It must have been 1988. I was assembling my college applications that winter. One of the teachers in school whom I had requested a recommendation letter from sat with me in an empty classroom.
“What do you want to do?” Mrs. Bhattacharya asked, curious what my infinitely fertile brain was cooking. I had a reputation in school as a troublemaker. In a conservative all girls’ school in 1980s Calcutta, the notion of out-of-the-box thinking hadn’t caught on yet.
“I plan to study Computer Science, then run my own business,” I declared.
I could see that the answer didn’t please her. “What about your femininity? What about all your talents in dance, painting, writing?” she asked.
Cut to November 2014. >>>
I don’t. On a number of issues. Most of all: Don’t play little ball—swing for home runs.
Over 99% of the businesses that seek financing get rejected. Asking every entrepreneur to swing for the fences is dumb advice, in my opinion.
Acc. to Peter, a small idea = bad idea.
I couldn’t disagree more.
I just published Bootstrapping With A Paycheck, where we have case study after case study of businesses that have been successful by starting small, taking small amounts of risk, and developing very nice businesses.
Sorry Peter, I don’t get why every entrepreneur needs to swing for the fences.
Here is an excerpt from my new book on sale today, Bootstrapping With A Paycheck:
Entrepreneurs looking to launch their startups are often faced with myriad difficult decisions, chief among them being the question of seed financing. If you’ve ever found yourself asking, “How can I fund this?” or “Can I fund this on my own, while I’m still holding my current job?” the answer is yes—you absolutely can.
Vasu Akula and his two cofounders launched Voziq in late 2011 with one simple goal in mind: to help companies who purchase advanced analytics and business intelligence solutions better utilize the information they gained access to.
What makes Washington, D.C.-based Voziq unique is that Vasu and his partners didn’t utilize outside investors in order to bring Voziq to life. Rather, they funded Voziq themselves while holding on to their day jobs. Vasu is a part of the 1M/1M premium program, and one of the many entrepreneurs who have bootstrapped a startup venture while holding on to a full-time day job.
Frank Bien: They saw, of course, that people who were booking hotels were also referring customers because they had a great service. What they also saw was that people who are not using the service were referring the most number of customers. In a lot of organizations, when they see something like that, the thinking goes to fraud. In Hotel Tonight’s case, since they had Looker, they could drill in. In our environment, you constantly have this ability to drill-in to data.
They were able to infer that the people who were referring customers were flight attendants or bartenders. >>>
Sramana Mitra: Any other trend that you want to discuss?
Eugene Laney: I just want to point out a study where we looked at the trends in global e-commerce. Some of the more interesting trends pointed to the importance of finding a market. We noticed that a lot of the goods that are sold out of the US go to Germany and UK. We also saw what the demand for products in different countries was like. In places like China, they depend more on the reviews of products whereas in Germany and UK, they just do searches on the product price. I’ll definitely invite you to take a look at the Shop The World study because there are some very interesting trends that you can see within the e-commerce environment. >>>
Sramana Mitra: In the case of HP as the anchor tenant, were they paying you?
Louis Tetu: They were in exchange for significant development capacity and applications suited to their needs. Of course, we had the framework for that. As I said, we went to them with a concept of digital competence profile. That was a significant value proposition to large companies, which is evidenced by the fact that by 2004, Taleo had 40% of the Fortune 500 as customers. Those companies deal with a lot of people and did that in very antiquated ways just by reading résumés and writing job descriptions. We thought there was a better way to perform the match as well as manage that supply chain. There was quite a bit of science behind it.
Sramana Mitra: In that early phase when you got HP as your anchor tenant and got Taleo off the ground, did you also put in some seed capital or did you raise venture capital at that point?
Frank Bien: We’ve found that organizations have now stored lots of data, but trying to layer on the traditional BI tools hasn’t really worked. I think as we look across our customers, that’s a constant theme.
A great customer story would be one of our earlier customers like Hotel Tonight who are doing same day hotel bookings. They’re really disrupting the hotel booking industry in a big way. The way they have to do that is oriented towards data—understanding how customers are traveling and where inventory will be required. In a place like Hotel Tonight, getting departmental views was not good enough. What they had to do was have information across the entire organization and that information had to be very reliable.
Sramana Mitra: Essentially, what you’re saying is, there could be another third-party logistics provider involved that is handling all the fulfillment and inventory. You do the shipping part. At the same time, you still work directly with the website owners and not with the fulfillment players.
Eugene Laney: Depending on the needs of the customer, it can change. Even with large corporations, they may have a variety of providers based on their products.
Sramana Mitra: We’re talking about small merchants.
Eugene Laney: What I’m saying is the model is still the same. It doesn’t really change. You sit and figure out who can give you the best service and also who can meet your current needs. >>>
Sramana Mitra: How long did you stay at Baan?
Louis Tetu: I stayed at Baan until 1998. The dynamics of Baan at that time, without going into too much detail, had changed quite a bit. Several of us left. Several started other companies. I was 34 years old. I was doing some investments in multiple technology companies. When you’re 34 years old and you’re basically technically retired, there are not that many people to play with on Wednesday mornings. You realize that the DNA of entrepreneurship is something you enjoy. The world of investing, albeit interesting, does not have the same DNA as the world of entrepreneurship and building organizations. We soon wanted to get back in the game.
Sramana Mitra: What was your next step?
How far are we from software making decisions based on Big Data rather than human data scientists having to make those decisions? Let’s see what Frank Bien, CEO of Looker, has to say.
Sramana Mitra: Let’s start by introducing Looker and yourself. Tell us what you do. What’s the company all about?
Frank Bien: I’m the CEO of Looker. Looker is a new kind of data analytics and business intelligence solution that really provides end users a new level of exploration capabilities on top of very large and complex sets of data.
Sramana Mitra: What kinds of customers are you going after?
Sramana Mitra: What are your observations then? These small one or two-people e-commerce merchants who are sitting on top of third-party logistics providers, are they then working directly with DHL Express or is there another layer of third-party intermediary before you come in to the picture?
Eugene Laney: They’re very dependent on us.
Sramana Mitra: Who’re dependent? Is it the people who own the website or is there a layer between them and you that is a logistics provider layer?
Eugene Laney: In most cases with these small to medium sized businesses, the CEO is also the CFO and also has a variety of hats. A lot of times, we’re on phone calls with the person who started the business.