Bootstrapping to $100 Million: Edifecs CEO Sunny Singh (Part 4)

Sramana Mitra: While it wasn’t a small company, it wasn’t one of the major companies – SAP or Oracle.

Sunny Singh: That’s right.

Sramana Mitra: What were the contract sizes of the projects you were doing?

Sunny Singh: Under $2,000. They were all between $500 and $2,000. It depends how many seats they buy. If you bought more seats, you pay more.

Sramana Mitra: Early on, how did the revenue track? What was the revenue ramp like?

Sunny Singh: Around 1998 to 1999, we were a sub-$2 million company. We were doing a couple of projects. We were doing one contract where we were helping develop format for processes. How does the entire process work? For order fulfillment, what are the various transactions? You take an order and send acknowledgement. All the transactions within the process were being standardized. We were also working with Microsoft on developing their BizTalk. In 1999, we were about $2 million to $2.5 million.

Sramana Mitra: What’s the next phase of the company?

Sunny Singh: Then there’s the 2000 to 2001 time frame. I was not a business savvy guy. We had a sales pipeline with a sales manager. The pipeline wasn’t realistic and I trusted the sales manager, but the pipe wasn’t there. We got hammered on the sales not being realized on one side. One the second side, funding dried up. It’s almost at that point where, if I’m not mistaken, it was a million dollar plus contract. That dried out. At that time, we had also walked away from Microsoft because we couldn’t come to terms on IP. They wanted to own the entire IP for the work we were doing with them. We had to walk away from that.

While this was happening over an 18-month period, we were starting to go in debt. We stopped paying our taxes. That’s how business savvy I was. We stopped paying our rent payment. We stopped paying our vendors. When the salary was hit, the worst was when we didn’t pay for four pay cycles. Then, 9/11 happened.

I was sitting in bed and I was thinking, “Why should I get up and go to the office?” I could have been in debt for life. It was a very hard six months for me where, at that point, my only daughter was born. I said to my wife to go back to India, “It’s going to be very tough. I don’t have any idea what’s going to happen.” At that point, my family and friends were telling me to shut the company down. I sent my family back to India for six months.

This is the second time I was looking at the bathroom mirror and doing some soul searching. I had three options. I could shut the company down. I could declare bankruptcy, or have some other option that I was going to explore. At this point, I thought, “What kind of role model do I want to be for my family?” The going got really tough. It was really bad. That’s when I said, “Look, the only option I have is, so long as I have one more day to live, I’m going to fight one more day.” Every day was just, “Let’s see what we can do today.”

We started to do things that were more focused. We became more communicative with our team. The team became very tight and really came together. Most of them are still here with us. It took us 2005 to 2006 to pay off all our debt. I think I can talk to the IRS as good as anybody in the world now. I became really good friends with the IRS office because I tell them everything. I paid the vendor debt. I paid the landlord. I paid extra stock options to people because they stuck around. By 2005 to 2006, we were back in action. It took us five years.

This segment is part 4 in the series : Bootstrapping to $100 Million: Edifecs CEO Sunny Singh
1 2 3 4 5 6 7