WHAT DO SANJIV SIDHU, CHAIRMAN AND CEO of i2 Technologies, and Manu Das, President and CEO of Soffront, have in common? Both started their companies by writing product code at home. While Sidhu took his company public, yet retaining a majority of his stake in the company, Das built his company in the old fashioned way and has managed to keep it profitable for almost a decade now, remaining private.

Das has built his product company—Soffront—without any venture funding. An early runner in the CRM industry, Soffront was founded in 1992 creating the first customer support product in the Windows platform. Today, with more than 500 product installations worldwide, Soffront's installed base includes several Fortune 500 companies and small-to mid-sized businesses across many industries.

During the early part of 1992, Das developed interest in building commercial software for Windows 3.0 platform. At that time, there was no software for customer call tracking or defect tracking on the Windows platform.

Seeing this as an opportunity, Das decided to build the first such tool on the Windows platform. “I bought a copy of Borland C++ and Windows 3.0 SDK, a few books on how to trademark and incorporate a company, a computer, a fax and a printer—about a $6K investment—and started Soffront,” recollects Das.

Das spent several months coding his product, TRACK, for Windows. The product had many capabilities such as tracking customers and the products they bought, tracking product defects and the calls from the customer, and logging the customer call history. Das' TRACK was the first customer relationship management tool for small companies on Windows platform. “Even though I intended to sell TRACK for Windows to the smaller companies, my goal was to make it easy to customize from the outset, and to attract medium size companies,” Das adds.

In February 1993, TRACK was ready for launch. Coincidentally, there was a Software Development Conference being held at San Jose, California. Das shared a display booth at the Conference with two other companies. The trio took turns in their product demonstration. “Most of the conference attendees were developers who were not too excited about keeping track of their bugs! The customer service reps, on the other hand, liked the idea but were not too excited about documenting all customer communications into a database. However, I found there was some interest from their managers,” recollects Das.

Das, who quoted $499 per copy to license his product, received some prospects from the conference, but couldn't get a single customer. Das approached Mike Schmidt, president of Quantasm Corp. (one of the two companies with whom he shared the booth) for selling his product and the two entered into a 50:50 partnership at a special introductory price of $199 per license. They sent out mailers to about 1000 small companies, out of which only four purchased TRACK for Windows!

In 1994, Das set out to sell the product on his own. He had a direct mailer written by a professional, and sent out the mailer to 2000 people. Fortunately for Das, the response was good, and he got many calls inquiring about TRACK. In a span of few months time, he managed to sell over 50 copies.

Soffront was slowly shaping up. From a one-man show, Das nurtured Soffront into a full company, incorporating it in 1994.

As Das was recruiting his initial set of employees, he noticed his competitors in the marketplace: Colorado-based Software Edge, Massachusetts-based Underware and San Francisco-based Archimedes Software—all offering tools for defect tracking. “Our product was customizable from the ground-up and had a customer service component apart from the features offered by our competitors,” says Das.

Das began concentrating more on marketing. His product was reviewed in various magazines, and Soffront actually became profitable in 1995. In 1997, Soffront launched two additional products: TRACKWeb and TRACKRules. At this time, there were offers to buy out Soffront. “The offers weren't very impressive. Most importantly, I was passionate about building the company. I was not in need of money as Soffront was profitable, so there was no reason for me to go to VCs either.” Das has also started a development center in Kolkata, India in 1999.From the beginning, Das believed in a direct sales force. His sales team is based all across the U.S.

In recent years, Das has focused on establishing channel partners. “I realized that value-added resellers bring good customer base, and have regretted not building the VAR channels,” admits Das. “We have added twenty new channel partners in 2002, which is a critical element of our growth strategy. The channel adds value to the customers by contributing on three counts - vertical expertise, technical skills and proximity,” says Das. “Even though we expect to be profitable this year, revenue remains flat. We need to grow.”

And now, with Microsoft launching its CRM suite, the landscape is expected to change. “Microsoft scares anybody,” says Das, “but our focus continues to be in delivering the best value to our customers. More than ever, we are determined to serve the mid-market better than all of our competitors. We understand the needs of the mid-market companies, and we plan to deliver it as we have been doing for the last ten years. We believe that we have significant advantages over others in terms of our experience, technology, adaptability, deployment, and ROI.” While the giants leave customization tasks to the consulting companies, Das believes his products will save small-to-medium companies millions, as the tools for customization are contained within the product.

The CRM landscape is undergoing a dramatic change. According to Gartner Dataquest, revenue for the CRM market is forecast to total $25.3 billion in 2002, growing to reach $47 billion by 2006 with small and medium-size businesses being the main drivers. With large players like Siebel, PeopleSoft, SAP and now Microsoft, the competition is heating up. The future for Soffront depends on how Das and his global workforce will ride over the changing landscape.