Russ: This is the BusinessMakers Show heard here and online at thebusinessmakers.com. And it's featured guest time on the show, and I am very pleased to have with me Gaurav Khandelwal, founder and CEO of ChaiONE. Gaurav, welcome to the BusinessMakers Show.

Gaurav: Thank you, Russ. Thank you for having me.

Russ: You bet. Well, let's start at the top. Tell us about ChaiONE.

Gaurav: Well, ChaiONE is in very simple terms a digital agency. We provide work, everything from strategy development to execution of the strategy in the Web, iPhone and social media areas.

Russ: How long have you been doing this?

Gaurav: Four years.

Russ: Going back four years it was a little bit different landscape then than it is today, right?

Gaurav: Absolutely. Four years ago we were focused more as a Web site company – there's many that are out there – developing small Web sites and fairly soon we realized that we needed to find a way to differentiate ourselves from the market and that's why we moved into strategy.

Russ: And did that pan out well?

Gaurav: That did pan out really well. Clients realized that the immediate need that they would come up with was not always the right need or the right way to look at a problem, so we started helping solve that problem first, establish some goals first, and then figure out how best to build a solution to tackle it.

Russ: I know that there's a lotta people in the business world that have been to many Web sites, so they think they understand Web sites. I bet some didn't necessarily want your advice.

Gaurav: Yeah. It's tough to tell a client to take a step back and look at their business or even worse to say maybe we understand the business a bit better than they might.

Russ: Particularly a client that's ready to put you to work and pay you, right?

Gaurav: Absolutely.

Russ: Okay. (Laughter) Have you ever had the experience of losing one over that exchange?

Gaurav: Oh, yeah. There have been clients who've said, "Look, you know, we want to spend X amount of dollars and this is what we want." And we would come back and say, "You know, we sure would love to do this for you, but six months from now you're not going to be happy." In some cases we have said, "No, we don't want to touch this project because it's not scoped out the way it should be."

Russ: Interesting. Well, you also mentioned social media and mobile phones. Tell us how you migrated into that.

Gaurav: So the mobile phones, you know, have been around for a while. Smart phones have been around for a while. But the launch of the iPhone has really brought it close to the common public. The unique nature of the phone allows both business users as well as common people to really benefit from the application that can run on the phone. So we decided that the mobile business is where dotcom was in '97. There is a whole new platform, whole new range of phones. The app store concept is fairly unique, and we wanted to tie that into our Web model and focus on the enterprise market.

Russ: And that has gone well?

Gaurav: It has. We don't focus on games or your iBeer type of applications. We want to build apps that actually benefit consumers by logging on and retrieving data that are stored on corporate Web sites.

Russ: So in the world of corporate iPhone applications, a corporation has the idea and brings it to you and you might improve it and design it and build it, meaning you're not actually creating a product to sell to them. Is that right?

Gaurav: Yeah, at this point, corporations come to us with their problems or come to us with their ideas. At this point, you know, we put on our strategy hats and help them identify what will be the best solution and then build those custom solutions.

Russ: Okay.

Gaurav: So, so far this company has been just custom application development for corporations. Now we feel the need to build our own products.

Russ: Oh. So these would be corporate iPhone apps that you build and design and sell to corporations.

Gaurav: Right. So this would be something geared towards, for example, conferences throughout the country, so we are building an app called iConference and this app is currently being launched for free. If a listener out there has a conference that you're running, we will give you an app for free. This app allows users or attendees to the conference to download session, speaker, conference location info, all of that via an app to their phones.

Russ: Oh, wow. Cool. So let's say we do have a listener that's interested. Do they go to your Web site to download it?

Gaurav: Yeah. They go to the Web site and they send us an email. At this point, we are custom branding each app to the conference's logos and colors. The idea is that attendees would be able to register on our iConference Web site, which is not up yet, and be able to network with other attendees prior to attending the conference thereby making it a much more richer experience.

