Building a Global Enterprise Software Company from Portugal: Paulo Rosado, CEO of OutSystems (Part 4)

Sramana: It sounds like you were showing substantial revenue by the time you finished your product and got your second round of financing.

Paulo Rosado: I did not take another round of financing until we were at the breakeven point. The original intention was to go to the market at the end of 2002 and get another $4 million to support sales and marketing. However the bubble burst, so all money closed up, especially in Europe. We had to change our business plan and tighten operations. Our primary market was telecoms and they stopped spending so we had to switch back to the enterprise.

I don’t know how we did it, but we managed to slowly overcome the burn rate until a point where we made it into the black. We started growing in the enterprise and that is the market that brought us to the breakeven point. Once we hit that point, we brought in our second round of financing.

Sramana: When did you do your second round?

Paulo Rosado: I believe it was 2005.

Sramana: So your first round really took you a long way. You were generating reasonable amounts of cash to last a while.

Paulo Rosado: It was a combination of generating cash and living on a shoestring. We would rent a car and drive to Madrid instead of getting a plane ticket. Those types of things are good because it sets the DNA of your company. We have always been very good at investing when we have money.

Sramana: How much did you raise in 2005?

Paulo Rosado: Between the Series B and a VC who came in to provide our first VC with an exit, we injected about €7 million. That is all we have used in the history of the company.

Sramana: What are some of the key milestones in your company’s growth and what were the strategies behind them?

Paulo Rosado: After the burst we focused on Portugal, Spain, and Holland. We started tackling the enterprise market. Fortunately what we saw was a complete validation of the problem that we had seen. Our customers started to increase the size of their requirements and doing more and more with development. Suddenly, we realized that we had stumbled upon building the perfect platform to use in the development of agile methods. This was about four years into our first install base and we had about 40 customers spread across various industries. We saw the same issues in all of our customers.

We also started doing our first really large installations. One of the things that we see when young competitors start to come into the fray is that doing a rapid platform application is not that difficult. What is difficult is doing it on an enterprise scale. You need to provide control when you have very large installations. The challenges that we faced were challenges of scale. That has resulted in us having a product that is very difficult to replicate or defeat.

This segment is part 4 in the series : Building a Global Enterprise Software Company from Portugal: Paulo Rosado, CEO of OutSystems
1 2 3 4 5 6 7