Bootstrapping from the UK to Over $10 Million: Roger Hale, Co-Founder of Linguamatics (Part 4)

Sramana Mitra: What’s the next major strategic move in the company’s evolution?

Roger Hale: I’m not sure there was an inflection point around that time. We were continuing to develop the product. We had customers. They were quite demanding customers. They wanted new features in the product. There was a lot of work just to support that. The next major revenue point was around about 2007 when we sold our first deal in excess of a million dollars. That was quite a significant point.

Sramana Mitra: All these other deals until 2007 almost served as pilots. Then you got to these larger deals starting 2007.

Roger Hale: That’s right. Most of our customers would take a small pilot deal to start with. Then they’d move on to a larger annual or multi-year deal. We sell our software on annual license. We sell it in a SaaS-like way.

Sramana Mitra: In terms of the entrepreneur’s journey, even if you reached a million dollars in 2007, your 2008 number must have been a lot larger.

Roger Hale: The last year actually had multi-year deals.

Sramana Mitra: How many people were you at this point?

Roger Hale: We were probably around 15.

Sramana Mitra: So a relatively small team with million dollar multi-year contract. What happens next?

Roger Hale: We are essentially a company that has been fairly steady. We’ve grown organically. We’ve grown by developing our products. We sold into the pharmaceutical industry. We have most of the top 10 and top 20. Then we decided to look at other verticals. The next vertical that we addressed was healthcare.

Sramana Mitra: What year was that? What year did you expand into healthcare?

Roger Hale: Our first healthcare customer was about five years ago. So 2012.

Sramana Mitra: Did you have to make major changes in the product or was that reasonably easy penetration from a product point of view?

Roger Hale: There have been changes since, but not so much initially. The main issue we had to deal with was from a sales point of view. That’s really the big difference. In healthcare, the use cases are different.

Sramana Mitra: What were the use cases?

Roger Hale: In healthcare, it’s more about extracting data from electronic health records. For example, we might be looking at identifying patients who might be misdiagnosed with heart failure. Looking at the health records, we determine whether diagnosis has been missed.

In one case study that we did, we identified 750 patients who were potentially at risk for being misdiagnosed. In population health, we might be identifying patients with risk factors of heart failure or cancer. It’s potentially for getting structured information out of unstructured text.

Sramana Mitra: How far did you get to with the healthcare market expansion in terms of revenue level?

Roger Hale: The healthcare market is a much bigger market than the pharmaceutical market. There are far more hospitals than there are pharmaceuticals. Initially, it was about 100% year on year. It has slowed down a bit since then but it’s still in the 70% to 80% year on year. Still, our major business is in the pharmaceutical sector. Ultimately, the healthcare market will overtake it, but it hasn’t happened yet.

Sramana Mitra: Your sales is all direct sales.

Roger Hale: Yes. That majority of our sales is direct sales. We go after big customers. We know who they are and so direct sales model makes sense. We are increasingly looking at channel. We’ve just done a couple of deals with channel partners.

This segment is part 4 in the series : Bootstrapping from the UK to Over $10 Million: Roger Hale, Co-Founder of Linguamatics
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