Self-Financing an Artificial Intelligence Software Company: John Rauscher, CEO of Yseop (Part 5)

Sramana Mitra: Let’s talk about sales. How did sales ramp at that point?

John Rauscher: Of course, it was not easy. I cannot remember that it was a big start. We had to convince a lot. We had to be passionate. We had to be very good at delivery. My philosophy is we cannot lie. You have to tell him what is going to happen and that sometimes you don’t know, because each case is unique. You have to build trust with customers. In the end, they’ll tell you that they trust you. We have been very successful because we never tried to do quick sales. We were focusing on delivering high quality service.

Sramana Mitra: What kind of average deal size were you encountering in the market?

John Raushcer: Generally, it was in steps. People were asking for pilot applications. Probably between $200,000 and $300,000 and $1,000 to $3,000 for pilot applications. People were buying licenses later. It was probably half a million dollar deal as an average.

Sramana Mitra: Each deal was half a million deal. How many of these deals did you get together and in what time frame? In 2010, how many customers were you able to get?

John Rauscher: Two or three big deals at the beginning. Then, we ramped up. For the first year, we got about 20 customers. It was the beginning and the beginning was time-consuming. Today, it’s better because people can build their application on their own. They have tools they can use. Also, we now support many languages. We support English, Spanish, French, German, and we have more languages coming out. That is very important because many international customers require this type of feature.

Sramana Mitra: Give me a sense of how, from 2009 to 2013, your revenues ramp? What kind of scale of a business were you building? I’d like to understand if there’s a financing that went along with this.

John Rauscher: We had growth of 80% year on year. I was doing the financing but we have been positive cash flow for the last four years. I stopped putting money in 2011.

Sramana Mitra: Until 2011, you financed the business personally. At 2011, the business became cash flow positive and started growing organically.

John Rauscher: Exactly.

Sramana Mitra: So today you are an organically-growing company?

John Rauscher: Absolutely.

Sramana Mitra: What else is interesting in your story that you’d like to share?

John Rauscher: The fact that we did share responsibilities with Alain perfectly. He was in charge of the vision of the product and working with the R&D team. I was in charge of the overall operation but focused more on sales and marketing. I have a third partner who is working on finance. We work well together and share the same values. That’s very important at the time you grow. I don’t need great people. I need a great team. This is what’s important in the story. This is what I would share with my peers. You don’t need great people. You need a great team. Of course, if you can do both, much better. But you get great people when you have a great team. You don’t have a great team by having great people. You need to share values.

This segment is part 5 in the series : Self-Financing an Artificial Intelligence Software Company: John Rauscher, CEO of Yseop
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