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Bootstrapping to $30 Million from Czech Republic: Vaclav Muchna, CEO of YSoft (Part 2)

Posted on Tuesday, Apr 11th 2017

Sramana Mitra: What year are we in now?

Vaclav Muchna: That was 2000. It was a month after my 20th birthday. We started the company together. We really didn’t have any vision, we just wanted to be rich and famous. We wanted to succeed and we had no idea how. We had no education. We had no background.

The only thing we knew was that we are not afraid to work. We did different things. We wanted to participate in projects and build something. We had no idea what. What happened was we were often hired as developers to participate in a project that was funded by a business angel. We were paid in cash and were promised some stock options in that project. We did various things. We did Internet encyclopedia before Wikipedia. We did an information system for inventorying products. There were a lot of different projects.

The last project was a free hosting server in Slovakia. We participated as developers in this project. The project got about 40,000 users, which is not a huge number. It was the very beginning of the Internet. Our Slovakian partner agreed that they would sell the product to the local telecommunications company for something like $2 million. With our share, we would get a couple of hundred thousand dollars.

Sramana Mitra: That’s pretty good.

Vaclav Muchna: Remember that when I did the temporary job, I earned $1.20.

Sramana Mitra: Absolutely.

Vaclav Muchna: It was an incredible amount of money.

Sramana Mitra: Yes.

Vaclav Muchna: You would expect that we would sell. It was not that easy. One day before we were supposed to go to Slovakia and sign the agreement, one of the developers called me. He said, “The servers are not running.” I said, “What do you mean? They can’t be not running.” We tried to reach out to our Slovakian partner, but we couldn’t. So we jumped into the car and drove to see what’s going on. By the way, there was no virtual hosting. We went there. They were open.

They asked, “What do you want?” We were like, “What do you mean what do you want?” We discovered that our partner had taken away the servers physically and disappeared. It didn’t make sense. What happens when you take the server? The server ceases to exist. So, 40,000 websites ceased to exist. We’ve never discovered why until today.

Sramana Mitra: Wow.

Vaclav Muchna: What we know is that we were highly indebted. Especially in the last few months, we were focusing a lot on the project with prospective buyers. We owed money to developers everywhere. It was that time when we were very close to closing the company. Pretty much, everybody left including my partner. The only person, surprisingly, who didn’t leave was the developer I talked about a few minutes ago.

The story is complicated. There was another person who I had met years ago. When I was 16 years old, he gave me a computer and taught me some programming. I worked for him before I moved to Brno. We had an agreement that I would work in his company, but he had some financial problems and was bankrupt. He came back to me and he said, “I’m going to sell my apartment so we can pay the debt, and we’ll start again.”

This segment is part 2 in the series : Bootstrapping to $30 Million from Czech Republic: Vaclav Muchna, CEO of YSoft
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