Chandika, Himal and Chris run Leapfrog Technologies out of Seattle and Kathmandu – Nepal.
Romi and I had a chance to catch up with Chad (Chandika) and talk about his experience quitting Microsoft and building a 7M+ business with over 250 employees!
- Loose your fear of Sales – Pick up the phone and close!
- Focus Focus Focus – Technology Horizontal (Node, React etc.) and Opportunistic Verticals (Education, Healthcare)
- When its lonely and dark – go to the parking lot and meditate!
- All right, we’re gonna start another episode of broadcasting with Romy and Vivek Romy how you, how you doing, man.
- 02:23 Absolutely incredible. Man incredible how are you
- 02:26 Good. I love your green screen.
- 02:28 Yeah, big green screen that you come up with. So today, we have our friend Chandigarh Bhandari aka Chad that we know him. Welcome to the show. Chairman you doing
- 02:41 I’m doing great. Thank you. Thank you for having me here.
- 02:43 Absolutely, absolutely. So, Chad. And we can start the show off with some a little bit of humor. So, so what I’m gonna do is I’m gonna play a little
- 02:54 I’ll show a little strip, I guess, and I want you to guess what this is, or which movie. This is from ok
- 03:02 OK.
- 03:03 Actually, hold on, hold on. I gotta turn on.
- 03:07 One second, and edit this out. One second. I gotta
- 03:11 Do to do that for what to do that. Give me a second.
- 03:16 To share the computer sound for recording. Alright so today we are going to play a little clip and I want you to guess which movie. This is fun. Okay. Okay. Yeah. What do you do there.
- 03:28 I sit in a cubicle and I update bank software for the 2000 switch
- 03:36 Will see they wrote all this bank software and to save space they use two digits for the date, instead of four. So like 98 instead of 1998
- 03:45 So I go through these thousands of lines of code and
- 03:49 It doesn’t really matter. I don’t like my job and I don’t think I’m gonna go anymore.
- 03:57 It’s not going to go, yeah, once you get fired.
- 04:02 I don’t know.
- 04:04 What I really don’t like it, and I’m not gonna go
- 04:08 See that. No, not really.
- 04:13 I’m just gonna stop going
- 04:18 When did you decide, all on our
- 04:24 Own so you can get another job. I don’t think I’d like another job. What are you gonna do about money in bills and, you know, I’ve never really liked paying bills.
- 04:35 I don’t think I’m going to do that either.
- 04:40 Well, so what do you want to do.
- 04:42 So Ted,
- 04:44 Do you know where this is from and what do you want to do.
- 04:47 Oh my goodness. Yes, of course I do, man. This is all time one of our all time favorites. I don’t know how many times we’ve watched this movie.
- 04:55 office space and the favorite line for me from this movie is like, Well, you know, if you if you don’t want to do anything. Then why do you need a million dollars for remember that.
- 05:04 That’s right, yeah.
- 05:06 That’s right. So yes, this is from office space. And the reason I played this clip really is. Because I know a little bit about you, you quit your water Microsoft for 10 years. Yeah.
- 05:17 That’s right. I lived through you there for 10 years
- 05:22 You know, just just enjoying the your entrepreneurial conquests. It was about 10 years at Microsoft. Yes.
- 05:30 And Romy. Do you want to chime in. Right now, since you also have Microsoft, you go, yeah.
- 05:34 You know, it’s, it’s funny. I worked at Microsoft for about
- 05:37 10 years as well. And I know chunky guy was more on the developer side. I was on the marketing side but yeah i think i you know for some people.
- 05:46 You know, being a developer and the developer manager at Microsoft is like, wow, it’s the, it’s the height of the career. The apex of their career, but for you. I think you found more meaning and fulfillment afterwards. Tell us about that.
- 06:02 Yeah, you know, I mean that that’s that’s that’s a very interesting question, something that I think about a lot.
- 06:09 You know, I think the way I think about my life at Microsoft, was it felt like every day was the same. So, you know,
- 06:18 So I was there from 2001 to 2010 and
- 06:23 You know, so I, you know, so if I would kind of look back after two years. It felt like, you know, I’ve been doing the same thing for two years. Right. So the 10 years just went by, really, really fast.
