Sramana Mitra: Who on your team was the key sales guy?

David Chmielewski: That’s Joe McLean who’s now our CEO. He was able to sell and fill clients with that confidence. I also did a fair amount of sales myself, but it was more of solutions consulting and technical design. Joe and I got into a pretty good pattern where he’d handle the business folks and I’d handle the ops and technology folks. We would tackle sales in that direction and it got a lot of deals done.

Sramana Mitra: We do a lot of developer-to-entrepreneur transitions. That combination of having a technical co-founder and more sales-oriented co-founder is a very good combination. What you were coming out of Bank of America with was deep domain knowledge. You’re selling into the same customer base that valued that domain knowledge. That combination of a techie person with that kind of domain knowledge and solving a particular problem around is invaluable.

David Chmielewski: You can build the software. That’s great. We all knew how to do that through productizing, marketing, sales, having a website, and making sure your people are getting paid.

Sramana Mitra: There’s a long list of things.

David Chmielewski: If you’re a developer working at a company, you don’t have to think about a lot of things. As an entrepreneur, you are incumbent to do those things. The more you can bring people along to help shoulder that burden, the better off you’re going to be. It allowed us to grow into a much larger company and be successful.

Sramana Mitra: My next question is about the trajectory of growth. How long did it take you to get to $5 million in revenue?

David Chmielewski: We hit $5 million three years in probably. We landed some large services contracts. Some of the sizes of the services deals brought in a good amount of Revenue. We found services to be an absolute grind. When one deal is ending, you’ve got to have another one lined up. You have too many people around or too few people or you are over budget. It’s maddening. We were certainly able to hit decent revenue numbers but Recurring Revenue is incredible.

Sramana Mitra: When did you hit $5 million in annual recurring revenue?

David Chmielewski: I would have to check, but it’s either last year or this year. It took us a while to pivot from services to recurring revenue. Not only did we have to agree that that’s the direction we wanted to go, but we also thought we were going to build 10 different products. We had a lot of other things going on. We had complaints, incident reporting, and KYC.

We thought they could all be viable products. We had to select from all these things. We kept the IP and we had to pick one of them to run with. Then we had to pivot that to recurring revenue. I mentioned that we had these expensive fixed-price onboardings.

Once we started focusing on recurring revenue, we decided to make that part of the cost. Now we onboard our clients for no cost. We charge more on a recurring basis. That helps fund the onboarding. We don’t have that anymore. Our recurring revenue has gone up substantially. We are able to handle onboarding at no cost to our clients.

It took a while to get there and get to that model. That requires investment. The investment was coming from our clients. They’d give us $400,000 for onboarding. That was enough for us to go live.

Sramana Mitra: All these products that you’ve built early on, were they built as services projects?

David Chmielewski: If it was a bank and they wanted us to build something, we would say we’re going to keep the IP that’s not pertinent to your business. That allowed us to have lots of different products. They came to us with many different needs.