“Oscar Wilde once said, “Experience is one thing you can’t get for nothing.” Possibly, but books like Sramana Mitra’s “Entrepreneur Journeys: Bootstrapping: Weapon Of Mass Reconstruction”
aim to help you gain from the experience of others. I recently had to opportunity to sit down – OK, trade some emails – with Sramana to discuss the book and entrepreneurship. Here’s what she had to say…
Tim: Sramana, thanks for taking the time to do this interview.
First off, let me say how much I enjoyed the interviews and essays within your book. How can small business owners apply the lessons from your book to their businesses? What overall lessons would you like your readers to take away from the book?
Sramana: Many. Really, many, because there are so many nuances to each entrepreneur’s story, and so many lessons to draw from them. But perhaps most importantly, I want readers to realize that doing a venture without raising gobs of external financing is eminently viable, and in fact, doing so preserves a certain independence, equity value, ownership, etc., things invaluable in an entrepreneur’s journey. And, within that context, I want readers to learn the tricks of how to do so in pragmatic ways: how to validate ideas, how to prototype, how to preserve sanity even.
Tim: Apart from the obvious – stories of bootstrapping entrepreneurs – is there a theme that you saw emerge during your interviews? What ties these entrepreneurs’ stories together for you?
Sramana: Their resourcefulness. Their creativity. For example, the story of Greg Gianforte and the billboard in front of the Novell campus in Utah is at the same time hilarious, and inspiring.
Tim: How did your own experiences as an entrepreneur shape these interviews?
Sramana: I made mistakes in my early career regarding financing strategy. As a result, I lost control of one of my ventures which had great potential if I could hold on to the driver’s seat for another 9-12 months. But I agreed to relinquish control to an external CEO whom the investors wanted to bring in because I was young and inexperienced. The guy came in and fired me immediately, and then got himself fired within 6 months. This was Intarka. I had positioned to sell that company to Siebel within 9-12 months, at the peak of the market (end of 1999). It didn’t happen, but it could have, if we didn’t have to deal with the distractions of boardroom politics, and focus on the business more precisely. I am sure, one of the reasons I felt compelled to write this book was because of that experience.
Tim: One topic you return to repeatedly in the book is for entrpreneurs to “…follow their own passions.” I agree. Can you talk a bit about what you heard in these interviews that makes that so important?
Sramana: Om Malik was a journalist who tried to be a venture capitalist. He failed. It was through writing that he found his renown. He admits in the book that he made a mistake in trying to be a VC in the dotcom heydays. Writing was his true calling, journalism was his passion. Once he came back to it, things started flowing for him. Throughout the book, there are stories like this. In Lars Dalgaard’s story, you can literally feel his passion jumping out of the pages. I personally believe that you cannot give entrepreneurship what it takes unless you have such passion. The risks are too great. It is too damn hard. It is too much work to do just for the money, or just for the heck of it.
Tim: Speaking of money, managing cashflow is critical for the survival of any business, bootstrapped or otherwise. For instance, you talk about how important it is to manage cash in your recent “Breaking the 9 to 5 Jail” interview. But in your interview in the book with Greg Gianforte, he mentions that “…greed is not a virtue.” Reconciling these two points seems to hurt many first-time entrepreneurs, through paying above-market salaries, hiring friends or family, etc. Can you talk about how a bootstrapped business’s need for cash and greed aren’t the same thing?
Sramana: They are entirely different things. Greed is what propels “brilliant” Wall Street bankers to sell hollow mortgage-backed securities for big bonuses. Greed is what people do for money setting aside their conscience, setting aside any need to worry about whether or not their actions are creating value or not.
Managing cash for a bootstrapped entrepreneur has nothing to do with greed, and everything to do with survival. For the venture’s survival, for its ability to create long term value, managing every last penny of resources is crucial. That’s what I talk about when I celebrate the virtue of frugality in entrepreneurs.
My mother taught me that. And I dedicated the book to her for that reason. Frugality, in entrepreneurs, is a super-important quality.
Tim: Great stuff, Sramana. Thanks again for taking the time to speak with us. Is there anything you’d like to add?
Sramana: I want to suggest to those millions of people out there who are out of work during these terrible economic times, that they seriously consider entrepreneurship as their path forward. They have nothing to lose. And everything to gain, as I am sure you can tell from the stories you have read in my books..
Gaining experience can be painful. But learning from others isn’t. Check out “Entrepreneur Journeys: Bootstrapping: Weapon Of Mass Reconstruction” and gain from the experience of folks who have been there before.
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