- 06:33 And when I quit Microsoft and started you know just the entrepreneurial journey. It felt like every day was a new day. And then, you know, you look back it back to yours, and you’re like, man, you know, I’ve done so many things. Yeah.
- 06:46 That’s right.
- 06:47 Yeah. So as an entrepreneur. That’s a good one. And as an entrepreneur. Every day is a new day.
- 06:51 Yes, Microsoft, you know, even 10 years is like, say, I really do. I mean, you probably disagree a little bit. You, you, you know, within the corporate world you you’ve had a you
- 07:03 Know, move the needle.
- 07:05 You know, I think what what Chandrika and you’re saying is it’s not just about being a bit in a big company versus entrepreneur, but really about your mindset, right about who you are inside that company so
- 07:15 You can be a what they call an entrepreneur and do all kinds of zany stuff crazy shit inside a company and break rules and push boundaries and all that. Or you can follow the process. Right.
- 07:25 Now it’s easier to do all that when you’re on your own when it’s your own money.
- 07:29 It’s your own staff, etc. But you know, I think that when people feel that
- 07:34 That that internal voice or hear that internal voice saying, Get out, go do something if you don’t follow it. You’ll regret it forever, right. So,
- 07:44 That’s what you’re saying whether
- 07:47 You make your the classic entrepreneur, but even you used to work for, you know, bigger firms for a very short time.
- 07:53 And I happened to do it for a little longer, but I do think that the voice. Did you know, open up. Now I’m way more open to
- 07:59 That sort of arrangement, even today, then probably you guys are. But then you guys also more successful entrepreneurs than I am. So, you know, hey, you know, tell us about. Tell us about that. Tell us about the big successes. You’ve had recently but also bit about your hiccups, man.
- 08:14 Yeah, I mean, you know, like the way I think about, you know, at least my life is, you know, a life of imperfections. Right. So there’s been so many, so many successes and so many failures. And that’s really the journey. And honestly, you know, for me.
- 08:32 The if I if I were to pinpoint. One thing that I always had is access to friends like you guys right so I remember
- 08:40 I remember you know like making up trips to go to the Bay Area, just to get a shot of energy from there. Right.
- 08:47 Yeah, so, you know, so many, you know, one particular example I want to actually talk about, you know, it was actually back in 2010 so even I so I worked for VIV for about two years after I quit Microsoft right and you know we hacked together a product
- 09:04 Mobile research panel product and you know we were having dinner after far about after about three months of building the product, you know, we had to start selling it.
- 09:13 So vivid, I went to pass the first guy local Italian joint here in Fremont, and we were having wine and I was kind of, you know,
- 09:22 You know, trying to figure out what to do next. And so with told me, Chad. What do you want to do next and like
- 09:30 This, I think it’s time for me to start calling people
- 09:32 And he was like, really, you know, that’s so awesome. That’s the first time we’ve actually said that’s so awesome, right. Otherwise, like, Dude, you gotta do this, you know, like, it’s not like like so I’m like okay
- 09:42 And then, you know, we go home. Next day come to the office and Dave has this big binder with like all these people to call
- 09:49 Our VIP VIP and like did not so fast. When I mean, yes, I do want to do that, but not you know like until this point, I’ve never actually called anybody you know for sales, you know, never sold a dime in my life and and
- 10:04 And then, you know, I still remember the first name on the list was David. Remember David from hemisphere that right so so so I called him and
- 10:15 You know, at that point, I was so relieved. He didn’t actually pick up the phone and it went to voicemail. So I’m like, Damn, you know, like, I’ll just, I’ll just hang up.
- 10:23 And then it was like what happened and like well you know i i called in rented voicemail. And you know, I, you know, I’ve called him back and say, No, no, no call him back and leave a voicemail and and i did and and to this day. I don’t know what I said in, you know,
- 10:40 For sales calls are always tough.
- 10:43 It was absolutely for
- 10:45 Sure, everybody.
- 10:46 On the call, you’re vulnerable. You feel like you’re asking for something and you don’t want to ask for things, you know,
- 10:51 Yes, exactly. And, and, you know, and you know the point there is, you know, that sort of inhibition of actually calling and asking for things. And, you know, doing something that you’re not comfortable right are things that you do all the time when you’re bootstrapping.
