Solo Entrepreneur Focused on Autonomy as Key Success Driver: Hank Luhring, Founder of IssueTrak (Part 3)

Sramana Mitra: How much were you pricing?

Hank Luhring: It was $100 a month. This was before the cloud. There was a term back then called Application Service Provider.

Sramana Mitra: I remember that. It was the precursor to the cloud.

Hank Luhring: We first offered IssueTrak on ASP or cloud basis. Then we had a client, EDS, who was working with Dal Chemical putting in new infrastructure all over the world. They want a cloud-based system. They wanted it fast and it also had to run in Dal’s data centers. We scrambled fast to make these software work on-premise as well as cloud. Then to this day, it’s the same codebase. It works either on-premise or on the cloud.

Sramana Mitra: What did you price the on-premise at?

Hank Luhring: It was $895 an agent. End users were free. End users could submit requests or issues. They could add notes and some limited reporting. If you wanted to have a request assigned to you, then you need to be an agent.

Sramana Mitra: What was an average deal size?

Hank Luhring: It varied a lot. The Dal deal could have been in the $10,000 range. To this day, we get one-agent deals and hundred-agent deals.

Sramana Mitra: You haven’t really focused on enterprise or mid-market?

Hank Luhring: Yes. It’s all been people finding us on the website. We have had a problem with the fact that we could do several things well, but then people get confused. Is it a helpdesk product or is it an issue tracking product? Is it customer support?

Sramana Mitra: It’s also a very competitive market at this point. There’s a company in our portfolio that was incubated in 2011 to 2013 that just went public at a $10 billion-plus valuation. That is Freshworks. They have that capability. ServiceNow has that capability. A lot of players have that capability now. In 2000, the market was a lot less mature.

Hank Luhring: One of the things we did intentionally was not to take outside money.

Sramana Mitra: Why was that?

Hank Luhring: The control. I came close. I talked to venture capitalists from time to time. I remember one VC giving us a term sheet. He said, “It’s going to be like you’re getting on a treadmill with no stop button.”

Sramana Mitra: From the point at which you involve a VC, you have to deliver $100 million a year in revenue for the next five to seven years. Zero to $100 million in revenue trajectory in five to seven is the VC’s desire. If you sign up for that, you have to commit to being on the treadmill constantly. It’s basically all-consuming.

It sounds to me that you wanted more of a lifestyle business where you didn’t want that pressure. It’s one of the things that I tell entrepreneurs. Success is a personal definition. You started as a solo entrepreneur. You bootstrapped solely with services, built a product company, and grew that at your own pace.

What is the revenue level now?

Hank Luhring: It’s in the $5 million range.

Sramana Mitra: How many people do you have

Hank Luhring: 30 or so. What was very important to us from the beginning is we really get a lot out of interacting with customers. We have been told often by our customers that we provide the best support of any software company that these people deal with. I’ve hired people who really like pleasing the customer. That’s part of our culture. I have a good life. The people enjoy working with customers. I’ve stepped down as CEO. Dan Flowers is now the CEO. He’s doing some great things. We were named in the Inc 500 list in 2007 but we haven’t grown that much since then.

Sramana Mitra: This is a very interesting point that I want to close this conversation on, which is one of the reasons I like this case study. A solo entrepreneur whose primary motivation is autonomy and working with customers – these two factors can create very wonderful lives. It is not for everybody to chase unicorns and being on the treadmill. That’s a very intense path.

Some entrepreneurs do not like that path. In your framework, you desired autonomy and doing meaningful work. You have been very successful. You have built a successful life based on those parameters.

It was a pleasure talking to you.

This segment is part 3 in the series : Solo Entrepreneur Focused on Autonomy as Key Success Driver: Hank Luhring, Founder of IssueTrak
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