Bootstrap First to $10 Million from Australia, Raise $25 Million Later from the US: Ashik Ahmed, CEO of Deputy (Part 7)

Sramana Mitra: Where did you choose to raise your $25 million financing from? In Australia?

Ashik Ahmed: Funny story was that every morning, we’d wake up and there’d be an email from some VC. I wanted to focus on growing the business as opposed to getting interested in VCs. In mid-2006, we realized that our product has product-market fit. We have saturated the partnership model but we’re limited by how much our partners are getting. We need to grow the business.

The other thing was, even though we didn’t plan for it, something unreal happened. All of a sudden, we have enterprises with 3,000 to 10,000 employees using Deputy, and they’re really happy with it. One of our customers here in Australia is Qantas Airlines. They are so blown away by Deputy that they wanted every department to use Deputy. There was not a common system. Those who were using Deputy as employees were really happy.

If we can sell to the coffee shops of three to five employees and sell to the biggest brands, we can definitely take the product upmarket. When you want to take the product upmarket, you can’t rely on a self-service model all the time. You will need to navigate the enterprise sales process. We needed to have proper support in the business.

Sramana Mitra: You need direct sales for large enterprise deals.

Ashik Ahmed: Exactly. Even though they’re 100% inbound, you still need to navigate the opportunity in there. If we just keep funding ourselves every year, we’re not going to be a global company. We need to have sales, marketing, and customer success. So we wanted to see the interest in the VC community.

We have all these people who have reached out. We don’t have to knock on anyone’s door. Back in November, we got on a plane and went to San Francisco and saw all the usual suspects. Open View is Boston-based, but they flew in to see us. All the VC companies  were really impressed to see Deputy. I got validation that what we were doing was good.

Sramana Mitra: There’s nothing else you need apart from validation. As your customers want it, who cares about the rest?

Ashik Ahmed: Exactly. There is this prejudice that magic only happens in the Valley.

Sramana Mitra: I don’t believe in that at all. 

Ashik Ahmed: There was this one firm who said, “For us to invest, you have to be in the Valley.”

Sramana Mitra: That’s too bad. That’s not your problem.

Ashik Ahmed: Exactly. Open View were really excited to the point that they sent us the term sheet saying, “This is how much we’re going to invest. You write your own valuation.” It’s been four months in. They’ve been fantastic. They’re helping us expand. There are a lot of things they’re helping us with which is going to allow us to be a billion dollar company one day.

Sramana Mitra: What percentage of your business is Australian business versus abroad?

Ashik Ahmed: 60% of our business is in Australia. What excites me the most is the fact that we are growing 600% year on year. There is this one guy in UK and he has been doing 300% in sales. There is massive international expansion.

Sramana Mitra: As you develop the channel and put in sales teams in different geographies, you’re going to be able to generate a lot more business through all those geographies.

Ashik Ahmed: One thing I found out is that you can have an online self sign-up model, but as soon as you put a person on the ground in a specific region, they can get a 4x return.

Sramana Mitra: Especially if you’re doing enterprise deals. Enterprise deals are large deals so if you have direct sales and if you have a product-market fit in the enterprise, those accumulate very quickly.

Ashik Ahmed: Absolutely and that has been working so far.

Sramana Mitra: Great. Thank you for your time. It was nice talking to you.

This segment is part 7 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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