Sramana: You own the company 100%. How do you incentivize your employees aside from salary? Do you have a private stock option plan?
Arvind Agarwalla: We do not have a stock option plan, and that would not make sense because I really have no intention of exiting the company. Our sales team operates with an excellent commission package. The support teams are also on an incentive program based on top-line targets. The R&D work is different, but they are compensated very well. Everyone in the company is well compensated.
Sramana: You have a very profitable company and can invest in a variety of areas if you want to. What does the future look like from where you sit?
Arvind Agarwalla: We want to be in every country in the world. That is very challenging from a human resources perspective.
Sramana: I’m not sure that is a reasonable goal because there are markets full of competitors.
Arvind Agarwalla: Every market is full of competitors. When we came to Singapore, there was no reason for us to sell a single copy.
Sramana: You went to Singapore very early on in the technology adoption cycle. If you come to America, you will find that Intuit will probably kick your ass.
Arvind Agarwalla: Intuit covers the bottom end of the market. I have been to the US and done my research. At the bottom end, everyone uses Intuit. The moment a company hits revenues of $5 million to $7 million, they will find QuickBooks to be incredibly insufficient. The next set of accounting software is designed to serve companies that make in excess of $100 million. That gap in between is incredibly under-served.
Sramana: I think you need to do more competitive analysis on that market segment. There are a lot of competitors in that space. I do agree that there are a lot of markets in places like South America and Africa. I would go to those countries first.
Arvind Agarwalla: Going to the US is a different ballgame. We definitely could not start off with a nationwide approach. My analysis shows that the mid-market is under-served in the US. If I compare salaries of accountants in the US, I will find it higher than in Singapore. We always have to keep salary arbitrage in mind because the more efficient we make our operations, the more money we save companies. We are definitely looking to grow beyond the regions we are currently serving. My main challenge to expansion is problem of human resources. We have to find the right people.
Sramana: What do you think makes a successful entrepreneur?
Arvind Agarwalla: I have three points that I focus on: passion, focus, and integrity. For an entrepreneur to be successful, they must be passionate about their product or service. I still love getting up and going to work. I love talking about our product. My wife tells me that it is my first love.
In order to excel at what you are doing, you need to remain focused. It is very tempting to lose focus and try to pursue other opportunities. You need to have a reality check every now and then. My final point was integrity. Once you start making money, it can be very easy to cheat a customer, stakeholder, or colleague. We went through very tough times and we stayed afloat because of our integrity. I was always very honest and told people when I was going through hard times and when I would work to help make payment arrangements.
Sramana: Congratulations. It has been a real pleasure talking with you.