Insights from second time SaaS founders - Part 1

Pranay:

Hey, everyone. Welcome to another episode of the Matrix Moments podcast. I'm Pranay and I lead our enterprise software investments. I'm excited to do this topic with three phenomenal founders but today we’re going to talk about second innings and all of you people with me today are second time entrepreneurs again building enterprise SaaS companies. So going to learn from their experience of building and selling companies, why they started the second time, how they changed their approach on market, team, product, customer discovery or building. So with that we’ll just do a quick set of introductions around the room. So Rishi is the founder of Revvsales, he had earlier founded 1Click which was acquired by Freshworks. Revv was recently acquired by Legal Zoom build in India. Vijay is the founder of Atomicwork, I think this is Atomic’s Tshirt, he has planned a lot, the bottles are also his. So he was the founder of Minjar, was acquired by Nutanix, was a VPN GM there do a business to 100 million plus in revenue and has started his second innings with Atomic.

Vijay:

Because they don’t declare, it’s a public company, you can't say.

Pranay:

Next is Vijay, he’s the founder of Atomicwork. He was earlier the founder of a company called Minjar that was acquired by Nutanix and he was a VP and GM over there, thanks for having us over, Vijay. And along with that on this Zoom link we also have Arvind, Arvind is the founder of SuperOps where again Matrix is an early investor. Arvind was earlier the founder and CEO of a company called Zarget in marketing automation which was again acquired by Freshworks there’s a pattern here. And he’s on his second journey as well so I think let’s start off. Right, so first question for all of you, and feel free to answer wherever you feel strongly about the topic. But all of you have sold companies before, why start up again?

Vijay:

I was actually thinking of not starting, right, but I told myself I can't go through the pain again so let me not start. I think a year before I left Nutanix I think actually a year after we joined in 2018 so I started like not, putting money into a bunch of VC funds. I thought I will enjoy that but I really didn’t enjoy it. So somewhere in 2021 end I thought – I actually took a break also from Nutanix so I thought, because we were expecting our first child so we thought maybe a break is a good time to reflect and think about what to do. So and we thought of coming out of Nutanix, you know, that's when it was very clear to me that I really enjoy seeding things, startups gave lot of opportunities to seed lot of new things. You know, why not go out and try one. And Dheeraj who was my boss and the founder of Nutanix also told me that we all are very fortunate people so we have competence, some skills, some credibility we can raise capital, we’re most people of in our respective countries. So don’t cool it, do something that's needful in general. Yeah, then I found 2-3 good people like Kiran and Pasu so I thought let’s go start again.

Pranay:

Arvind, any thoughts on this one?

Arvind:

Yeah, yeah, so I think I want to show this tattoo to people here, this is the tattoo which I got the day I sold my first company to Freshworks just to remind me to start up again. This says die with memories not dreams, my dream was to start a company and as Vijay said it’s like this thing, right, like can you climb and reach this particular and if you go to a or something you’ll have this thing of completing that race. So we got acquired, I know it was this hard journey to end up just never think like I always had this question of what if we didn’t get acquired and we continued with the journey and what we would have become. That question was never completed so that's my answer for – twofold answers, that is one. If I were to create a company how big and can I do build a big organization with great culture and company. That was my question which I needed an answer for myself that was the first reason. Second is this concept called lifestyle design, right, see, end of the day I'm sure money is one thing, building a great empire is one more thing but the most important thing is what gives you happiness in life. So for me it is I can actually surround myself with people, likeminded people, where if you create there is this rush of joy and adrenaline plus you get to do the great campaign after launching a product that rush and surrounding likeminded people and being able to do that I think is where the joy is. So these are the two reasons why I started a company.

Rishi:

I think I had like couple of reasons to get it and this has been for me if you're in tech I think in the last 25 years and for the next 25 years there is so much opportunity, the market is for those who goes after an opportunity and it’s amazing that despite so much of productivity and size of the market that's happening there are still so many less who are trying to pick up an go out and work, except for me that has been the gap that how do you go out and what should be that software tech. The challenge that happens is sometimes it’s you need to have a right path. My lesson learnt at least in the first thing that I did was it really didn’t work out with the co-founder/co-founder team that started this and early days first time you're but then you learn and grow up. And the second time when you are largely looking at I think finding a right co-founder and a right partner is what makes it really worth it to go on, for me both of those examples. And I'm now after exit the way I'm looking at it is everybody goes through their own journey in a startup. Some would put 10-15 years from 0-1 to IPO, some would take it’s bootstrap to. For me today I'm looking at is exit is happening just a point in time events in a journey that’s this ongoing. So I don’t think I will call it as first exit or second exit, it’s just an ongoing journey of being in an awesome market and responding to the needs and solving them, that's how I see it.

Pranay:

Now I think it’s a really good segue actually to the next which is how did you think about it, and it is a lonely journey, it’s a hard journey but it’s also a commitment to it another person who may or may not have owned for a long time. So how did you think about being cofounder?

Vijay:

Yeah, I think the first thing I did and I did like alone.

