Bootstrapping a Technology Startup: Panel Discussion – Highlights

The Panel discussion hosted by Aspire Systems on “Bootstrapping a Technology start-up” evoked a very good response from software startups across the globe and a few consultants/ecosystem partners as well. We had 3 eminent panelists participating (Prakash Narayan, co-founder and CTO of MiCello; Ted Finch, Owner and CEO of Chanimal and R S Ramkumar, Managing Director and founder of MangoDVM) and Bhoovarahan Thirumalai, Board member and co-founder of Aspire Systems, moderated the panel.

It was an interesting & lively session – we had four broad themes, around which each of the panelists shared their views.

Perfect Vs Quick and Dirty Product

The first theme was on the conundrum of getting a perfect product out Vs a quick and dirty product. One view was that if you’re an engineer, you want a perfect product but from a marketing perspective, you want to show something to your customers as soon as possible. As users are much more ready to give you feedback nowadays, you need to get your product to the market as soon as possible. The importance of iterating early and iterating often was also stressed upon. Another good point brought up was the use of analytics – measuring how your customers are using your product, which part of your product they are using the most etc.

On the question of who is your first best customer – one of the panelists mentioned that if you are a startup, and if you have a customer, you should embrace that customer – whether it’s a marquee customer or someone (who may not be big) but believes in your product. The point was that when you do approach professional investors, they certainly want to know who believes in the product apart from you & it adds a lot of value to have a MoU with a company willing to use your product.

Another panelist was of the view that a customer who requests your product to be custom-built is your first best customer, as your product is paid for. While this product may not meet all the market needs, it could possibly meet 70% of the needs and can get you started.

Time, Budget and Scope

The question of where does one start when developing the product idea evoked different responses from each of the panelists. Prakash’s view was that it was a good thing to have some protection (read: patent) around your core idea and by all means to use existing frameworks and tools to reduce the time-to-market. Making crucial decisions in terms of the trade-off between features and time/budget are also extremely important.

Ram felt that there is a conflict between Time, Budget and Scope and it is a balancing act getting it right – his advice was to focus on getting the first few customers and developing the core differentiating features for the same. Otherwise, technology could be a black hole which sucks up time, money and effort. When bootstrapping, his recommendation was to keep the product to a bare minimum to get the first few customers and then get more funding.

Ted was keen on getting entrepreneurs to focus on the differentiating factors and the positioning of their product. It’s always important to keep asking yourself, he says, as to why someone would want to buy your product compared to some other product. Studying competitors and talking to their customers are important in finding out if customers are willing to pay for the missing part of existing products.

When should you bring in professional investors?

The next theme discussed was on the timing for approaching professional investors, and what do they bring to the table (besides money, of course). One view was that it depends on where you come from (personally and financially) – so you may not have a choice in some cases. This is also true when going in for angel funding. However, a certain amount of traction in the market can help bring in professional investors. Also, while professional investors can help you scale and go after a larger market, they cannot really help in proving the product in the market, and that is upto the entrepreneur.

Another opposing view to this was that investors may actually help you by directing you to different channels, which you might not have thought of yourself. In fact, some VCs may introduce you to your first beta customer (you never know). On the other hand, if you can get customers/traction without going to investors, that is the best situation as you don’t have to give out much equity.

Team formation

On the theme of team formation in a startup and roles/skills required, there was unanimity in that you should try to assemble the best team possible and build a best-of-breed solution. Ted’s view was that often he found that in a tech startup, the development team is in place building the product but product management and marketing is often missing.

Prakash mentioned that one critical aspect of product development is the UI – and there are people who are extremely good at it but it may not make sense to have those people in your team permanently. So it’s better to pay for those services rather than hiring. On the other hand, the crown jewel of your product is your internal engine and it would be ideal to hire people who can build that for you. Support and building adjoining components of your product can again be outsourced.

Ram’s view was that thought-leadership and strategy should be internal and execution could be outsourced. Also, it was agreed that it is important to have a multi-dimensional, well-rounded team with a mix of entrepreneurial experience, sales /marketing/ business development experience and of course the engineering expertise.

Closing remarks

Ted: Build a product that is validated and meets the needs of customers, build something that has value and that customers are willing to pay for.

Prakash: Don’t focus only on developing a product – focus on getting others excited/passionate about your product.

Ram: There is a lot of opportunity in the market – when you are developing your product, focus on marketing because you are not likely to fail because of the technology.

Bhoo: Besides everything, you need the attitude and the willingness to succeed.

For those of you who would like to view the recorded version of the Panel discussion, please register here

Note: Vijay Anand who was originally supposed to be a part of the panel had an emergency and could not make it for the event – Ramkumar very graciously accepted to be a panelist on special request.

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