Sramana: You went to market with 15 carriers. At what point did you start getting them to pay for products?
Alon Maor: We got them to start paying once we had the initial product. That means it had to be a carrier-grade product. They will evaluate the product in a lab. We had a few cases of Tier 1 carriers in the US stating that our product was the most “plug and playable” product they had ever seen and that let us bypass processes in some of the other labs. The reality is that carriers will not go through a deployment without validating that the product is a carrier-grade product. We shipped the initial version of the product 20 months after Series A.
Sramana: This is something very valuable to discuss. The market today is struggling with companies that cannot be bootstrapped quickly in a lean mode and turned into a business. Any entrepreneur who is trying to do what you have done is struggling with that scenario. You said you and your co-founder ran 9 months without outside financing. You had 15 reference customers who validated your strategy on paper. Can you talk a bit about your bridge loan and the seed capital situation? Was it a convertible note?
Alon Maor: In order to build a carrier-grade product or enterprise software, you need to make sure you address a very big problem. You need a unique and compelling value proposition that is not available. You have to articulate the best technology. All of those conditions needs to be met on paper in order to get funding and get out on the road.
Sramana: It is important for us to understand what you have done because the market is struggling with the approach that you have proven is successful. You had 15 reference customers that validated your strategy. Is that what you raised your convertible debt with?
Alon Maor: Even more than that. Prior to developing the product and marketing story we developed a team. We had ten people on board, prior to the seed round, who said that if we were able to raise money that they would join the company the next day. Most of the people were individuals that we knew and wanted to be part of what we were doing. They knew that our team would do something good.
When you are coming to the investors and telling them about the type of problem that you are willing to call, and that you have reference customers, and that you have a prototype that was built in the garage then they are going to want to see the team that will stand behind you. You need to build the ecosystem that convinces people that they will follow you ahead of time. You have to climb the hill virtually.
Sramana: You have 10 people who were willing to come on board, and a validated strategy. Who are the investors that you went after? What is their profile?
Alon Maor: We were talking to a few selected venture capitalist and got validation of the idea. We got a sense that the idea could be financed. We did that in parallel to taking the bridge loan. During the time that we were gaining that traction we approached a few angels and told them that we were likely to get a Series A. We showed them the traction to get their funding.