Pranay:

But why is that?

Vijay:

So because as a founder when nobody will believe you're the most positive person or the bullshit optimist but there will be days where you might not be the most positive in your spirits and two is as a founder you always you have to be with the team also you have to be outside the team, right, with your customers, your partners, the market. So I think it’s always good to have like one more so that you can balance, this speaks also also feel lonely.  And so I believe that I have to start with people but so if you look at my all journeys they always started with people I didn’t go to school with because I genuinely believe that you can actually start with people and get to know them in the process and also build a company rather than starting with just starting with people who you went to school or college because both of you have a perception as cofounders. Even in my last company with Anand the only commonality I had was he but we never worked together. And he was not there, he left. But, yes, that's a commonality. So even with Kiran and Parsu I mean I knew Kiran for a very long time so we always like spoke, exchanged ideas, thoughts, tech and you know, what not. But it’s not like we went to school together. But I think I came to realization that I used to take at least in terms of attitude and aptitude now I changed that definition to taste and talent. So these people have a really good taste, right, that means their bar is very high. And so the way I Kiran had a high knowledge like tried selling me multiple tasks. So I said, okay, this guy really has a high taste. And, second, you know, I also look on exchange in what’s multiple times especially around tech. especially around tech, I felt that we got good talent. Similarly, Parsu, so when we three of us got together we were never like trying to compete with each other for ideas, rather we were all like trying to fill in each other’s ideas. So I said okay, looks like there’s a chemistry we must go on this journey. But I didn’t just  lot of people we go with people they know personally like is at school and college because that brings mutual trust and relationship. So I also believe that as a founder’s, so if you make every movie with the same cast and crew it will get boring for you and for everyone. So you need some people, of course you need some people. So if you look at our team composition there are people who have worked with me for the last 15-20 years, there are people who worked with Parsu and Kiran probably from 10-15 years, right, so we have mix of both of them. And I also believe just like you're discovering your product you also have to get to know people. If you know everything about let’s say I start with you we work and you have a perception of me and I have a perception about you guys I think but if you don’t see the change in his perception it is very hard. So it’s like I recently met an intern and he was still – I'm like his [0:15:31]  VP level the guy still calls me, sir, I did internship with you, I'm like, dude, don’t call me sir. But 15 years people generally have this, okay, my boss means my boss. So the perceptions are hard to change, I also believe that we should get to know people and the good thing of at least for me it worked out whether it was with Amit in GizaPage we only knew each other socially. Whether it was with Anand, Prashanth in Minjar we only know socially. Now Kiran I didn’t even know socially, but you also respect people. Respect people for their taste and talent. Now I think I basically apply these two – do they have really good taste so they know what great means, what it looks like and they’re always satisfied with what normally is. Talent everybody has --

Rishi:

I feel that one of the things that we don’t talk much about is largely founders, entrepreneurs are very paranoid and insecure set of people. They’re very, very – we used to see so much of failures day to day we’ve realized where we’re good at and where we’re really bad at. And at least in my case what I’ve largely seen is I’ve understood that these are the top of the things that I'm very, very bad at. I love to partner with whoever it is who would complement in these things and really go out. My cofounder Sameer he complements in terms of where I'm very, very pushy or basically in terms of going after an opportunity Sameer is a lot more reasonable and really balances out the things and in the net net that really, really helps.

Pranay:

He is classical music and --

Rishi:

So we don’t talk, founders in our optimism in our storytelling and messaging we don’t bare our souls much but we’re always aware of our failures, we’re always self-aware of our shortcomings and we’re always looking for this particular set of team members who fill in that gap. What I have not agreed upon and now I’ve changed that is that you really mix it up and change that. The challenge with that is over a 5-year, 10-year journey there will be scenarios where your character is put to test. And what comes through that is this bawls and relationships and trust and the challenge that comes is at that moment if there’s a new person that you do not know in personal what the character of that person is it’s where you're risking almost the entire dream of the company. There are multiple examples and is now at a place where we’re talking about second innings people are there with third, fourth, fifth peak and are same startups that they’ve been running for 12 years, 15 years and 20 years and they have been together for decades. So that's the learning there also is in the end your high bandwidth communication, your trust, you knowing each other clearly outweighs a lot of other things because at some point in time in the market. You can fill that gap in the market but high trust, high bandwidth is very, very hard to fill in and I think that's what we’ve started building interest. But I think my approach has been be extremely self-aware and if you have that cofounder or a founding team where you bare your souls and they’re okay with that I think you have a team that you're all winning.

