Sramana: Bootstrapping a company requires that you run a very tight ship. Can you comment on how you did that and how it impacted team building?
Steve Cotton: Every hire that you make has to have an ROI within six months to a year or it does not make sense. The people we brought on were scrutinized heavily. We would only on-board people when we were really comfortable that they were going to add value and bring something to the table. We have had a few poor hires, and when you do that in a bootstrapped company it is very expensive.
Sramana: What I like about your approach is the transition from a services to an IT company and how you played your hand. You encountered the right technology at the right time, but you had to be smart to recognize that. At any given time there is a bunch of deadpool technology. A lot of this technology has had serious amounts of money invested and a huge amount of talent placed into designing it. Sometimes it makes sense to sift through the deadpool technologies if you are a services company.
Steve Cotton: I agree. The key is coupling those and harnessing the buying side of it. We established trusted relationships with customers based on services.
Sramana: That is the beauty of services companies. They have the trusted relationships and they are able to leverage that to understand what the opportunities in that space really are. They can sell into those customer relationships far more effectively. That is a very interesting way of leapfrogging the product development life cycle.
Steve Cotton: We could have built it organically but it would have been a lot longer to build. What we introduced to the market via our acquisition was fundamentally the same. There are quite a few impacts we were able to have because we had that frame of reference.
Sramana: What do you think lies ahead for Canara?
Steve Cotton: It has been quite nice to have capital available to us via our private equity partners. We are spending it smartly on technology development. We have also focused on geographic expansion in Europe and Asia. What is exciting for me is having someone back the company and think long-term with us.
We have spent the past year preparing for this next phase. The nice thing about private equity is that they are five- to ten-year strategist, whereas a lot of the VCs have a shorter window. I know there are some firms that are going longer, but that is not always the case. It is nice to be able to realize that we have a way to make money and that we have a clear vision for the future that is attainable due to our financial resources.
Sramana: Fantastic. This has been a great story; thank you for taking the time to share it.