Bootstrapping a $7 Million Company in Houston: Gaurav Khandelwal, CEO of ChaiOne (Part 3)

Sramana: What specifically did you do when you launched ChaiOne? Who was your first customer?

Gaurav Khandelwal: I was dating a girl at the time who is now my wife. She was working at Microsoft and called me on a Friday night frantic. Her boss needed something done by Monday morning and it was something the company was relying on. She knew I did stuff with the web and wanted to know if I could help them out. I got on a call with her boss at 10 pm that Friday night and he showed me the problem he was having developing a survey application. He sent me a quote that a third party company had sent him.

I quickly realized that the quote was actually another company’s pricing for a product and that this company had just put their logos on top of it. When I googled the company I found that while they had been asking for $20,000 to do the project I could get the same software online for $80. All I had to do was configure the software.

I spent the weekend configuring the software and I got it up and going by Monday morning. That was a big turning point for us, because that allowed a manager at Microsoft to feel like they could get what they needed from me. For the next 18 months, I received a lot of work from Windows Mobile. They came to me because that one manager was very vocal about how well we had done for him. They also drove a lot of other customers my way as well.

Sramana: Did you port over a survey application to Windows Mobile?

Gaurav Khandelwal: No, Microsoft was launching the Windows 7 devices. I still had my full time job at this time as well. I did not want to quit my job until I had some revenue coming in. When the Windows 7 phones were coming out, they were sold through carrier stores like Verizon and AT&T. Microsoft needed a way to survey the customer and the sales rep to receive customer feedback about those devices.

They needed a sophisticated way of measuring the analytics of those responses. They wanted a survey application that would allow the customers and store reps to rate the experience of the Windows 7 devices. We customized and branded some commercial software so that it could be used in that environment. This was the big customer that allowed me to leave my full time job when the app store launched.

Sramana: How much income were you generating by the time you quit your full time job?

Gaurav Khandelwal: I probably had a run rate of around $85,000.

Sramana: Did you have confidence to hire an employee based on that side income or did you run your business solo for a while?

Gaurav Khandelwal: After I quit, I decided to start using contractors as opposed to hiring employees. I had been doing that for three to four years, so I knew how to sustain and manage a business in that manner. That is what I did as a consultant. Now that I had time on my hand, I was able to go out and sell. In my first year, I did about $250,000 in business, which was sufficient to pay contractors and hire a couple of guys. That was in 2009.

This segment is part 3 in the series : Bootstrapping a $7 Million Company in Houston: Gaurav Khandelwal, CEO of ChaiOne
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