An Emerging Success Story from Indiana: Fathom Voice CEO Cameron Weeks (Part 7)

Sramana Mitra: What are some of the bigger strategic moves as well as accomplishments in 2013 and 2014?

Cameron Weeks: We talked about the big event in 2014. It was literally a year-long event living through that whole process and uncovering what went wrong, and building better control systems to protect against it. At the same point in time, we invested heavily in the product. We started off as a local sales company working with people around us. By this point in time, we have clients in all 50 states and multiple countries. It was a very risky move when we did it especially with what was happening on the sales side. We decided to invest in a new data replication system. We knew that one of the ways that we’ll be able to compete is provide a single solution to multinational companies. So something like ExactTarget that is headquartered in Indianapolis but has sales, marketing, and support offices in the UK, Australia, and the Asia Pacific market. No one was able to service that.

We felt that using the underlying infrastructure of what Fathom had built, we could probably do that pretty easily. We made a major investment in 2014 to build out five additional data centers all around the world. By the end of 2014, we had geo-replication running in eight data centers in real-time. If a piece of data is generated in US1, it lived in US2, US3, UK1, UK2 within a hundred milliseconds. Talking about the distance from Indianapolis to Singapore, a hundred milliseconds is literally the transport time to move the data back and forth. We’re replicating all of the data we’re generating in that same amount of time. It was a huge engineering accomplishment for us that we were really proud of. From that, now that we have this global infrastructure to play on, the call centers will be more engaging with us. We built a new product called Fathom Queue that allowed people to have agents located at their homes and just plug in to the system over the Internet. Fathom was able to distribute traffic evenly and all kinds of different metrics on how, when, and why to all these different people.

Sramana Mitra: Why was the data replication such a key issue? You’re providing a phone service. What is so special about the data replication as a value proposition?

Cameron Weeks: In communication, latency is the big evil that we fight against. It takes time to leave your phone, get to the server somewhere, and then get to the person you’re talking to. The longer it takes, the worse the quality is. In the US, we had built a partnership with several ISPs to basically ensure that, without any special configuration of the Internet, we could guarantee 50 milliseconds of latency between our client and our network. This is true today.

Our competition was at about 90 to 120 milliseconds. We were way below that. The issue when you left the country was you had to have the same people connect to the system and share a common database so that you can manage call traffic back and forth. Almost all of our competition, even today, are still just trying to connect people in the UK or people in Australia to US data centers and make that work. It, flat out, doesn’t. We just saw huge growth in bringing on these multinational companies because they can’t find another way to solve this. It’s an incredibly hard thing to solve that we focused on two years ago.

Sramana Mitra: All this while, there are these other major competitors. RingCentral went public. Grasshopper has done pretty well. What was your strategy to compete with them?

Cameron Weeks: We had the partner networks that was actively solving our products and winning deals. It’s not until this year that Fathom has really focused on its PR and marketing strategies. We are always selling products and growing revenues. The focus has been refining the product continuously and ensuring that we can truly support one user to 10,000 users. Now that we have all that work done, we are coming back and having a strong sales and marketing channel.

For example, we just recruited a former executive of another large company here in town to be the Chief Revenue Officer of Fathom. Prior to the company in Indianapolis, he ran another company that he grew to over a billion dollars in revenue. He’s a real champion in the sales and marketing space. Starting in Q3 and Q4, we’ve started doing some major investments into our sales and marketing strategies. I think you’ll quickly see us become one of the major competitors in that space. We have the highest SLAs in the a market, and we’ve hit them for two years solid.

Sramana Mitra: Besides both Series A and Series B, you raised two more rounds of financing?

Cameron Weeks: One more. In 2014, we raised another round of financing.

Sramana Mitra: Who was that led by?

Cameron Weeks: Current shareholders.

Sramana Mitra: Your investors are all Indiana investors.

Cameron Weeks: Yes, everyone has an Indiana connection.

Sramana Mitra: At this point, you are over $5 million in revenue. What other metrics do you want to disclose that are interesting metrics to peg the story?

Cameron Weeks: One of the biggest changes that we had from 2014 to 2015 was the average annual contract. The average deal size in 2014 was around $2,000 to $4,000. In 2015, the average ACV jumped to almost $100,000.

Sramana Mitra: I see. Your client base went up market. You’re starting to go for larger clients.

Cameron Weeks: Yes, by building out the global databases and the call center application. The largest account before this was $50,000 a year and the current largest account today is multiple millions of dollars.

Sramana Mitra: You do multi-year contracts?

Cameron Weeks: Yes, we prefer to do two-year contracts. We try very much to sell software and not telcom. We align ourselves very much with the SaaS industry.

Sramana Mitra: Thank you for your time.

This segment is part 7 in the series : An Emerging Success Story from Indiana: Fathom Voice CEO Cameron Weeks
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