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Bootstrapping to $30 Million from Czech Republic: Vaclav Muchna, CEO of YSoft (Part 1)

Posted on Monday, Apr 10th 2017

This is a wonderful story of a Czech entrepreneur, who at 22, at a time when his country was far from ready to support entrepreneurs, struggled through immense odds and has built a global business. Read on for inspiration and excellent lessons from the trenches.

Sramana Mitra: Let’s start at the very beginning of your journey. Where are you from? Where were you born, raised, and in what kind of background?

Vaclav Muchna: I was born in Czech Republic. I studied electronics in high school, which I didn’t like. It was not possible back then that would parlay into the software industry. Because the country was not so developed, access to technologies was limited. I really didn’t like the school. I was born and raised in Prague and then moved to Brno which is the largest city.

Sramana Mitra: I’ve been to both by the way.

Vaclav Muchna: You’ve been to Brno?

Sramana Mitra: We actually drove from Vienna to Prague, and we went through Brno.

Vaclav Muchna: I moved to Brno because it had the only university that had a faculty in informatics where I could focus on studying software. Of course, my parents gave me some money to support my studies. Studies in the Czech Republic are quite cheap. The tuition fees are paid by the government. I was living in the dormitory. I got about $150 a month and that was fine to live comfortably.

As a side job, I went for three days to a local market and my job was to stock the shelves. The job paid $1.20 per hour. I needed to do something else. I was working with computers and coding for years already. So I said, “Maybe it’s time to start earning money through programming.” I looked around trying to get some job but for some reason, when I did the interviews, I didn’t like the feeling because it was like you were talking to an authority.

Sramana Mitra: It sounds like you had a lot of attitude.

Vaclav Muchna: I did have a big problem with authorities all the time.

Sramana Mitra: That’s the kind of personality that typically becomes entrepreneurs.

Vaclav Muchna: I’m unemployable. I started to work as a freelancer. In the university, I got introduced to the Internet and the Unix environment. I did admin things for Linux and Unix environments. I did software development basically. People would hire me to do some coding for them and develop some application. Because there was a shortage of developers and you don’t need to be really good to get some work, I quickly got more work than I could handle so I started to outsource the work to some people from the university.

After one and a half years, it felt good but if we wanted to get bigger, you don’t really get that chance as a freelancer. It was time to start a company. That was not as easy as it seemed because my parents were strongly against that. After our country went through privatization, nobody could own anything. Everything was owned by the government. After the revolution, the government had to return all the assets of the companies back to the people. They called it coupon privatization where part of the companies were returned to people in the form of coupons. The problem was that the legal structures were not really in place. They were not solid. The word entrepreneur had a negative meaning.

Even today, there is a negative connotation to that word. It is improving, but slowly. My parents were afraid that I would become an entrepreneur, which was “bad”. They also were afraid that the company would go bankrupt and executors would take their TV and their sofa. They never borrowed money. They were part of the generation that would never borrow money. They would always save, save, and save. It was very difficult to convince them. That was another reason why I didn’t start a company right away.

I started a company together with my friend. Interestingly enough, I had a friend who advised me. She helped me convince my parents. She told me, “I will only support you if you will own the company with the majority of shares. You’re 20 years old. You’re full of ideals.” I wanted to do 50/50. She said no. We started at 52/48. That’s how we started YSoft.

This segment is part 1 in the series : Bootstrapping to $30 Million from Czech Republic: Vaclav Muchna, CEO of YSoft
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