- 11:05 Yeah, right.
- 11:06 Now, so if
- 11:08 Jamaica and survey swipe you also were involved in creating the HR manual right
- 11:22 Well, I’ll let Vivek answer.
- 11:24 Okay, let’s move on.
- 11:26 So tell me about leap frog. The frog is making 5 million $4 million how much, how much you’re gonna make it right now.
- 11:32 Yeah. So last year we did 4.5
- 11:36 Yeah, and we’re tracking to
- 11:38 Your Dragon to Kobe. What’s your forecast.
- 11:41 Robot forecast is six. And if things if things go well then seven looks
- 11:47 Within ternary God
- 11:50 How, how many people you have out there. I mean, can you disclose that
- 11:53 Yeah, absolutely. So we have about 250 people in our offshore development center and then about 10 here in the US, you know with with a network of, you know, SMEs that we work with projects.
- 12:06 Are you profitable.
- 12:07 We are profitable. Yes.
- 12:08 Yeah. Hey Ronnie side question like, I think we should ask questions and somebody says they cannot disclose it. What do you think we should do in this show like
- 12:17 Get off the show.
- 12:18 Get the phone on my show. If you’re telling me like I’m not gonna answer this question is that can we agree on that. Can we agree on that rule and
- 12:24 I love it.
- 12:25 Okay, so, Chad. If you tell me that I’m not going to answer a question, we’re gonna we’re gonna put you on the show really right so it’s like
- 12:31 Can I defend as Rumi said last time, this is the no spin zone. So stop.
- 12:34 bullshitting us right so you guys are making good money and I know like you know you’re a services company. You got a great demon got model. I saw something on your website that really captured my attention.
- 12:44 You said something to the effect that we only hire 2% of the people who apply to you or some of that.
- 12:51 More that’s kind of an interesting kind of filtering process that’s never seen. Have you seen something like that.
- 12:56 Or else, like, What do you mean, I’ve heard of it, but I’ve never seen people broadcast that as a as a way of saying, look, quality matters.
- 13:03 Yeah, it’s, it’s interesting you ask that question, I think.
- 13:08 You know, I’ll talk about the why the 2% and how in a bit. But I think it goes to the foundation of what we believe it takes to build a services company, you know, we’re so people focused. Right. I mean, at the end of the day.
- 13:23 customer success for us depends on the kinds of people that we have
- 13:28 So when we were, you know, five, six years ago, you know, during our formative stages you we
- 13:37 You know, we tried to kind of force culture from top down right where we said hey look, you know, you got to learn new things. You got to try these things, you know, there’s a new you know blockchains coming out, you know, let’s go experiment with it.
- 13:52 And what we found out that it didn’t work. So then, you know, we kind of flipped the model a little bit and said, hey, look, you know, if we’re going to be successful in a large scale server in a building a large scale services company.
- 14:04 You got to kind of get the right people in so that really is sort of
- 14:09 The the the genesis behind it. So what we ended up doing after that is we started looking for evidence of people who are already hackers. Right. And then we focused leaf rock to be sort of a platform for smart people to flourish. You know, we created a structure and processes that all
- 14:25 Right.
- 14:27 This is this is music. Right. I mean, how many. I mean, this is like starting from the problem and it’s kind of like building an entire company around that problem.
- 14:35 And it looks like I was like john because actually, when when people talk about People First and people centricity they’re usually frankly bullshitting
- 14:44 Yes, because it’s built the company around that. Yeah, yeah.
- 14:48 That’s great. And so you guys have a turn 50 people and and recently. Like, I know you guys have kind of like your business model. Don’t
- 14:55 I mean, I think, you know, business models also. And I know a little bit about it, like, Tell us. Tell our viewers, like you’re not like a regular services company come, you know. Give me, give me x dollars at build stuff for you.
- 15:05 tell someone your business model innovation in terms of how you pivoted services to recurring revenue. I know you guys are recurring revenue services. So I want to I want everybody to really understand this.
