Bootstrapping Zero to 7M from Kolkata: FusionCharts CEO Pallav Nadhani (Part 6)

Sramana: You said you changed your pricing and started going after mid-sized and other larger customers. How did you manage that process? It can be tricky to change pricing.

Pallav Nadhani: We started at $15 and the next year we moved it to $35. After that we went to $99, $250 and finally $500. In the beginning, having our product priced so low helped us to attract individual developers and small teams. Our product at that point and time was not as feature-rich as an enterprise product needed to be. As we added features, we also increased the cost.

When we were enterprise ready and we began selling the product for $500, we found that enterprises found that price point to be very cheap. There was the impression that if we were selling our product so cheap, it must not be a good product. Other competing products were two or three times the price we were charging, and they did not offer half of the features we offered.

By this time we had several thousand customers. We had a good product with a lot of success stories. We decided to create a pricing strategy that would help us to propagate our product into the enterprise market. Our strategy was to avoid abandoning our existing customers, so we gave them all a free upgrade. We then implemented a tiered pricing strategy that would allow small users to continue purchasing our product. We like having small developers as customers because they give us great feature requests and ideas. On the upper end we created enterprise pricing that included high-end support and free upgrades.

We also felt that when enterprises used our product, they were not going to use it only on one server. They were likely to put it on multiple, even hundreds, of servers. There would likely be three or more developers implementing our product. We created a licensing model that allowed a single developer to purchase the product for $199, and then we offered enterprise pricing that grouped servers by units of 10.

Sramana: What has been the impact of that pricing strategy on your revenue since you implemented the change?

Pallav Nadhani: We have doubled our revenue every year since 2009 when we implemented that pricing strategy. We did $1.5 million in 2008, then to $2.8 million in 2009. We followed with $4.2 million in 2010. We did $5.5 million in 2011, and this year we did $7 million dollars.

Sramana: Have you changed your sales and marketing strategy?

Pallav Nadhani: In 2010 we changed a few things. When Apple introduced the iPad, we had to adjust our strategy. Apple does not support Flash and our product relied on Flash. Initially we thought that Apple would finally begin supporting Flash, but that did not happen. We had three months to figure out a solution. We figured that even if we had to rewrite our entire code base with Javascript and HTML 5, it would take three months and cost us all of our customers.

At that point we partnered with one of our competitors, which offered a charting library in Javascript. We took their code and integrated it with our code, which we then sold as a hybrid product that could work on iPad, iPhone, Android, PCs, and the web. That gave us big push and people started looking at us as the thought leader in the industry.

At the same time we changed our marketing from plain SEO and display advertising to a marketing program that displayed our thought leadership. We ran ad campaigns that questioned anyone’s decision to use a charting program that could not support multiple platforms. At that time most of our competitors had failed to use a hybrid model. That resulted in a spike in interest from enterprises. They wanted support for all of the devices their stakeholders used.

At the same time, we matured our lead system. We were getting upwards of 10,000 leads a month. We knew that automated sales were good, but that if we gave a lot of these customers a little push that we could get them to spend more on licenses. As a result, we developed an inside sales team and they worked only on inbound leads. We did not do cold calls or unsolicited offers.

This segment is part 6 in the series : Bootstrapping Zero to 7M from Kolkata: FusionCharts CEO Pallav Nadhani
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