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.

Sramana Mitra: When did you exactly start Pramata?

Praful Saklani: We incorporated the company in late 2005. We really got our operation under way in 2006.

Sramana Mitra: When you got started, what did you do? You obviously had this concept. What did you do in terms of validating the concept and getting a bit more broad validation from the customer base?

Praful Saklani: The first thing I did was, I reached out to all of my friends who were in the legal community who I thought would be able to give insight into, “Did they have visibility into this unstructured legal information? Were there any tools or processes that they used?” One of the first people I reached out to became my co-founder. He said, “Yes, I deal with this problem all the time.” That was a very positive validation. I talked to my law firm and attorneys who had worked with me on Yatra and they said, “Yes, this is something that we know is an issue for our customer base.” I also reached out to potential business users and asked, “How do you get your arms around legal information?”

One key point that I think will be relevant to a lot of entrepreneurs who read your blog is that initially, we were just looking at all legal information. There wasn’t any specific focus on one type. We asked a few questions, such as “Where is the biggest pain point? Where is the biggest bottleneck?” We didn’t know. All we knew was that most of this stuff was managed using manual processes and brute force. It was through a process of sifting that we realized that there’s actually pretty good solutions out there for litigation and email. E-discovery is a full space. We actually started to zero in on contracts because what we realized is this is one area where a lot of the value accrued to business users weren’t legal people, yet the information were all very stylized and was very impenetrable for non-legal people to get their arms around. That was a lot of interest to us.

Sramana Mitra: In terms of customers, were you planning to sell to the businesses or to the law firms?

Praful Saklani: Initially, we tested both. We looked at both. For a variety of reasons, we actually decided that businesses were the best customers for us because of the value of unlocking this information. There was some value to attorneys but the real value was for the non-attorneys and non-legal people who really needed to understand these complex relationships. Therefore, the law firm was a less natural audience or customer for this capability.

Sramana Mitra: Before you actually started to build this product, did you have any customer commitment? I heard all kinds of stories that entrepreneurs do to get customers to come on board or pay advances for the product. Did you do any of that?

Praful Saklani: Our engagement with customers and potential customers started even before we had determined exactly which problem we were going to aim our product at. Our customers were actually telling us what we should focus on. We, very quickly, zeroed in on two beta customers who are still our customers today. Both of them started working with us in late 2006 and we actually designed the beta in conjunction with these customers. At that point, it was bootstrapped entirely with founder investment. Very quickly, we got the two beta customers as paid customers early in 2007. Part of that was also because they had a big voice in the process of building the product.

Sramana Mitra: Who were these customers? Are there any common characteristics of these customers?

Praful Saklani: One was a manufacturing company and the other one was a technology company with very complex software and technology relationships. Both of them were based in Minnesota. They were nearby. When we founded the company, we were based in Minneapolis. We were able to collaborate very closely with them. One of the companies whose case study is actually on our site is FICO, that does data storage. Another company that we worked closely with was Valspar.

This segment is part 3 in the series : Bootstrapping in Minnesota: Praful Saklani, CEO of Pramata
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