This article was published in the Winter 2019 issue
by Jackson Ostler, Plena Data
We haven’t raised a dollar. At least not from traditional places like VC firms, angels, or banks.
When we tell people about our startup they occasionally ask if we are raising capital. My answer is always “Yes,” followed by the quip, “We’re always raising money from customers!” (Credit to Sahil Livingia, founder of Gumroad, for this bit of banter).
When Aditya Dave and I set out to bootstrap our company in 2017, we had no idea what we were doing. Not a clue. Dave quit a lucrative career at Adobe and I dropped out of dental school. Less than six months into building Plena Data we found ourselves suing a third cofounder for embezzlement and tax fraud while watching our eight customers walk out the door. When people say start-ups are a wild ride – it’s absolutely true.
You see, we violated Y Combinator’s first rule of startups: build something people want. In 2017 we were selling data warehouses and dashboards, but we weren’t doing anything unique, different, or better. After 12 months it was clear that people didn’t want more dashboards and data warehouses. We were competing in a crowded market without a unique value proposition. Nobody listened to us because we weren’t selling anything valuable.
Then we accidentally pivoted.
In 2018 a few of our clients requested that we make their accounting processes more efficient. The market was subtly telling us what to build.
Fortunately, we listened.
We (and by “we” I mean Dave) wrote software and began building a platform to solve the pain that Utah-based CFOs were feeling. Their pain centered around reconciliation, month-end close, accounts payable, and commissions. By early 2019 our platform and pitch had evolved to “Plena Data will automate your accounting department.” We began meeting with CFOs and Controllers along the Wasatch Front who expressed excitement about automation and technology. We strategized with our Board of Directors and booked tickets to San Francisco, Denver, Minneapolis, and Boston to attend conferences and meet with our clients.
Then two things happened:
1. Bots. Upon meeting with partners at several international and regional accounting firms, we began hearing the word “bots.” Without knowing it, we had been building bots for a few months. We began pitching to CFOs that they could use our bots to automate their manual processes. The concept was well received, and in September of 2019 we signed seven new clients, more than we had ever signed in a single month.
2. Momentum. Our phones finally started ringing. We went from giving two demos per month in early 2019 to giving 24 demos in November of 2019. While visiting a client in Washington state, my phone rang at 6:40 AM because a client on the East Coast needed to talk. I had never been happier to take a call at 6:40 in the morning.
Our small team in Orem, Utah is building something enormous. We accidentally designed a robotic process automation platform for the mid-tier market.
Over the last three years we’ve learned a few valuable lessons while building Plena Data.
- Allow the market to tell you what to build before raising money from VCs or angels. It’s easier to succeed and scale if you know where you’re going as opposed to raising money and then trying to chart a course. Nail it, then scale it.
- Surround yourself with amazing people. We learned early on that leaches and lies will kill a startup. After we fired our shady cofounder, Dave and I surrounded ourselves with a Board of Directors and wise mentors that have guided us. And we started listening to our respective wives. That has proven to be a competitive advantage!
- Profitability matters.
It’s been almost three years since I dropped out of dental school. Had I stayed, I would currently be $250,000 in debt and learning how to do root canals. No thank you! I’m glad my brother-in-law Dave convinced me to move to Utah to join his “startup” (it was really just an idea at that time). When I presented this idea to my wife, she was furious. After much deliberation, we both concluded that it was a risk worth taking.
So here we are three years later. Plena Data is still bootstrapped, and we finally have a value proposition that resonates: automate your accounting with bots.
Read the rest of the articles in the Winter 2019 issue of Silicon Slopes Magazine