I believe it was legendary deejay Casey Kasem who enticed his Top 40 listening audience to stay tuned with the phrase “the hits just keep on coming.” I’m beginning to think that could be the new tagline for the TEMBA program.
A few months ago, I chronicled the success of FocalPop, an online marketplace for custom photography hatched by a group of TEMBA students from the Class of 2009. Winners of the Texas Moot Corp finals, FocalPop followed an entrepreneurial path blazed by other successful TEMBA ventures such as Bigfoot Networks, Phurnace Software and Pure Golf.
Given this success, it came as little surprise to learn that yet another TEMBA-originated venture is once again in the news. eVapt, Inc., a leading platform for subscription management and billing solutions for cloud computing, which was launched in 2007 by TEMBA grads Divakar Jandhyala and Ranjit Nayak, has been acquired by MagnaQuest Technologies, a Hyderabad-based billing software company.
Divakar and Ranjit, both Class of 2007, developed the idea for eVapt while in the program. Although they quit their day jobs in early 2007 to focus on the start-up, their big break came when they won the McGinnis Venture Competition at Carnegie Mellon. In addition to the recognition they garnered, capturing first place gave them some much needed cash to keep the business afloat during the first year of operation.
At the time of the competition, Divakar told the Austin Business Journal that the duo “used the Texas Evening MBA coursework to flush out the details of the business plan.” Apparently, it worked quite well.
I was able to catch up with Ranjit earlier this week and congratulate him on the company’s success. While an extremely busy time for him, he was kind enough to answer a few questions about the venture and the recent acquisition. Here is a part of that conversation.
TT: “First of all, congratulations on the news. I know this is an exciting and probably very satisfying accomplishment for you guys. Was acquisition always a part of the strategy or did the MagnaQuest deal come as a surprise?”
RN: “Acquisition was the preferred exit at the very inception of the venture. It was therefore not a surprise.”
TT: “Give me a little background on what you guys were doing when you entered the program and whether or not you thought TEMBA would be a platform to launch your own venture?”
RN: “I was working as an integration manager at IBM Corporation when I started the evening program (Divakar was a product line development manager at BMC Software). As far as starting my own business, no, that was not on my mind when I entered the program. However, starting my own business has always been something I wanted to do.”
TT: “How did you and Divakar first meet and when did you realize you wanted to pursue this idea together?”
RN: “Divakar and I had actually met socially before the TEMBA program, but we were in Bob May’s managerial accounting class and were fascinated by the use of activity-based costing and use of cost drivers for accounting. We felt that this should be applied in the computing industry.”
TT: “Very interesting. Dr. May will love to hear that. Cloud computing technology was fairly new when you developed this idea, so take me from that managerial accounting class to the development of the idea. In other words, exactly how was eVapt born?”
RN: “True, cloud computing was new. The idea was born out of problems seen in the enterprise software space but clearly the solution was more applicable in a SaaS ( Software as a Service) space which is now a subset of cloud computing. Incidentally, Divakar and I had a conversation about the problems faced by enterprises en route to the first BIC (now Austin Intensives) prior to the start of classes.”
TT: “Can you define cloud computing in layman’s terms?”
RN: “In layman’s terms, cloud computing is the delivery and consumption of computing services as if it were a utility.”
TT: “I understand that you guys bounced a lot of ideas off of Daniel Nelson (TEMBA ’06 and founder of Phurnace Software) before your launch. How valuable was it to have someone like Daniel in your corner?”
RN: “That is correct. It was extremely valuable to have someone like Daniel to bounce ideas off. It was like driving in a thunderstorm following the tracks and tail lights of the car in front.”
TT: “Great analogy. Clearly, you and Divakar also did a lot of brainstorming and bouncing of ideas. What do you consider the strengths that each of you brought to the table?”
RN: “Both Divakar and I brought a track record of experienced software industry management capability. Divakar brought some technology evaluation strength, while I had experience in customer engagement and professional services.”
TT: “Other than Moot Corp, what part of the TEMBA program best prepared you for launching this venture?”
RN: “Being part of the TEMBA program allowed us to participate in UT’s Idea 2 Product competition. Also, I took an entrepreneurship practicum that was simply the best preparation I could have hoped for. The class, taught by John Doggett, opened my eyes and let me consider my options.”
TT: “Tell me about the Moot Corp experience and how it helped refine your business plan.”
RN: “The preparation for Moot Corp gained in the New Venture Creation class allowed us to think through the issues rationally in gradual progression. The Moot Corp competition itself helped us identify gaps and holes in the business plan. The questions posed by the judges came from their own experiences. It was up to us to learn from their perspectives – and perhaps mistakes – without having to commit them ourselves.”
TT: “Obviously, you knew you were onto something when you won the McGinnis Venture Competition at Carnegie Mellon. Were you guys prepared to launch even without the validation of a competition such as McGinnis or Moot Corp?”
RN: “Interestingly, the decision to launch this venture was made before the McGinnis Venture Competition. Divakar and I had quit our regular jobs by Jan 2007.”
TT: “Wow. So, how was eVapt initially funded and at what point did you get investors?”
RN: “eVapt was initially funded by our savings. The McGinnis Competition gave us almost $45,000 in cash and services, which kept eVapt going through the end of 2007. We got angel funding in Jan 2008.”
TT: “So, back to the acquisition. I understand that eVapt will remain in Austin. Will you and Divakar stay with the firm?”
RN: “Yes eVapt will continue operations in Austin. Divakar plans to stay on with the firm.”
TT: “So, what’s next for you? Any new ventures in the works?”
RN: “I am definitely looking at all options at this time. A new venture is an option I am seriously considering.”
TT: “Looking back over the last few years, is there any advice you would give current TEMBA students planning on pursuing an entrepreneurial path upon graduation?”
RN: “Students must understand that entrepreneurship is a very tough proposition. Financial preparation and spousal support is absolutely essential before diving into it. It is an emotional roller coaster, but very rewarding.”
TT: “Thank you Ranjit. Again, congratulations and best of luck to you and Divakar. I look forward to hearing about your next adventure.”