Russ: Okay. And your Web site address is?

Gaurav: It's chaione.com, C-H-A-I-O-N-E dot com.

Russ: Okay. So your target prospect for an iPhone app is a corporation. Is it easy to find those or do they find you or how is that market maturing?

Gaurav: You know, it's funny because typically our business has grown through referrals. In the iPhone business, it's fairly new, so we've had to spend a considerable amount of time educating companies on how the phone and the app can benefit them. So typical engagement goes like this: We will hear about, say an insurance company that could benefit from a phone. We would call the director of marketing and, believe it or not, we would get a callback the next day. Because why? They are holding an iPhone in their hand, and they want to retrieve data on their phone.

Russ: Okay. Well, it's interesting that you first say "We don't do games," and I think that's what the market probably thinks of iPhone development at first. They're just applications that the developer hopes a lotta people will subscribe to or use. It's kind of unique, is it not, to be focused on the corporate market for iPhone apps?

Gaurav: It is a bit. I think initially when the app store launched and Apple touted the marketing power and the moneymaking power, a lotta young guns made a ton of money building games, and I think that was the initial focus for most people. Now, as iPhones are reaching 12 to 30 million handsets in the U.S. alone, corporations are standing up and saying, "Well, most of our executives carry this phone. How can we benefit from this?"

Russ: Now you started down this path mentioning a range of phones and obviously there's the new Palm and there's BlackBerry. Do you do much mobile developing outside of the iPhone?

Gaurav: You know, iPhone is probably about 60 to 70 percent of our mobile business. We have had clients asking about Android development and BlackBerry development. We are looking into those platforms. We are developing some apps. However, the possibility and the range of functionality that an iPhone offers is unsurpassed.

Russ: You started off as this digital agency focusing on Web development, and I can detect passion in your voice about iPhone apps for corporations. What percentage of mobile product development is of your total business these days?

Gaurav: It's almost half now. It was less than 5 percent about a year ago. At this point, we're reaching almost 50 percent.

Russ: That's impressive. I'm talking with Gaurav Khandelwal, the founder and CEO of ChaiONE, and we'll be back with more of Gaurav after this. You're listening to the BusinessMakers Show heard here and online at thebusinessmakers.com.

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Russ: This is the BusinessMakers Show heard here and online at thebusinessmakers.com, and continuing on with Gaurav Khandelwal, founder and CEO of ChaiONE. Now Gaurav getting into the mobile application business is a real happening thing, but you mentioned that you started ChaiONE as a digital agency, focusing on Web development. Take us back and tell us what triggered the idea and what convinced you, "Hey, I'm gonna step into this business"?

Gaurav: Well, Russ, I can take you back in time a little bit and talk about the years when I was growing up in India. Microsoft and Intel and technology were big back in '95, '96 and going forward. So fast-forward. I came to college for my undergrad, did my computer science and MIS and then went to work for an HR firm.

Russ: And this was all in the U.S.

Gaurav: This was all in the U.S.

Russ: Okay.

Gaurav: So a couple of years outta college, I decided that I wanted to do something different. I had seen how big Starbucks was getting, and I wanted to do something on my own. My family has been in the tea business for over 30 years. What better to do in the States than open a model like Starbucks and call it Chai Hut? And, therefore, I started Chai Hut. The idea was to sell tea.

Russ: All right. A retail business like Starbucks but focused on tea.

Gaurav: Yep, exactly, and for business users because I realized that a lot of people at Starbucks used it as a business meeting place, so I wanted to have a retail location that would serve tea and breakfast and have a conference room where people could actually have meetings.

Russ: So now this happened after you left the consulting firm?

Gaurav: This was while I was at the consulting firm.

Russ: Okay, something to do in the off hours, hey?

Gaurav: Yeah, exactly.

Russ: Start your own tea chain of – (Laughter) cool. Does that continue to this day?

