Bootstrapping to $80 Million from Canada: Rob Purdy, CEO of Power2Motivate (Part 4)

Sramana Mitra: What happened in 2008?

Rob Purdy: There was a turning point in 2007. We went to our first ever trade show and unveiled the product in April. At that show, we had more international people asking about the product. There were a lot of companies that wanted to resell the product in their countries. We were pretty quick to realize that we had something in terms of a product and its appeal.

What was interesting is these companies wanted to take this into their country and resell it. We actually closed a contract at that show with an Australian whose family had started an employment law firm. They had over 18,000 companies in Australia that they provided employment legal services for. They were branching out into employee services and needed a platform to help create engagement with their customers.

That model of creating a reseller and providing them a version of that product enabled us to scale the product really quickly. We created a reseller model that we were able to replicate around the world. That was a big turning point for us. It allowed us to take the product and plug it into another company.

Sramana Mitra: That happened in 2007?

Rob Purdy: Yes. We signed the contract but we had a build out to do, which didn’t allow us to launch that program until 2008. In spring of 2008, we delivered a cloned version to them. It’s a complete replication of the software. We plug it into a virtualized server that allows us to also do the automated updates.

Think of it as you’ve got a reseller. They’re operating in Australia and logging in your services in North America. They have a firewall-accessible system. They can launch as many new clients off that application. We built a self-service model for channel partners that created a whole marketplace for us.

Sramana Mitra: It sounds like 2008 was the first year that the partner started to sell your product. What did that do to your revenue?

Rob Purdy: In those days, we had a small tech fee that we charged per instance. The reseller partners get a little bit of money on the license fees. They had to go out and present it to their customers. That process of on boarding is still going on today. In 2008, we started with an empty vessel. By the end of 2008, that reseller probably had 15 or 20 clients up and running. They had started building a nice business that today is a significant business. They operate in Australia, New Zealand, Singapore, and London.

Sramana Mitra: It sounds like this partnership was a big inflection point for your business that drove a lot of revenue growth.

Rob Purdy: It was a major inflection point for us.

Sramana Mitra: Were there other partnerships like that that created similar kinds of impact on your business?

Rob Purdy: Yes. Once we had created the model and finished the technical build, we started to change our sales pattern from selling direct. Direct sales was very expensive and hard for us to support. Launching a channel partner was a more efficient strategy. The next partner was a company out of New York. They’re one of the top five recognition companies around the world. We were really thrilled to sign them up as a partner in 2008. That propelled us into the recognition space because, now, the technology is well established.

Sramana Mitra: When exactly did that kick in gear?

Rob Purdy: We signed them up in 2008 and they probably launched in June of that year. They have a large stable of clients that they have been providing years of service for. The technology space was starting to advance very quickly and engagement was becoming a more popular piece of software. It was very complementary to what they were doing.

It was an easier decision for them to license the product from us and then resell it to their customers. It gave everybody a perfect solution. We would be the back-end development company developing the tools and they would be the front-end sales company selling it to their customers.

This segment is part 4 in the series : Bootstrapping to $80 Million from Canada: Rob Purdy, CEO of Power2Motivate
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