Capital Efficient Entrepreneurship: Ephesoft Founder Ike Kavas (Part 2)

Sramana Mitra: How much money did you get from your friends and family to start this company?

Ike Kavas: Less than $200,000.

Sramana Mitra: How did you find these four people in India?

Ike Kavas: I did a lot of research on companies that can develop software. I interviewed companies from Ukraine, Russia, and India. This company passed my test.

Sramana Mitra: You were doing this on Elance or oDesk?

Ike Kavas: I contracted this company so that I could also make sure that I retained all the intellectual properties.

Sramana Mitra: How did you find them?

Ike Kavas: Through the Internet.

Sramana Mitra: Were you using one of the services marketplaces?

Ike Kavas: No.

Sramana Mitra: You just did Google search and found these companies?

Ike Kavas: Correct.

Sramana Mitra: So now you’ve got this group in India that met your requirements. You decided to outsource and you have a demo version ready in about three months.

Ike Kavas: Correct.

Sramana Mitra: What happens next?

Ike Kavas: On December of the same year [2010], I got my first customer.

Sramana Mitra: How did you do that? How did the first customer find you?

Ike Kavas: With the help of the Internet, I was looking for companies that can utilize my technology. I met this local company in Orange County. They were a startup. They handled documents for other companies. They were doing everything manually. I introduced them to the software and I showed them how easy it is. They told me that they used to work at Accenture. Accenture tried to do this for two years and spent millions of dollars. They bought it.

Sramana Mitra: What kind of a company was this?

Ike Kavas: It’s called Service Bureau. Generally, they were an outsourcing service for other companies’ business processes.

Sramana Mitra: What kind of a customer was it? How much were they paying? Was it a SaaS model?

Ike Kavas: It was a subscription model, but on-premise.

Sramana Mitra: On-premise subscription. You put your software on their premise but you charge them on a subscription basis.

Ike Kavas: That is correct.

Sramana Mitra: Kind of a private cloud type of model. How much did you charge?

Ike Kavas: That first check which is still on my wall was $28,000.

Sramana Mitra: So in December 2010, you got your first customer who was paying you $28,000. What happens next?

Ike Kavas: I found a CEO.

Sramana Mitra: How?

Ike Kavas: I used to work for him at KOFAX. He came on board. He was employee number two. With his help, I hired sales and support people. Then we got another deal in March. The deals were becoming more and more frequent. Then in 2011, we reached $200,000 in revenue.

Sramana Mitra: How many employees at this point? Development is still outsourced?

Ike Kavas: Five in United States and four in India.

This segment is part 2 in the series : Capital Efficient Entrepreneurship: Ephesoft Founder Ike Kavas
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