Navigating the Microsoft Ecosystem to Build a 12 Million Dollar Company: Brian Knight, CEO of Pragmatic Works (Part 4)

Sramana: How were you finding your consulting opportunities?

Brian Knight: In the early days I found a lot of customers via Microsoft. They had a barrier that their sales people could not get past, which was that they did not provide a way to upgrade from their old SQL Server to their new one.
We lifted that barrier for the Microsoft sales force, so a lot of our early growth came by evangelizing inside of the Microsoft sales force. We got a lot of referrals from them.

Sramana: What process did you follow within Microsoft to make that happen?

Brian Knight: We took two approaches. One was at a corporate level. At Microsoft, getting attached at the corporate level can be a challenge. They constantly rotate their personnel. The marketing person you have built a relationship with during one quarter will no longer be in that role the next quarter.

Our second approach was to contact the field offices. We built relationships with the FSP’s inside of Microsoft. We would go directly to the person who was talking to the customer. We found it much easier to establish relationships with the field offices than with the corporate office.

Sramana: This is where you prior experience building that 1.2 million member community kicked in.

Brian Knight: Exactly.

Sramana: Did most of your referrals come from field sales reps?

Brian Knight: We had very few referrals from corporate. We only got them from corporate if one of their folks was speaking at a conference and they mentioned our product or service to get past an upgrade barrier. Sometimes they would invite me to speak at a conference, which at times, gave me a chance to speak to the customer directly.

Sramana: What was the volume of leads that Microsoft was generating for you?

Brian Knight: They gave us a relatively steady stream of small and medium businesses. Big companies did not aggressively migrate. We found that we had SMB’s up front. That was great because it gave us a chance to perfect our offerings. Now that the big companies are hitting us this year we can safely anticipate exactly what is going to be required.

Sramana: Even though they were SMB’s were they able to afford 40,000-dollar consulting engagements?

Brian Knight: The good thing for us is that we were able to charge a per-component upgrade fee. For a small business, that could be $900, and for a larger install that could be $40,000. It scales based on the need. We were able to make our volume across all of our clients.

Sramana: So you also serviced sub-thousand dollar projects?

Brian Knight: Exactly. Those were raw software deals that had no services attached. The work to be done was so simple that the clients were able to do the upgrades themselves. Our software would do 90% of the work, and the clients were able to do the remaining 10% of the work on their own.

This segment is part 4 in the series : Navigating the Microsoft Ecosystem to Build a 12 Million Dollar Company: Brian Knight, CEO of Pragmatic Works
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