This is part of our series “Bootstrapped, Profitable, & Proud” which profiles companies that 1) have $1MM+ in revenues, 2) didn’t take VC, and 3) are profitable.
Q&A with Andy Wilson of Logik
What does your business do?
Logik helps companies find, organize, process, and make searchable terabytes of digital documents for legal discovery. I always say we sell digital aspirin to attorneys experiencing discovery migraines.
How successful is your business?
Financially, we’ve been very successful considering our size relative to the competition (most have close to or well over 100 employees, we have 16). We don’t reveal internal financials now, because 1. we are private and 2. we don’t want VC’s beating down our door anymore after what happened with the 2009 Inc 500 ranking.
With that said, from 2005 to 2008 we grew revenue by 1,067% from $373,866 in 2005 to $4.4 million in 2008 with about $3 million in profit. We did that with 8 employees, a ton of servers, niche software, and 1 dog. This, minus the profit, is all public information now. We were ranked #181 overall on the 2009 Inc 500 survey and #1 for eDiscovery companies.
Getting on the Inc 500 was a great marketing tool for us, because it helped some of our more skeptical, on the fence, customers realize we were indeed legit despite our small size. Although we don’t reveal financials anymore, we have doubled our company size, moved to a new, bigger, and more open office space closer to our customers, and we are hiring for more engineers and support staff.
How did you get started?
In 2004 Sheng and I met for some quality Chinese food in Virginia to discuss what would become Logik. Prior to Logik, we were working for a small legal printing company helping to destroy rain forests. No seriously, we would print hundreds of thousands of emails to paper, so that massive legal teams could manually review each page. Very efficient ;) (odd fact: I worked on the Microsoft antitrust litigation and at one point was printing out Bill Gates’ email for a few weeks. He is very long winded.) After a few years of doing this and inhaling enough toner to paint your entire house black a few times over I decided I needed out and to find a better way to solve this problem. I mean, why would you “print” electronic documents to paper? Why not just print them to PDF or TIF? Ah-ha!
So, after letting the Chinese food settle we got to work drawing out the process flow for our document processing software. We quit our jobs, cut back on expenses, leased some servers, and got to work. I have a CS background, but Sheng is the real engineer and created the first version in just a few months. We got our first real customer 9 months after we started. This is how we got started.
Logik founders Sheng Yang and Andy Wilson.
How did you fund yourself at first?
Savings and credit cards. Our total startup costs were less than $20,000. Funny enough, we are still funding ourselves in the same way, but with a lot more savings and less credit card debt.
Did you ever consider taking on any investors?
Yes. We created a presentation, met with a dozen or so well-known investors, and then decided to scrap the idea all together. We realized that it didn’t make any sense to give up the control of our company for money. We couldn’t even figure out what we would spend the money on if we got more of it. So, we decided that, for us and for our culture, it would be best to keep growing organically. It was probably the best decision we’ve made yet.
How long did it take to get to profitability?
Approximately 9 months. The very first project we got was about $45,000, which covered all of our startup costs and gave us some solid profit to grow with.
What is your work environment like?
Professionally laid back and generally fun. Our website has a pretty good description of our culture: Work With Us and Our 10 Core Values. I like to think of it as a cross between Zappos and Google. Zappos because of the way we think about happiness and work. Google because of how we’ve been able to focus on 1 thing very well, creating a niche and profitable market for us.
We aren’t like many traditional companies. We don’t have set hours. We don’t have set dress codes. We don’t hold many meetings. We don’t care if you are in or out of the office, so long as your work gets done. We don’t care about our competition, because we can’t control what they are doing. We don’t work with just any customer, because some customers can negatively affect your company culture with theirs. We DO care about our employees and their well being, which is why we’ve created this culture.
What’s your goal with the company?
Not too long ago I was a naive entrepreneur thinking that one day I would eventually sell our company for an absurd amount of money, making everyone in the company rich. But I realized that 1. although a huge cash payout would be nice it would have to be for the right reasons and 2. if we are building a successful, profitable and fun company, why sell? So, my goal is to continue building a successful, profitable and fun company. If we ever decide to sell our business it will be for the right reasons and with the right company.
Any advice for someone considering starting a business?
Forget the resume, hire smart and highly resourceful people that fit in with your company culture. Oh, and don’t try and do it all. You can’t.
The right way for us is growing organically, not growing too fast, not hiring too quickly, and building an awesome niche product that solves a real and complicated problem that customers rave about.
You wrote that you’ve “created something fun and unique in an industry dominated by boring, uptight, over-priced, and error-prone vendors.” What do you mean by that?
Yeah, that’s a bit vague. Let me illustrate. The eDiscovery industry is about a $3 billion dollar industry now. Many of the vendors are large consulting companies, think top 5 accounting firms. These vendors have a tendency to embody the boring, uptight, and over-priced characteristics of traditional big-money companies. They, and others, even smaller companies, are error-prone because most of them lack focus. They end up offering every service and product their customer needs. This lack of focus ultimately ends up with a mediocre experience and the potential for costly errors.
By focusing on one product and a positive culture, we’ve been able to reduce errors and have fun building a successful product that is reasonably priced. This is very unique in the eDiscovery industry. We’ve also managed to create our own eDiscovery apparel line called eDDStuff, our own wine called Redaction, and recently our own beer called ASAP Ale. These things are definitely pretty unique to us and fun to do.
Any other aspects of your company that would be interesting to readers of Signal vs. Noise?
Yes. Don’t worry about the competition. I can’t say that enough. I think you mention this in Getting Real. The only thing you can control is what you do in your company and even that sometimes is out of your control. You can’t control what other companies are doing, so why even worry about it? If you focus on the problem you are trying to solve and being the best at solving it, your competitors will be spending all their time trying to figure out how you do it.