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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 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.

Read the full summary here or register to view the Recorded Version of the Panel Discussion

In software development, we have seen how the waterfall model is gradually drying up; how agile/xp/scrum has already made huge inroads; and now we are also witnessing how kanban is heralding the ‘lean’ software development. I infer that similar shifts are happening in market/customer development for software products.

A start-up that builds the software and waits for the customers to find the product will possibly remain an up-start. More often that not, start-ups fail from lack of customers, not from lack of product development methodologies. But the reality is that most companies spend more energy on building products instead of setting up a structured (and repeatable) process for customer development. It is in this context that Steve and Eric recommend a 4-step customer discovery, validation, creation and expansion process. More details are available in their blogs and so I am not going to elaborate more here. Suffice to say that within the context of this customer development model, software development needs to be executed. At least, both should happen in parallel.

PS: Doesn’t this sound like THE thing to do? Why should smart entrepreneurs need such reminders about such basics? My hunch is that entrepreneurs (romantically and rightfully) see an Apple in their companies. Ain’t a software that is good enough for them, good enough for the market???

It goes without saying that start-up firms produce breakthrough innovation. This is because they have no existing customers to worry about or existing markets to defend. They are free to start out on a clean slate, tap the latest technologies and drive innovation aggressively. Three things could happen now:

(A) The innovation is not successful, which means they are still free to tinker around with breakthrough ideas (until they succeed or close down)

(B) The innovation is successful and they get bought out by a larger firm.
Acquisitions like this catch the eye and contribute to our perception that small companies are the drivers of innovation.

(C) The third alternative is where the innovation trap lies. Let’s assume the innovation is successful and the market accepts the product. Suddenly, all those sharp engineers who built the product are stuck dealing with and satisfying all kinds of mundane customer requests. Before you know it, feature requests (and of course, bugs) flow in and there is no time for anything else. The same engineers who were at the cutting edge when building the product start to fall behind because their very success keeps them busy enhancing the existing product, but no longer innovating.

Read the full post. Sandhill.com also featured this article in their blog here