Bootstrapping a $175 Million Business with Services: TEOCO CEO Atul Jain (Part 2)

Sramana Mitra: What were you consulting on?

Atul Jain: I was helping them build a system for oil trading. I had developed a certain amount of expertise in doing that, so they were happy to get my expertise to help them figure out how to go about building an integrated oil trading system. I told them upfront, “I’m not doing this to be a one-man shop. I have a clear goal of building a team of people so if you don’t feel that you want to give me additional opportunities, please tell me upfront. Because if you take me, you’re committing to me that you will give me additional opportunities to begin building a team and a company.”

They accepted my terms. A few months later, they told me that they are going to hire three or four people. They wanted me to find one person to add to the team. Slowly, I built a team of about four or five people who were working with me on the project. I hired people very carefully – people who I felt were aligned with our values and who were deeply technical.

Sramana Mitra: How did that pan out? What is the timeframe we are talking about? Starting from 1995, you now have four or five people and you have this one client.

Atul Jain: That was in the first year. It took me about nine months to get to a team of about four or five and at the end of another year, we were probably about 15 or so. The company and I have been very fortunate. I have never seen a day where I couldn’t meet payroll. Most entrepreneurs struggle making payroll in at least some point of their journey.

My philosophy was that if I didn’t have six months of somebody’s salary in the bank, I wouldn’t hire them. In the first nine months, I didn’t take a salary. I deposited all the money I generated into the company. Three months later, I hired a second person. A couple of months later, I hired the third person. I was very conservative.

Sramana Mitra: In these two years that you built up this 15-person team, was Mobil Corporation your only client?

Atul Jain: We acquired one or two other clients. We got some business from Siemens in Germany, Cable & Wireless, and Freddie Mac. Mostly, they fell into our lap based on the reputation of the people we hired when they called on us to ask if he/she could do some work for them.

Sramana Mitra: Where were you hiring these people from? What were the basis and the logic of hiring these people? What kinds of people were you hiring?

Atul Jain: I was hiring technical people. These are people who knew how to do programming. I was giving them a dream of sharing the equity of the company. I was presenting them a picture of building a principle-centric workplace and a model of shared success. Since the concept of ownership in the East Coast is not quite prevalent as it is on the West Coast particularly 20 years ago, the concept of shared ownership appealed to a group of people.

Sramana Mitra: You were doing this in Virginia?

Atul Jain: Yes, I was doing this in Fairfax, Virginia.

Sramana Mitra: If you’re talking about Boston or New York, the picture is a bit different. Virginia is definitely a different story.

Atul Jain: I didn’t mean to say East Coast very broadly. I meant to say that in the region that I was in, the concept of shared ownership was not as prevalent. I must have in some ways been able to sell a dream. When I look back at it, I cannot believe that I was able to convince people about some of my stupid ideas.

Sramana Mitra: What kind of projects were you doing for Siemens and Cable & Wireless?

Atul Jain: It’s mostly technology projects. For example, with Mobil we’ve been building this oil trading system. For Cable & Wireless, we were helping them build a system to do some interface between two of their telecom systems. They were all specialized projects to do specific tasks around custom software development.

Sramana Mitra: Other than random custom software development projects, there was no tie-in between any of these projects?

Atul Jain: It was whatever walked in the mall to the kids. I always felt that I wanted to build some capital and intellectual property. As I built up the capital from the profits of the company, I began to think about what we could focus on to build some intellectual property. This was about three years into the journey.

One industry in this area was telecom. Everything else was garment contracting, which I didn’t want to have anything to do with. The only technical sector that seemed to have some traction was telecom. I decided that if I was going to go after an industry, it was going to be telecom.

I bought a very small piece of intellectual property around which I started building a solution where we process invoices that carriers were sending to each other for validation. It’s called bill reconciliation. These carriers send bills to each other and there are always errors in those bills. We built a system to import those bills, put them into a canonical format, and then process, audit and, pay those bills.

This segment is part 2 in the series : Bootstrapping a $175 Million Business with Services: TEOCO CEO Atul Jain
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