Bootstrapping from Indiana: Passageways CEO Paroon Chadha (Part 2)

Paroon Chadha: You are never going to be surrounded by so many super smart and super open people in your life. When you’re at school, there are a lot of engineers and computer scientists. There are a lot of people who are good at math. You can pretty much come up with any idea and if you try hard enough, you can find two or three people who will start meeting around that idea.

Forming a company is a real possibility. I realized that going into school and I really started to look for a good way to do this. My co-founder Christopher Beltran was an undergraduate. We were part of an e-commerce club. In 1999, Yahoo! and eBay were the two hot companies. Yahoo! was a portal company in the consumer space and eBay was an auction engine.

The first thing we did was, we tried an auction engine on campus. We called it BoilerZone. This was so new. People were starting to exchange goods. We were running this out of our dorm room. We realized that this was not going to scale. We didn’t know what liability it was going to entail. The university, at that time, was not out there supporting the various things that were happening. They were trying to figure out their own philosophy on how to support entrepreneurship, especially when it came to the web.

Purdue has been very good about supporting engineers. This was a new start of something that required a lot to figure out. We shut the auction site down and started thinking about taking the portal idea into the enterprise world. That’s how we started Passageways. We tried building a portal software for any organization to piece together the right set of information for a person in a certain role within an organization.

If you are a CEO of a bank, what should you see? If you’re a teller at a bank, what should you see? What information makes sense so you can be efficient at work?

Sramana Mitra: Personalized portal. Plumtree was doing that.

Paroon Chadha: Plumtree was the big portal company that came out of that movement. They used to own portals.com, which I now own. We really did have an amazing run. We got funded right on campus. The business plan competition gave us $7,000. We came in 2nd. It was so good to win there.

We were in the early throes of what ended up being a pretty important part of the campus. Now there’s a full-fledged center. I’ve taught an entrepreneurship class. When we won that business competition, we started to get serious about our business plan. We went to other business schools and won some money elsewhere. That led to that moment where we were like, “We should seriously do this.”

I got a consulting job out of my MBA program. I joined that for a few months because Chris was going to graduate six months later. As soon as we graduated, we had funding that came through a local credit union in town. It’s like a small community bank. This was Purdue Federal Credit Union. I remember I made a cold call to the IT manager saying that my finance professor suggested that I talk to them.

They called us and invited us in. They got serious about it. They wanted to buy the about-to-be-real software. It was still concept software at that time. They invested $100,000 into Passageways. That was the seed capital. Chris and I started full-time after school. We moved into their building. We occupied a small office space. We had 150 users of our software constantly around us giving us feedback every hour of the day.

This segment is part 2 in the series : Bootstrapping from Indiana: Passageways CEO Paroon Chadha
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