Capital Efficient Entrepreneurship from the Czech Republic: Runecast CEO Stan Markov (Part 3)

Sramana Mitra: They invested because the five of you had deep domain knowledge. This is a very desirable team.

Stan Markov: In addition to that, we had all the certificates. I was the first one in the entire IBM to get the highest VMWare certificate – VMWare Certified Design Expert. Only around 300 in the world have it.

Sramana Mitra: How long from that point did it take you to get to the launch?

Stan Markov: It took one year. The MVP that we launched was barely usable. We were debugging minutes before the expo opened. It was an MVP. Only in the weeks after that did we fix the major problems.

Sramana Mitra: We are talking mid-2015?

Stan Markov: September 2015.

Sramana Mitra: By the end of the year, you had your first paying customer?

Stan Markov: Yes, with big discounts.

Sramana Mitra: When did the €1.6 million come in?

Stan Markov: In October 2016 – a year later.

Sramana Mitra: In that year, you got how many paying customers?

Stan Markov: I would guess around 20.

Sramana Mitra: What was the pricing?

Stan Markov: We wanted something similar to other solutions in the VMWare space. Our approach was to look at what other IT operations management solutions for VMWare were offering. We took that as a reference. It’s an annual subscription.

Most companies, even at that time, were switching to subscription from perpetual. In the beginning, we were offering huge discounts. It was important for us to set the list price at a level that is comparable to other solutions. We didn’t want to devalue what we had.

Sramana Mitra: What was the list price?

Stan Markov: It was $25 per CPU socket per month. It was about $250 per year per CPU socket.

Sramana Mitra: Average deal size was how many CPU sockets?

Stan Markov: In the beginning, it was small. A few thousand dollars I would say.

Sramana Mitra: These 20 customers that you got, what kind of customers were they?

Stan Markov: They were quite a mixture. Not from the biggest of enterprises. There was an aerospace organization and some public institutions. What helped us have a diverse group of customers was that we were exhibiting at these big events. You have audiences from all kinds of verticals. The fact that you could just deploy our solution without assistance on our side helped. It helped us get some recognizable logos.

Sramana Mitra: Talk to me about the VMWare ecosystem. You’re talking about the conference to launch. Were you using any kind of developer ecosystem facility from VMWare? What other VMWare-related resources were you able to harness?

Stan Markov: VMWare has such a well-defined community. Prior to Runecast, we’d been in the community for many years. People know each other. They follow each other on Twitter. Everybody is trying to contribute and to create blog articles and educate themselves.

The fact that we were so ingrained in that community helped a lot to get champions. We were doing something quite cool; and it was resonating a lot with VMWare admins. It was solving their every day problems. The VMWare community has helped a lot. Some of them became customers and partners.

Sramana Mitra: Does VMWare send you leads?

Stan Markov: In some sense, we are partners with VMWare. We are also on the VMWare Marketplace.

This segment is part 3 in the series : Capital Efficient Entrepreneurship from the Czech Republic: Runecast CEO Stan Markov
1 2 3 4 5 6