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Bootstrapping Using Services, Managing a Successful Pivot: Oomnitza CEO Arthur Lozinski (Part 2)

Posted on Tuesday, Jan 5th 2021

Sramana Mitra: Why did you go after this kind of problem set? Did you have any background in this? 

Arthur Lozinski: I spent a little time at SAP, but Trent and I decided that we wanted to build the greatest enterprise software company ever. This was in 2010. We were two guys in our early 20’s. We were sitting in a little office with a whiteboard.

It was my dad’s office that he let us work out of. We had a whiteboard and we wrote, “We are going to build the greatest software company ever.” We started working backward from there.

In 2011, mobile enterprises were the big deal. It was a hot topic at that time. It was right at that time that we started the company. We were talking a lot about the mobile moment. Thinking about when people need a mobile in the enterprise.

There are two mobile moments we connect with. One was in sales. If you are a field salesperson, you might want to use a mobile device for various reasons in field services. That’s what we started. We decided to do field services. We started going after incident management on manufacturing shop floors. We just started chipping away at this hypothesis and working with anyone willing. 

Sramana Mitra: Talk about the first customer that you convinced to work with you. How did you get this customer?

Arthur Lozinski: We have done a lot of co-innovation which means finding a problem set with a company and solving it on a contractual basis but still keeping the IP of the product. We own the IP of all of these projects that we did. For a long time, we were doing these projects and owning the IP. A lot of them never saw the light of day.

Our first customer for the product that we have today came via Twitter. We had a website for capital equipment. We got a tweet from a company called Korean International, which is a Japanese gaming company.

They said, “We know that your product is meant for capital equipment on the soft floor, but could we use this to manage our IT app?” We were looking at each other and thinking, “Why would you ever want to do that?”

As we started with them, they bought the product. It was a quick sales cycle which is what they wanted. They already had another product in Redline. They ripped it out and put our contract instead. This team introduced us to another company and within the next six months, we had about 10 customers. We found our product-market fit quickly through that. 

Sramana Mitra: What was the financing strategy? Were you purely doing bootstrapping using services? Was the seed money coming from the early revenues?

Arthur Lozinski: Yes, it was all bootstrapped in the beginning. We were trying to raise money. We thought that we wanted to raise money. What we were looking to do is a repeatable sales model that could be invested in. We were doing a lot of consulting. 

Sramana Mitra: We have this formula or methodology of bootstrapping using services. It’s something that a lot of entrepreneurs in B2B have successfully done. It’s like what you call co-innovation or problem discovery while doing consulting services and preserving intellectual property.

We are a big believer in the model of innovation and entrepreneurship that you have followed. Many successful companies have come out of this mode of company building. 

This segment is part 2 in the series : Bootstrapping Using Services, Managing a Successful Pivot: Oomnitza CEO Arthur Lozinski
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