Sramana: How much revenue were you able to generate during your first year of operations when you had no formal marketing budget?
Pallav Nadhani: Our first version launched in October 2002. Our accounting cycles run from April to March. From October 2002 to March 2003, I was able to generate around $10,000.
Sramana: What happened in the following financial year? What did your ramp rate look like after your first year?
Pallav Nadhani: In 2003 we made $100,000. In 2004 we made $300,000 and in 2005 we generated $750,000. Every year we kept multiplying our revenues.
Sramana: As you were going from milestone to milestone, what were the strategies you were following in marketing?
Pallav Nadhani: After the first year, I realized that I should dedicate some money to pay for paid listings. Back then there used to be a lot of directory sites which would allow you to pay for listings. I found a multi-platform directory to get listed in their charting directory. The helped us get some traction, but not a lot more. Once Google AdWords came around, we started building our strategies for purchasing AdWords. We also sponsored some email newsletters. Fortunately for us, by the time these methods were mainstream, we were generating enough money that we were able to afford to use things like Google AdWords.
Sramana: What were the cost structures of your AdWord campaigns?
Pallav Nadhani: For the first year and a half we did not track metrics from Google AdWords. We just put 10% of our revenues into marketing. I was the only person working in the business for the first three years, and the business was growing very fast. I just relied on the data provided by Google to determine which AdWords were working and which ones were not. In 2006 we built our own back-end system to see what customers were doing on our site and how that related to Google. For every dollar we spent in 2006, we got a five-fold return.
Sramana: What was happening in the other aspects of your business during this time? Was your business financed entirely through organic means, or did you take investors?
Pallav Nadhani: The seed financing was from the article I wrote. When the product started selling, there were no real expenses. I was running the business and server from my bedroom, and I had no employees. That let me save a lot of money, and I got my own office in 2005. That office was able to accommodate 20 people, and by the end of 2007 I had hired 20 employees. I really had no hiring strategy, I just needed people who could help me build the code faster. The coding was a challenge because I did not know what skills to look for.
Sramana: What was the experience level of the people you were attracting at that time?
Pallav Nadhani: The first guy whom we tried to hire did not join us because he did not want to be the first employee. After that I looked for people who did not want to work for a big company. My first hire did not even have a degree, and the second person was someone who had an art degree. They were people who had a personal passion for coding. They did not have degrees, but they were capable of writing good code. I gave them the freedom to work as long as they met their goals. I did not care what time they came and left work, as long as the work got done.