By Ann Meyer
— With an eye toward innovation, Chicago technology company kCura relies on partners to sell its software so it can spend more time on service and add-ons.
“We’re continuously innovating the software at a pace we believe is ahead of the industry,” said Andrew Sieja, president and chief executive officer.
The distributed sales model has accelerated the company’s revenue, user base and headcount at a far faster pace than it could achieve on its own. By year end, it expects to employ 200 workers, up from about 100 at the end of 2010 and eight employees in 2007, said Sieja, 34, who launched the company as a consulting business in 2001.
To keep up with the growth, kCura moved to a new office at 175 W. Jackson in February, but it already has secured a larger space at 231 S. LaSalle for a planned January move.
From consulting to product sales
After chugging along as a consulting firm for six years, kCura recognized the potential of a particular e-discovery application it had developed for Foley & Lardner, a commercial litigation firm, in 2002. Finding Sieja ” was like finding the needle in the haystack for me,” recalled Bruce Blank, director of litigation support and service for the law firm.
Blank had been looking for a software engineer for months, but couldn’t find anyone who could address his questions until he met Sieja, who was only 24 at the time. “One after another he answered them in detail,” Blank said.
While Foley & Lardner has permanent ownership of the software, it gave Sieja the intellectual property and encouraged him to sell it to others. “I knew Andrew had every ability to capitalize it,” Blank said.
It took about three years to prove the concept in the larger marketplace, but focusing on one product instead of myriad consulting jobs proved an effective business model, Sieja said. “Being able to work on one piece of software….is a far more scalable business in terms of making money,” than consulting is, he said. While the company doesn’t report sales figures publicly, since transitioning from a consulting firm to focus on off-the-shelf software for the legal discovery process, Chicago-based kCura has amassed 43,000 end users and has 6.59 billion files under management, Sieja said.
As a whole, the world’s e-discovery software market is projected to hit $1.5 billion in 2013, up from $889 million in 2009, according to a report by market research firm Gartner.
Software-as-a-service catches on
Driving the category is new acceptance of software-as-a-service e-discovery applications, the Gartner report noted. By 2013, SaaS applications will account for three-quarters of the segment’s revenue, Gartner said.
While some large legal firms and corporations built their own review tools, “One by one those companies slowly but surely decide they can’t keep up” said Kimothy Taylor, chief operating officer at Phoenix, Az.-based Encore, a litigation support company that offers a hosted version of kCura’s Relativity software to legal firms and corporations. Most turn to an application like Relativity, he said. Encore is one of 89 hosting partners and 19 channel partners who distribute the Relativity software.
While the Gartner report suggested kCura might be reaching a saturated market by working with so many channel partners, Taylor is skeptical. “There are hundreds of thousands of attorneys that have yet experienced Relativity,” he said.
Sieja estimates the company currently has about 17 percent of the 250,000-user market, allowing ample opportunity to double sales. He also said the company is actively working to expand its product line. While Sieja says the company has attracted attention from venture capitalists, he hasn’t had to draw on external funding. “It’s not about cash,” Sieja said. “It’s all about hiring talent.”
Culture and core values
To that end, kCura relies on an extensive hiring process, including using online questionnaires and essays and multiple interviews. In addition, Sieja meets with all new hires to explain the company’s history and culture, which includes a set of core values employees drafted. The values include: Be an excellent communicator, exceed expectations, embrace the talents of your colleagues, and hold yourself and your colleagues accountable, he said. To keep workers motivated, kCura posts key performance indicators on the walls near the bathrooms, where they won’t be missed.
“We believe every single touch point a customer has inside the company is a reflection of the company itself,” he says. “People aren’t necessarily buying the product per se. They’re buying into the company.”
kCura lets its channel partners set the price of the application, but it often sells for $100 per user per month plus a data-storage fee, Sieja said. Accompanying the software is ongoing service and updates.
Working together to solve problems
While Encore also hosts several other e-discovery applications, Taylor said kCura’s entrepreneurism and dedication is unmatched in the industry. “Not too many CEOs make themselves available like Andrew,” Taylor said, including working after hours and through the weekend to help a customer.
“I’ve had numerous round tables working with this team constantly on issues,” Taylor said. “That’s the nature of the beast. It’s not a one size fits all.”
When Encore had trouble loading customers’ data, kCura found a way to automate the process by sending two programmers out to work with Encore’s developers, all at no charge, Taylor said.
Sometimes, a problem lies outside the software. “They’re about solving the problem. At the end of the day, it’s their reputation as well as ours,” Taylor said.