Serial Entrepreneur: Manoj Saxena (Part 4)

In part 4 of our interview we discuss Manoj’s second venture, Webify.

SM: In the case of Webify you were funding it with your own money, right?
MS: Right, the first million bucks, I wrote those checks myself. The interesting part with Webify was I started it in March 2002. I had the hardest time finding pilot customers. This was in the middle of the nuclear winter of IT. No one wanted to talk to you. The last person who did that lost their job trying new stuff. So one of the things I did was I went out and I bought the controlling interest in a company out of India that had 50 odd customers, many multinational customers. I sent my VP of engineering over there, I went there for a month and started selling to companies like Johnson & Johnson, Cadbury, and Pfizer. Johnson & Johnson is still running our product.

My goal was to get brand name customers in India and then come back to the U.S. We were doing this in India because no U.S. customer would talk to us. My conviction was that there were still very large and hairy problems to be solved. As long as those problems are there, the market phenomena is a temporary one. So, as I said, there is no bear market for good ideas.

SM: I guess it depends on whether companies can survive a downturn.
MS: That’s right. That is exactly why my mantra used to be take a little money and build a lot of value. So we did that and interestingly enough as we were doing that, even though customers were hard to get, money was not difficult to get. We had an offer of a $6M investment in Webify, but we didn’t need it and actually turned down that money. If I took too much money and the market didn’t go right, I would have lost the whole company. Instead of raising 6 million dollars we raised 750 thousand in two batches until we got the market validated and enough of a pipeline built.

We did about $1.1M the first year and $5.5M the next year, and $13M the third year. We’re on target this year, but, I can’t give you the number because IBM has put all kinds of restraints on these numbers.

SM:And you’ve already been acquired this year. And that number is not public correct?
MS: It’s not public but it’s in the neighborhood of the first company’s acquisition. There is a good multiple with a great return.

SM: It’s interesting what you said earlier. You were offered 6 million dollars and turned it down to only take 750 k so you had room to validate the market, and that’s a very wise decision that less sophisticated entrepreneurs would not make.
MS: Exactly, because we learned and I saw this in 2000-2001 when I used to meet other CEOs among entrepreneurs, it was almost a badge of merit how much money you raised. Which is really quite the opposite and it’s true, it’s a bit counterintuitive. If you raise a lot of money you are leveraging the hell out of yourself. And you probably have a lot of people wanting to grab at the steering wheel if things don’t go right.

[Part 7]
[Part 6]
[Part 5]
[Part 4]
[Part 3]
[Part 2]
[Part 1]

This segment is part 4 in the series : Serial Entrepreneur: Manoj Saxena
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