you need to go to Asia?

Jocelyn Denis: Technically, we are already connected. The main challenge for us is to find the right partner there. We need a sales director. We also need to organize the translation features. We have about 50 customers throughout Europe, including sales in Germany and the U.K. We also have U.S. customers.

This segment is part 4 in the series : Bootstrapping to 8 Million from Brittany – Digitaleo CEO Jocelyn Denis
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