Bootstrapping with Services: 2600Hz CEO Patrick Sullivan (Part 4)

Sramana Mitra: What year are we talking now?

Patrick Sullivan: That was between 2009 and 2011. Around 2012, we had our first real working platform. We open sourced it. The reason for open sourcing it is, we thought, “If we try to push this out to the world, let’s give this out for free. If we give away the base layer for free, people will still want to pay for support on top of the platform. Eventually, we can start adding paid applications that sit on top of the platform.”

In 2012, we started to change the company from consulting to support. In 2011, 90% of our revenue was from consulting. In 2012, the revenue from support went to about 50/50. Then in 2013, we went to about 10% consulting and 90% support. It was a hard transition. When you turn to support from consulting, you have to build a bunch of things. You have to make sure you have 24 hours monitoring.

It was a painful transition. We also knew that at the end of the day, that platform was still early. We were putting on so many iterations that we didn’t have time to fully QA the system. We were relying on the open source to do a lot of the QA for us. That’s why open source is great because they will do QA for you for free.

Sramana Mitra: The clients you were supporting were all open source users?

Patrick Sullivan: There’re two types of open source users. There’re people who are do-it-themselves. They might not give you money, but they’ll give you free QA or documentation. Then there’s the other type where they like open source because it gives them the flexibility and freedom to go in the direction they want. They like to have support behind the system.

They’re pretty smart about it because if they have the system up and running and they have the team that built the system supporting it, it’s a good win for them. Even if the system never goes down, at least they have it on speed dial if ever there’s an issue. It’s interesting because the company was doing pretty well around that time. Like all startups, you have your peaks and valleys. I like to be a little transparent.

Around 2013, the company did pretty well. I looked at our bank account, it was dropping a lot faster than it should be. We were closing deals and were doing well. Then one day, I wake up and I’m like, “Payroll is tomorrow.” I remember going to the bank at five in the morning and writing a personal check to the bank to make sure we had payroll.

This segment is part 4 in the series : Bootstrapping with Services: 2600Hz CEO Patrick Sullivan
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