GetApp | Interview with its founder & CEO – Christophe Primault
In Barcelona we interviewed the founder and CEO of GetApp, Christophe Primault. GetApp is a marketplace for business applications that helps companies find the right app.
Christophe provided some insights why it’s better to start your company in Spain instead of in the US, how the business model works, some market statistics, as well as great advice for first time entrepreneurs.
Interviewer: Hi. Today we are in Barcelona with GetApp. Christopher, who are you and what do you do?
Christopher: Good morning. I’m Christopher, I’m the CEO of GetApp. I founded this company five years ago with Manuel, my cofounder. We are a marketplace for business applications where businesses of all sizes come and discover applications for their business.
Interviewer: How did you come up with this business idea?
Christopher: Both Manuel and I, in our previous jobs, were facing this issue about to how to get products distributed in the new world of cloud computing and online. We realized that there was no solution in place, so we decided to build one.
Interviewer: What did you do before you started this company?
Christopher: I started my career at NCR, which is not a startup, it’s a big American company that has been there for ages, and I spent 15 years there. I ended up being the VP of Global Marketing, and then decided to do something a bit more entrepreneurial. So I built my first startup which was about data integrity and security. This startup really failed. So that was my previous experience before GetApp.
Interviewer: Did you found this startup or did you just join them?
Christopher: Actually I joined the startup but at the very very beginning.
Interviewer: Can you tell us a little bit more about the business model of GetApp?
Christopher: GetApp has two value propositions for two main stakeholders. For businesses, we help them discover business applications wherever they need to find them, it can be searching on the web, it can be searching on their mobile, it can be when they use another application and they want to find an additional feature that is integrated with the application they’re currently using. So that’s our value proposition to them. Wherever you are, you will find new applications that are suitable for your business, and GetApp will help you discover the right one.
Our second biggest stakeholders are our clients. They are developers of businesses applications, it can be Software as a Service providers, or native mobile applications. For these companies we serve as an online distribution channel. We are generation leads for them online. They come to GetApp, they give us information about their product, we review their product independently, and then we organize this information so that people who really need the application find it.
Interviewer: For these businesses can you cluster them as related to some industries or so, maybe you have more focus on one industry?
Christopher: Today we mostly deal with what we call horizontal applications, or applications that offer a feature that can be used in any industry. As an example, customer relationship management, or project management, or an accounting online software. This is currently the core of our business, but the market is developing a lot towards vertical applications, applications for the life science industry, applications for the retail industry, or ecommerce industry, so more and more we’re going to this space. Rather than selling verticals today, we sell more horizontal solutions, but verticalizing our marketplace is definitely on the agenda.
Interviewer: So the revenue model basically works like this that you get paid for the lead from the app developers?
Christopher: It works very much like Google. We feature applications and we get paid for that. It is pretty clear for the client, for the end user that the application they’re looking at has featured. And then we get paid per click or per lead. Sometimes we also have revenue sharing every month with our clients.
Interviewer: In terms of corporate strategy, what do you think are the main drivers that make you company stand out of the crowd?
Christopher: First of all the main market driver is that more and more companies are testing and buying cloud-based software or native mobile software, just because it’s easier to get started with it and also it’s cheaper than traditional software. Today it represents about 7% of the total business software market, but it’s growing much faster than the traditional software. And there’s no established distribution channel for this new part of the software industry. And this the space we want to grab. So GetApp’s intention is to become the dominant distribution platform for the online business application industry.
Let’s talk about the global market. What has made us successful in the last five years is two main things. The first one is customer service, we are extremely focused on making our clients happy. We never compromise on the quality of the traffic we are sending to them, the quality of the leads that we are sending to them. And if our clients for some reason are unhappy, we are really on top of it to make sure that we understand why, and how we can fix it.
The second scene is that from day one we’ve been very clear that we wanted to turn this business into a profitable business as soon as possible. So we’ve been very focused on selling and selling directly to the advertiser. I see a lot of young entrepreneurs who believe that they’ve got a great idea, and they put it on the web and expect people to come and buy. Usually it doesn’t happen, especially in the B2B world, which is our world. You need to establish your very close relationship with your clients, and it means talking on the phone with them, meeting them on a regular basis, understanding their needs, really paying attention to them. And both my cofounder and I come from this culture of where you’re nurturing the relationship with the client. We just put it into practice and that’s our main differentiator.
