Bootstrap First to $10 Million from Australia, Raise $25 Million Later from the US: Ashik Ahmed, CEO of Deputy (Part 3)

Sramana Mitra: From a vertical point of view, it was all in the hospitality area?

Ashik Ahmed: That’s correct – all restaurants, bars, and hotels. That was the industry we were focusing on.

Sramana Mitra: How many customers are we talking?

Ashik Ahmed: By the end of 2013, I believe we only had 150.

Sramana Mitra: These are small businesses? You were working with small businesses?

Ashik Ahmed: Medium-sized businesses. Most of them had 300 to 800 employees.

Sramana Mitra: Sizable businesses.

Ashik Ahmed: Exactly. That’s the curse in there. None of these businesses will just come to your website, do a free trial, and convert. The challenge with Deputy is that it’s a product that the whole company uses. You have to have the whole company in there. You therefore need someone to talk to them. They want to see your face and know the different things you’re doing. It was great to have that, but at the same time, it was a scalable model.

Sramana Mitra: Revenue-wise, what were you doing at this point?

Ashik Ahmed: I don’t think we even broke through the million dollar mark in revenue at that point.

Sramana Mitra: But you were operating profitably?

Ashik Ahmed: We could have been profitable if we wanted but at the same time, we wanted to keep hiring more people. One of the advantages that we had in Australia is that the government provides this grant where you can claim back 40% of your expenses as an offset. We weren’t spending too much capital. We were being very efficient as we were building the business. We weren’t really worried about raising capital to keep going.

Sramana Mitra: In 2013, you have about 150 customers. You’re, more or less, self-sustaining. What happens next?

Ashik Ahmed: In 2011, Amazon used to run this startup challenge worldwide. Deputy got selected as one of the winners out of Asia Pacific. We were selected and went over to San Jose to present to the leadership of Amazon. We got quite a lot of good PR out of it. In 2012, we hired some new leadership into the company.

I’ve been a technical founder, so we hired a CEO. In 2012, we tried to be more mature at the company. We released mobile. We were working towards online sign up. We were also redefining the product. That was a big lesson. A lot of people came over. They didn’t understand the customer. They didn’t understand the value proposition. The culture changed where they wanted to raise capital. Unfortunately, that backfired to the point that in 2012, we had to let a lot of people go.

The business wasn’t performing and it was going in a different direction. In 2013, we became even more agile and leaner. We tried to execute on a strategy. They went to selling the software for the masses even if it didn’t work for them. Originally, we were too afraid to lose. It had to be perfect before we launched. This time, it was just another release even though the conversion rate wasn’t there. That was a pivotal moment where we learned a lot. Over time, every time somebody didn’t sign up, I’d personally contact them. One of four people would respond. Whatever we learned allowed us to really hone in on how we could improve.

This segment is part 3 in the series : Bootstrap First to $10 Million from Australia, Raise $25 Million Later from the US: Ashik Ahmed, CEO of Deputy
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