Bootstrapping with a Paycheck: Axosoft CEO Hamid Shojaee (Part 3)

Sramana Mitra: What happened in 2004?

Hamid Shojaee: First of all, that was a very interesting wakeup call in observing how Microsoft, as a company, operates and how competitive they are, and how laser-focused on competition they are. I got introduced to various different things with respect to talking points. Microsoft was very savvy in execution. I was quite awed by all of that. In a great company, I saw how they operated. They give a lot of power to their employees. I was quite impressed.

My work at Microsoft involved helping Microsoft enterprise customers be more successful in that stack and help bring best practices into their development. A lot of the times, Microsoft enterprise customers would hire Microsoft Consulting Services to make sure that their projects didn’t fail – managing a group of developers, and helping implement enterprise applications.

What I realized is that I didn’t have the tools to manage my team and see what everyone was working on and what bugs we had in the system that we needed to take care of. Slowly, I started putting together a tool on my spare hours. I started using that tool for myself and put it out on the internet for other people to use as well. Lots of people started using it and gave me great feedback. I started improving it and eventually started charging.

Sramana Mitra: What was the name of that piece of software?

Hamid Shojaee: It was called On Time. That became the foundation of the company Axosoft.

Sramana Mitra: This was what year? What year did you leave Microsoft to do full-time?

Hamid Shojaee: I left January of 2004 to work full-time on On Time.

Sramana Mitra: Before you jumped into it full-time, how much time did you spend from developing that software to getting it out into the free domain and maturing it? How much time passed between starting of that to when you started full-time?

Hamid Shojaee: I basically had two full-time jobs during the time I worked at Microsoft. I was lucky because I worked my typical hours at Microsoft. I didn’t have to put in a lot of overtime at Microsoft because the charge rates were quite high for enterprise customers. I was working the typical 40-hour week. My wife was going to school at that time. Nights and weekends were always at the library doing home works for her. I would join her and work on my laptop on the product.

The first version of the product was released in August of 2002. Between August of 2002 and January 2004, there were several versions of the product that came out. The first version was free. Eventually, the second version, I started charging nominal fee for teams that had more than 10 users but still free for everybody fewer than 10 users. People started paying and I was like, “Wow! This is amazing.”

Sramana Mitra: We have a name for this style of entrepreneurship. This is really becoming a trend these days and we call it bootstrapping using a paycheck.

Hamid Shojaee: That’s right. What’s funny is that I would have never have option a few years later. Two years later, I had a child.

Sramana Mitra: January 2004, you had a paying product – a product that is already generating a little bit of revenue. Is it now still just you?

Hamid Shojaee: It’s now me and a good friend of mine who I hired about four hours a week to help me. I basically paid him for four hours a week because he was also working on a full-time basis.

Sramana Mitra: What function did he assist you with?

Hamid Shojaee: Programming.

Sramana Mitra: How long does this mode continue of you and your 4-hour a week friend? How does the revenue ramp?

Hamid Shojaee: The revenue was ramping up very nicely. I actually hired a second person for accounting as well right away. That person was also probably single-digit hours per week. That continued until about October of 2004 when I finally brought in the programmer on a full-time basis. In December, we hired two more people. Basically, for almost a year it was just me and somebody else part-timing.

Sramana Mitra: What was the revenue at the end of 2004?

Hamid Shojaee: In 2004, we were just shy of $300,000 in revenue – up from $50,000 the previous year.

Sramana Mitra: What happened in 2005?

Hamid Shojaee: In 2005, we grew substantially. We went from $300,000 in revenue to $800,000. We added a couple more people. We were six or seven people by the end of the year. From $800,000 in 2005, we went to $2.2 million in 2006. Then, $3.1 million in 2007. We’re pretty spread apart between 2005 and now.

This segment is part 3 in the series : Bootstrapping with a Paycheck: Axosoft CEO Hamid Shojaee
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