Bootstrapping to $6M from Durgapur, West Bengal: Pinnacle CAD CEO Bimal Patwari (Part 3)

Sramana Mitra: Once you received your first order, what were your next steps?

Bimal Patwari: Immediately I found a team of four people from the students I had trained. I had one experienced person, and the rest were my top students. I used that team to get us started. All of the architects typically work through a reprographics company to get their drafting work accomplished. These companies had a large network of architects, so I realized that instead of approaching architects directly, I should be approaching the repro companies. They essentially aggregate the work and send it to me via good Internet connections.

That plan worked very well. We kept our business model simple. We provided prices based on the size of the drawing. There are typically five sizes of drawings, which are A, B, C, D and E. We provide fixed rates for those sizes which made repro companies very happy. They were getting close to 200% margins and they were paying us only after they got paid by the customers. They had very little risk, and we operated that way for the next few years.

Sramana: How did the business grow? What kind of scale were you able to achieve?

Bimal Patwari: By 2001 we had almost 30 people. We were doing just shy of a million dollars of revenue.

Sramana: Were you primarily working on architectural drawings?

Bimal Patwari: Yes. Every company has a lot of old paper drawings. They needed to get those moved into the AutoCAD format so that the architect could make adjustments. The architects and engineering companies used us to convert the legacy drawings into the AutoCAD. format. Accuracy was incredibly important.

Sramana: How many repro companies were there in the United States that service the architect industry?

Bimal Patwari: There must be at least 500 companies today that are actively catering to architecture, engineering and contractor firms.

Sramana: What percentage of those firms were you able to penetrate by 2001?

Bimal Patwari: We were working with close to 350 of them.

Sramana: Outstanding! How did you get to them?

Bimal Patwari: We did a couple of things. First, these repro companies also attend the major industry conferences. They all get together at one of two annual events and we made sure that we exhibited at the conferences they attended. We did not have a large budget for marketing, so this was a significant way for us to get in touch with those firms. Our business model was so simple that our customers were our best brand ambassadors. They would call other people and tell them about us. They would bring us more customers.

Sramana: Your tightly couple marketing strategy is good for both word of mouth and conferences. It is easier to market to high segmented niches.

Bimal Patwari: Absolutely. It is relatively easy to penetrate.

Sramana: In 2001 you were doing about $800,000 in revenue and you had penetrated 350 of the 500 repro companies in the U.S. What did you do next?

Bimal Patwari: In 2002 we had another landmark year. We opened an office in Houston, Texas. That was a bold decision. We received a large three-year contract from one of the large power companies in the U.S., but we had to do the job in the U.S. only. We hired a team of 10 people in Houston. That was a very exciting time. We recruited out of colleges and they were very nice to us. I could open a bank account in the U.S. without an issue. Everything is so complicated in India, whereas everything is so simple in the U.S.

This segment is part 3 in the series : Bootstrapping to $6M from Durgapur, West Bengal: Pinnacle CAD CEO Bimal Patwari
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