We’ve discussed Bootstrapping Using Services extensively over the years. Ruslan used eLance (not Upwork) to source service projects, then built, first a platform+services business that scaled to over $10 million in revenue. Then he spun off a pure play e-commerce platform business that now has over a million merchants using it. Revenue is over $5 million.
Sramana Mitra: Let’s start at the very beginning of your journey. Where are you from? Where were you born, raised, and in what kind of background?
Ruslan Fazlyev: I was born in a very little town in Russia. I grew up in Ulyanovsk, which is a city on the Russian river Volga. The city that you grew up in interests you more than the place of birth.What’s interesting about that place is it’s the place where Lenin was born – the guy who founded USSR. Because it’s Lenin’s birthplace, the communists want to make sure that it’s thriving.
By doing that, the Soviets were able to create the top universities in that city. That’s why my parents brought me to that town. I failed them because I ended up becoming a university dropout, but my time there was definitely valuable. Later we grew up to be the number one employer for the university graduates in our city.
Sramana Mitra: What did you do instead of finishing university? Where did you go and what did you do?
Ruslan Fazlyev: My first attempts at being an entrepreneur were in late high school. It was really simple. Some people dream of being entrepreneurs but, at that time, Russia was a very poor country because USSR had just collapsed. It was really just about survival. I remember my monthly salary then was about $14. If that’s the best option you can have on the job market, then you can create your own employment. You become an entrepreneur. That’s what I did. I started an e-commerce platform company, which apparently is the world’s first PHP e-commerce platform.
Sramana Mitra: What year was that?
Ruslan Fazlyev: 2000.
Sramana Mitra: Where were you based at that time?
Ruslan Fazlyev: Ulyanovsk.
Sramana Mitra: How did you get this company off the ground? How did this come about?
Ruslan Fazlyev: It was bootstrapped. There was no other way. There was no such thing as venture capital investment. Me and my friends just wanted to build something. We wanted to make sure that we made our living by creating software. There were no software jobs in the city. The closest we could have is to customize some accounts in installations. That was pretty much the only IT job in the town. We just started coding this e-commerce implementation for some of the customers worldwide.
We built one online store for one customer. Then we built another one for another customer. We thought, “Why do we have to build it from scratch every time? Why not help other people reuse it? Why not help them start with something?” It sounds very obvious now in 2016 where there are tons of e-commerce platforms and you can either have a cloud platform or a software piece that is downloadable. Back then you had to code it from scratch.
We have provided the platform for online stores down from hundreds of thousands of dollars to a hundred dollars, and enabled many PHP programmers to use their language of choice to build e-commerce stores globally. There were many other competing solutions. OSCommerce started the same year. Magenta started six years later and got acquired by eBay eventually. We bootstrapped X-Cart from zero to a hundred employees. They’re currently powering $2 billion in annual transactions.