Sramana: Where is your inside sales team located?
Pallav Nadhani: They are all in India. Most of them are in Bangalore, although some of them are in Calcutta.
Sramana: How has your team evolved and shifted over the past several years?
Pallav Nadhani: One of our biggest challenges is that it is very hard to find product guys in Calcutta. You cannot find people who understand product and how to build it. It took us a year to figure out how to solve it. Rather than looking for experienced people, we now hire them directly out of college and have our experienced people train them. It takes one year, but by the end of a year they are ready to perform. Using that strategy, we ramped from 20 people to 50 people in less than a year and a half.
The increase in size brought on another challenge. Most of those people were reporting directly to me. That did not give me enough free time to work on business strategy. I had to start developing and finding management guys to lead my sales and development teams. I looked in Calcutta for nine months and could not find even one person to do one of those roles. I then looked to Bangalore, but I could not convince any of them to move. Ultimately I decided to open an office in Bangalore and then allow a management team to work from Bangalore. I since hired a VP of engineering, a director of operations, and a VP of sales.
Sramana: So, you essentially have a management layer in Bangalore?
Pallav Nadhani: Initially, but we are now adding more developers there as well as our inside sales force. Wherever we find the right person for the job, we hire that person at that location.
Sramana: How have you developed your product?
Pallav Nadhani: FusionCharts is commercial open source. We give our customers all of our source code. I do that because it builds trust with our customers. When you buy any of our standard licenses, you do not get source code, but if you are willing to pay a threefold to fourfold licensing fee, we will provide you the source code. In 2006 and 2007 there was a Eastern European company that took our source code, made minor changes, and started selling it under an alternate brand name at a reduced price.
I did not have a legal team, but I contacted one. When they quoted me the cost to pursue that company in court, it was almost a full year’s revenue. I knew I could not afford that. The worst part was that if they had done this in Western Europe, we could have had a case. We thought about it, and we decided that our best alternative was to take our main product and make it entirely open source. Today, whenever we release a new version of the product, we make the previous version open source.
That gives us two benefits. It makes it more challenging for our competitors because now they have to compete with our free product first, and then they have to compete with our commercial product. Second, it gives us credibility. Our own internal competition becomes stronger because we have to ensure that we are building a product that is worth paying for when they have the option to use a free product that we also produced.
Sramana: You are at $7 million of revenue and have shown good growth. Are you interested in financing?
Pallav Nadhani: At this point I am not. Even if I took money, it would not help me grow. We have a very lean operation and for the first seven years we ran at 80% profit margin. We have a cash reserve. My growth limits are not cash. If I had a strategic investor who could bring something other than money, I would have something to consider.
Sramana: This has been an excellent story. I think you have been very disciplined in your approach. I congratulate you on your success and am pleased that you have demonstrated how to start a company from Calcutta.