Lessons of a Startup
Javed Mohammed
Javed Mohammed
Writer-Producer
Writer-
k2film@live.com

Stages of a Start Up
Success
Honeymoon
Stage
+Energy Accommodation
Stage (We can work it out)
Time
Transformation
-Energy
Crash and Burn
Reality
Kicks in
(What did I get myself into?)

Timeline (Approx)
Project idea kicked off by CEO Jan 2001
Started with Program Manager and then
team of 3-4 engineers in Hyderabad
India
MarCom Dir joined spring 2002
VP of Ops and VP Mktng joined Nov
2002

Timeline Continued
Architect joined Summer 2003
Lead Engineer joined Fall 2003
Software 1.0 launched Feb 2004
Software 2.0 launched Jan 2005
Left full-time position Feb-end 2005

How project started
Founder was running parent consulting
company.
Served SMB customers
They identified a need
Rather than charge customers $1000+
for taking Linux freeware and
customizing it for clients
Develop an off the shelf, easy to use
Windows software

What worked @ start
Had an infrastructure and cash and courage
to incubate startup
PM had a couple of focus groups with IT
managers, administrators
MarCom Dir created a GUI for the prototype
and bounced the idea of some large
customers like Netscape, Sony, Adaptec
To reduce costs used a team in India
PM documented the project well

What didn’t work @ start
Marketing and Sales were to be outsourced
with another party
Unfortunately not experienced in marketing,
sales, IT, or the software industry
Issues arose between founders and party,
and they split
PM was a Unix hack, but no experience in
developing software projects
Founders had experience in consulting s/w
projects but not complete product delivery

What worked @ stage2
Formed a company with management
team and board of advisors (BOA)
BOA helped
to reach one strategic OEM evaluation
feedback on VC presentation
A couple of VC connections

What didn’t work @ stage2
VP Eng left and VP Operations took over
Experienced management, but difficult to
oversee India team
Communication & trust issues
Software code not architected well (not
modular) or documented
Installation & Configuration were key feature
sells, but in-practice after-thoughts

What did work @ stage3
Excellent Beta Sites, across different
industries, including UCB
Good test lab setup
Product eventually launched
Website and E-commerce, downloads
all worked
Analyst meetings and reviews of
product and company, including SJ
Mercury News

What didn’t work @ stage3
With exception of one local engineer,
engineering talent either remote or not
very skilled
Project delays lead to frustration
Project underestimated Supposed to be
6 months, actual 2 years+
Poorly defined, you only get one
chance, lacked important features eg
network monitoring

What worked@ stage4
Had VC and Angel meetings 6-10+
Continued to get Beta site feedback and improve
product
Improved Installation and added Configuration
Wizard, dropped price
Brought two more talented BOAs
CEO by in large good cheer-leader
Director of MarCom talented and did 3 peoples work
CEO Invested Approx $500K of seed money
Tried all types of sales and promotion efforts
Contacted all potential Tier One S/W Business
alliances

What didn’t work @ stage4
Founders attention divided to parent company.
Startups cannot work with divided attention
CEO main source of ideas, no one to counter-balance
VP of Marketing & Sales, a marketing & biz dev guy,
not a Salesman
Other marketing folks also lacked experience,
motivation, or other issues eg startup environment
VP of Eng, senior management experience but not
hands on
Eng Director experienced but not with this type of
software
Opportunity to start project again, appeared but lost

What didn’t work @ stage4 contd
Getting VCs to get their checkbooks out isn’t easy
Contractor signed up to sign up VARs & End-Users.
Promised 50+50, after 3 months zero
No lead OEM or Channel partner who can penetrate SMBs
Signing up many $500 customers much harder than
signing up one $5,000 or $50,000 customer (same
concern as VCs)
The idea of a simple easy to use software caught on by
competitors, now little product differentiation
Large and smaller OEMs provided software for free
bundled with hardware

In Conclusion
A successful startup needs many things
to be aligned at the same time.
Great idea
Super-star CEO and management team
Great BOA and Funding or deep pockets
Team that can execute
Perfect market timing, luck, and prayers
The Perfect storm

In Conclusion
Was it worth it?
Absolutely, it was an
awesome experience