Bootstrapping Using Services: Evariant CEO Bill Moschella (Part 2)

Sramana Mitra: At what point does the strategy change? You described one strategic change which went from pure services to multi-year contracts and then to reselling other people’s software. What’s the next major change in strategy?

Bill Moschella: The next major change in strategy happened somewhere around 2007 where the reselling of original equipment manufacturing of other people’s software actually became more attractive than doing any of the services work. We became system integrators as opposed to doing agency services. We’re still doing some of the agency services work, but it was a means to get to the selling of the software. We weren’t selling our own software yet. We were selling other people’s software. We were actually writing software contracts, reselling other people’s software for multi-year deals, receiving an income stream, and cutting a portion of that contract back as part of the agreement to customers like Salesforce and Eloqua. That was a huge change in the customer profile. We were a local agency and maybe, we stretched into the tri-state area. We never really went further than that.

Sramana Mitra: You’re based in Connecticut?

Bill Moschella: Yes, we were based Connecticut. Now, we’re working with Salesforce and Eloqua. They pick up the phone and say, “You’re one of our top partners. Can you go to Colorado?” We got in early enough on this whole CRM and marketing automation that we became one of their top partners. We were signing big services contracts and in some cases, we were actually writing on our own paper from multi-year deals. The base line revenue goes up. The size of the customer goes up. The opportunities increase. Now, we start going away past the million dollar mark.

The market would still not call us a SaaS company because we were selling other people’s goods. We’re a glorified services solutions business who has some recurring revenue streams by selling other people’s IP. Our value is much lower because we didn’t own our own IP. That takes us to about 2009 to 2010 when we realized that in the healthcare market, there was a huge void in engagement in CRM. This is where we say, “It is time to build our own software.”

Sramana Mitra: At that point, what was your revenue level from the rest of the business?

Bill Moschella: At that point, we were probably doing around $2 million.

This segment is part 2 in the series : Bootstrapping Using Services: Evariant CEO Bill Moschella
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