Bootstrapping from Ukraine: BPMOnline CEO Katherine Kostereva (Part 2)

Sramana Mitra: Tell me a little bit about you and how this came about. You’re saying that you experienced demand from different countries for CRM. This was 2003?

Katherine Kostereva: Yes.

Sramana Mitra: How did you get this off the ground?

Katherine Kostereva: It was just the two of us – myself and my partner. We bootstrapped the company. Especially in Ukraine, there were no venture capitalists. This industry just didn’t exist in Eastern Europe. Almost everyone was bootstrapping. Today, the company has 700 people on board. The question is how we grew from two founders to 700 people on board today. My friend was a developer. I left my job. He started to develop the product. I did the rest.

I’ve been testing the product, developing the website, and developing the collaterals. The first version was very primitive. It wasn’t even not a web version. It was a client-server version. It had functionalities to work with a contact, work with accounts, and manage opportunities-based BPM engine. I started to sell this first version. I had this great experience from the newspaper. I did, more or less, the same with our product. I started from Ukraine. Immediately, we started to get leads from all over the country because we built it in both Russian and in English.

We started to get leads from all over Europe. I called them and started to sell. In a few months, we had five to seven people on board. Interesting thing is that from the first day, the company has been profitable. It didn’t require a lot of investment. We built our first version of the product. Then my partner continued to develop the product. I started to acquire new customers. We started to get revenues. We reinvested all the profits that we had. During the first year, we worked without any salary.

Sramana Mitra: When you said you were getting customers, help us understand how you were charging these customers? How were they paying you?

Katherine Kostereva: For licenses of course. That was an old-fashioned way of selling onsite licenses. We sold on site licenses for this product and technical support. That’s how we started to generate revenue.

Sramana Mitra: Do you remember what price point you were selling at? What was the average deal size?

Katherine Kostereva: The price of the license was about $10 per month. It’s about $120 per year. That was the price for one license. That was not a cheap price for that market because, remember, we are talking about the Eastern European market. That product was not cheap, but still the demand was huge. Although Microsoft, Siebel, and Salesforce were dominating the American market at this time, in Eastern Europe, those products were not introduced. Everyone needed a CRM system.

Sramana Mitra: How many of these were you able to get in the first year?

Katherine Kostereva: After our first release, I had five customers. That was in the first month.

Sramana Mitra: How did it ramp?

Katherine Kostereva: Starting from this point, it has been growing each month. I believe that part of our success is that everything we earn, we literally reinvest it into people. We hire developers, testers, architects, and sales people. Everything we earn each month, we invest into hiring new people.

This segment is part 2 in the series : Bootstrapping from Ukraine: BPMOnline CEO Katherine Kostereva
1 2 3 4 5 6 7