Sramana Mitra’s Bootstrapping: Weapon of Mass Reconstruction
is a book for our time, because it’s something real out of Silicon
Valley. No more stories about legendary VC fundings or startup-to-IPO
in six months. In this, the second volume of Entrepreneurs Journeys,
her focus is on doing more with less, in tune with the times. The book
comes out June 1, but I got an advance copy because this is my passion:
starting up companies without outside investment. Unfortunately, this
is another one of the books Buppy read first, so the photo isn’t what you might expect it to be:-)
Sramana Mitra has herself been an entrepreneur and a strategy
consultant in Silicon Valley since 1994. She founded three companies:
Dais (off-shore software services), Intarka (sales lead generation and
qualification software) and Uuma (online personalized store for selling
clothes using Expert Systems software). Two were acquired, while the
third received an acquisition offer from Ralph Lauren that the company
did not accept. Now she interviews entrepreneurs to find out what makes
them tick. It’s quite interesting to read some of the stories,
especially those of entrepreneurs you think you already “know,” like Om
Malik, in my case.
The very first entrepreneur in the book, Greg Gianforte, begins by
saying he doesn’t believe in raising money from investors. “The best
money comes from customers, not investors,” he says, echoing what Stealthmode’s partners have always said to our own entrepreneurs. And for the same reasons. Boseman, Montana, where Greg started RightNow,
a customer service software company, isn’t a tech hotbed anymore than
Phoenix, Arizona is. And bootstrapping, Gianforte says, ” is a
discovery process.” He goes on to say that if you got a bunch of MBAs
in a room and asked them how to start a company, they’d say write a
business plan and go get funding. And then they’d build a bonfire and
throw the money into it. Admittedly, RightNow took expansion capital
after two years.
Both Om Malik and Rafat Ali, who have found ways to monetize content
online, were also bootstrappers in the beginning. Both came from India,
where VC money wasn’t an everyday occurrence but hard work was, and
both are writers. Ali tells of how he named his blog PaidContent.org
because the .com name was taken, the Internet bubble had burst when he
started in 2001, and he had nothing else going. Om has worked so hard
at being a successful entrepreneur that he had a heart attack last
year, when only in his early forties. He has had to learn to let things
go a bit.
Ramu Yalamanchi’s father was an entrepreneur, and was the FFF
(Friends Family and Fools) who gave him the first $10,000 to start the
social network Hi5. To avoid mistakes, he watched Friendster.
If you start a business that you think will get very big, plan for the
scaling issues in advance, he says, because that’s what Friendster did
not do. He watched that company in the days when people couldn’t get on
the site and couldn’t register.
Mitra points out that Silicon Valley now is where Silicon Valley has
been many times in the past: the IPO window is closed, the M&A
market is adrift, and the VCs who can’t see an exit will not make an
entrance. The economy sucks, and the layoffs have happened. The talent
is out there looking for something to do. The last interview in the
book is with Lars Dalgaard, CEO of SuccessFactors,
who decided during the last downturn to buy companies that were
struggling and turn them into successful businesses. Two of them he
actually bought at an auction in Redwood City. From the portfolio of
“stuff” that he bought emerged the company that’s now SuccessFactors.
This book has some fascinating histories of the different paths
people take to entrepreneurship, and the difficulties they face. I
would only have wished each of the interviews to be longer and deeper,
because every story is worth the telling.