Bootstrapping Using Services and Piggybacking from Australia: StoreConnect CEO Mikel Lindsaar (Part 6)

Mikel Lindsaar: The really cool thing about StoreConnect business model is that Salesforce gets their license revenue and they get a very sticky customer who then is investing more into the platform. The partners love it because they get a client who has an upfront setup fee but has a part of their business related to that partner’s consulting revenue.

They’re going to spend money on the consulting fees to make it better and better. For every dollar they put in, they’re going to get dollars out. Salesforce is usually a cost side of the balance sheet. We love it because we get licensing revenue and the first level of configuration support is handled by this ever-expanding partner network.

Once we get our certification program in progress, this will go crazy. I’ll give you an example. Two days ago, we were one of the four companies worldwide that Salesforce decided to feature as part of their International Salesforce Days training program. We’re nothing in terms of revenue to Salesforce. We generate $35,000 in commissions to them.

They see so much potential in it that they would recommend us. That got us in front of almost 400 Salesforce admins. We got an hour with them teaching them about StoreConnect and how it works. The response was amazing. Two months after launching our own business, we won the International Salesforce Partner Innovation Award of the Year. For a 15-person company, to win that was just crazy.

Sramana Mitra: I think your model is very promising. I’m not convinced that it can go to a hundred million dollars in two or three years. That’s a very big scale. Even if it gets to a hundred million in five years, you still have a great hypergrowth company.

Mikel Lindsaar: Exactly. If we can get to $50 million in two years, that’s still good.

Sramana Mitra: Even if you get to $10 million in two years, it still is a high-growth company.

Mikel Lindsaar: Right. The primary way that we’re going to focus down that line is through this partner network. That’s taking a lot of work. We still have to build our consulting platform, because part of our partner channel is the first two clients they sign up for StoreConnect. We work with them as the partner to make sure that the client is successful.

Sramana Mitra: This is where scaling has limitations. You have to do that to enable those clients to succeed.

Mikel Lindsaar: Once the partner gets over those first two, they just start doing them themselves. That’s when the scaling comes back.

Sramana Mitra: One of the tracks we have we call Bootstrapping by Piggybacking. That’s what you’ve done – piggyback on Salesforce effectively.

Mikel Lindsaar: 60% of our clients were not using Salesforce before they chose StoreConnect. For Salesforce, that’s unheard of in their ecosystem. It’s very rare that a customer will buy Salesforce because of the software package that sits on top of it. We have one of our customers tell Salesforce the only way they’ll consider Salesforce is through StoreConnect. 93% of our prospects are new logos for Salesforce.

If you’re piggybacking, people think that this incremental uplift in revenue for the company you’re piggybacking on will incentivize them to help you grow. If your only benefit to Salesforce is the 15% commission, the account executive working with you can get 100% if they sell an internal product. They’re going to sell the internal product.

Sramana Mitra: The enhanced capability is the piggybacking value. When you really expand the platform with additional capability that gives that platform an unfair advantage, that’s where piggybacking works. That’s a very good point. The platform vendor is not just looking for commission; they’re looking for ways to create an exit barrier on top of their platform.

Mikel Lindsaar: Yes, the other aspect is your product needs to help the platform win business that they would not otherwise have won. If you can do those two, you’re golden. We do that. Salesforce loves us. We help them win prospects. There were five or six times when a client said, “Salesforce looks good, but I’m not quite sure.”

Then they bought StoreConnect and are sold on Salesforce. Word of that spreads in the platform sales team. You start getting these other leads.

Sramana Mitra: This is a very promising company. This one is going to pan out.

Mikel Lindsaar: I spend about an hour a week on reinteractive and maybe an hour or two on MetaPulse.

Sramana Mitra: This is the horse to bet on. Thank you for your time.

This segment is part 6 in the series : Bootstrapping Using Services and Piggybacking from Australia: StoreConnect CEO Mikel Lindsaar
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