Bootstrapping in Minnesota: Praful Saklani, CEO of Pramata (Part 5)

Sramana Mitra: What are the significant developments in 2008 and 2009? How is the company growing now?

Praful Saklani: This is where it gets interesting and fun. 2008 was a phenomenal year for us. We started to see traction with the use cases around understanding the risk inherent in your relationships and how you comply around those risks. I’ve been really talking to a lot of legal departments and finance groups who really need to get their arms around that. If you recall the mid-2000s, it was the post Sarbanes-Oxley era when everybody was concerned with those topics. That was very much in line the zeitgeist of the time.

Then in 2009, the whole world changed. The risk of today was a lot greater than any potential risk 10 years from now. The whole notion of what was important to a customer from an enterprise perspective started to evolve very rapidly. That was a challenge to us. We were seeing some good traction and growth and added some key customers during that time. Suddenly, we realized that the budgets around >>>

Bootstrapping to $55 Million from Rural Minnesota: Tom Fallenstein, CEO of Fun.com (Part 5)

Sramana Mitra: Wow! That’s 2010. What happens next? In 2011 to 2013, what are the next major moves?

Tom Fallenstein: An acquisition that I’ve been looking to try to get for the last five years just happened about 18 months ago. We acquired the domain name fun.com. That’s ultimately the domain I wanted to expand into every type of product. We’ve got a unique culture here. It’s fun. It’s like a small town Google. We’re all super nerdy and geeky. We love all the pop culture pieces. >>>

Bootstrapping in Minnesota: Praful Saklani, CEO of Pramata (Part 4)

Sramana Mitra: That brings us to what timeframe?

Praful Saklani: That brings us to probably mid to late 2007. There’s a second piece that I’d like to add to this. As we were developing this, it wasn’t just about a technology product model that we built. We actually built a whole service and delivery model around it. One of the things that we identified in our discussions with potential customers was that their issue was only partially a technological problem. Yes, they didn’t have tools that allowed them to get at this data. A lot of it was around data integrity and data accuracy. Where is the data coming from? >>>

Bootstrapping to $55 Million from Rural Minnesota: Tom Fallenstein, CEO of Fun.com (Part 4)

Sramana Mitra: Wow! It must have been very scary. How long did it take you to recover that $1 million from that domain?

Tom Fallenstein: It paid for itself in nine months.

Sramana Mitra: Awesome.

Tom Fallenstein: We bought it in January. By the time we made it through October, about 30% to 40% of our sales came directly from that website became 30% to 40% of our sales. >>>

Bootstrapping in Minnesota: Praful Saklani, CEO of Pramata (Part 3)

Sramana Mitra: Which brings us up to mid-2000?

Praful Saklani: That’s exactly right. In 2005, I decided it was time to move back to the US for a variety of reasons. I wanted to get back into enterprise software and started to think about the things that either I had experienced as a pain point or my customers had experienced that would be really interesting to create a company around. That’s when I started to zero in on my experience when I sold Yatra and had to deal with lots of paper work as well as the attorneys and accountants coming in and looking at files. I remember there was very little automation in that process during that time. I started to zero in on how well-understood all of that information is and started to network with other people who would have done some other things or who might be dealing with that problem on a regular basis. That was really the seed idea that eventually flowered into Pramata. >>>

Bootstrapping to $55 Million from Rural Minnesota: Tom Fallenstein, CEO of Fun.com (Part 3)

Sramana Mitra: What next? What happened in 2006?

Tom Fallenstein: In 2006, we moved into a 10,000 sq. ft. facility and started the company. I hired my mom and two sisters to work full-time and started building out the websites.

Sramana Mitra: Were there other properties in 2006 or just those three?

Tom Fallenstein: No, we had more websites—superherocostumes.com, rennaisancecostumes.com and a few other exact match domains like that. >>>

Bootstrapping in Minnesota: Praful Saklani, CEO of Pramata (Part 2)

Sramana Mitra: Where were you when you were doing this company?

Praful Saklani: I was back in Minnesota. We were based in the Twin Cities. Our customer base was all over the country and the world. The company that bought us was actually based out of Ireland.

Sramana Mitra: Before we go into the details of selling the company, how did you get the company off the ground? You were 25 years old and not very long out of school. What was the financing? How did you get this company going?

Praful Saklani: Much like yourself, I’ve always been a big fan of bootstrapping. That has always been the model that I followed in the businesses that I’ve been the founder in. We had a small consulting practice that had some very good clients in the Minnesota area. >>>

Bootstrapping to $55 Million from Rural Minnesota: Tom Fallenstein, CEO of Fun.com (Part 2)

Sramana Mitra: You joined the costume business in 2004?

Tom Fallenstein: Yes, I was the only one doing it full-time. It was only a seasonal business up until 2002 and then I built a website to see if I could make it a full-time job. I was doing extra orders basically through college out of my dorm room, which was just extra cash for going out. When I graduated, I wanted to do it full-time. In October, everything exploded.

Sramana Mitra: What happened that October? >>>