Bootstrapping from Australia: Emagine CEO Dave Peters (Part 5)

Sramana Mitra: Was this the first funding?

Dave Peters: That’s right.

Sramana Mitra: What happened after you got that first funding? What were the next major milestones or accomplishments?

Dave Peters: Based on that, we built up the team and started to develop the product further. We started to push the sales and marketing team. We managed to then win a deal with a telecommunications company in Singapore and a deal with Hong Kong Telecom in Hong Kong. Over the next 18 months, we won two more deals. They were license deals with maintenance and support. The one in Hong Kong was a multi-million dollar deal. We started to see good returns for the business.

Sramana Mitra: How did the revenue ramp from 2000 to 2005?

Dave Peters: In 2000, we would have been sub-$1 million. By 2005, we were turning over $3 million to $4 million a year.

Sramana Mitra: Did you raise any more money during that period?

Dave Peters: That was a very interesting period. Soon after the first round, we won another customer. We were on a bit of a roll. This is a good story actually, which I tell to a lot of entrepreneurs. We had a US company come over offering to buy us for $60 million. The deal was going to be 20% cash and 80% share in their company. My partner and I were high-fiving each other. They then went back to the US. I told my wife and she said, “That sounds like bullshit to me.”

The dot-com crash came and within 12 months the company that offered to buy us was insolvent and had hit the wall. I spent a lot of time that year talking to different people. We had some big players wanting to invest money at that time. When the dot-com crash hit, all of those discussions ceased. Since I’d spent the best part of the year on discussions with different parties, we weren’t able to focus as much on growing the business. We made a decision then to focus on the business and put the funding on the back burner, which is what we did. We were successful in expanding the customer base.

I learned pretty early on that the first focus is looking after your customers and looking after your cash. If you’re really focused on those things, the whole funding will follow. I stopped searching for it and just focused on the business. We didn’t raise any more funding. We grew the business from operating cash flow from 2000 onward. Our approach has really been controlled profitable growth. As a result, it’s been steady. Every year, we’ve grown and we’ve been profitable since 2006. The year that we weren’t profitable was the year we decided to invest our own funds back into products, sales, and marketing. That’s what we’ve done since then. We looked after our customers and tried to keep them happy.

This segment is part 5 in the series : Bootstrapping from Australia: Emagine CEO Dave Peters
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