Jeff Wilkins: It was fascinating to see that one virtue of being lean was that you’re going out. In some cases, we’ve even got companies that had such a pain point to pay us for creating a solution.
The challenge is, you need to be able to retain enough rights to the IP so you can market more broadly. That can be a very good way of making sure that you’re working on a problem that really matters to a customer. There are nice to have. That’s not the same as writing you a check.
One of the things we learned was to get out early and to try to test the market for product-market fit and getting those initial customers. Another mistake that a lot of businesses make, particularly at the beginning, is they think in terms of TAM exclusively. It’s important to work on a big problem of course, but markets don’t buy products; people and companies do.
If you can’t name who the first 10 customers that are likely to buy your product, I don’t think you really have a business or a well thought out idea for a business.
Sramana Mitra: One of the principles that we use in our business is a concept we have come to call Bootstrapping Using Services.
There have been lots of companies that have been built using this general principle of Bootstrapping Using Services projects, preserving intellectual property, and then productizing it in due course while using the cash from the services project as seed money.
Jeff Wilkins: Absolutely right.
Sramana Mitra: We are big believers in the phenomenon that you are describing. We are very much into that general idea. Any other nuggets that you want to talk about?
Jeff Wilkins: One of the things that I had both good and bad experiences in is just making sure your founding team shares the same vision and the same goals personally. I’ve been in businesses before where I always just assume that what we want to do is build something big that’s going to create personal wealth for us as founders. That’s a big part of it.
There are a lot of people I’ve worked with who wanted a lifestyle business that pays the bills. That’s not necessarily a compatible point of view if you really want to build something bigger. Having alignment amongst the founding group is really important.
Corazonics is a great example. One of the other problems we had was that one of the founders wanted to have a little boutique type or customized research thing. He was excited about doing the invention on the frontend and not working through a lot of the business building. Most recently at Motili, I think we have very good alignment. As a result, that contributed to our success.