Bootstrapping Using Services from North Carolina: Ateb CEO Frank Sheppard (Part 3)

Frank Sheppard: At that time, my spouse was still with IBM, working in the retail division. She just saw some opportunity there. We agreed to bring her on board in late 1995 to see if she can develop a lot of what we were doing for the telecom industry. We were able to do that very effectively.

Our idea in late 1995 was to take a lot of the telephone automation stuff that we were doing and apply that to retail. The first place that we started doing that was with the pharmacy line interactive voice response (IVR) solution. When you call a pharmacy to refill a prescription, the system that would answer that call is what we developed. Our intent was to focus on using that as way to go into retail. What we found when we got into pharmacies is that it was a wonderful niche.

Sramana Mitra: However, it seems like you switched somewhere along the way from a pure contract software business model to selling your own product and building solutions around some core intellectual property that you developed. Am I correct in drawing that conclusion?

Frank Sheppard: Exactly correct. That occurred when we started working with retailers.

Sramana Mitra: Give me a bit of benchmark. You started in 1992. It was 1995 when you switched to retail. What was your revenue level at that point?

Frank Sheppard: It would probably have been around $3 million to $4 million.

Sramana Mitra: When you introduced the pharmacy product line and developed intellectual property, how did that transition go and how did that impact your revenues?

Frank Sheppard: Transition was extreme. We transitioned from about 80% telecom to 80% to 90% retail. We saw our revenue grow 50% to 80%. In the late ’90s, we were approaching $10 million.

Sramana Mitra: So in late ’90s, you were approaching $10 million. 80% to 90% of your revenue is from retail and mostly from the pharmacy IVR type of solutions. What happens next?

Frank Sheppard: We continued to expand where and how we could improve the efficiencies and workflow inside of pharmacies. From IVR, we went through to signature capture and management. We continued to expand our offering and help pharmacies run more efficiently.

Sramana Mitra: Were there any strategic moves that is worth discussing? Obviously, the switch to a different vertical is a strategic move. Was there any other major move in the early or late 2000s that is worth double-clicking down into?

Frank Sheppard: This is an area where I want to be very sensitive. I don’t’ want to create any confusion with some of our competitors and/or partners. In that timeframe, we endeavoured to start to develop a pharmacy management system, which was a disastrous decision for us. We spent about two years for that. We actually brought in an external CEO for that period of time and basically, we left a lot of our roots where we were successful. Within that, we accumulated a tremendous amount of debt and put ourselves in a tenuous situation where survival was certainly questionable.

Sramana Mitra: What years were those?

Frank Sheppard: It was about 2002 to 2003 timeframe.

This segment is part 3 in the series : Bootstrapping Using Services from North Carolina: Ateb CEO Frank Sheppard
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