Well known venture capital firm Sequoia Capital made a now famous presentation to their portfolio companies titled “RIP: The Good Times”,  warning these companies about the seriousness of the economic crisis and the need for them to become cash flow positive before they need more capital.

This has been widely circulated and cited and now potential customers of venture backed companies are being warned to ask about their financial stability. This has prompted me to write this blog post assuring our existing and potential customers and partners that SLI is in a fantastic position at the moment.

We are cash flow positive and don’t need any more capital to survive or to grow further. SLI has a pure software as a service (SaaS) business model. This is good for our customers because it means that they don’t have to pay a huge sum up front and we do almost all the work. It is also great for us because it means we get recurring revenue across all of our customers (which now number in the hundreds). Being cash flow positive, this revenue gives us a very solid base from which to operate the company.

Interestingly the SaaS model means that we have a very strong incentive to focus on customer satisfaction. In order to keep our solid base of recurring revenue we need to keep our existing customers happy. This is why we have an internal policy ensuring requests from exiting customers should always take precedence over those from prospective customers. This is also one of the motivations behind our aim to continuously improve our service. In a survey we did earlier this year 100% of the customers we surveyed said they would recommend us to other website owners looking for a search.

Even in these difficult financial times we are growing strongly. Last quarter was the best quarter we’ve ever had in terms of new customers and the first month of this quarter was the best month we’ve had in over a year. We expect that most of our customers’ business will continue to grow and we are still hiring staff and investing in improving our service. Our situation has been helped by the demise of one of our competitors, Mercado and by the extremely poor attention to customer service of some of our other competitors. There is speculation that other search companies are struggling.

SLI Systems has been around since 2001. We have built the company on very little capital (we received more revenue from our customers last quarter than we have received from our investors in total). If you are considering using our services then you can be assured that we will be here for many years to come.

A few weeks ago I was quoted in an interesting blog entry on Information World Review (http://blog.iwr.co.uk/2008/08/google-stakes-i.html) talking about enterprise search and, particularly how Google is, once again, putting pressure on the industry. I think it’s worth expanding on a couple of things, particularly what I mean by enterprise search going beyond “what’s behind the firewall”.

As Phil Muncaster quite rightly points out, for many, searching documents behind the firewall is exactly what enterprise search means, but I don’t think that’s the whole story. In our experience, larger organizations need to store, retrieve and track digital information that exists in many different containers such as e-mail servers, desktops, intranet sites but also, crucially, on their Web sites and e-commerce sites which fall outside the corporate firewall.

For most organizations, Enterprise Search Software as most people know it today can’t provide access to all the information it needs within a single search – that’s because the content exists in numerous locations and formats. When this is coupled with factors such as technical limitations, cost and bureaucracy, it prevents all these various enterprise silos being unified under one index. Certain ideas such as ‘federated search’ are being explored in parts of the industry but, in my view, you are better off having a few different products that each perform a function well, rather than trying to manage everything under one cumbersome, expensive project.

When using an enterprise search function behind the firewall, employees will expect complexity and even accept that they may need training in order to use it.  When people are using a public search function however, even to search for information connected to the organization they work for, they expect it to be simple to use like Google.