Sramana: Did your dad mentor you or help you as you were starting Kayako?
Varun Shoor: I went to him for feedback but the feedback he was able to give was from a different industry. He was accustomed to dealing with factory laborers. Apart from that, he did help me when it came to managing finances and ensuring I was meeting government regulations. He also gave me advice when I started to look for an office. I started off looking for a smaller space with around 2,000 square feet. He encouraged me to look for a space 3 or 4 times larger and it turns out he was right. We have been in our current office for 7 years. Our office was designed to seat 45 people and we now have 100 people crammed into that space now.
Sramana: Earlier you mentioned that 2008 was a big inflection point for your business. How much revenue did you do in 2008?
Varun Shoor: If I remember correctly, we did about 2.5 million dollars in revenue. Historically, we have grown at a rate of 40% a year.
Sramana: How many people did you have in 2008?
Varun Shoor: We had around 25 people onboard. We also saw new competitors entering the market in 2008. People started taking our space a bit more seriously. I will be very honest; we underestimated the size of the market. Our competition came in and showed us the true size of the market. I had an “oh shit” moment when I realized they were out-innovating us. We found it difficult to scale.
I traveled to a trade show in Hanover, Germany. There was a CRM section which was a giant hall full of exhibits. It was my first exposure to the real world. I saw names and companies from all over the world. There were companies I had never heard of doing $30 million of revenue. That was a wake-up call to me. I had always considered my market size to be the same as my revenue. I realized that in order to survive we had to modernize and scale.
We were working on modernizing our product in 2008 and 2009 with a big focus on usability, but we really were behind the power curve. I started burning the midnight oil and worked 14 hour-days. I realized that I had made a big mistake because although I had a solid revenue stream I had not focused on growing our engineering team. In 2010, I had 60 employees and only 4 of them were engineers.
In 2011, I realized I needed to have an office in a place where I could actually hire engineers. That is when I decided to open an office in New Delhi. Our engineering team now has 35 people working out of that office and we hire one or two engineers every month. I have also relocated to New Delhi. I lead engineering operations today with the help of my team leads.