Bootstrapping a Virtualization Services Company: Chris Grandi, CEO of Abacus Group (Part 2)

Sramana Mitra: What was the next move after Maxim?

Chris Grandi: I took a pretty divergent turn. I thought that maybe I wanted to be in Wall Street. I joined the Goldman Sachs Associate program out of Harvard Business School and joined their fixed income group. I was an associate in that group specifically focusing on high-yield debt and bank loan debt. It’s essentially high-yield financing to companies. I was there for a very short period of time. I was very thankful that I got the opportunity to work on Wall Street, but I realized technology was in my heart. Also, the timing of this was 1998. That was the first Internet boom. At that point, a friend and I had a business idea to start an Internet company. I decided not to go back to Wall Street.

Sramana Mitra: What was that company?

Chris Grandi: We had conceptualized this idea of people using the Internet for online invitations. >>>

Bootstrapping a Virtualization Services Company: Chris Grandi, CEO of Abacus Group (Part 1)

Chris had significant domain knowledge in the hedge fund industry. He has self-financed a successful company offering to secure virtualization services to the segment with high service levels.

Sramana Mitra: Let’s start at the very beginning of your story. Where are you from? Where were you born, raised, and in what kind of background?

Chris Grandi: I was born and raised on the East Coast outside of Washington DC, and I grew up in suburban Maryland. For university, I went to the West Coast and attended UCLA. I then continued on to graduate work. I got my MBA from Harvard Business School. I moved out to San Francisco, California where I’ve been for approximately 20 years. >>>

Is Entrepreneurship All About The Exit?

If you spend time in the Silicon Valley culture, and that culture, today, is being exported very aggressively around the world, you would be easily convinced that entrepreneurship means financing and exit. I have never believed in this point of view. At a recent roundtable, I invited Christian Blume, CEO of Cleverbridge, an online payments company based in Germany that does about $40 million in self-financed, bootstrapped revenue, to kick the topic around. Please listen to the conversation, and weigh in with your thoughts …

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Bootstrapping a Virtual Company to Scale: Taso Du Val, CEO of Toptal (Part 7)

Sramana Mitra: Have you bootstrapped your company all the way or have you raised money along the way?

Taso Du Val: We raised a really small round for approximately $1.4 million with some really great individuals. It was a seed round, so it was not a priced round. We still consider ourselves a bootstrapped startup. Hence, we only did everything off of convertible notes. That was about two and a half years into starting the company. It was a very different experience relative to a lot of other companies. We’ve only taken a seed round.

Sramana Mitra: Tell me what the philosophy is behind that decision. That’s definitely a contrarian philosophy. We are very supportive of bootstrapped entrepreneurs. We’ve probably been one of the biggest supporters of that philosophy. Tell me more about what is your thinking. >>>

Bootstrapping a Virtual Company to Scale: Taso Du Val, CEO of Toptal (Part 5)

Sramana Mitra: I’ll just benchmark it by saying oDesk, for instance, charges 10% of the contract value. Tell me what the additional value is that you’re adding to the process.

Taso Du Val: We screen all of the individuals for you. Not only for our network but also for your specific request. There are many layers of screening. There are many individuals involved in that screening process. There’s very little automation in our screening processes. We’re able to not only look at our network and screen everyone so that they can get in, but we’re also finding the perfect individual and contracting them out to you in an on-demand style.

We only give you one or two people when you post a job. It’s almost always the right person every single time. Our average job post to client ratio is 1.7. That means for every 1.7 person that we give you, you’re going to accept them. That’s an incredible metric that no one in the world can match. World renowned staffing companies  probably have a ratio of eight to one. People don’t even believe it, but that’s actually what we do. >>>

Bootstrapping a Virtual Company to Scale: Taso Du Val, CEO of Toptal (Part 4)

Sramana Mitra: What is the business model? Is it a commission-based business model? How do you charge?

Taso Du Val: We take a percent of every single contract.

Sramana Mitra: Are you still based in Budapest?

Taso Du Val: No, I’m mostly based in New York and Moscow at the moment. That’s where I’m spending the majority of my time. >>>

Bootstrapping a Virtual Company to Scale: Taso Du Val, CEO of Toptal (Part 3)

Sramana Mitra: Let’s take that on a more granular basis. What year are we talking when you decided, two years in, to give up?

Taso Du Val: That was probably around 2012. In 2012, we said, “Maybe we should figure something else out.” That was two years after we started the company.

Sramana Mitra: Who’s we? Who else was in the project?

Taso Du Val: My co-founder, Breanden Beneschott. After I started it in 2010, I ended up teaming up with my co-founder. He was still at Princeton University studying Chemical Engineering. Funny enough, he was actually one of the clients of Toptal. >>>

Bootstrapping a Virtual Company to Scale: Taso Du Val, CEO of Toptal (Part 2)

Sramana Mitra: You’re more of a freelance engineering talent exchange?

Taso Du Val: That’s accurate. We think of ourselves as Uber for engineers. It’s funny. A lot of companies have pitched this.

Sramana Mitra: Let’s go from there. At 25, this is what you decided you wanted to do. How did you get the business going?

Taso Du Val: I started to do software consulting with a few individuals, and then contracting out engineers to them that were already working with me. I had individuals in Russia, Argentina, and other places who I was working with for my startup. >>>