Bootstrapping Using Services: Bay Dynamics Co-Founders, Feris Rifai and Ryan Stolte (Part 4)

Sramana Mitra: What year did you start this consulting company?

Ryan Stolte: 2001.

Feris Rifai: Precisely on October 16, 2001.

Sramana Mitra: You did analytics consulting. How long did you continue in this consulting mode?

Ferris Rifai: When we first started, we started with consulting in analytics and, in parallel, information security and IT. What we saw was a gap in the market that nobody was addressing. Through our expertise in analytics, we identified this gap. Then we introduced the product into the market in 2007. That was our first entry into becoming a vendor.

Ultimately, we did not go out there and brand ourselves. We became an OEM for Symantec. They built it into their product. It was great value for clients. It was serving the need of IT practitioners and security practitioners in helping them deal with all the data they were collecting. They were collecting a lot of data but turning that into something meaningful that answered complex and difficult questions was something they couldn’t overcome on their own. Bay Dynamics introduced this product.

Sramana Mitra: Let me navigate through this with you a bit. That way, we can capture the entrepreneur journey. You were consulting. At what point did you identify the product opportunity and what were the circumstances in which you identified the product opportunity?

Let me give you some context here. We, actually, have already figured out for many years that bootstrapping using consulting services is a very powerful way to launch very good product companies. Oracle started that way. Many other companies started that way. I told you we have published 12 books. One of them is called Bootstrapping Using Services. We know this trend. We know this inside out. You’re basically explaining and describing that journey in that mode.

What I’d like to understand is where in that progression of doing service projects did you hit upon an idea that you thought had potential to become a product?

Ryan Stolte: There is a couple of points that were very significant to us. As a consultancy, especially in the time frame right after 9/11, we got to a point where there was a lot of competition for web and analytics. It was a difficult time in general. The first major decision we got was we needed to find a route to these customers that can get us lots of customer relationships starting with a small funnel.

As Feris likes to say it, we flipped the sales funnel and said, “We’re going to look for a couple of really key partnerships and seek those partnerships that can result in many customers experiences. We very deliberately went out and said, “Let’s go find some existing product companies that need people who have a high degree of expertise to go on and provide value-added consulting on their products.

We partnered with NetIQ and Altiris where they had a product but they needed somebody that could really bring an end-to-end experience together for their customers and ensure that they got the business value they were looking for when they bought the product. With those small number of relationships as a channel for us, we got a large amount of customers in the end. That really fuelled our growth. We took off.

Feris Rifai: I just want to add to that point. That’s a very important part of our journey. We flipped that funnel on its head. We started with the sales funnel. We partnered with some of these vendors. They brought us in into these opportunities. What fell out of that funnel were many clients that now had a lot of faith in Bay Dynamics. It also strengthened our relationship with our partners.