Deimos, a leading African cloud-focused cybersecurity company, has achieved remarkable growth without external funding. Founded by Andrew Mori, Jana Schoeman, and David Anderson, Deimos has increased its revenue from $1.3 million in 2019 to $15.2 million in 2022, according to Financial Times's Africa’s Fastest Growing Companies 2024. This rapid growth is a testament to the company's ability to create value and make money through its technology services.
Bootstrapping: The Key to Deimos' Success
Deimos is a 100% bootstrapped company, meaning it has funded its operations entirely through its own means. This approach has allowed the company to maintain control and independence, which Mori believes is crucial for a startup. "Revenue is vanity, profit is sanity, and cash flow is king," Mori emphasizes, highlighting the importance of managing cash flow efficiently.
Engineering Team and Competitive Advantage
Deimos' engineering team is a major competitive advantage, with Mori describing it as "excellent" and rivaling those of big players like Ernst and Young, Deloitte, and Accenture. The company's ability to attract valuable clientele is also attributed to its mission to help businesses use technology in the right way. This mission resonates with customers, who are drawn to Deimos' focus on technology as an enabler for businesses.
Lower Pricing and Attracting Customers
Deimos' lower pricing strategy allows it to attract customers that would otherwise go to larger competitors. This approach has enabled the company to build a loyal customer base, with Mori noting that Deimos has made $20 million in yearly revenue from just 80 customers.
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Challenges and Lessons Learned
Despite its success, Deimos has faced challenges, particularly during the COVID-19 pandemic. The pandemic affected its customers, which in turn affected the company. Mori emphasizes the importance of maintaining a tight debtors book and collecting money promptly to ensure cash flow. "You must collect your money, and you must have a very tight debtors book because that produces the cash flow, and you need cash flow," he stresses.
Fundraising and Future Plans
Deimos is currently looking at fundraising for one of its subsidiaries, but Mori emphasizes that the company does not need to raise funds. He notes that fundraising is a skill set he'd like to learn, as it's essential for companies to be prepared for the future. The company's plan is to scale to 500 and hopefully 1,000 customers, which would increase its revenue and cash flow.
Conclusion
Deimos' journey serves as a testament to the power of bootstrapping and the importance of creating value and making money through technology services. The company's focus on engineering, lower pricing, and customer satisfaction has enabled it to achieve remarkable growth without external funding. As Deimos continues to scale and grow, it will be interesting to see how it navigates the challenges and opportunities that come with its success.
What do you think is the most significant factor in Deimos' success, and how can other startups learn from its approach to bootstrapping and creating value through technology services?
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