Bootstrapping Using Services, then Raising $10M and Scaling to $16M: EZOPS Co-Founders Sarva Srinivasan and Dutt Chintalapati (Part 3)

Sramana Mitra: You were doing this out of Chicago?

Sarva Srinivasan: New Jersey. All three of us are from New Jersey. We started off in a small office back in January 2014.

Sramana Mitra: All these 20 clients, you serviced with just the three of you?

Sarva Srinivasan: It took us two years to build the 20-client portfolio. By that time, we were 30 people.

Sramana Mitra: 30 people in New Jersey? 

Sarva Srinivasan: And India. We hired our first employee who wanted to go back to Dublin. We said okay. So we have operations in New Jersey, New York, Dublin, and India.

Sramana Mitra: What kind of average deal size were these clients?

Sarva Srinivasan: They range from $200,000 to a little over a million dollars. This is largely advisory-related work. It used to be six months to nine months. It helped us do two things. It allowed us to bring the team that we wanted to work with us. It also gave us good visibility into the challenges they were facing.

Dutt Chintalapati: Talking about the entrepreneur’s journey, the big difference is starting the company and building it up. The three of us have been working for a long time. We know this space quite well. With the ability to talk to the right people within the financial institutions and attract the right talent, it’s a slightly different journey than a typical startup. 

Sramana Mitra: It’s not necessarily a different journey. The bootstrapping using services journey is very similar to yours. People with domain expertise go out and do services projects, start building a team, start understanding their customer problems, and then productize it. This is not at all an unusual journey, but it is a tried and true way of building companies.

Dutt Chintalapati: Typically, you don’t find people who spent 25 to 30 years in one place going out and starting something. All three of the founders are relatively senior people in the industry. 

Sramana Mitra: I think it’s more common than you think. The real question that I want to spend time on is what was the problem that you identified in your conversations with the first 20 clients that could be productized.

Sarva Srinivasan: The crux of the problem was data quality. If you look at the challenges the clients are facing, they have tremendous amount of people. There was a time when a lot of the work was done here, then people started outsourcing work. People measured this as cost per transaction.

The idea was how do I get my cost-per-transaction down. The easiest way was to ship work to low-cost locations around the globe. It got to a point around 2013 where the margin of shifting work to these low-cost locations was starting to shrink. They had two things going on. They had these bloated teams located all over the world reducing the cost per transaction, but the time to resolve issues was extending. Then we have the financial crisis.

It basically asks the bank to start spending 30% to 40% of their dollars that they would otherwise spend on newer technologies in managing and reporting regulatory and compliance needs. In 2014, the number one topic for the CEO and the CEO of the banks was, “Am I compliant or not?” We started working with the clients. We spotted that data quality was the primary reason why they were not able to meet the mandates.

This segment is part 3 in the series : Bootstrapping Using Services, then Raising $10M and Scaling to $16M: EZOPS Co-Founders Sarva Srinivasan and Dutt Chintalapati
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