- 15:14 Yeah, you know, with this is actually, you know, some of the simplest things make the biggest difference in how you do business right so
- 15:25 You know, so about two and a half years ago, we made a decision to kind of go by a monthly recurring revenue model in the sense that
- 15:35 You know, we would simply focus on only one metric, which is what is your, what is our monthly recurring revenue.
- 15:42 So you know when when you’re doing services, you know, you get different kinds of deals. Right. So you’ll get a startup that wants an extension of their team. You know, the you want an enterprise that wants to do their innovation project quickly.
- 15:55 And they’ll hire us and, you know, and there’s going to be
- 16:01 You know, like a startup team that basically wants us to define their entire journey from ideation, where they have zero customers to, you know, you know, millions of IOT devices passing in data right so that journey of going from zero to, you know, high, high scalability.
- 16:20 You know what, you know, what we decided to do is we said okay on a month by month basis. We’re going to simplify our sales problem and our targets by
- 16:31 You know, increasing our monthly revenue now. So, in the process of doing that, you know, will get fixed projects or you know something, some sort of a six month or eight months or one year contract. Right. And then we’ll just divide that up into, you know, monthly revenue, you know,
- 16:49 You know, like revenue per month.
- 16:51 And
- 16:51 Just kind of track that number and go, you know, keep keep trying to
- 16:56 Just an accountant regards but you’ve done your customer. So, so you go back, if somebody says, like, look, I want to pay you, you know, 40 grand or four months. You say, like, no, no. Just pay me 10 grand a month and I will accept and grandmother, you can cancel anytime. Are you gonna
- 17:11 Die.
- 17:11 Absolutely, absolutely. And then, you know, we don’t believe it. You know, it goes beyond the counting, like you said 100% right
- 17:17 So one of the things that we do is like we don’t believe in multiplex and people right in different sizes, you know, will you know because of the great foundation that we have with
- 17:27 You know, basically, you know, insist that look, you know, the people working on the project that for a given customer. Yeah, there’s some shared skills that we have skill sets that we do share
- 17:39 You know, so people only work on one project at a time. You know, we, you know, simple thing like invoicing you know we invoice at the end of the month. Right. So all of our
- 17:49 Entire operations are kind of geared towards you know like
- 17:53 You know, looking at our business on a monthly basis. And it’s a great value for customers. Also, and they can you know it’s very simple for them to look at us and say, look, you know, if I don’t want to just leave a month from now I can just, you know,
- 18:04 Right.
- 18:05 And you give everybody like
- 18:07 All your customers like they can come in, they can get out eight and they want
- 18:12 This is
- 18:14 Like okay, look, I gotta pay you underground or the or and then you know you’re locked in for undergrad.
- 18:18 And, you know, the flip side, it’s amazing how it works, right, because it keeps us accountable for making sure that you know we’re continuously delivering value.
- 18:25 Yeah, you know, it gives flexibility for people who are working with us and it’s worked out really well. I mean, you know, like our oldest customer is like six years old right now.
- 18:36 I have a question for you because you know I love the way you’re talking about your model, but I do have a couple of maybe somewhat tougher questions around the model because you know
- 18:45 There are a lot of firms that you know say we outsource the India, you know, your Nepal.
- 18:50 Sort of, same idea. Right. And a lot of those firms, number one, they claim they do everything. Number two, they take on a
- 18:57 Piece of work at $1,000 or a million dollars right and three, they have a really floating employee pool. So you really don’t get consistency. Now, I’m not saying that’s true with all of them. Tell me how either you get afflicted by those issues or how do you get around those
- 19:14 Rami. That is a great question and and something that I think about a lot of times, and you know, something that, you know, I think, you know, we’ve kind of reached at the center of
- 19:27 You know, figuring that out in and I’ll explain what I mean by that. Right. So. So back in 2013 I remember I went to this office one time and they’ve said, so this is gonna be a long answer, by the way.
- 19:37 I do love talking about this right so
- 19:41 So I went to Vegas office in 2013 and it was like, okay, you know, what are you doing chatters wyborcza. Did you know I’m doing, blah, blah, blah. And I’m like, Well, you know, Chad. You gotta focus
- 19:53 And I’m like, thank you.
