Three Co-founders Bootstrapped with a Paycheck, Now at Over $50M Revenue: Ganesh Shankar, CEO and Co-Founder of Responsive (Part 3)

Sramana Mitra: So, you got to prototype in a bootstrapping with a paycheck mode. Your two co-founders who were doing the design and implementation work, stayed on working in a bootstrapping with a paycheck mode. You quit and went full-time. Then you got to a release in June of the next year, in six months. Which side did you decide to build the product for? Was it the buy side?

Ganesh Shankar: No, the sell side.

Sramana Mitra: Sales.

Ganesh Shankar: Buy side had a lot of big players like SAP, Ariba, Coupa, and Oracle. They had a lot of ERP solutions that were there already.

We realized that on the sell side, which is typically the sellers and the smaller companies who respond, they don’t have a solution or a place to centralize the knowledge. So that’s when we decided to stay focused on one side – the responding side.

Sramana Mitra: And that’s the side that you understood because that’s the side you operated from.

Ganesh Shankar: Absolutely correct.

Sramana Mitra: Double-click down for me and tell me what’s in the product. If you looked at your top features with which you were able to get to first customer, what were you supplying? What were you building into that product or the MVP?

Ganesh Shankar: Today, we have a much bigger platform story, but initially when we started off, we wanted to solve one use case at which we will be the best in the entire world. No one else can compete against what that is.

Typically, RFPs come in different shapes and forms. We focused on Microsoft Excel-based RFPs. If you’re a seller, you’d receive an RFP from your customer in Excel format. We were the only provider at that time who processed Excel RFPs, and we even patented it. We didn’t solve for Word, PPAT, or PDF formats; we decided to excel at Excel-based RFPs.

When you receive an RFP in Excel, you upload it into our system. The system intelligently understands and parses the Excel document so you can start responding to the RFP. Often, buyers insist on keeping the RFP structure intact for easy comparison across multiple vendors. We were the first to support both importing and exporting in the same format, which we called source export. That is another key feature no one else supported at that time. Just to give you clarity on how it was prior to responsive, we truly invented that whole thing.

Before the Responsive solution, existing tools required copying text from Excel into a template, because the template is the only thing their system can understand. That’s how the systems were built.

We said, “No, that’s not how the real world works.” Our system eliminates the need for copying and pasting. You upload the Excel RFP, our system extracts the questions, and you can collaborate with multiple stakeholders internally. Once everyone is done, the salesperson can export the answers back into the same format received from the customer, keeping the format intact but with the answers in the right place. And you can submit the RFP back.

Sramana Mitra: Now, if you came to me in 2015 with this idea, here are the questions that I would ask you. So I’m going to ask you these questions and see what level of understanding you had of the answers to these questions, first and foremost.

What percentage of the RFP process was in this Excel format?

Ganesh Shankar: Let’s take a step back. Excel is the next level, and I’ll get to that. At that time, when we did the analysis, we realized that if you’re trying to sell to the government, it’s all about RFPs. At that time, I believe it was a couple of trillion dollars’ worth of proposals each year.

Our research indicated that responders would spend anywhere between 2-3% of the project value to prepare an RFP. For example, if you’re bidding on a $100K project, you could easily spend $2-3K, or even up to $5K, just to prepare the RFP.

Without even knowing the result, whether you win the RFP or not, it is easy to spend anywhere between 2-5%. The market, with a trillion dollars, doubles if you include the private segment, making it a massive market. Even at the bare minimum of 2%, billions of dollars are spent on responding to RFPs.

When we did the analysis, we found that almost 40-50% of those requirements came in Excel, around 40% in Word, and 10% in PDF. PDF is only ten percent because it is non-editable, making it a nightmare for responders. So, it is either Word, which is the most common, or Excel. We focused on Excel.

This segment is part 3 in the series : Three Co-founders Bootstrapped with a Paycheck, Now at Over $50M Revenue: Ganesh Shankar, CEO and Co-Founder of Responsive
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