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Bootstrapping with a Paycheck and Scaling in Coimbatore: Kovai CEO Saravana Kumar (Part 4)

Posted on Thursday, Nov 5th 2020

Saravana Kumar: That is the good part about running a business in Coimbatore – the attrition is low. People are loyal and if you look after them well, there is no reason for them to go anywhere. 

Sramana Mitra: Yes, and they are probably close to their families. That’s a huge advantage.  

Saravana Kumar: I think that’s why our people are still with us. I thought that many pay a lot of attention in terms of culture and making sure that they have room to grow in the company. All these things contributed and now we don’t have any hiring challenge.

We brought a lot of programs to the company as well. For example, we hired 30 interns. We went through all the colleges in Coimbatore and interviewed 500 people. Out of the 500 people, we brought it down to 30 people who are trained for six months.

We have a full-time curriculum. They will be trained in all the technology that we need. We only need selected technology. They need to be good at a certain backend technology. That is all we need most of the time. We train them properly and we are now producing the talent required for us. We want to eventually build that ecosystem in Coimbatore. 

Sramana Mitra: Perfect. I love to see these companies developing in off-center places. It makes such a difference when you situate a company in a smaller city and develop that place with a good solid company. The impact on the community is huge and I love that. 

Saravana Kumar: I am a big fan of Girish and what he has done to Chennai. I keep telling our people that we are going to replicate what Girish did in Coimbatore. 

Sramana Mitra: Go back to 2015 where you have a larger operation and you have found this tried in terms of hiring and scaling. What is happening in customer growth? Is your blog still producing customers?

Saravana Kumar: The blog is still producing customers. Even today, our number one acquisition channel is our inbound channel. In 2013, we started conducting an annual event because we identified that there’s no one talking about this specific space. It’s called integration space in the Microsoft ecosystem.

It started as a one-day event. Now, it’s a three-day annual event. About 25 speakers join this event and 15 out of the 25 speakers are from Microsoft core product group. That became the core event for this industry. About 500 people come from different countries.

That became another channel for us. We tried the outbound channel, but that didn’t work out well. Even now, using the inbound channel is the main strategy for us. 

Sramana Mitra: What was the revenue trajectory? What was your revenue level in 2015 and how did that scale in the last five years?

Saravana Kumar: in 2014, we had about 150 customers and we were adding 100 to 150 customers yearly. Revenue would be around $1.5 million. It’s a gradual growth. We are constantly adding about $1 million to $1.5 million yearly. In 2015, it would be about the $3 million to $4 million mark. 

Sramana Mitra: Where are you now?

Saravana Kumar: We are close to $10 million now. 

Sramana Mitra: What about the business model? You had started with the $5,000 to $8,000 plan with 20% maintenance. Did you switch to a SaaS model?

Saravana Kumar: That is one of the best decisions that I have made. 2015 is when I worked out some numbers, and I felt that we should do the SaaS model even though the platform is not SaaS. Typically, people install it on their premise.

I switched the pricing model to a more subscription-based model and killed the perpetual end support. The pricing can vary. We even have some six figure numbers. The average customer pays about $10,000. The $10 million I’m talking about is the recurring revenue. 

Sramana Mitra: Is it all bootstrapped?

Saravana Kumar: It’s completely bootstrapped.

This segment is part 4 in the series : Bootstrapping with a Paycheck and Scaling in Coimbatore: Kovai CEO Saravana Kumar
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