Bootstrapping to $20 Million From London: Guy Mucklow, CEO of PCA Predict (Part 6)

Sramana Mitra: How much were you selling for? What was your business model and pricing model? How were you monetizing your product?

Guy Mucklow: I might have mentioned earlier that we had two main licensing models in the early days because we saw mass market potential for this kind of service. We looked to go down a very lightweight transactional base licensing model. Let’s say $50 would buy you a thousand lookups. Those lookups would be valid for a 12-month period.

Our customer would come to us. They would buy the credit packs. We would get paid upfront. That model still exists today. The typical experience for our customer was that they would buy online and get invoiced online. That invoice information was being stored against their account. When it came to renewals, generally speaking, we would have an auto top-up set in place based on their credit card payment details. It would automatically be applied to the new invoice. Those credits gets automatically added.

The other thing that we put in place was different kinds of events that triggered important messaging. There was total transparency. It’s important in the whole e-commerce SaaS-based self-service environment because you can’t hide anything. You certainly can’t hide usage. You’ve to demonstrate that value. Hiding it away, which is a major difference between ourselves and some of the more traditional established players, was really important in terms of propelling the growth of our business.

Sramana Mitra: What was the first year that you were selling this technology?

Guy Mucklow: 2001. We managed to secure the UK passport service as an early adopter of our service. They were using our technology in the online passport application process. If I’m to relate it back to some contextual information for your readership, getting those early reference customers on board is so important in the early days – having those logos that you can name drop to other customers.

Sramana Mitra: What revenue level did you finish your first year at?

Guy Mucklow: We lost money.

Sramana Mitra: Lost money of course. We’re trying to see how the revenue developed.

Guy Mucklow: It took us four years to break into profitability. I was the guy who was funding that through those four years. I didn’t pay myself during that time. I guess, in dollar terms, it was about $600,000 down by the time we got to profitability. In terms of revenue, it was probably about $20,000. I’m digging around my memory to remember the numbers.

It took us probably to $300,000 or $400,000 equivalent to make it to profitability. We were very slow to start up. I think that was largely symptomatic of how we were looking to develop the business. Unlike a VC-funded business that threw a lot of rocket fuel into the process to accelerate growth, we grew our business really conservatively. It was our own money that we were spending.

When you’re spending $20,000 of your own money, you’re looking at those checks really carefully. What it did do was it really gave us the courage. If you’re spending a lot of your own money, you have to be really careful about how you do things. We were incredibly pragmatic in how we got the  business going. We lived on the cheap, like the expression, we cut our suits according to the cloth that we had.

Sramana Mitra: How did you finance that $300,000 to get it to profitability?

Guy Mucklow: It was closer to $600,000 if you look at it over those four years. I had been fortunate in another business venture of mine. I managed to get development permission on it. I had then sold that which enabled me to free up some funds. It was all risk capital. There was a lot at stake. That was money that was going towards my children’s school fees. I didn’t want to go back to being someone else’s slave. It was really important for me to make it work.

This segment is part 6 in the series : Bootstrapping to $20 Million From London: Guy Mucklow, CEO of PCA Predict
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