Gaurav: It does. But to be honest with you, after about ten months of blowing through cash – you know, I spent about $25,000.00 in trying to build the business and I made $8.00 'cause I sold one can of a product – I decided that it had to stop somewhere, and it coincided with me reading Robert Kiyosaki's book, Rich Dad, Poor Dad, which kinda transformed my life. So I decided that I didn't wanna put any more money in down the hole, stop with the tea business, and focus where my strengths really lay, which was Web technologies.

Russ: Okay. Why didn't you start off with Web technologies from the beginning?

Gaurav: It's a good question. At that point, I felt that the tea model and the idea and the need to help my family back in India by providing another source for revenue for them was more important.

Russ: Okay. And the family back in India was still in the tea business.

Gaurav: Yeah, they're still in the tea business. My dad is now here and he's running the Chai Hut company.

Russ: Ah, so Chai Hut continues and your dad is here running it.

Gaurav: Yes.

Russ: So tell me a little bit about your dad's tea business in India.

Gaurav: It's a business where he would buy tea from teagardens, you know, all over India and Vietnam and Sri Lanka. He is a master blender, so he would mix the teas and create a new blend which he would then sell to exporters who would then send it to Russia and Germany and countries like that.

Russ: So this is the business that you would experience in the family as you grew up.

Gaurav: Yes, I experienced a lot of the business, overheard a lot of the conference calls that he was on and the deals that he was making, you know, with the gardens as well as with the people he was selling to so, you know, unconsciously maybe I picked up a few traits.

Russ: All right, cool. What city in India was this taking place in?

Gaurav: In Calcutta.

Russ: And so you went to school in Calcutta.

Gaurav: I did. I went to high school in Calcutta. You know, one of the questions that was asked to me when I first came to college was if I knew English, if India had electricity, if I went to school on elephants and of that nature. So no, I mean, you know, since I was 2 years old I learned how to speak English and that was my first language going through school, which really helped, you know, coming to college here. And the school that I went to was right across the street from Missionaries of Charity, never really got a chance to meet Mother Theresa, but always knew that she was across the street if I ever needed to.

Russ: Wow. Okay. Now Calcutta is not one of the cities in India that was famous for embracing technology, right?

Gaurav: No, it's not. Calcutta definitely is not, but what is unique is the community that I come from is a predominantly business community. It's almost said that business is in our blood.

Gaurav: What's interesting is my dad and my mom had this vision of a successful kid and that was for the kid to go work at Microsoft.

Russ: Okay.

Gaurav: Microsoft back then was hiring a ton of people, and it was one of the world's largest and fastest-growing companies, so every Indian family wished that their kid would either be a doctor or an engineer, a lawyer or go work for Microsoft.

Russ: (Laughter) All right. And here you are having Microsoft as a customer.

Gaurav: My parents' dreams have come true.

Russ: That is so fantastic. Great, great story. Okay. Had you kinda set technology aside for a while during the Chai Hut period?

Gaurav: Well, it's interesting. During the Chai Hut period I was spending a lotta time building Chai Hut's Web site because I wanted to sell wholesale tea off the Web site, so while I was doing that, I got fairly comfortable with the Web technologies prevalent at that time and pretty soon I had some customers or would-be customers who said, "Hey, you know, we like what you're doing with your Web site. How about you help us with ours?"

Russ: So you had people that noticed the Web site you were building for Chai Hut that motivated you to actually move forward and get into the Web development business as ChaiONE.

Gaurav: Yeah. My first client actually paid me $100.00 in straight cash to build them a Web site, which I happily took because it was more revenue than I'd made in the last ten months.

Russ: On the tea business.

Gaurav: On the tea business.

Russ: Cool, cool story. Well, now you mentioned India. How old were you when you left India and moved to the United States?

Gaurav: I was 18 when I came here for my undergrad.

Russ: What were you like as a teenager in India?