- 19:54 Thank you. I know, I know, I know I need to focus, you know, and you know when you’re not financed right you don’t really have a choice of
- 20:06 You know, choosing the customers right and and in a services industry, you know, like in our business, you don’t really have a choice of when people will have problems right and what kind of problems that they’re going to have. Right, right. So,
- 20:20 So yeah, so. So a lot of times, for me, you know when when I was starting what the choice was hey you know do you keep the lights on.
- 20:27 Or do you choose to sort of be focused on a vertical. Let’s say you know you’re you want to provide a healthcare services, you know, platform or something like that. Right.
- 20:38 Now you know so choosing a particular vertical and focusing on one thing and saying no to smaller deals as at least in the beginning.
- 20:47 You know, it’s almost like saying, hey, you know, I’m going to build a product, you know, so you still have to, you know, there’s not, it’s not different from building a product company right
- 20:56 You still have to find a product market fit, you still have to say no to a bunch of deals that come in, you still have to go
- 21:02 You know hunt for customers and find the right set of customers that you know for that space, right. So what we ended up doing is for years just did pretty much everything that came our way.
- 21:14 Right.
- 21:15 And. And the interesting thing about that is now you know there’s so many different
- 21:22 Problems that you have to solve. When you’re like a services company. So you have this, you know, large
- 21:28 You know, customer base that that you can potentially target, then you have a large, you know, technology base that you could
- 21:35 Potentially target. Right. So, so, which one do you focus on. So what we ended up doing is in 2016
- 21:42 We farm. So we used to do like PHP, Java, you know.net you know whatever you know WordPress, you know, things like yeah from a technology perspective, right. So what we ended up doing is we said hey you know let’s reduce the surface area of
- 21:57 You know what recover. Right. We said Node JS react React Native you know Java, you know, AWS has the cloud infrastructure.
- 22:08 You know RDS for data stores and stuff like that. So, so we kind of took a cross section of that and said, Okay, this is what we’re going to focus on
- 22:17F rom a technology perspective, right. And then, and that that actually really helped us, you know, especially around recruiting and build, you know, scaling our business. And, you know, getting the right kind of people in right so and then over time what ended up happening is
- 22:32 You know, because we did so many different things in so many different industry verticals, you know, today, you know, our 50% of our business comes from healthcare industry right a lot of our businesses in ed tech, you know, we have a fintech division within the frog. And we also have security.
- 22:53 You know division within leap frog and and you know so. So what what’s happened for us is, you know, today, internally, we think about leap frog as a set of verticals meaning industry verticals and then instead of horizontally meaning foundational elements that that
- 23:11 Technology specific
- 23:12 Yeah, technology, especially yeah a lot of services companies, you know, like forget that, hey, look at the end of the day you are using
- 23:21 Technology focusing on certain industry verticals to bring a digital experience for the customers, right. So, you know, you can’t really build a business by saying, I’m going to be a Java shop or I’m going to be a node.
- 23:33 Node JS. So what you’re saying is, like, you got to get the technology or technology because sort of pick a set of technologies and because of articles and then that gives you a good Venn diagram to kind of chase after
- 23:44 Yeah, exactly. So so so in our case, right. So we have you know now an AI ML team, right. So those are our fundamentals. Those are our horizontal our platform, which essentially is a competitor to Salesforce, you know, you know, we have DevOps. We have
- 24:03 To get right
- 24:05 And some of these things are cross cutting across industries.
- 24:08 Yeah, I got I got another question for you.
- 24:09 Yeah, please.
- 24:11 What’s a good marketing and sales tax. So you obviously got from, you know, couple of million bucks to 7 million almost right now. So give us some interesting marketing or sales hack that you came up with that work for you guys.
- 24:24 Yeah, for us, so even today 99% of our business comes through difference, right. So, so what we do is
- 24:34 So, you know,
- 24:37 Basically we mind our relationships and our friends relationships so. So pretty much, you know, services is a trust business.
- 24:48 You know, people. People have to trust you. People have to like you. People have to know that you know you’re going to be with them for a while, you know, through taking skin taken thin
- 24:57 Yeah, so, you know, for us, the most effective things. The thing has been, you know, so called Vega, for example, with I’ll call you up and say, can you introduce me to fight.
- 25:06 Yeah.
