Samir Mehta doesn't look much like a 15-year-old Chinese gymnast, but in many ways, the 41-year-old serial entrepreneur is just as nimble. You may have heard of him a few years ago when he sold 4th Pass, developers of a Java-based wireless platform, to Motorola for $20 million. And he's in the news again, this time with a startup called Keetli whose products are designed to help consumers manage high-definition video.
But if you think Mehta is a golden boy who has never tasted failure, you'd be very wrong. His first two ventures crashed and burned, and his third succeeded only after five years, a cross-country move, a complete change of technological direction, and a big dose of help, financial and otherwise, from an understanding wife. "I learned the hard way, that it's all about focus," he says.
Difficult as it was, Mehta's journey from unknown engineer to software millionaire is filled with lessons for the hardworking IT jockey who dreams of starting a company that might develop the Next Big Thing. There's no such thing as a surefire formula that will take you from the workaday world of IT to the heady heights of Silicon Valley. But we've turned for advice to more than a score of successful tech entrepreneurs, venture capitalists and angel investors to give you the basic how-tos.
Quitting Your Day Job: Pros and Cons
Can you start a start a company without quitting your day job? Yes, you can, and in many situations it's the right way to go. But as Mehta learned, you won't get any cash from the venture capitalists if you do -- at least not right away.
Ann Winblad, a managing partner of Hummer Winblad, one of the best-known sources of venture capital for software startups, answers this way: "There is an important trait we look for in entrepreneurs: that they have the courage and commitment to do the job. We see a major red flag if they want the money before they leave their current job."
Alex Bakman, who now heads his third startup -- VKernel, a 2008 InfoWorld "hot startup" whose software is used to manage virtual server environments -- jokes about the three F's of non-VC funding: "friends, family and fools." There's another way as well; Bakman calls it "bootstrapping."
The idea for his first startup came while he was working in the advanced technology group of Unum Providence Life. "We were doing leading-edge client-server and distributed computing work, but as the company changed, it lost interest in research," Bakman says.
The young American University grad convinced Unum that he could build the technology for it. While still at the financial services company, he negotiated a deal for the rights to the intellectual property he had developed and quickly found three customers willing to sign prepaid maintenance agreements. "Those payments let me bootstrap the idea into a company," he says. Within a few years, CleverSoft had been sold and Bakum was on to his next venture.
Be clear: Bakman had customers and a real revenue stream in place before he cut loose from his employer. Even so, the move from employee to founder is very, very tough. "You've got to be comfortable with all aspects of the business. Initially you are the product guy, the marketing guy, and the technology guy," he says. "It's like drinking from a fire hose."
It's also worth noting that most top-notch IT types work long, hard hours; moonlighting at a new venture in addition to that will really test your stamina.
4th Pass founder Mehta was working as a programmer at InstallShield when he conceived of a software tool that would make it easier for pharmaceutical companies to make forecasts. "I had a family and was a little bit risk-adverse," he says. And because there was no overlap between his potential product and those of InstallShield, Mehta figured he'd handle both jobs. He couldn't. "I was only sleeping three or four hours a night. And even though I was just 26, I found that I couldn't do it," he says.
Even so, Jay Valentine, now vice president of TDI, an infrastructure management firm, and the founder of four companies, has this advice: "Never quit the day job. Get a consulting gig with a real customer and build a real product. Then you have a reference, you are eating three meals a day, and you are not under pressure. After that it is easy to find the second customer," he says.