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This is a presentation about the lessons of a software startup.
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Time
+Energy
-Energy
Stages of a Start Up
HoneymoonStage
RealityKicks in(What did I get myself into?)
AccommodationStage (We can work it out)
Success
Transformation
Crash and Burn
Timeline (Approx)
Project idea kicked off by CEO Jan 2001Started with Program Manager and then team of 3-4 engineers in Hyderabad IndiaMarCom Dir joined spring 2002VP of Ops and VP Mktng joined Nov 2002
Timeline Continued
Architect joined Summer 2003Lead Engineer joined Fall 2003Software 1.0 launched Feb 2004Software 2.0 launched Jan 2005Left full-time position Feb-end 2005
How project started
Founder was running parent consulting company. Served SMB customersThey identified a needRather than charge customers $1000+ for taking Linux freeware and customizing it for clientsDevelop an off the shelf, easy to use Windows software
What worked @ start
Had an infrastructure and cash and courage to incubate startupPM had a couple of focus groups with IT managers, administratorsMarCom Dir created a GUI for the prototype and bounced the idea of some large customers like Netscape, Sony, AdaptecTo reduce costs used a team in IndiaPM documented the project well
What didn’t work @ start
Marketing and Sales were to be outsourced with another partyUnfortunately not experienced in marketing, sales, IT, or the software industryIssues arose between founders and party, and they splitPM was a Unix hack, but no experience in developing software projectsFounders had experience in consulting s/wprojects but not complete product delivery
What worked @ stage2
Formed a company with management team and board of advisors (BOA)BOA helped
to reach one strategic OEM evaluationfeedback on VC presentationA couple of VC connections
What didn’t work @ stage2VP Eng left and VP Operations took overExperienced management, but difficult to oversee India teamCommunication & trust issuesSoftware code not architected well (not modular) or documentedInstallation & Configuration were key feature sells, but in-practice after-thoughts
What did work @ stage3
Excellent Beta Sites, across different industries, including UCBGood test lab setupProduct eventually launchedWebsite and E-commerce, downloads all workedAnalyst meetings and reviews of product and company, including SJ Mercury News
What didn’t work @ stage3
With exception of one local engineer, engineering talent either remote or not very skilledProject delays lead to frustrationProject underestimated Supposed to be 6 months, actual 2 years+Poorly defined, you only get one chance, lacked important features egnetwork monitoring
What worked@ stage4Had VC and Angel meetings 6-10+Continued to get Beta site feedback and improve productImproved Installation and added Configuration Wizard, dropped priceBrought two more talented BOAsCEO by in large good cheer-leaderDirector of MarCom talented and did 3 peoples workCEO Invested Approx $500K of seed moneyTried all types of sales and promotion effortsContacted all potential Tier One S/W Business alliances
What didn’t work @ stage4Founders attention divided to parent company. Startups cannot work with divided attentionCEO main source of ideas, no one to counter-balanceVP of Marketing & Sales, a marketing & biz dev guy, not a SalesmanOther marketing folks also lacked experience, motivation, or other issues eg startup environmentVP of Eng, senior management experience but not hands on Eng Director experienced but not with this type of software Opportunity to start project again, appeared but lost
What didn’t work @ stage4 contd
Getting VCs to get their checkbooks out isn’t easyContractor signed up to sign up VARs & End-Users. Promised 50+50, after 3 months zeroNo lead OEM or Channel partner who can penetrate SMBsSigning up many $500 customers much harder than signing up one $5,000 or $50,000 customer (same concern as VCs)The idea of a simple easy to use software caught on by competitors, now little product differentiationLarge and smaller OEMs provided software for free bundled with hardware
In Conclusion
A successful startup needs many things to be aligned at the same time.
Great ideaSuper-star CEO and management teamGreat BOA and Funding or deep pocketsTeam that can executePerfect market timing, luck, and prayersThe Perfect storm
In Conclusion
Was it worth it?Absolutely, it was an awesome experience
