Scaling a Technology Company Against Major Competitors: Solix CEO Sai Gundavelli (Part 4)

Sramana Mitra: At what point did you bring in the first financing? Walk me through the financing history of the company.

Sai Gundavelli: As I was building the company, I was also looking for funds, but I didn’t want to go through the VC route. One of my good friends heard the story and he introduced me to one of his doctor friends in Los Angeles. I presented my story. He liked my story and immediately wrote me a check for $1 million. Then there is a company back in India where I’m an investor too. That also provided me some funding. That gave me the initial support for building the organization.

Sramana Mitra: How much money in total have you raised from angels?

Sai Gundavelli: I would say it would be close to $8 million. We run the organization very lean and mean. I’m a small company. I’ve got these three competitors. One of them got acquired by HP, another by Informatica, and the third by IBM. If you look at the Gartner Magic Quadrant, all the other three companies got acquired.

This happened in the 2008 time frame. In the initial stage, they got bigger accounts with the VC funding. I said, “Let me see what I can do here.” Number one is engineering. Other than my VP Engineering, all my engineering development is in India. The second thing is how do I do my sales. In order to hire enterprise sales guys, you need to have anywhere between $120,000 and $200,000. Marketing costs a lot of money. This is an area where I can’t compromise. I invested on marketing. I hired the sales people based on the number of leads we have rather than hire the sales person and expect the numbers to come. It was optimized in terms of how I invest.

The third is, there is no way I can hire enough number of sales people. I started investing in alliances. That was my three-step process. Bring engineering back to India. Spend money on marketing and then cook up alliances.

Sramana Mitra: Talk to me a little about these competitors. It sounds like you had competitors that got acquired. How did you position against them? How do you win deals against them? Especially after the acquisitions when you have all these big channels to compete with, how do you do that today?

Sai Gundavelli: That’s a fabulous question. The moment IBM, HP, and Informatica got into the picture, it blew us out. We were like fish out of water. We didn’t know how to compete at that point in time. It really put a lot of stress in the organization. What I said was, “Number one is I have to create more ROI form a technology perspective. I’ve to give the best product to the customer.”

This segment is part 4 in the series : Scaling a Technology Company Against Major Competitors: Solix CEO Sai Gundavelli
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