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Best of Bootstrapping: Best Tactic for B2B Startups

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
. 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 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
. How The Intern Group CEO David Lloyd Bootstrapped to $13 Million
. How Passageways CEO Paroon Chadha Bootstrapped from Indiana
. How SmartBuyGlasses CEO David Menning Bootstrapped to $50 Million
. Death by Overfunding
. How RainmakerForce CEO Mack Sundaram Bootstrapped Decisively to $5 Million+
. How FormAssembly CEO Bootstrapped a Virtual Company with a Paycheck
. TimeSlips CEO Mitch Russo Bootstrapped to Exit with Sage
. The VC-Entrepreneur Compensation Disbalance
. BioConnect CEO Bootstraps with Sophisticated Strategic Maneuvering
. Tremend CEO Marius Hanganu Bootstraps from Romania
. Gesture CEO Jim Alvarez Bootstraps to $10 Million
. SproutLoud CEO Bootstraps to $30 Million from Florida
. Tuft & Needle CEO Bootstraps to Over $100 Million
. Co-founders Bootstrap Linguamatics to Over $10M from the UK
. Ownership Matters
. Vainu Co-founder Mikko Honkanen Bootstraps from Finland
. Entrepreneur Couple Bootstraps to $10M from Colorado
. Power2Motivate CEO Bootstraps to $80M from Canada
. Financial DNA CEO Bootstraps to $10M+ from Australia
. Big Barker CEO Bootstraps a Niche E-commerce Brand
. PrecisionLender CEO Bootstraps to Over $10M from North Carolina
. Master Bootstrappers with Over $1B in Exits
. Ultra Mobile Founder Bootstraps to Over $100 Million
. Bootstrapping a Two-Sided Marketplace to $10M
. Can You Bootstrap a Virtual Company to Over $5 Million?
. Capital Efficient Entrepreneurs Turn $1M into $80M
. Discussing the Journey Through Failure to Success
. From a Small Town to $12 Million
. Bootstrapping to Y Combinator and $10 Million Series A
. Bootstrapping a Marketplace to Over $10 Million
. Freightwise Bootstraps to $33 Million
. Bootstraps First to $5M ARR, Raises $10M Later
. Bootstraps in Europe, Raises Money and Goes Global in the US
. English Major Bootstraps a Tech Company
. Bootstraps with a Paycheck to $15M from Tennessee
. Queue-It Bootstraps from Denmark to the US
. Bootstrapping A Virtual Company To $25M
. ActiveCampaign CEO Bootstraps Using Services to $40M
. Alteryx Bootstrapped with Services to a Public Unicorn
. Inspyrus Bootstraps Using Services to an Awesome Business Model
. CEO Bootstraps Using Services to Millions from Russia
. Wiredrive CEO Bootstraps Using Services to $10M
. Scaling to Over $10M by Bootstrapping Using Services
. Bootstraps Using Services from Poland to a US SaaS Company
. ButcherBox CEO Bootstraps a Perishable Meat Business to Significant Scale
. Waveform CEO Bootstraps to $8M
. Bootstrapped Entrepreneurship from Estonia
. From Laid-off Engineer to Successful Startup CEO
. Imagine Easy Solutions CEO Bootstraps to Exit
. BannerBuzz CEO Bootstraps to $35M
. Bootstrapping a Virtual Company to Scale
. Bootstrapping Using Services from Wisconsin
. Best Tactic for B2B Startups
. Bootstrapping by Piggybacking from Romania
. Bootstrap First, Then Scale with VC Funds
. Bootstrap to +$10M First, Raise Money Later
. Madwire CEO Bootstrapped First, Raised Money Later to $120M
. Bootstrap Using Services First, Raise Money Later

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