Bootstrapping a Robust SaaS company from India: Rategain CEO Bhanu Chopra (Part 3)

Sramana: Who did the development on the technology while you started the business?

Bhanu Chopra: Initially, I did everything. I was the project manager, the coder, and tHE visionary. While I was building the technology, I was also focused on selling it. I made several trips to the US and Europe to do road shows. It was a very new concept for people, but everyone recognized that there was a dire need for it. In the first year, I signed up a dozen clients.

Sramana: Were your initial clients travel portals?

Bhanu Chopra: Yes. Most of the clients were travel portals or online travel agents. I think that was a significant event for us. I was starting this company that was completely bootstrapped and had very little capital. The focus was on selling to customers. Winning a dozen customers gave me the infusion of money needed to keep things going.

Sramana: What were the deal sizes that you were able to obtain?

Bhanu Chopra: It ranged anywhere from $25,000 to $100,000. If I can recall correctly, we did almost $200,000 of business the first year. The business that we won was actually more than that but not all of the income arrived on day one. It arrived during the course of a year.

The first three years of the business were just awesome. We did about $2 million of business in our first three years. As a result, we participated in Deloitte’s Fast 50 list which tracks the fastest growing companies in AsiaPac. We were the number one company on that list in 2007.

Sramana: What was the business model behind those early deals? Did you sell a onetime license?

Bhanu Chopra: We are a SaaS company, so 100% of our revenues are annually recurring. We have very little churn in our business, less than 10%. We are approaching our 10th anniversary and we still have a lot of customers that I signed up during our first year.

Sramana: How big is this market niche that you have gone after? How big of a market is meta search for online travel agencies?

Bhanu Chopra: We started doing online meta search but now we do a lot of other things. We no longer sell only to online travel agencies. We also sell to hotels and now have a few thousand of those as clients. We also sell to all of the major car rental agencies. We are in a dominant position in terms of car rental companies. We are working with their franchises as well. We also work with large cruise liners.

Sramana: The premise behind your deals remains helping them understand competitive pricing?

Bhanu Chopra: That is our base model. What we have done over the years is take the next logical step. If you think about the information that we provide, people use that information to decide how to price their own particular product. If you are giving Hertz information about what Avis and Enterprise are charging for an economy car for a day in March, we also want to tell them that based on the competitive information and other information how they should price their economy car. We don’t use over-hyped marketing buzzwords. We have actually built a big data application, which is a utility that based on price optimization software that we have built. That helps our customers price their products to maximize their revenue to better understand the market dynamics of the market supply.

This segment is part 3 in the series : Bootstrapping a Robust SaaS company from India: Rategain CEO Bhanu Chopra
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