Arvind:

I think pretty much both of you covered the point but I ask two questions to myself before I pick my cofounder and the team. So one is as you rightly said, Rishi, good day scenario is everything is rosy, everything is happy, it’s all good. The question you need to ask as a founder or a partner you need to pick is when shit hits the roof like how you behave, that's the dark night code like what happens that day, how you react, how you operate is what who you truly are. I believe that very strongly and you need a cofounder who will stand by you on those bad days, that is the most important part of picking a cofounder. And second thing is complementary and you both mentioned about it, it’s not just the skills like he takes care of product and I take care of marketing and sales. That is not just the complementary, it’s even in the attitude. I'm a more a gut – I wrote about this as a blog, kirk and spock in the startup terms. Somebody who can be that gut person, another person can be the logic person so that it complements like extreme everybody thinking in the only logic you will not be able to have that kind of new ideas and things like that. So that's the combination is very, very important and complementing each other is very, very important. And goes without saying that trust, right, like that's very important as a founder.

Vijay:

Yeah, I think people I think both of them mentioned when we were starting there’s like lot of positivity and I think one of the things what most people don’t know I think lot of people before if you're planning to start a company with someone before even you say we’ll start a company probably spend a quarter on it, meet multiple times, discuss about how do we handle conflicts, what is no go on each other’s side and how do we get back together. And what happens if one person fails, right, so one of the things like I basically told my current cofounders is very simple things, right. So this could be emotional things tomorrow so the equity can't be the same because if somebody plays the CEO role initially we can say all three came together in same sled. But things may change and as Arvind said today you might be looking at product, tomorrow you might be looking at go to market, day after tomorrow you might be looking at people operations, who knows. So while initially you start because the person is bringing some strength you also want to look at people who have one they start with trust and that's the kind of people that I like always. Trust, you know, there are two approaches, you spend a lot of time build trust. I always say start with lot of trust then keep adjusting it based on interactions and experiences. And, two, have ability to resolve problems. I think most conflicts could be resolved if they reconsider positively and most conflicts never get resolved because people can't come together just sit across the table and talk. I think we’ve had our share of conflicts, I think as Arvind said Anand is like the most gut guy, I used to be this brain guy and then we reverse roles. There are times where I’ll be like the person who shows a lot of empathy but I have to I think it makes sense. The first company I started not many people know it was like online restaurant plus food delivery and that was my first inning macro. But I tried doing it solo and I really felt it’s very hard. People can do it like but it’s very hard. I think having two, three people who are as founders and also raising funds, 10, 25, 50 as a founding team can actually be Founders just see the current need, this is really the founding team that actually shapes the company and scales the company.

Rishi:

I think I’ll just add because you said Freshworks had a pattern I think the early founders they evolved largely on shared values. They made sure the  team was very much from Freshworks and people first kind of shared that. There are those who are on wealth creation there are those who are in  in terms of technology or something. So that shared values is very, very, important because in the end that's like the North Star for all your challenges that you’ll find. When shit hits the roof you need a direction on why would I take this position and solve this problem and. So I’ve seen constant  with all the problems and solutions on the table and there’s one boss say is this how people first answer at least that's the solution that's picked. So, yeah, I think there’s lots of it said, very, very hard to find that, if you're lucky you hit it off right off the bat, if you're unlucky like in my case for the first gig it’s a waste of time for a long time.

Vijay:

I think if you don’t get along it’s best to part ways, there is no point trying to see they cause friction to each other because if you as founders there’s a friction among you the teams will see it much earlier than even as a founder you realize there’s a friction. But lot of things could be resolved, people, if you're a first time founder I think talk to your partners about trust, how do we resolve conflicts and whom do you go let’s say if you agree on something. Is there some I think be willing to adopt is what they inspires because things are constantly changing. Don’t hold to your beliefs or ideas, see you should hold on to your values, your values don’t change for decades, probably it might not even change for a lifetime. But lot of facts or beliefs can actually change very fast, right, so even being able to adapt to those changes and start with trust and then go from there.

Rishi:

Tactically keep the capitable clean, US capitables I do not know, Singapore capitables – US capitables are fairly – these are fairly fluid in the sense that there’s structuring and other things where you can in case of a cancerous item in there you can work around it. But in India capitables I think are once it’s set it’s set in stone. So it’s very, very hard and values sticks there and sits there for a very, very long time. So it’s very, very important that if you believe that this is as soon as possible. So many of us holding a

Vijay:

I think a practical rethinking because now this is like startups are starting third time, fourth time, or second time. And I think we have seen this with our own friends in our own companies and investors have seen it, board members have seen it. But don’t start a company if you think it’s going to complicate the cofounders. The second advice is assume even if I get into a conflict I will put my effort to resolve it because company is greater than my own.

Arvind:

Yeah, I think the first principle thought process, right.

Vijay:

And the third thing is if things are not working out I think it’s okay for two adults to sit across the table, talk about it maturely and move on even in new directions but don’t kill the company, don’t drain the energy of your team, don’t drain the capital in a few weeks.

Pranay:

Awesome. I think we’ll stop here. We’ve gone way over but really enjoyed the session. I think we can do a chapter 2 and a chapter 3 because there’s a lot more to adopt. But really appreciate you making the time, Arvind, Vijay and Rishi.

Vijay:

Thank you everyone for listening to us.

Arvind:

Thanks, everyone.

Rishi:

Thank you.

Pranay:

Thank you. Bye.

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