Bootstrapping Using Services, Scaling Using Content Marketing: John Sundberg, CEO of Kinetic Data (Part 7)

Sramana Mitra: How do you describe the value proposition of what you’re delivering to your customer base today?

John Sundberg: Generally speaking, most companies already think that they’re all messed up internally and it’s very hard for them to get something done. They already see the pain. What we do is we come in and say, “For these internal processes, we’ve got a system that is straightforward to create forms that people fill out and workflow processes are structured so that requests don’t get dropped. It is automated and you get visibility to it at all times. In a general sense, the average employee makes at least 10 requests a year. With our automated software, they save $10 per request. That’s savings of $100 per employee per year. If you take a look at a company with 5,000 employees, that’s savings of $500,000.” 

Nobody actually argues with me on $10, but they know their internal costs are higher than that. I find people don’t buy software because they save money. What they want to do is look good to their peers. They want to improve the service that they’re delivering. They buy our software so they can raise their status in the company.

Sramana Mitra: Whom do you compete in all this?

John Sundberg: SharePoint, PMG, BMC have similar product. The question of who do we compete is a good one because the only ones that I really consider we compete with are the ones that I actually lost a sale to. I only lost sales to two of those companies.

Sramana Mitra: Very interesting story. Congratulations! You’ve navigated extremely well. I look forward to following your journey.

John Sundberg: Good to chat with you too. I like the idea of One Million by One Million.

Sramana Mitra: Thank you.

John Sundberg: Are you familiar with 37Signals?

Sramana Mitra: Yes.

John Sundberg: I’m a big fan. They’re into producing real software that solves real problems of real companies, and not positioning yourself to look good to investors who really don’t know your business. I think that’s hurtful, to be honest, to the space. Do you think so?

Sramana Mitra: What it does is it creates a tremendous amount of confusion amongst the young entrepreneur types. This last couple of years has really been traumatizing for the community because of these big deals like WhatsApp and SnapChat. These companies don’t make money but get acquired for billions of dollars. The young entrepreneurs get really confused and they think that this is a viable strategy. It’s just a nightmare.

John Sundberg: What’s in their vision is, “I have to be the next WhatsApp.” All of those are not great apps.

Sramana Mitra: Most of them are not businesses.

John Sundberg: There’re a million good ideas that produce actual money but they’re not going to be the billion dollar thing. That’s unwise for the world, let alone for them.

Sramana Mitra: The corruption of the market sentiment happens every time a deal like that comes through.

John Sundberg: I’m a fan of not positioning yourself for sale but to produce something that is actually of value. Quite frankly, if some company wants to buy you because it’s the right thing for them to do, that’s fine.

Sramana Mitra: But what you really need to focus on is customers, revenues, and profits.

John Sundberg: Exactly. Someone will come in to your space and be oddly financed so that they can do it for less than what it cost to do just to buy market share. You took real jobs from real people really stupidly.

Sramana Mitra: Alright. Thank you. Nice meeting you.

This segment is part 7 in the series : Bootstrapping Using Services, Scaling Using Content Marketing: John Sundberg, CEO of Kinetic Data
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