Bootstrapping Using Services from London: Ajay Patel, CEO of HighQ (Part 4)

Sramana Mitra: Anything that starts to validate and gets clients into a product is really a key milestone. In everything that we do, that milestone makes a humongous difference.

Ajay Patel: It was a turning point for us.

Sramana Mitra: In what year was that?

Ajay Patel: That was in 2006.

Sramana Mitra: At that time, what kind of services revenue were you doing?

Ajay Patel: I think our total revenue in those days was probably around £300,000.

Sramana Mitra: How did it ramp after that? After you got that first legal client, were you able to get more in that field?

Ajay Patel: To be honest, we started getting the odd client. In 2009, things started to shift gears. I think there was certainly a lot more acceptance of the cloud. One client is never enough. By that point, we had five to six clients and they are recognized brand names. One thing that I’m glad about is that we’re focused. In these communities, the IT people go to the same conferences. They start talking and sharing knowledge.

Something happened in that period and combined with the acceptance of the cloud, 2010 became a fantastic year for us. We really ramped up sales. Since then, we’ve had a compound annual growth rate of 50%. That’s when things took off.

Sramana Mitra: In 2009 to 2010, you said it flipped on a dime. What do you think happened that gave you that inflection point? That inflection point is another major milestone. Every entrepreneur is looking for that inflection point. What do you think happened?

Ajay Patel: I think at that point, in terms of clients, we had about six to seven. They got us reference clients. That must have gotten us acceptance. It’s really hard to put my finger on it. Thinking of some of the names we got at that point, one is never enough. Two is getting there. When you get to five to six with big brand names, I think it made a big difference. One thing we did was we went for the big boys first of all. Once you’ve got the big boys, you’ve got credibility. They’re thinking if it’s good enough for larger firms, it must be good enough for us.

We showed that technology to people and everyone was very impressed. The hurdle was the cloud. They are all used to hosting everything behind their own firewalls and their own data centers. When you’re dealing with the largest law firms, they’re dealing with the most sensitive transactions, many of which haven’t even made the press yet. It was very important data. It took a long time to convince people. We just had critical mass to get other people talking and considering it. Since that point, things really took off.

Sramana Mitra: How much did you do in 2008 and 2009?

Ajay Patel: Revenue in 2008 was about £600,000. 2009 was about £800,000, and 2010 was £1.5 million. This year, it is £6.3 million.

Sramana Mitra: Let’s talk a little bit about your customer acquisition strategy once you found the inflection point. Are you doing telesales or in-person sales?

Ajay Patel: We did a little bit of telesales but the telesales was done by my co-founder. It’s not the biggest market in the world and we were very much focused in the UK in those days. In terms of marketing, not much at all. A lot of it was word of mouth. There was a lot of inbound interest. We were still a relatively small team size. We didn’t actually have a dedicated sales team. Salespeople was myself and my co-founder. In the Software-as-a-Service space, the sales process is typically three months because you’ve got a lot of security hurdles to go through.

Sramana Mitra: What were the deal sizes? To be able to sustain that kind of selling, did you have pretty significant deal size?

Ajay Patel: The average deal size is about £50,000.

This segment is part 4 in the series : Bootstrapping Using Services from London: Ajay Patel, CEO of HighQ
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