Bootstrapping to $30 Million from Czech Republic: Vaclav Muchna, CEO of YSoft (Part 5)

Sramana Mitra: It must have been very helpful for you to recruit a bunch of channel partners who would then go and sell that same solution to other major players.

Vaclav Muchna: Exactly. Once they started with us, there was another deal with the headquarters of a central European bank. That helped us to build the relationship through the channel. We took the decision that we would be 100% indirect. Later on, we developed that model where the vast majority of our partners not only sell our product, but they also support it. We only support our partners and they go and support the end customers. If something goes wrong, the customer would call the channel partners.

Sramana Mitra: When did the power plant RFP happen? What year was that?

Vaclav Muchna: That was in 2004.

Sramana Mitra: In 2005, you must have escalated the business hugely because of the channel kicking it.

Vaclav Muchna: Exactly. That’s why we reached $1.4 million in 2005. Still that was in central and eastern Europe. I don’t remember exactly when we went to which country, but I know that we were in the region up until 2006 when we tried to expand to western Europe. It was very difficult. We were not successful. The western European companies still look at us as the East. We were good for having cheap labor. They move their factories to our country, but they don’t believe that we can produce solutions and that we would be able to support it.

Sramana Mitra: With the channel, how much of eastern Europe were you able to cover? Until which point, in terms of year, were you selling in eastern Europe and what revenue level were you able to reach? Then when did you try to go to western Europe?

Vaclav Muchna: I can’t really say because we are still growing with that product. It’s still growing. We are around $30 million. Of course, the product has significantly improved and is much bigger. Essentially, the value proposition still remains. In fact, there is a lot of competition today. We can’t really say that there was a point where we said, “Eastern market is saturated.” We are continuously trying to expand.

Sramana Mitra: Your business is still this network print management business?

Vaclav Muchna: Yes, until today. We now do things around scanning. We do things around 3D print management. We don’t just manage 2D printers. We are the only company in the world that would also manage 3D printing. We established our own venture capital fund. We do a bunch of other things. We have our internal labs project where we are trying to develop some things.

This segment is part 5 in the series : Bootstrapping to $30 Million from Czech Republic: Vaclav Muchna, CEO of YSoft
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