Bootstrapping a Virtualization Services Company: Chris Grandi, CEO of Abacus Group (Part 4)

Sramana Mitra: What was going to be the new company? What did you find that warrants doing another company?

Chris Grandi: This is one thing that I always tell the entrepreneurs I speak to. You always hear about entrepreneurs who start a company when they’re super young and don’t have a lot of experience, and they’re successful. That happens but ultimately, I’ve always believed that if you do something long enough, you get smart in it and get domain experience. Your risk of success is much greater.

I saw a better technical solution to the previous company. I believed that the company who does this 10 years from now is going to be bigger than any of the companies in the space. It was that conviction. I really believed that I had the most domain knowledge and was the best-skilled person to create this company. What Abacus does is the same – outsource IT solutions, but we were going to move to a cloud-based environment. Not that virtualization is new, but virtualization was just coming into the hedge fund space. It was heavily dependent on centralized technology and moving technology out of the hedge fund office into data centers, and moving all the servers into virtualized environments.

Sramana Mitra: You were essentially bringing virtualization technology into the hedge fund niche. That was your positioning for the new company?

Chris Grandi: That’s correct.

Sramana Mitra: The service was still system integration work?

Chris Grandi: Correct.

Sramana Mitra: I imagine, then, you self-financed this?

Chris Grandi: I did self-finance it.

Sramana Mitra: Tell me more about how you got your first client. Were they people who you already were working with in your previous company?

Chris Grandi: Yes, they were previous relationships. That goes back to my theory about it being easier to build a company when you’re working in a market where you have experience in. I was very well-known because of the years I’ve spent in this marketplace. Through the years of creating relationships, a few of these relationships wanted to come with me.

Sramana Mitra: What were the sizes of deals that you were selling to these hedge funds?

Chris Grandi: While starting the company, I started small. We would take anyone who would pay us money. Our initial contract was $50,000. Some of these were very small hedge funds. I’m talking of hedge funds that only had five people. We would take anyone who would pay us money. Every year, we got bigger. We went from working with hedge funds that managed $100 million to working with the largest hedge funds in the world. These guys are running an excess of $20 billion to $30 billion.

Correspondingly as you take on bigger clients, there’s a natural revenue ramp. When we started this company, we grew 100% for many years. It was a small revenue amount. Now, we have significantly larger revenue. We’re still growing 50+% per year.

This segment is part 4 in the series : Bootstrapping a Virtualization Services Company: Chris Grandi, CEO of Abacus Group
1 2 3 4 5 6