Sramana Mitra: Help me out with one piece of this story. In an entrepreneur journey, the first time you’re doing it without personal money is a different ball game than when you have made money and are doing it a second time. By the time you come to Zimit, you had money. It’s a different situation. The bootstrapping using services story is important in CPG. How did you get your first customer? What got you your first customer?
James Cramer: My partner and I were both employees of our previous companies. We met on a project that their company and our company were working on together. We were in our mid-20s. You can convince yourself of a lot of things at that age. We started to convince ourselves that we could make it on our own. We convinced ourselves that we could compete with the companies that we worked for even though they were billion-dollar organizations.
Looking back, the way we did it was interesting. At that time, if you were a system integrator, you largely defined your company by the technology that you were aligned with. If you were an SAP implementer, that was the definition of your company. Implementing Oracle or SAP at a bank or implementing SAP at a manufacturing company are fundamentally different things.
Sramana Mitra: I think that thinking has come through into the industry now. People are looking for not just technical expertise but also domain knowledge.
James Cramer: In 1997, it was unheard of.
Sramana Mitra: In 1997, your insight was that you needed a vertical specialization or technology platform specialization and that you could go on your own with this other guy.
James Cramer: Yes, in that order. That was the key. We had both focused on the supply chain-centric industry. From taking orders, inventory, coding, and scheduling, we understood that stuff. I understood the financial side of that really well. When we went to the market, that was what we led with. Our first customer was somebody that was implementing technology. They were specifically looking for people that had expertise in the distribution industry for that particular technology.
My partner had an opportunity to meet with that customer. He said, “If I could get the customer to agree to go with us, we’ll go in together.” I said, “Sure, we can do that.” I was thinking that there was zero chance of this happening. Sure enough, he comes back and he’s like, “Yeah, they want to go with us.”
Suddenly, we were both resigning from our positions. What we had at our advantage was our understanding of the technology. We legitimately understood the services that we needed to provide. With that, we hired a few people and started our first project. There were just four or five of us. We were making five times what I was making as an employee just a few months before. I just said, “Man, I can’t believe everybody doesn’t do this.”
Sramana Mitra: How did you find that first project?
James Cramer: At that time, there was more demand than there was supply. We had presented some solutions that we had built and delivered at a conference, somebody in attendance got our contact. The number that they got was my partner Ali’s number. That is how the conversation started.
He talked about the solution that we had previously implemented independently through our company at that time. He displayed an incredible amount of knowledge about the process far more than they had talked to anybody else. The knowledge and expertise are what you are buying, so they were all in. They had gone through two or three implementers and failed. The combination of being in the right place at the right time and also having a lot of expertise to offer was the key.
Sramana Mitra: How did you market that for $25 million? What marketing strategy did you follow?
James Cramer: There wasn’t one; there were several. We learned a lot. The first one that became obvious is that we were very good implementers technically, but we knew nothing about running a company. The first thing you realize is how you are going to show them the deal and bring in new customers. What we thought was knocking on the customer’s door. They’ve got Oracle or whatever technology that they are implementing. You go to their door and get their interest.
That proved to be completely unsuccessful. It is very expensive and it took a long time. It was just terrible. What we realized was that the most efficient way to do that was to put ourselves inside an ecosystem where we added value to the ecosystem and not necessarily to the customer. We started marketing everything to Oracle. When Oracle sells their technology, they need an implementer to come along for the ride. They often have to propose or suggest an implementer.
We also focused ourselves industry-wide and geographically to make the market narrow and as specific as we can possibly make it. That was different from what the other implementers were doing. Everybody was focused on this; if there was an Oracle deal, we could implement it for anybody. We said, “No, only call us a supply chain deal.” Over time, our brand became clear to the Oracle ecosystem. From there, the rest of the story became a sophisticated version of that approach.