From High School Drop Out to $20M in Revenue: Brad Lea’s Journey with Lightspeed VT (Part 5)

Sramana Mitra: What is your customer acquisition strategy? Were you basically calling these people who have motivational speaking or other kinds of training programs and just direct-selling them into your technology?

Brad Lea: Yes, pretty much. We would find and select a target and camp outside their office. We would knock on doors and wait until we got in front of them.

Sramana Mitra: Getting to that $1 million milestone, what percentage of your revenue was in the revenue share mode and what percentage was in the per user pricing model?

Brad Lea: 100% was in the revenue share mode back then.

Sramana Mitra: So in the beginning, you basically had to give people the software and convince them to get on the fee model.

Brad Lea: Yes.

Sramana Mitra: How long did it take for these accounts to monetize and start paying back? How long before you brought on a client that would start turning into revenues?

Brad Lea: That’s a great question. Usually, it would take between 60 and 90 days for them to become revenue-generating. For some, it took a year. There was a difference in varying degree.

Sramana Mitra: Is that still the case? Does it still take 60 to 90 days to ramp up an account?

Brad Lea: Ironically, yes because there’s a lot of planning, production, and development that goes into a full motion interactive VT system. It’s not just slap something and go. It’s like making a movie. I think it’s still true. I’d say 60 days. We’ve now done it in 10 days and 20 days. On an average timeframe, I would say it’s cut in half. It’s probably 30 to 60 days now.

Sramana Mitra: What is the percentage distribution today? You started with 100% in revenue share mode. Since you brought up the other pricing model, at what point did the new pricing model kick in gear and start generating revenues for you in a different mode.

Brad Lea: I would say it’s about 80/20, 20% being application pricing. People just need to use the system. They’re not looking to generate revenue or monetize the content. They’re just looking to utilize the platform. A lot of times, companies recognize the platform because they had purchased some of our revenue-generating clients’ content. One of our clients said, “This is a great platform, but we’ve got out own training. We’re not selling it. How do we use it?” We came up with a pricing model that allowed them to just deploy it similar to a normal online learning system or an LMS model.

Sramana Mitra: What other major strategic moves have you made in building the company so far that are worth discussing in a strategy discussion?

Brad Lea: An important strategic move was creating our own facilities and services because we identified that a lot of the companies and subject matter experts didn’t have a lot of production services or abilities. They didn’t necessarily know where to find them. Quite frankly, even if they did find them, they were very expensive. I think the strategic move on our part was to create an all-in-on one-stop shop. We have three studios  – graphic designers, courseware designers, and instructional designers. A company that wants to monetize their IP or put it online can come here and not have to go anywhere else. A lot of our clients like that.

Sramana Mitra: Where are you now in terms of metrics? How many customers? What’s the revenue level? How many users across your different customers?

Brad Lea: We have around 300 customers that have thousands of customers and millions of users. One of our customers might have a thousand customers and each one of those customers might have 80 employees each.

Sramana Mitra: You’re basically selling through a bunch of customers who are training companies who have large employee bases. The number of users is much larger.

Brad Lea: Yes.

Sramana Mitra: According to my notes, you are above $5 million in revenue. Do you want to specify anything further than that?

Brad Lea: Our revenue is closer to $20 million.

Sramana Mitra: What do you want to do with the company? Is this something that you want to sell, or do you want to keep building?

Brad Lea: I didn’t start it with an exit strategy. I started it because I loved to do it. We’re still having a great time. I think we have some milestones to hit. As far as our technology goals go, we have some goals that we want to reach. We will take a look at that probably in the next three to five years. Right now, we’re just having too much fun.

Sramana Mitra: Excellent. It was nice talking to you.

This segment is part 5 in the series : From High School Drop Out to $20M in Revenue: Brad Lea’s Journey with Lightspeed VT
1 2 3 4 5