Bootstrap First, Raise Money Later from Oregon: Paresh Patel, CEO of PayRange (Part 3)

Sramana Mitra: I’ve experienced the use case that you described. The gas station around the corner from me doesn’t have any digital payment option.

Paresh Patel: That was the problem. The machine only took cash.

Sramana Mitra: Do the gas station people attend these kinds of trade shows?‘

Paresh Patel: No, but the people who make the machines do. I wasn’t just solving for air machines, laundry, or vending. It was unattended retail in general.

Sramana Mitra: All unattended machine makers were at that trade show?

Paresh Patel: Correct.

Sramana Mitra: Great. You said you spent six months to get an MVP done by hiring contractors. Talk about that. Where did you get these contractors from?

Paresh Patel: I was self-funding this, so I didn’t have a lot of cash. I had to look for people who weren’t big companies. These are just individuals who were in my network. I hired one person to work on the hardware and another on the firmware. It was just a very bootstrapped company. They were not even full-time.

Sramana Mitra: Were they from the vending machine industry?

Paresh Patel: No, just general engineers.

Sramana Mitra: Your undergraduate was in business and not in tech?

Paresh Patel: Correct.

Sramana Mitra: But you had enough understanding to scope out what they needed to build for you.

Paresh Patel: Exactly. I’ve always been pretty technical, so I’ve been able to architect effectively. I’m not a coder, but I can design a solution. If you can do that, then it’s hard to hire somebody to build it. You need to be able to scope it out.

Sramana Mitra: Six months in, you have a minimum viable product. You’ve taken this booth at a trade show and you showed this to the community. What response did you get?

Paresh Patel: I didn’t have more money to go past the trade show. I needed to get validation and I needed to get validation in a way that investors would appreciate. Leading up to the trade show, I signed a deal with a distributor who agreed to distribute our product.

When I was ready to sell it, I had somebody to distribute it. This was a distribution company that had 220 sales reps across the country. That was huge because that showed that if I could get customers to buy it, I had somebody to distribute it as well. When I went to the trade show, we did a very nice job of collecting pre-orders. We had people sign up pre-orders for our device.

We also built 500 working devices and sold them at the show. We gave them to people for a nominal amount. They could take them home, test them on their own machine. You’ve got to remember, in 2013, using your mobile to send money was a very foreign concept. Nobody understood that at that time. We took pre-orders. I signed up over a million and a half in pre-orders. It was amazing. The reception was fantastic.

This segment is part 3 in the series : Bootstrap First, Raise Money Later from Oregon: Paresh Patel, CEO of PayRange
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