Sramana Mitra: This was 150 users through that credit union customer?
Paroon Chadha: Yes.
Sramana Mitra: You had one anchor customer and you had a software that was receiving feedback from the beginning.
Paroon Chadha: Chris was writing code, and I was out selling. We didn’t fear anything at that time. I wish I could be like that again. We really went in and looked for funding and customers. Our finance professor was the Chairman of the Purdue Federal Board. We formed a pretty solid relationship with Purdue Fed. We finished our software. The MVP was rolled out. We started in January of 2003. The MVP was rolled out in March of 2003.
The first true sale came to us after the first nine months. We joke that it was the gestation period that any baby would take. That was the first sale that we had. It was another credit union. By the end of the year, we had 10 sales. It was amazing because we were selling this for $30,000. We had $100,000 in seed funding, but we already ended the year with $300,000.
Sramana Mitra: Was this credit union theme coming up over and over again or was it more incidental?
Paroon Chadha: We started in a very niche market.
Sramana Mitra: You decided to start in the credit union market.
Paroon Chadha: Right. Purdue was a friendly word, but Federal is a bad word. Union is a bad word. I didn’t really know anything about it. When you really dial into it, you realize that there are 6,000 credit unions. A lot of them are really friendly and are people who have deep affiliation with the local community. We kept going from one to the other. There was some specialization that started developing. We found a lot of success after that.
We started looking for adjacencies. We started selling to banks later on and we ended up on Inc.’s 500 list in 2007. We had a great time upfront, but we stayed with the niche. I think we overstayed there. When 2009 came around, 90% of our customer base was in the financing sector. In 2009, a big meltdown happened in the financial segment. We really were disproportionately concentrated in that vertical.
Sramana Mitra: Were you based out of Indiana at that point?
Paroon Chadha: We’ve stayed in Lafayette till this day.
Sramana Mitra: Your first year of sale was which year?
Paroon Chadha: 2003.
Sramana Mitra: You ended 2003 with $300,000 in bookings and $100,000 in financing. What happened the next year?
Paroon Chadha: We hit our first million in year three and we hit the two million mark in year five. We were bootstrapped. One of the challenges that we ran into was, we didn’t realize that it’s great to start in the credit union industry, but you take the shape of where you are.
One of the mistakes we made was we had to stay in Lafayette Indiana, but we were inside of a credit union. That’s a non-profit environment. What we got out of that was a deep service culture. That’s what credit unions do very well. All the people around us taught us how to treat customers. What they didn’t know much or cared much for was the triple triple double that everybody tries to do these days.
Sramana Mitra: Especially not in Lafayette, Indiana.
Paroon Chadha: Exactly.
Sramana Mitra: In my view, that’s a good thing.