Bootstrapping to $6M from Durgapur, West Bengal: Pinnacle CAD CEO Bimal Patwari (Part 4)

Sramana: Why did you elect to establish your U.S. office in Houston? Was that where you client was based?

Bimal Patwari: Our client was in Tennessee. I elected to establish the office in Houston because I had friends there. Houston in an engineering hub, and there is a lot of oil and gas industry there. Also, the cost of living in Texas is lower than in other parts of the country.

Sramana: What was the size of the contract you won?

Bimal Patwari: It was a three-year contract and the company guaranteed to send a certain number of drawings to us for three years. It was a contract that was worth at least $500,000. There were also a lot of small companies in the area that could give us small orders worth a couple hundred dollars. That adds up over time and keeps the accounting going.

Sramana: What happened after you had a Houston office established?

Bimal Patwari: By this time we had become respected in the industry. I have had my customers pick me up at the airport and offer to take to me to the golf course to play golf with me. I was amazed by that. Having that type of relationship with my customers makes me feel really good.

At that time I realized that I had a very loyal business. I knew that soon we would have major competition, and the reality is that anybody could do what we had done to that point. I realized that architects and engineers want their transcripts and drawings converted into construction documents. A lot of those firms are small and can’t afford a full-time resource in their company. Fortunately for me, there were no drafting service providers in the U.S. that could do what we did. I could provide a resource to these firms and charge them on an hourly rate.

Sramana: What kind of rates were you able to charge for drafting services?

Bimal Patwari: In 2002 we were almost charging $12 an hour. In the U.S. the going rate was almost $25 an hour. We were almost offering a 40% discount. Architects would pay more because they were concerned about turnaround. They wanted top quality with the drawing. They would make hand sketches and would need iterative response. The U.S. office would collect the feedback from architects and engineers and would pass it on to the Indian team. That made our response time very fast.

Sramana: Were you delivering all of this work from Durgapur?

Bimal Patwari: Absolutely. Today we have 450 people working in Durgapur. We have a world-class infrastructure there, and we have people from all over the world coming to our campus every month.

Sramana: So, the primary change that occurred in your business in the mid-2000s was that you moved from being sheet based pricing to hourly pricing work, which took you to the next stage of value add for engineering service firms, correct?

Bimal Patwari: Absolutely. That meant we were not working just for repro firms, but also working directly for the engineers and architects. That also meant that I had to hire architects and engineers, so I started hiring them to my team. Fortunately, Durgapur had a lot of engineering firms around, so engineering talent was never a problem. In most cases these are people who do not want to leave the company. The most important thing I had to do was teach them how to do American construction. The materials and processes are different in the U.S. than in India.

Sramana: How did you meet that challenge? How did you teach Indian architects to understand the U.S. processes?

Bimal Patwari: The training center we operated came to play again. That is what differentiates me from everyone else. I invited clients to come to our office to provide training. Some customers were very nice to us and were willing to invest their time to teach us their processes and standards. I was also able to send some of my people to the U.S. I took advantage of that to collect training materials and create a training course. That has really paid off. Almost 90% of my people have been trained in-house.

This segment is part 4 in the series : Bootstrapping to $6M from Durgapur, West Bengal: Pinnacle CAD CEO Bimal Patwari
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