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. We used the revenue from the consulting practice to help fund our R&D at Yatra. That’s how we bootstrapped. Eventually, we did get some Silicon Valley angels to put in a relatively small sum of money, but we never took venture funding. That’s how we got the business off the ground.

Sramana Mitra: We have a name for your strategy of bootstrapping. We call it Bootstrapping Using Services and we have a book on that. One of the 12 books in the Entrepreneur Journeys series is Bootstrapping Using Services.

Praful Saklani: I think it’s a very powerful model. A lot of people who are in services have a lot of product ideas. But they might be stuck in an either or situation. Either they can be in the services business or they can have a product company. But actually, there is a way to make them both symbiotic.

Sramana Mitra: Typically, there is a capital gap in the early stages when you don’t have a validated business model. That is when this whole experience of using services to bring in cash and sometimes, depending on what you’re working on, validation.

Praful Saklani: That’s a really good point. The actual product idea behind Yatra came from a consulting engagement that we were doing. It actually sparked a sequence of connections in our mind that there is actually a way to productize this. It came out of the consulting.

Sramana Mitra: Completely in tune with what you’re saying. Consulting does put you close to customer’s problems. That’s a great place to unearth product ideas from. What year did you sell Yatra?

Praful Saklani: That was in late 2000.

Sramana Mitra: What did you do after that? Did you have to go to the acquirer?

Praful Saklani: Yes, I did. In fact, I was head of the business unit through early 2002. At which point, I had a bit of the entrepreneurial itch. I thought that it was time to move onto something else. I stayed on with the business unit for about two years. At that point, I was looking to do something with a philanthropic mission. I actually tied up with an entrepreneur who’s founded a company called WaterHealth International. It was focused on purified drinking water solutions for rural communities in the developing world. I became the Vice President of Market Development for that company and was focused on setting up some of their first international deployment and actually headed their operations in the Philippines and helped the first distribution for that company in India. It was really nice a for profit company with a very strong social mission. Our funding partners were the International Finance Corporation and certain NGOs. It was a great experience and I got to use my entrepreneurial skills to develop a market. While it was about technology, it was technology in a very different context.

Sramana Mitra: How long did that last?

Praful Saklani: I was at WaterHealth for about two years. Out of that, I spent a year outside of the US doing all of these partnership activities and helping set up some of their markets.

This segment is part 2 in the series : Bootstrapping in Minnesota: Praful Saklani, CEO of Pramata
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