Bootstrapping to $14M, Solving Serious Pain in IT Lead Generation: DiscoverOrg CoFounder Henry Schuck (Part 6)

Sramana: In the U.S. and Canada, how many companies are there that have 400 or more employees, and what percentage of that market have you penetrated?

Henry Schuck: That is a very good question. The answer is a black box in our industry. No data provider knows exactly what that number is. Even if we knew what that number was, it would not be indicative of how many IT opportunities there are. When you get to be a company of that size, 400 to 600 employees, a lot of the IT services are outsourced. A lot of companies don’t have IT people in-house.

Sramana: In our audience we have a tremendous number of software as a service and cloud computing service entrepreneurs. These are people who are trying to sell outsourced IT to these organizations. They need to find those decision makers.

Henry Schuck: We cover companies that have an IT decision maker. We need to see a CIO, director of IT, or even an IT manager to add them to our database. If a company does not have one of those individuals, we will not cover that company.

When building the small and midsized database, we ferreted out companies that sit on sales reps [in] territories across the country. Those companies do not represent true opportunities because in many cases their IT department is part of a larger company and is profiled in another way. There are probably 20,000 companies in North America with 400 or more employees. We have 13,000 of those company profiles.

Sramana: When we were exchanging emails to arrange this interview, you told me that you do not have a CEO. What is that all about?

Henry Schuck: Kirk and I have always run pieces of the business. We have always shared decision-making authority on large items. There is nobody above Kirk and me to oversee what we do. I cover sales and marketing, and he covers account development and research.

Sramana: Do you want to keep this as a private company?

Henry Schuck: Yes. We are growing like a weed, and we will continue to do that until we feel we are playing out of our league. If an opportunity arises to take some financing and get to the next step, we will look at it. Right now we are focused on doubling or tripling sales every year. That is our focus.

Sramana: Talk to me a bit about you pricing model. If someone is evaluating buying your service, how should he or she look at it?

Henry Schuck: That person needs to know what data sets he or she is most interested in. Is the buyer looking to sell in the enterprise space or the mid-market space? Based on the answer to that question, people can buy access to any number of datasets.

Sramana: What would be a starting price?

Henry Schuck: You are talking around $20,000. It is a subscription fee model that gives you access to all the data in a set for one year, and it renews each year.

Sramana: Is the payment due up front, or is it a monthly payment business?

Henry Schuck: It is generally an up-front payment. Generally companies will sign on for a longer commitment.

Sramana: That strategy indicates you are trying to sell to more established companies rather than early stage startups. Is that correct?

Henry Schuck: You would think, but that generally does not play out. The vast majority of our clients are small mom-and-pop shops.

Sramana: How many clients do you have?

Henry Schuck: Just over 600.

This segment is part 6 in the series : Bootstrapping to $14M, Solving Serious Pain in IT Lead Generation: DiscoverOrg CoFounder Henry Schuck
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