From Developer to Successful Entrepreneur with Exit: ACCELQ CEO Mahendra Alladi (Part 3)

Sramana Mitra: What was the MVP that you came up with? You had worked in that domain and created a vision for what would be the product that you wanted to go out with. You say it’s accidental, but a lot of developers transitioning to entrepreneurs encounter problems in their work life and go on to solve that problem. It is a common path.

By the time you were in the second one, you had a very deep view having worked with thousands of customers. Out of all that you observed, what was the minimum that you could start getting into the market with?

Mahendra Alladi: What I had was the clarity of the problem and not the clarity of the solution. When I look at the MVP, it looks laughable. When I embarked on this, there was a lot of skepticism. There were products from IBM and Microsoft in this domain. The problem is acknowledged, but the solution is difficult. I knew that I wanted to do something. Creating the solution wasn’t easy.

For the first couple of years, we were in stealth mode. It was almost like trying to get my imagination translated. I knew the Chief Architect at HP with whom I’d worked closely. I showed it to her and got her nod. None of the pitches we did to customers was successful. I remember the exact sequence of events, but it just started and had a couple of customers. Each reference was winning a couple of customers.

Sramana Mitra: You had a good Rolodex in that space.

Mahendra Alladi: These were not HP customers that we were solving problems for. I was still on the technology side. The accounts were still with HP. They were large enterprises and not something that a startup like ours could access.

Sramana Mitra: The two years that it took you to build this product, you financed that from your proceeds from the previous acquisition?

Mahendra Alladi: That’s correct.

Sramana Mitra: The previous company was all bootstrapped, so the proceeds came to you and your co-founder?

Mahendra Alladi: Right.

Sramana Mitra: Did your co-founder transition to this as well?

Mahendra Alladi: No.

Sramana Mitra: How were you getting these customers?

Mahendra Alladi: I had some contacts in that past. I was living in India. After these two years, I spent a couple of months in Dallas. I had some sales contacts who took me to some of these clients. I was pitching it myself.

Sramana Mitra: How long from that point did it get to product-market fit?

Mahendra Alladi: The first couple of months was really frustrating, but six months in, we got our first check from a customer from Africa. It was a $300 check for six months of subscription. We broke into some large companies like United Airlines who were looking for solutions similar to us.

Sramana Mitra: How did they find you?

Mahendra Alladi: When we started in this segment, we started with a codeless approach to test automation. We were one of the very few companies who were doing it.

Sramana Mitra: How did they read about you?

Mahendra Alladi: On the web and some forums probably. We were doing some marketing – LinkedIn and Google AdWords.

Sramana Mitra: What was the pricing? What kind of a pricing model did you use with United Airlines?

Mahendra Alladi: It’s been the same. It’s subscription-based. We have multiple tiers of the product we offer today. Since the time we started, we have now evolved into four different product lines on four unified platforms. Depending on what services you are subscribing to, the price varies.

Sramana Mitra: What range are we talking?

Mahendra Alladi: It’s anywhere from $350 per user per month to $700 per user per month.

Sramana Mitra: What does an average enterprise deal size look like in enterprise clients?

Mahendra Alladi: It can go anywhere from $200,000 to $500,000 a year. The average is about $100,000.

This segment is part 3 in the series : From Developer to Successful Entrepreneur with Exit: ACCELQ CEO Mahendra Alladi
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