Bootstrap First, Raise Money Later from Oregon: Paresh Patel, CEO of PayRange (Part 2)

Sramana Mitra: What is your Ph.D. in?

Paresh Patel: It’s also in e-business and organization management.

Sramana Mitra: The vending machine company was yourself?

Paresh Patel: There were employees. We grew to about 25 employees.

Sramana Mitra: What kind of revenue levels did you get to?

Paresh Patel: We’ve never disclosed that publicly.

Sramana Mitra: Was the exit substantial?

Paresh Patel: It was enough for me to reinvest in a new company.

Sramana Mitra: This is what I like about these bootstrapping techniques. It’s a wonderful way. Also, it paid for your education.

Paresh Patel: By the time I finished my education, I didn’t have any student loans.

Sramana Mitra: Terrific. What year did you start the new company?

Paresh Patel: I had one company in between this one and the vending company. I started that one in 2011. It was a company that made credit card readers for vending machines. I had that from 2011 to 2013. It did not go well. I got out of that and started this company in 2013. I bootstrapped this as well.

Sramana Mitra: Let’s start at the very beginning of this company. You already described the problem. People didn’t have cash in their pockets. How did you go about starting this company? What form would your MVP take?

Paresh Patel: The genesis of this company was a singular moment. I had always known about this problem. Not just vending, but any unattended retail. I wasn’t quite sure how to solve the problem.

There was a particular moment in Labor Day of 2013 where I was in my car with my kids. My tire pressure light came on. I pulled into the gas station and went to the air machine. I was a quarter short to start the machine. My kids were in the backseat worried. I picked up my phone and made a call. My call connected to my car’s Bluetooth.

I just realized wouldn’t it be neat if my phone could connect to the machine. I have a network connection. I have money in my account. I have a credit card. I just don’t have a way to tell that machine. At that moment, I realized that there should be a technology that allows your smartphone to connect directly to a machine. I went home and I found the industry trade show. I rented a booth which was going to be in April of 2014.

I put the booth on my credit card. I drew a line in the sand and said, “I’m going to build something to show the industry.” I got a small group of contractors who I reached out to. We spent the next six months building an MVP. It was working and was able to send payment. I demonstrated that at the trade show.

Sramana Mitra: What kind of trade show was it?

Paresh Patel: It was called NAMA which stands for National Automatic Merchandising Association.

Sramana Mitra: It was a retail industry trade show?

Paresh Patel: Yes, a vending industry trade show.

This segment is part 2 in the series : Bootstrap First, Raise Money Later from Oregon: Paresh Patel, CEO of PayRange
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