Building An Outsourcing Company In China: Bleum CEO Eric Rongley (Part 3)

Sramana: When you started the operation, what were your first steps? What was the startup process?

Eric Rongley: As an expat in Shanghai, I had a lot of other friends in Shanghai who were doing well and feeling entrepreneurial in the heyday of the dot-com era. I had quit my job about two months before the stock market collapsed in 2001. Right after that, all my friends decided they were nervous about investing at that time.

I ended up starting Bleum with $100,000 of my own life savings to work with. Because of that, I had to be more careful, which caused me to change my strategy. My first employee started August 25, 2001. Until that time I was planning and preparing. Once that person started working, I was spending my money on the company and it got more serious.

Originally, my business strategy was to do what I had done before in China and India. When it became apparent that I was going to start with only $100,000 and that I did not have any customers from the U.S., I decided it would be best to do business in the local market. For the next year and a half I did projects in the local market. That was a very difficult thing for us to do, and in retrospect it was something that I should not have done.

As a small, underfunded company, we were just a sucker ready to be taken advantage of. We would get a lot of customers who hammered on price while talking about a long-term partnership. We fell for a few of those deals, and payment was always an issue. It became a lot more than just winning a project and delivering a project. The rules of the game are not published in China, and it is hard for a foreigner to know how to play that game. We did good work for customers, but we were not getting ahead and I was burning through the little cash I had.

The first major starting point for the company came about a year later when I realized that I had to change our strategy. I then focused on offshore customers. Over the next six months we brought in some offshore business. With twelve months, we had transitioned from a local revenue company to an offshore-only company.

Sramana: How did you find your first foreign customer?

Eric Rongley: I had been in the industry for a number of years, and I had a good network with a lot of contacts. At time I was the chair of the American Chamber of Commerce IT Committee. Someone in my network was the head of development for an ERP company in the UK and they were thinking of coming to China. They gave us a project to try us out, and that project was a great start.

Sramana: How big was that project?

Eric Rongley: I was about 10 guys for four months. It was probably something like $60,000 to $100,000 dollars. The problem with project work is that it is feast or famine. When the project ends, you have 10 C++ guys and the next project will require Java. We did get additional projects from that customer. They kept the wheels turning for a period.

Sramana: What else were you doing to recruit more customers?

Eric Rongley: We changed our website to be focused on building ODCs. We let go of our local salesforce, so we no longer had local deals. We also started placing Google ads very early in 2003. At that time we were one of the first outsourcing companies to take advantage of that. That led to our first couple of ODCs.

Sramana: What keywords did you advertise with?

Eric Rongley: They were keywords like ‘software outsourcing china.’ In the early days the keywords were effective, but they just are not that effective anymore.

This segment is part 3 in the series : Building An Outsourcing Company In China: Bleum CEO Eric Rongley
1 2 3 4 5 6 7