Posted on Friday, May 29th 2020
What is the best bootstrapping tactic for B-to-B startups? Solve an acute customer pain. Get paid an advance to do so. Leeyo Software CEO Jagan Reddy followed this strategy to bootstrap to $20 million. He built a niche software that solved a very specific problem and started selling it to enterprises for a lot of money. This story is a textbook case study of how well you can scale with no outside financing if you can identify a burning pain point in customers who are willing to pay a LOT to solve that pain.
Sramana Mitra: Let’s start at the very beginning of your journey. Where were you born, raised, and in what kind of background? Jagan Reddy: I was born in India. All my schooling was done in India. Sramana Mitra: Where in India? Jagan Reddy: In Chennai. My schooling was all done in Chennai. Sramana Mitra: Where did you do college? Jagan Reddy: Guru Nanak College in Chennai. My education was mostly in the accounting field. Sramana Mitra: What did you do after you finished college? Jagan Reddy: I actually had a parallel education. While studying accounting, I was also doing some IT type of training. Once I came out of college, I started working for a well-established company in India called Goodrich. They specialize in a lot of different products, ranging from manufacturing to cosmetics. I joined them in 1996 to support their ERP implementation. I was part of the finance side of the ERP implementation. Sramana Mitra: How long did you stay there? Jagan Reddy: I stayed with them for three to four years. I traveled across India trying to implement the software. Then I worked for another company in Bombay. I worked there for a year. Sramana Mitra: What year does this bring us up to? Jagan Reddy: Around 1999. Sramana Mitra: What did you do in 1999 after you left this company in Bombay? Jagan Reddy: The company had a project for me in the US. I came to the Bay Area for that. I spent three months on the project and impressed with my work, my project was extended to almost two years with the same client. After two years, I decided to come back to India.
I had a job offer from Juniper Networks, a leading networking equipment manufacturer. This happened in 2001. I decided to stay in the US and took the job with Juniper Networks. My job was all about accounting-related software and supporting the IT in finance. I spent almost eight years there. I worked there from 2001 to 2008.
Sramana Mitra: Then what happened in 2008? Jagan Reddy: Juniper went through a major shift in their business model where they were challenged with a lot of revenue recognition and accounting automation issues. They asked me to go and find a software that they can use and implement for their automation. I did a lot of research, but I couldn’t find a software that could help automate what they were looking for. In that process, we decided to custom-build for Juniper. I went and built a custom solution for Juniper, but it was all tailored to Juniper’s requirements.
Since I was researching the market, I figured out that there’s no software that could solve the complexity and I also understood that the issue was there for other customers as well. It was not just for Juniper. I did more market research. I talked to several companies. I understood the challenges and why they are not able to automate this, and why the ERP vendors are not able to provide a solution that cannot meet all this. I understood the complexity in doing this automation.
Our discussion continues
here. This segment is a part in the series : Best of Bootstrapping . Bootstrapping to an Exit . Why is Bootstrapping Important? . How Can You Play this Low-Probability Game Intelligently? . Do NOT Go to VCs as Beggars - Go as Kings . Excess is NOT Required for Success . Bootstrap First and Raise Money Later . Some Bootstrapping to Exit Case Studies . The Buy Side of Bootstrapping to an Exit . Blitzscaling vs. Bootstrapping . Bootstrapping to Unicorns More »» . Cinedigm Acquires Bootstrapped 1Mby1M Company Future Today for $60 Million . Mailchimp Bootstraps to $600M Revenue . Bootstrapping from Arizona to $10 Million . Bootstrapped Basecamp Executes a No Nonsense Strategy . How Under30Experiences Bootstrapped to $5 Million . Bootstrapping with a Paycheck . How Algo.ai CEO Amjad Hussain Bootstrapped using Services from Michigan . Seed Investors Who Like Bootstrapped Businesses . How iHeartRaves CEO Bootstrapped a Niche e-Commerce Company to $20 Million . Bootstrapping with Services . 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Bay Dynamics Co-founders Bootstrapped Using Services . Building an AI Software Company from Dallas . RJMetrics Co-founders Bootstrapped First, Raised $22M Later . Bootstrapping Niche E-Commerce Business BuyAutoParts to Exit . TemplateMonster was Bootstrapped to $15 Million . Bootstrapping Edge Hosting to $18 Million . Bootstrapping, Fund Raising and Exiting with Sefaira . Bootstrapping IdeaScale to $5M from Scratch . Bootstrapping to $10M from Finland . Happy Grasshopper CEO Dan Stewart Bootstrapped to Inflection . Bootstrapping Gravity Pro Using Services . Founder Builds Multiple Bootstrapped Education Software Companies . Bootstrapping to $10M from Australia, Raising $25M from the US . Bootstrapped Y Soft to $30M from the Czech Republic . Bootstrapped from Belarus, Raised Money from Silicon Valley