- 25:07 Yeah, right. So,
- 25:08 So relationships like is a good thing I growing, do you, I’ve talked to a bunch of guys and say, like, well, we’ve not done any marketing, but all our businesses to referrals and we have chatted with here with you know 8 million bucks just a reference right i mean is that
- 25:19 People used to ship on referrals and say, like, it’s not. We don’t do any marketing and so reference itself is a good marketing kind of process.
- 25:26 To me, everything’s about the face of the company. Right, right. Because at the end of the day. Yeah, you know, you can get to four or five or six or eight or 10 right on point your Rolodex runs out the low hanging fruit runs out.
- 25:38 You know your
- 25:39 Friends after say no to you, sometimes they don’t have the budget or whatever. And so when you think about, you know, if
- 25:44 It depends on what he wants to do with the company if he wants to go to 5080 million he’s gonna have to bring on a CMO or somebody right
- 25:51 If he’s happy with 10 million with referral and recurring that’s cool. So, you know, a lot of it’s about what vision. Do you want, right, like we all know that. I mean,
- 26:00 It’s not that everyone who builds a big marketing and sales team is done right. Some of them are doing it for a reason because that was very different vision that may be an entrepreneur has who says, I’m happy.
- 26:11 Million dollars of incredible customer revenue and you’re running a team where I know everyone on the team and I love them. All right. So it really depends on what you want.
- 26:18 Robbie. I actually agree with you. Right. So, so it’s not like we didn’t try to build a direct sales team. The problem is
- 26:27 You know when when you’re doing services, like you said, the same problem, you know, reflects in you while you’re trying to build the sales organization as well. Right. So, so, you know, you try to hire a sales guy and then the first question, they’ll ask is, like, Okay, well, what do you do right
- 26:4 1Yeah.
- 26:42 And then, you know, what’s your focus, you know, what’s your unique value proposition. What you know all of those things, right. So, you know,
- 26:48 For us, we’re now at a point where we can take a cross section of the company and say, look, you know, we have this awesome core competency on health care you know solutions.
- 26:58 Right. And, you know, we have all these foundational elements of being able to use you know do interesting things with data and AI and ML and you know cloud and devOps and, you know, things like that.
- 27:10 So we’re in the actually in the process of hiring you know industry specific sales people.
- 27:16 Yeah. Does especially
- 27:18 That’s brilliant. That’s really good context, right, you do have the content so
- 27:23 Good, good, good. And we’re going to wrap up, you know, and give it a shot and wrap up right now. Last question Chan before like good things we learned today like
- 27:31 Interesting times they don’t have focus, but for services companies also like have focused on services on technology verticals around, you know, regular regular verticals, you know that we learned today. Obviously, it’s pretty interesting.
- 27:45 You know, last question. JOHN you got done. It is like when when a word. Was there a moment when he said this shoots for real. You started this company. You got jumped into it.
- 27:53 And you said like, Oh, fuck. This is for real. So what dummy Dummy, dummy how you felt when you realized you are outside of Microsoft, you are on by yourself and you say, like, Well, actually I’m going to build a company. Now what was, you know, when was it and how was that feeling.
- 28:09 You know, it’s interesting. So I’ll share a little bit of a story. So back in 2013 when things were really tough, you know, I was in my office by myself. So one of the things that I always had is an office.
- 28:22 Even though I didn’t have revenue. And I remember, staring at the parking lot and saying then, you know, am I, why is it so difficult for me to find the people that I want to work with and
- 28:36 You know, so, so, so you know that that you know it’s not been sort of a smooth ride right so. So to answer your question.
- 28:46 I think it was around 2016 when 2016 2017 when we move to this monthly recurring model, you know, at least when you started thinking about it like that. And then we closed a million dollar deal
- 29:03 Right, that’s when we said okay, you know,
- 29:07 Yeah.
- 29:07 That’s when we look, you know, we can actually make this a real business.
- 29:11 Good, good, good. Now that’s about it. Thank you so much. And you know you’ve been a gracious host the graces, I guess, guess. Sorry. Thank you so much for hanging out with us and we’ll keep it keep it short and keep it that way. Thank you, everybody. Thanks.
29:25 Thank you, Tommy. Thank you. I