Bootstrapping to $10 Million from Helsinki, Finland: Mikko Valimaki, CEO of Tuxera (Part 3)

Sramana Mitra: Were they willing to pay if you had a good website and if you had a company?

Mikko Valimaki: We were able to get some of our very first money just by basically consulting and helping some of the first commercial users. For that, we improved the website a little bit. We tried to make it look like it was a company.

Sramana Mitra: I’m asking a very different question. There are certain things that customers are willing to pay for and certain things that customers are not willing to pay for. The question I’m asking you is were you able to pick up that these customers were willing to pay if you were set up to look and act professional like a real business.

Mikko Valimaki: Yes, we were able to get some money out of some of those customers. Customers were willing to pay.

Sramana Mitra: How many customers in 2008 were you able to engage as paying customers?

Mikko Valimaki: I wouldn’t even call them customers. A couple of companies paid $1,000 to $3,000 as a one-time fee. By the summer of 2009 when we launched with the company name Tuxera and went public with that, we had less than 10 paying customers, and the revenue total was way less than $100,000, it was around $50,000.

Sramana Mitra: These were coming from people who you were finding through these open source projects that wanted more support? A typical commercial open source business model is what you were encountering in this marketplace, right?

Mikko Valimaki: Yes. For some companies, they were extra features.

Sramana Mitra: We’re clear that by 2009, you were starting to generate some decent amount of money based on these projects.

Mikko Valimaki: Right. It was just enough to pay the salary of one guy, but not more than that. It was clear that this would not scale up.

Sramana Mitra: What happens after that?

Mikko Valimaki: I think the most important change is the company name change. The open source project went into the background. It was important to get these customers leads from open source, but actually we didn’t sell any more support or adding features. We were selling a commercial licensed product.

Sramana Mitra: When it became a commercial product and was no longer an open source product, how did you sell? How did you do the customer acquisition? Was there any tie-in with your open source work or open source legacy?

Mikko Valimaki: We did it gradually. We still had this open source project, which is quite a popular project today. We still identify ourselves as coming from this open source community. That’s an important part of our company even today. It was a gradual change, but all the business growth was coming from the licensing business. Open source wasn’t really for commercial purposes. It was a way to basically get customer leads. That’s when we figured out that we can help the customers much better with the software that is tailored for their particular needs. For example, in device market, we work with different chips manufacturers. We were actually able to develop some new features in the software that the open source community wouldn’t even have any use for.

This segment is part 3 in the series : Bootstrapping to $10 Million from Helsinki, Finland: Mikko Valimaki, CEO of Tuxera
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