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Bootstrapping a Robust SaaS company from India: Rategain CEO Bhanu Chopra (Part 5)

Sramana: What year was it when your OEM partnership went south?

Bhanu Chopra: In 2010 and 2011, there were a couple of major products that were contributing significant revenue to us. Our partner bought all of our competitors during that same time-frame, so we had to make some transitions in order to survive, and it took us about 2 years to do that. The revenue did not diminish immediately because it took them a couple of years to transfer all of their clients away from our platform. We had to restart our focus on the hotel segment. >>>

Building an American E-commerce Company that Now Sells into China: Peter Mann, CEO of Oransi (Part 7)

Sramana Mitra: How much business are you doing in China? What percentage of your revenue comes from China right now?

Peter Mann: This year, we’re planning to do $10 million. I would say 40% would be in China this year. >>>

Bootstrapping a Robust SaaS company from India: Rategain CEO Bhanu Chopra (Part 4)

Sramana: What is the market size you have available?

Bhanu Chopra: We started by providing competitive information and then we branched out to selling the information to all of the players in the travel industry. Every element in the travel industry is highly commoditized and consumers’ buying behavior is driven by price. We sell to all of the top hotel chains, car companies, and every major online travel agency.

As a result, our market size varies based on the customer segments. On the online travel agent side, there is only a handful that we can sell to but we sell to all of them. We sell to all the big as well as most of the regional players. We also have traditional travel agents as our customers. We pretty much cover the entire spectrum. We are in a very good position. >>>

Building an American E-commerce Company that Now Sells into China: Peter Mann, CEO of Oransi (Part 6)

Sramana Mitra: Where is your contract manufacturer in the US?

Peter Mann: They’re in Connecticut.

Sramana Mitra: Are you selling the new product in the US only?

Peter Mann: We sell in the US, Canada, and China.

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Bootstrapping a Robust SaaS company from India: Rategain CEO Bhanu Chopra (Part 3)

Sramana: Who did the development on the technology while you started the business?

Bhanu Chopra: Initially, I did everything. I was the project manager, the coder, and tHE visionary. While I was building the technology, I was also focused on selling it. I made several trips to the US and Europe to do road shows. It was a very new concept for people, but everyone recognized that there was a dire need for it. In the first year, I signed up a dozen clients.

Sramana: Were your initial clients travel portals?

Bhanu Chopra: Yes. Most of the clients were travel portals or online travel agents. I think that was a significant event for us. I was starting this company that was completely bootstrapped and had very little capital. The focus was on selling to customers. Winning a dozen customers gave me the infusion of money needed to keep things going. >>>

Building an American E-commerce Company that Now Sells into China: Peter Mann, CEO of Oransi (Part 5)

Sramana Mitra: It’s mostly paid search-based customer acquisition – PPC?

Peter Mann: That’s how we started. We have a brand that no one has ever heard before. It’s hard to get started and so PPC is the quick way to get up and going. It’s expensive, though. We’re trying to have PR and some other marketing in place as well. Google PPC is still probably two-thirds of our advertisement spend though. It’s down from close to 100%.

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Bootstrapping a Robust SaaS company from India: Rategain CEO Bhanu Chopra (Part 2)

Sramana: What was the premise of the company you founded in Chicago?

Bhanu Chopra: It was essentially the same thing I was doing before. We were working with some very large firms in the Chicago area. We had four Fortune 500 clients and we helped them implement large CRM systems. We built a very good yet small team of consultants. At our peak, we had a dozen people. There was a lot of home grown competition from Indian firms at that time-frame in 2002.

Indian firms were gaining a lot of traction via outsourcing because of the labor arbitrage. We realized very quickly that because our business model was based on billable hours that our company would likely not be sustainable. I had been in the US for about a decade by that point and I wanted to move back to India. I noticed that a lot of my friends were starting to move back to India. It made a lot of sense to me as well. I could see the potential in India. >>>

Building an American E-commerce Company that Now Sells into China: Peter Mann, CEO of Oransi (Part 4)

Peter Mann: Initially, I started with a couple of factories in China and started with those products to get the business started. These were mostly Chinese developed products that I adjusted and branded. It wasn’t really manufactured from the ground-up by us. Shortly thereafter, I started looking at air purifiers. In its simplest form, it’s a motor, fan, and a filter. My idea was to get the best filters, motors, and fans and put them together. That kicked off about a year’s worth of research into different motor manufacturers. I was looking at it as a high-end consumer product with industrial-quality components. I evaluated component after component until I settled on the components that we felt comfortable putting into the product. We built a prototype and ran it for several months. That’s how we got into the current air products at Oransi.

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