Nexthink CEO Pedro Bados
CEO of Swiss-based analytics firm talks hitting an IPO, US expansion and why an indirect sales model is essential for Swiss start-ups
This Swiss-based analytics vendor was founded in 2004 in Prilly and now boasts a workforce of 280 employees with additional offices in London, Boston, Paris, Madrid, Frankfurt, Dubai, Sydney and Mumbai.
How do you approach the European market?
We started with indirect from the beginning, 85 per cent of our business is through the channel; it could be with local VARs or large MSPs.
It is because in Switzerland the local market is really small, so we had to go international pretty early, and with a direct sales model it is really hard to go international if you do not have good access to accounts in different countries.
Especially in Europe, the channel is important because it is quite segmented, it has different regions and it is very important to have trusted advisors in each region so CIOs have access to the right decision making in the organisation, and the channel is important in providing leads and working on different accounts.
Also, the channel acts as an extension of our professional services and the ability to implement the product in different regions. It is important to have the partners that can use our resources and deliver the process for the customer.
We have 30 to 35 partners worldwide at the moment. We do not like to have too many partners; we used to have many more. We tried to change that and have more of a focus. We used to have maybe double that. It was a positive decision, a few years back we decided to focus on partners committed and invested in Nexthink.
How do you intend to grow your business over the next few years?
We are planning more for the US. The first green field [target] probably would be two years and then from there the company will have a new phase in the US.
I expect to have 150 customers in the US in two years and we have to get around 100 employees in the US, and then around probably 150 per cent growth annually. We are at 20 employees at the moment.
The company is growing at 50 per cent… and the US is growing faster actually. In two years we have to have the team and we have to hire a lot of people in advance.
We have a few partners in the US. We have four to five good partners and we are recruiting another four to five good partners each year at least. In the US, I would say we will be more conservative with our partner strategy. Probably around 50-50 [indirect/direct split], because it is such a big market. It is better if you want to grow faster to have more direct sales, since being local is not as important in the US as it is in Europe.
You secured $40m in funding last year. Are you looking for more investment?
For the time being we are not going to raise more funding for the next couple of years. We have got enough to fund our growth plans. We would like to reach an IPO stage in three or four years. We are talking about NASDAQ or a US stock exchange. It is the only market where they understand valuation for software companies. In the rest of the markets it is a secondary opportunity. 95 per cent of our revenue is software, so it is really important for us to be in a market that understands that.
We will see [if Nexthink will have to move to the US after going public]. I do not think it is mandatory to have your headquarters in the US.
What was it like being a start-up based in Switzerland?
Switzerland is great for many reasons. There is a very high quality of life, it is safe, everything works, there is no unemployment. It is easy to attract talent from the rest of Europe, we can get the best talent in Europe and they are very easily attracted to Switzerland.
But there are not many software experts in Switzerland. There are not many successful software companies, the only one is Logitech. Also, the local market is so small compared to France, Italy, Spain and Germany. It is a really small market, we had to go international fast, and I think that is difficult for most start-ups, since it is a challenge because they do not have the local market. A company based in Paris has France, and then they can grow to 10 to 20 million before they go international. After two to three million we have to go international in Switzerland.
I think there is a lot of funding [in Switzerland] to start off, but when it comes to serious funding, we are in a global world and you have to think globally, it doesn't matter too much where they are. [The initial funding] to start a company, the first half a million or 300,000 is pretty easy.
