Bootstrapping to $20 Million in Charleston, South Carolina: eGroup CEO Mike Carter (Part 4)

Sramana Mitra: It sounds like what you used in the beginning is a technique that we see repeatedly. I’ve written a book on this particular technique – Bootstrapping Using Services. The advantage of having services in the bootstrapping stage is that cash starts coming in early. You don’t’ have to take a long, red-ink faith to develop a product before cash starts coming in. It’s a very popular bootstrapping technique. It’s tried and true for generations.

Mike Carter: Absolutely.

Sramana Mitra: The next question that emerges from that technique is how long did you bootstrap using services? What was the process of actually deriving a product out of your service?

Mike Carter: I don’t know if we’ve ever gotten out of bootstrapping from services, quite honestly.

Sramana Mitra: But that’s different. The fact that you still do services isn’t necessarily bootstrapping using services. I think even every product company, especially enterprise or mid-market product companies, do a certain amount of services. My question is how long did it take you to get a product?

Mike Carter: In terms of our cloud services offering and what we do, that emerged about four years ago. It took a while. There was a certain portion from the services world that became so valuable to our clients in terms of building the advisory relationships and staying engaged on the forward edge. That gave us deep insights into what our clients were demanding, not only from an IT perspective but critically and more importantly from a business perspective in terms of revenue growth, cost cutting and the things that were more meaningful for them.

It took us several years and a lot of what we did within the cloud space emerged as a response to our own needs. We went to business contingency planning and continuity of operations, and realized everything that we have been doing up until that point was a little bit wrong or certainly immature for what we have evolved into. Based on certain decisions about a lower cost of delivery and more flexible response, we took everything that we had and we leveraged data centers through the Southeast and filled out the infrastructure and moved in.

What we realized was that this was very advantageous to many of our clients. As you can imagine, there is a significant barrier to entry in terms of cost and materials acquisition that goes into providing that offering, especially one in which you control the experience on behalf of the end user.

Sramana Mitra: Now that you’ve explained the process, what was the timeframe from when you started the company to when you arrived at that more leverage-able condition?

Mike Carter: 10 years.

This segment is part 4 in the series : Bootstrapping to $20 Million in Charleston, South Carolina: eGroup CEO Mike Carter
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