Building a Global Enterprise Software Company from Portugal: Paulo Rosado, CEO of OutSystems (Part 3)

Sramana: I know you had experience developing software and you knew the change process. You had a basic understanding of the problem domain. As you were building the company, did you bring together a set of customers to work with as you were developing the product?

Paulo Rosado: Fortunately we did, yes.

Sramana: What was that process like?

Paulo Rosado: We followed the rational process of trying to build something that was not going to be very specific to just one customer. We had a good product management process going on, yet at the same time, we were constantly evaluating early releases with a couple of the large customers that were committed to evaluating it.

We were selling to very large telecoms who were very worried about performance. We were talking about the first app on our platform and they had about 1.5 million users. That forced us to implement an architecture that scales. That was lucky because now we have a highly scalable system which has given us unique customer features. It took us a little longer and cost us a bit more but it has paid off in the end. The product has much greater market appeal.

It is very important to build a product that appeals to your customers and that is why it is essential that entrepreneurs obtain feedback from your customers. At the same time, you have to avoid the pitfall of building a product that is overly customized for just one customer.

Sramana: It looks like you positioned yourself for enterprise customers. How did you finance the product development phase?

Paulo Rosado: I raised money. We raised €1 million right after 9/11 in 2001. That money came from some early stage investors. I did more than 40 pitches at the time. Some of those VCs wanted us to move the company to London but the engineering pool in Lisbon is fantastic. There is probably a little less competition as well. Today we are all over the globe and we have a tremendous reputation for quality.

Sramana: How long did it take you to deliver your first product after raising your initial round of funds?

Paulo Rosado: We delivered that product in May of 2002. Half of the money we raised was contingent on production from customers. We were intent on delivering a production quality product to run at a customer site. We decided to focus on telecoms and we had a strong mobile capability at the time. We closed three large telecoms and we went from there. We sold to three different telecoms in three different countries.

Sramana: What were the sizes of the deals?

Paulo Rosado: At the time we were talking about perpetual deals. We would get anywhere from $250,000 onwards.

This segment is part 3 in the series : Building a Global Enterprise Software Company from Portugal: Paulo Rosado, CEO of OutSystems
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