This week I was lucky enough to interview Sanjay Sabnani. Sanjay is the CEO of CrowdGather. He has been an active proponent of message boards since 2002, when he acquired General Mayhem, his first message board community.
Adam: How did you first come up with the idea for CrowdGather and what made you believe this idea would make a great business?
Sanjay: CrowdGather came from my frustrations first as a forum member and then as a forum owner. I felt that forums and message boards had been ignored by technologists and investors alike, despite the fact that they are the largest repositories of user generated content on the internet. I started buying forums in order to gain some critical mass and soon my hobby took over my life so I was faced with no other choice than to do this full time.
Adam: In the initial days of CrowdGather, did you have a team of employees or did you “go it alone”?
Sanjay: Initially, CrowdGather was me, my forums, and engineering support provided by a couple of friends from those forums. I found it very difficult to work in isolation without a full-time team.
Adam: CrowdGather is a free service for members, so how do you make money?
Sanjay: We offer a free experience for our members, but we support it by running display advertising on our sites.
Adam: CrowdGather has recently raised a significant amount of finance, but initially you personally invested your life savings in the business. Do you think being so financially committed to the business helped or hindered your work?
Sanjay: I would have had a tough time asking others to invest and believe in my business vision if I was not able to demonstrate that I had sufficient “skin in the game”. Fear of losing everything is a very powerful motivator and it helps to drive me towards success. It can be overwhelming at times, but entrepreneurship is not for everyone.
Adam: CrowdGather has 1.9 million unique users monthly and this year your audience grew over 400%. Can you sustain this type of growth? Is there a point where you will feel you will be big enough or even too big?
Sanjay: Our growth rate is entirely based upon our access to capital. Given capital, we can keep driving our growth till we achieve critical mass and profitability. We anticipate this will happen when we are at around 10 million monthly unique visitors. Beyond that we will grow revenues by partnering with smaller forums in order to help them benefit from the higher advertising rates we have negotiated.
Adam: You occupied senior executive positions in several publicly held companies before starting your own business. Would you advise young entrepreneurs to work for others before striking out on their own?
Sanjay: Everyone should work for others in order to learn the discipline it takes to build a business. It is also helpful to watch others make mistakes so that you reduce your chances of having to learn everything the hard way- by screwing up yourself.
Adam: What about business education? You have a BA in English Literature from UCLA and seem to have learned your business skills on the job. Is formal business education important for entrepreneurs?
Sanjay: I would venture to guess that there are far more great business leaders such as Bill Gates and Steve Jobs who have never had a formal business education than those who have an MBA. I don’t think it really matters in the long run since entrepreneurship is usually learned in a real world setting.
Adam: You served as chairman of the board on two distinguished non-profits, Artwallah (arts festival) and TiE SoCal (venture capital networking). Do you think it is important for entrepreneurs to apply themselves outside of profit driven companies?
Sanjay: I achieved non-profit leadership positions by working hard and networking. This is no different than what it would take to succeed in a for-profit setting. My interest wasn’t philanthropic, it was to learn about different types of operational structures.
Adam: You are a founder of the California charity, EndDependence (scholarships for addiction treatment). Why did you decide to found this charity and are you still involved in their work?
Sanjay: I founded the non-profit while I was working at a for-profit addiction treatment company. It was heartbreaking to receive calls from drug dependent individuals who wanted to get better, but could not afford treatment. I convinced my employer to allow me to launch this venture so that those in need could apply for treatment scholarship. I named the company and found a very low cost way to launch it, but I was never officially involved in the day to day operations of the non-profit since it needed to be fully independent of my employer.
Adam: Finally, what is your next challenge or goal?
Sanjay: My goal is to build CrowdGather into one of the most successful internet companies. If my team and I are successful, forums will be treated as a big deal and not as second class citizens of the social media landscape.
Adam Toren