Bootstrapping Using Services from Montreal, Canada: Silanis CEO Tommy Petrogiannis (Part 7)

Sramana: How did your strategy work when it came to reaching credit unions?

Tommy Petrogiannis: We ended up partnering with CUNA which does the technical due diligence for a community of 700 credit unions who do not have the technical resources to do that internally. CUNA will make recommendations for the best suppliers in any give space.

Sramana: Where are you now in terms of revenue?

Tommy Petrogiannis: We are in the $20 million zone. Over the past four quarters, our new business bookings have been growing 30% per quarter. We are helping ourselves by making the product easier to find and evaluate. We have had some major customers become customers very quickly through self-guided evaluations.

Sramana: In the industry we call this trend inbound marketing. That is really changing the sale cycle dramatically.

Tommy Petrogiannis: What’s great is that it forces suppliers like us to expose everything. Whatever is good or bad has to be put out there. During the self-evaluation process, they will know if you are being transparent or not. Nobody is going to buy from you if they think you are trying to hide something. When I started my business, my father told me that “when you are on the dance floor, you have to dance!” If this is the way the market is moving, then you have to learn to dance to that music or you are not going to survive.

Sramana: What about financing? Have you taken any additional funding after your angel round?

Tommy Petrogiannis: Back in 2000, we did a good sized round of about $15 million. We had the largest pension fund in Canada there along with Lehman Brothers. It was a perfect storm in that we had tremendous growth and marquee clients. That was the right time to do financing.

In 2007 we created an entity in Europe and listed it on the AIM in the London Stock Exchange. We listed an investment company that had an investment stake in Silanis. That allowed us to stay private here, making access to talent easier. When the recession hit, we ended up taking the company back private because most of our investors were getting liquidation calls. We bought back 60% of what we floated the prior year at a really good discount simply because their market was getting hit so hard.

We still run the business today on the simple philosophy of revenue minus expenses equals profits. We had to do it that way in the beginning and we know that we have a model that works.

Sramana: You can do what you are doing without additional financing.

Tommy Petrogiannis: Exactly. We’ll take funding if we are going to do some acquisitions or we are going to enter some new market segments that require investment. We always focus on making sure the business model makes sense and that we have proved it. When I look at a potential project, I double the expenses and half the revenue. I want to plan conservatively to make sure that we have enough gas in the tank.

Sramana: This has been a very nice story. Congratulations and good luck with your ongoing business.

This segment is part 7 in the series : Bootstrapping Using Services from Montreal, Canada: Silanis CEO Tommy Petrogiannis
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