Sramana Mitra: That is extremely valuable.
Asher Delug: I agree. There is no other company in the world that has that particular data asset. Other companies, like the ones I mentioned, have very interesting data assets. But the nature of ours is unique.
SM: Tell me a bit about how you built your company. You said you bootstrapped your company in the L.A. area. Up to what point did you bootstrap it and did you then raise money?
AD: We haven’t raised any capital to date. We have very significant scale at this point. We have 150 employees and are north of $100 million in revenue – very profitable. Last year we closed around $50 million in revenue. We are growing very fast, and it is all bootstrapped. The secret to our success is definitely our decision early on to focus the personnel out of Bangalore, India. Out of the 150 people we have, around 110 of them in our Bangalore office, which is a very large office with top-quality people, costing us about a sixth of what it would cost us in the U.S. So for our bootstrapped company that wasn’t an option, it was a requirement. That has had lasting effects in allowing the founder and employees to keep the vast majority of equity. We still own all of the equity today. The second major benefit is that it created a culture of being profitable from day one. Given the nature of your blog, I am sure you have seen this story over and over.
SM: Yes, and we are very fond of these kinds of stories. You brought yourself to a point where investors are knocking on your door constantly, wanting to invest. Personally, I love when entrepreneurs can get themselves to that point.
AD: It is tragic what happens on the reverse side, where founders take a lot of equity early on, it is very expensive, and by the time they are profitable they are only holding 10% to 15% of the company. The other side of the coin is absolutely tragic. I am a huge proponent of bootstrapping. I am not a one-hit wonder. I bootstrapped another company – GoLive! mobile – to Inc.500 with the same strategy, only with a different location, the Philippines. The concept of bootstrapping a company and scaling it very large can be absolutely done.
SM: Tell us a bit more about your Bangalore experience. Do you have a partner who specializes in managing these offshore operations?
AD: In both cases I am the one involved in building up these organizations. You find one or two people you can really build around. You should spend 70% of your effort finding those people. In Bangalore we have two guys whom we took away from AOL. We built the entire organization around them. Once you get those two people, your work becomes much less because you have someone you can trust and you can build the organization around them. What a lot of companies face when going offshore is the churn issue. We have top engineers from AOL, Yahoo, Goldman Sachs, InMobi, etc. We have virtually no churn at Airpush. The way you do that is by really focusing on culture early on. Culture in this case means a family-style approach, where you are not a distant CEO. I work directly with everyone in the team, and I build a personal relationship with everyone on the team, even if they are thousands of miles away. Other companies come there and they treat it as an outpost that is essentially being taken advantage of. When you treat them like a family, which they are, then you will see no churn. We have virtually no churn, and this in Bangalore, which is the capital of churn.
SM: That is very impressive, considering that Bangalore is the churn capital of the world. But I also think that product companies have less churn than services companies in Bangalore. So you achieved $100 million in revenue already?
AD: Yes. This year we should do around $120 million.
SM: What are you going to do with the company in the future?
AD: As you said, investors are knocking on our door on a daily basis. I am not a finance guy. I am a product guy. At this point, we are past the point of venture capital. There are several options of IPO and exiting to strategic as early as next year.