Bootstrapping a $7 Million Company in Houston: Gaurav Khandelwal, CEO of ChaiOne (Part 4)

Sramana: Who were you going after in terms of clientele?

Gaurav Khandelwal: In the beginning, I was going after companies that had an appetite for innovation. Primarily, they were small and medium businesses. I often ran into entrepreneurs who were looking to build their ideas into the next big thing. This was happening in 2008 when large companies were not buying and the markets were in turmoil. I found that Houston was insulated from the recession. There was still a lot of healthy demand for technology products and web applications. I worked through incubators who had funded companies. The incubators were great at sending leads. That was the basis for us to get steady revenue.

Sramana: Was there a particular technical concentration for your projects?

Gaurav Khandelwal: Initially, about 75% of our business was attributed to web applications. About 10% of our business was mobile apps. In 2010, the numbers shifted and iPhone applications represented 20% of our revenues. In 2011, there was an even more dramatic shift. We started to see a lot of mobile application requests coming in. Most of those requests were from young entrepreneurs who had seen the overnight success that other applications had. They had a vision of spending $10,000 and making $1 million. That is when we started to get a lot more selective with our customer base. We turned away business that we felt would not have a long life cycle.

At that time, we also started recruiting experts. Up to that point, I had primarily used contractors to get our projects done. We did not have rock stars that were thought leaders. I started looking for people who had written books or who were speakers at conferences. I hired three people in sales, design, and development. These guys had massive followers and brought a rather large network with them. It resulted in a lot of buzz about ChaiOne in and around Houston.

Sramana: Why did they come to ChaiOne? What was the motivation?

Gaurav Khandelwal: We had a good connection, and I offered a lot of autonomy. They were all working for large corporations and they were not all that happy. I offered them equity in the company. If you give a very smart person freedom and you respect what they do, then they can really blossom.

Sramana: I think that would have been a lot more difficult to do in Houston. If you had done that in Silicon Valley, you would have had a much more difficult time with it.

Gaurav Khandelwal: Exactly. There is talent outside of Silicon Valley. When I hired those guys, a lot of VCs came and told me that I was in the wrong city, and that I should have been located in Austin or Silicon Valley. I disagreed. There are a lot of customers in Houston and I would rather be next to my customers, especially since I was not building a product company.

This segment is part 4 in the series : Bootstrapping a $7 Million Company in Houston: Gaurav Khandelwal, CEO of ChaiOne
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