SaaS Interviews with CEOs, Startups, Founders
1511 Moscow Based Video Conference Software Hits $5m in Revenue, Bootstrapped, 170 employees
13 Sep 2019
Chapter 1: What is TrueConf and how did it start?
Trucomp, founded back in 2004, where they got going in 2008. Today, 170 people in Moscow, Ukraine, and other remote locations. They'll sell about 1,000 plans this year at 5,000 bucks a piece, so that's 5 million in revenue. They then have a licensing, a kind of a component where people pay about 5% of that lifetime fee to keep getting annual updates.
There's a little bit of recurring revenue there, but the majority of the revenue is coming from things like hardware upsells or professional installations or a million seat for the ministry in Russia with the government there. So doing well, their free to paid conversion is about 8%, scaling quickly. Hello, everyone. My guest today is Lev Yakupov. He runs a company called TrueConf.
Chapter 2: How does TrueConf generate revenue?
Lev, are you ready to take us to the top?
Yeah. Hello, Nathan. Thank you for inviting me today.
Of course. Tell us about the company. What does TrueConf do and how do you make money?
Yeah, that's pretty simple. So what we do, if you are familiar with the solution, which is called Skype for Business, it's a corporate on-premises solution, which a large organization runs inside their network to provide video conferencing and messaging capabilities inside their network for their employees. That's what we do.
But we provide a solution which do much better video conferencing, much easier to deploy, much easier to maintain. And it is more money efficient. It is not just cheaper. It provides more features for the money. So we believe we do the best video conferencing product on this planet.
Okay. And what do people pay for this per month on average?
It is not a... cloud-based thing uh this is uh as i said on premises solution so it is a product so what we uh do we license the server software uh which is usually bought for a lifetime So we are a profitable company with more than 10 years history. Unfortunately, the exact figures are confidential. I just can't say you the annual revenue, for example.
Give me a range. Give me a general sense of size.
It's somewhere between from 20 to 100. hundred millions of dollars per year. But you have to understand that our main business is located outside of the United States. So we mostly serve countries like Russia, Brazil, Vietnam, Iran, some other South African countries and Eastern Europe.
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Chapter 3: What is the business model behind TrueConf's offerings?
Okay, so what is that annual maintenance fee?
It depends on the size of the license. So let's think about 5%.
of the price of the initial license we require to pay to get the updates for the new version for a new version so annually it's probably around five percent but let's think about this way so uh the average price for our product average is approximately five thousand uh five thousand usd so uh yeah for lifetime license it depends on the size so it's just an average uh so if
will be probably not a big money, like 250 bucks per year to continue to receive updates.
And how many customers do you have today?
We have to divide our customers into the two groups because we have a free product. We have thousands of companies who runs the free solution.
Yeah, so they're not customers because they don't pay.
Yeah, but they become customers. So if we took the number of customers who paid our solution, And we don't know exactly, are they continue to use this product or not? Because if the company don't buy the updates, it doesn't mean they stop to use the product. Because the product is usually located in the private network. We don't have access there. We don't know their usage statistics.
So I don't know how many of them are still active. But we had many deals based on our account. We sold our product more than 5,000 times during the last five years. So we usually have the conversion rate from the free version to the paid version approximately 8%. But this conversion might happen anytime. It could be next day or it could be next year.
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Chapter 4: How does TrueConf's freemium model work?
So we started with 15 people when we decided to do the product. And now we have 170 people and two big offices.
One seven zero? Yes, one seven zero. And in Russia and where else are you based?
not in russia we have the largest office is located in moscow and the second largest office is located in harikov in ukraine so we have two big offices in ukraine and in russia that's okay great and a lot of people who work remotely right moscow ukraine and remote locations and then have you guys bootstrapped the company or have you raised capital so we was always profitable so we never raised any capital we never so you're still you're still bootstrapped
Uh, yep. That's great. Very good. All right, let's wrap up here with the famous five. Number one, what's your favorite business book?
Well, I don't read business book, so I prefer to speak with a professional. No. Yeah. I speak with my colleagues.
Number two, who's a CEO that you really respect?
Uh, there is a one company I really admire, which is called, uh, Beatrix 24. Uh, so my, uh, uh, the CEO is, uh, Sergey Ryzhikov.
Number three, what's your favorite online tool for building your company?
Yeah, it is called Gmail because I can search for gigabytes of archives in seconds. That's very important for me.
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