Bootstrapping To 20 Million: Replicon Co-Founders Raj And Lakshmi Narayanaswamy (Part 3)

Sramana: Were you able to validate your intuition? Was there an enterprise need for timesheet software?

Lakshmi Narayanaswamy: We ran our timesheet product idea by a few of our customers. We confirmed that it was a big pain point with a lot of different companies. One of our clients actually liked our concept, so much so that he became an angel investor. Once we built the product, we had to find a go-to-market strategy. We decided to not only use the Internet as a platform for our product but as the sales and marketing tool for it as well.

Our product was based on the Netscape server product. which was bleeding edge at the time, and it was very popular. That partnership with Netscape got us a lot of exposure and we were doing the try-and-buy model, which was new at that time. We focused on making the trial and use of the product hassle free. To this day we still follow that model, and we still focus on making everything as hassle free as possible.

Sramana: Who were your first paying customers?

Raj Narayanaswamy: We launched the product in May 1998. We had our first paying customer in one month. We had built our product on top of Microsoft and Netscape server technologies, and we found our customer through those relationships. In 1999 Microsoft did a big promotion for their vendors and we received 2,000 leads from that conference. We did not know anything about sales at that time, so we figured we needed to go get a salesperson who would know what to do. The first salesperson we hired handled all the inbound calls we had.

That is when we went back to consulting for our clients. We still had to wind several projects down. When we did that, our clients wanted us to do more work for them but we told them we were making money on these products. That is when one of our clients decided to look more at what we were doing and wanted to invest in us.

We did not need the money at that time, but we did take some from him. From 1996 to 1998 we did not pay any taxes. Our credit cards were maxed out, and we had to clean all of those out. That credit card investment money was the cheapest money we had. We joke that we were funded by Visa and MasterCard.

Sramana: That is a very common mode in which entrepreneurs get started. They max out credit cards and take out loans against their mortgage. What was the price point your product was selling for?

Lakshmi Narayanaswamy: The timesheet product was $29, and it was a one-time fee. We made it as easy as possible for someone to purchase the product. We wanted to gain their trust. We found that a lot of customers bought it because there was such a low amount of risk. They could just buy in on their credit card and not worry about how well it was going to work for them, it was worth the risk to see if it would fit their business. Once they saw how well it worked, they referred us to others.

Raj Narayanaswamy: It was very easy for customers to buy. There was not much of a sales process. We just had to understand the customer’s buying process. The big thing that we learned was that we needed to reduce perceived and real risk to our customers. We also found that selling through PowerPoint or trying other tricks to convince customers to buy the product would not work. We needed to arm customers with the experience so they could make an entirely informed decision.

This segment is part 3 in the series : Bootstrapping To 20 Million: Replicon Co-Founders Raj And Lakshmi Narayanaswamy
1 2 3 4 5 6 7