Bootstrapping a $7 Million Company in Houston: Gaurav Khandelwal, CEO of ChaiOne (Part 6)

Sramana: Are you still a services company or have you developed a product now?

Gaurav Khandelwal: We have 55 developers in Houston. We did develop products over the years. Only one product is still active among the products that we have produced in the past four years. Last year, we felt we had learned our lesson in terms of developing products. A lot of the products that we had developed were opportunities that we saw in the market and on which we had our developers work on whenever they had downtime. We realized that is not the right way to develop a product. We are going to keep trying to develop successful products. Today, we have a separate path for the product team.

Sramana: Do you have an active product in the market right now?

Gaurav Khandelwal: We have one product called GamePlan. It is a sales enablement product. It is used by sales people to help close the gap between sales and marketing. Marketing will produce a lot of sales collateral and they don’t know if the sales team is even using it. We give marketing a view into the collateral that sales are actually using in the field.

Sramana: How many customers does this product have?

Gaurav Khandelwal: It has six customers with combined revenues of a billion dollars a year. We charge our clients a couple hundred thousand dollars for the product.

Sramana: Did the idea for this product bubble up from your services work?

Gaurav Khandelwal: Yes. We found ourselves solving the same problem over and over again. We realized that if several customers had that problem, then there were likely to be a lot of companies that had that problem. We built something fairly quickly and took it to market. The sales cycle on the product side is very slow, it takes about 6 months.

When we initially took the product to the marketplace we did not have a lot of initial success. We realized that our sales team consisted of solution sellers, not product sellers. We also realized that the market we sold our services to comprised of large corporations, and the market that we wanted to sell our product to was the SMB. We were trying to sell based on a per-user model without understanding that market.

We decided that we could switch our product model to enterprise software, and when we tried that out, we found that it worked. That has resulted in a very different sales model.

Sramana: What industry verticals are you finding your customers in?

Gaurav Khandelwal: They are pretty much all in oil and gas. Our clients are all billion-dollar revenue companies. As markets mature, the lower end market will become commoditized. I don’t want to compete on price at the lower end of that market. We have been developing design and research capabilities and that puts us in a different market. We are now talking about transforming business processes for large corporations. We still see ourselves looking at the billion-dollar market. We are looking to create an arsenal of several different product capabilities within mobility that we can take to our customers.

This segment is part 6 in the series : Bootstrapping a $7 Million Company in Houston: Gaurav Khandelwal, CEO of ChaiOne
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