Building a technology startup and taking it to IPO through the lens of Baskar Puvanathasan, Co-Founder of PagerDuty. Manjula Selvarajah moderated the discussion to ensure Baskar was touching on the critical aspects of building a company and the hurdles he faced along the way.
Questions and Answers
What are the challenges you faced early on when building your company and has there been any failures that you can share?
There were many difficulties trying to raise money, so we can hire more people to work on the product -- we had hard time convincing people the problem was worth solving Convincing someone to quit a high-paying job and work for a 3-person start up. Most of our failures were due to lack of experience. We should have hired our first product manager early in the company, say when we had 10 people or one of the founders should have just owned it. We waited until around we were around 30 people, before we had a person with the title “Product Manager”. The founders tried to do everything. Articles to Read: http://paulgraham.com/start.html
Why did you choose to go with external investment vs organically growing? and when is the right time to seek investment and what are the key things to be aware of?
For us, it was simple -- if you look at the most valuable tech companies in the world, 99.9% of them raised external funding to get there. Technology is a winner take all market. If you have a product that’s working, and you don’t capture the market fast enough, then someone else will do, it’s just the nature of competition and capitalism. You’ll need to raise capital to capture the market. There are some well established bootstrap startups like Mailchimp and Basecamp, but they are exceptions than the norm. When raising external funding, always try to keep control of the company. Just know this, most investors are investing other people’s money. For them, it’s just a job, and they are rewarded if they find a winner. Your first round of financing should be a SAFE note, don’t waste time on anything else. If the investor doesn’t use that, don’t work with them. Best resources: https://www.startupschool.org/ https://www.ycombinator.com/library https://www.ycombinator.com/documents/ Articles to Read: http://paulgraham.com/ramenprofitable.html https://blog.asmartbear.com/rich-vs-king-sold-company.html
What is the lesson that you think is most important for a new entrepreneur to learn and why? And how do you set aside your ego at times to address a gap or concern? and finally what is your recommendation to people who has a lot of ideas?
Story telling -- everything you do as a founder is tell story. You have to tell a good story to get your first customer, your first hire, your first investment. I’d say invest in becoming a good storyteller. The Best entrepreneurs are great storytellers.
For example, when we pitch PagerDuty, we always bring the story of how Amazon runs teams and how they manage to scale it. We tell great stories about our customers to potential hires to get them excited about the company.
What made you guys go public and how do you determine if a startup is ready for IPO? Were there any privacy concerns?
We had an obligation to our stakeholders (investors, employees and customers) to build a durable company and in the process create value for those early stakeholders. PagerDuty had raised Yes, they were some privacy concerns, but that’s the risk of doing something big.
What's your definition of success?
Having positive impact on the world.
Which tech industry should ppl focus on and what skill should ppl acquire to make a career in the tech industry? How do we increase Tamil representation in the tech space?
Canada is known for its AI talent, however still, there aren’t enough people with AI skills. You can become a pretty good AI engineer by investing time to learn the tech. The current AI primitives are already good for solving some hard problems for the next 2 decades -- the R&D work is done, it now needs to be applied to real-world problems:
As for increasing representation, I think it’s a cultural bias, and we need to educate the benefits of pursing a career in tech and the impact that would have on others.
Why can’t you just pour capital into your next company? why do you still have to go through product market fit like any other startup? Search vs Execute
This is best explained through this article: https://steveblank.com/2012/03/05/search-versus-execute/
How did you company succeed in going from $1 million annual recurring revenue (ARR) to $10 million ARR?
Relentless focus on product and customer success. We made sure that our customers were onboarded to our product rapidly and were deriving value quickly. We spent an enormous amount of time being at conferences where our customers go to (AWS Reinvent, Velocity). Furthermore, we produced a lot of content that our potential customers would find valuable (content marketing).
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