Gaurav: I think I grew up kinda like a geek a little bit, you know, not very social, more of a books kinda guy. You know, I read everything from the Hardy Boys to the Famous Fives to Nancy Drews and you name it and went on to Alistair MacLeans and, you know, others of that nature. I did know that I wanted to study economics and computer science together, which was not possible in India. You could either study computer science or study commerce.

Russ: And so when you came to the U.S. you found a university that would allow you to do that, right?

Gaurav: I did. I found a really unique university. I didn't want to go to a big public school. I wanted to go to a small private school, which I did. I found a small college called Goshen College in Indiana that had a very unique program that required every student, whether American or not, to spend a semester abroad to graduate. I found a lot of interesting perspectives from students who traveled to – you know, spent a semester in China or Indonesia or Costa Rica and so forth.

Russ: Okay, but were you already sorta developing this interest in entrepreneurial endeavors?

Gaurav: Yes. One of the promises that I made to my family when I left for the States was that I was going to pay for my own college myself. That required me having four jobs and the end of the day I came out with two majors and a minor, and the jobs that I did were fairly interesting. I did everything from starting with custodial work to construction to selling pizzas to selling kitchen knives. One semester I ran a catering business because I didn't have money to pay for my fall tuition. In my final year, I finally started my own company which was to help students applying for jobs at Monster and Yahoo! and HotJobs all from one platform. So when I graduated, I sold that company and paid my last semester's tuition.

Russ: All right. That's a great story. Well, I want to get back, though, to ChaiONE because I know for a fact that you have some very impressive clients and customers, and we'll do that after this. I'm talking with Gaurav Khandelwal, founder and CEO of ChaiONE, and you're listening to the BusinessMakers Show heard here and online at thebusinessmakers.com.

[Aflac Commercial]

Russ: This is the BusinessMakers Show heard here and online at thebusinessmakers.com and continuing on with Gaurav Khandelwal, founder and CEO of ChaiONE. Well, I know Gaurav, by spending some time on your Web site that you have done an excellent job of landing some big, nice clients. I would assume that you're pretty proud of that.

Gaurav: I am. Lotta hard work.

Russ: And why don't you share the names of a few of the clients that you work with here at ChaiONE?

Gaurav: Well, our biggest client is Microsoft. You know, we got them back in 2007. It's a pretty interesting story 'cause, you know, most people ask us how did we get them.

Russ: Right.

Gaurav: The answer is this. My girlfriend at the time, my wife now, used to work for them and one Friday afternoon a certain product development manager at Microsoft was very, very frustrated with a current vendor who they had been waiting for two weeks to get something done. She suggested our name, and he called me at 8:00 in the evening and said, "Can you do it?"

Russ: What day of the week was this?

Gaurav: Friday.

Russ: Okay.

Gaurav: He said, "How many days before you get it done?" And I said, "Twenty-four hours." I worked all night and I got it done the next day.

Russ: (Laughter) That probably did very well –

Gaurav: It did.

Russ: – in substantiating them as a client. And they are a big client today?

Gaurav: They are a big client today and referrals from them landed Nestlé and Intel as clients.

Russ: Nestlé and Intel. Oh, my goodness. Well, so you sensed the opportunity there and seized it big time.

Gaurav: Absolutely. You have to.

Russ: Cool. So you knew, wow, this is a chance of a lifetime. We gotta make this thing work.

Gaurav: Yeah, it is, because getting into these kinda companies is a long, winded process.

Russ: Right.

Gaurav: And now someone was knocking at my door. I wasn't gonna turn him away.

Russ: Okay and that wraps up the radio portion of the interview with Gaurav Khandelwal, the founder and CEO of ChaiONE. But obviously there is more, there is more in a BusinessMakers WebXtra. So just go to thebusinessmakers.com and look for the Gaurav Khandelwal WebXtra. You're listening to the BusinessMakers Show, heard here and online at thebusinessmakers.com