Interviewer: What type of customers did you focus on first when you started this company?
Christopher: Any one. We want more people to join our platform. But we started with the smaller or mid-sized business software developers, and as we gained credibility in the market we managed to break into the much larger players. You need to prove yourself before you can attract the big players in this world. And this is what we did. We still do our best to cater for smaller clients because they’re at the beginning and they are the ones who gave us a chance to succeed. But, clearly, as we are running the business we also need to pay application to our bigger customers.
Interviewer: In terms of market development and this kind of distributing of apps, what is roughly the global market size, maybe in the US where you’re mainly focused?
Christopher: Yes, we focus today mostly in the North American market, which represents 2/3 of the global market. And we went there from scratch. We never intended to start anywhere else but in the US, although we are based Barcelona, and today this represents 90% of our market. Just to give you an example, the next markets are UK, Germany, but each of them represents about 6% or 7% of the total market size. So it’s pretty obvious where we need to get started.
Now we’re starting to branch out into new countries. We’re French, so we picked France as our first date for expanding in new geographies. And we’re actually launching getapp.fr next month. So that gives you the size of the market. Today Software as a Service market, which is our core market, is about $40 billion dollar market. It depends on which analyst you talk to. In terms of marketing span in this industry, which is the market we’re going after, it’s currently about $2 billion dollars, and it’s increasing pretty rapidly.
Interviewer: This $2 billion is only made for, let’s say, online marketing and mobile marketing?
Christopher: Yeah. I’m only talking about online marketing. The percentage of sales and marketing cost for software business developers, online marketing span represents roughly between 15% and 20% of their total budget.
Interviewer: As you said that you were branching into new countries like France, etc., did you buy the web domains in the first place and secured that, because I can imagine, for example, it is the same with us, we have some ideas where we want to go next maybe in two, three, four, five years, we don’t know yet what we will do, so maybe we did not secure them right now.
Christopher: We did a bit of that, but not as much as we should have done. The main reason is that we bootstrapped this company initially. So it was our own money and we were pretty careful in how to spend it. We bought a few country domain names, but not that many. Actually we let a very important one go because we just didn’t renew it, which was really stupid, so we make mistakes. But we went into the market and bought as many important country domain names as we could, which has cost us quite a lot of money.
Interviewer: Did you raise some external money after you bootstrapped?
Christopher: Yes, in 2011 we raised one million dollar, which is one of the biggest VCs in Spain, they’re a very efficient company and a profitable company now. It’s been very useful to get this capital, but we’ve really decided to grow and focus on the cash flow of the company to keep control and be independent from raising more money, although this is something we may have to do in order to ensure the growth to the level we believe we should be. So that’s where we are.
Interviewer: At the point when you raised this money, had you been profitable already and just wanted to fuel your growth, or…?
Christopher: No, at the time we were not, so they helped us making some important decisions that we would not have made only with bootstrapping. That was very useful. But now we are in a situation where we are profitable, and if we raise money it’s more for the growth and we do it in the right conditions for the good reasons.
Interviewer: Christopher, we always try to teach some first-time entrepreneurs or people interested in entrepreneurship what not to do or what to focus on. Imaging your best friend calls you and says, ‘Hey Christopher, I’ve got a great business idea’, what advice would you give them?
Christopher: I think the main advice – and it’s always difficult to say that to entrepreneurs, because to be an entrepreneur you need to be crazy, if you’re not it’s not real – but they need also to be very realistic about their own capabilities. There are things we are good at and things we are not good at. That’s for me and that’s for anybody. So my biggest advice would be go and talk to people who have been there, that have expertise, ask them to do some sanity checks at every step as an integral part of your business, and learn from others. As entrepreneurs we tend to be over-optimistic and believe that we know it all, and it’s not the case. So go out there, test your ideas with people who can tell you whether you are right or wrong or in the right direction, and at the end of the day you make up your mind on whether you want to listen to them or not. But at least take this piece of advice from people who maybe have more experience than you.
Interviewer: Thank you very much Christopher.
Christopher: You’re welcome, thanks for coming.