Reddi’s recipe for startup success

Reddi’s recipe for startup success

Sashi Reddi
As I mentioned in my previous blog post, I recently met Sashi Reddi, who is chief executive of services firm AppLabs
but is also a self-confessed serial entrepreneur. Privately held
AppLabs, which Reddi founded in 2001, has achieved strong and sustained
growth but Reddi’s previous efforts were not nearly so tidy. He has
evidently learned what works and what doesn’t the hard way, so I was
keen to hear his tips for success.

“Finding the right product idea is one key activity, but a lot of
times it’s about how you fund your idea, how you position it, how you
market it,” Reddi said. “There are some extremely smart people with
great ideas, but the companies that succeed don’t necessarily have
anything to do with those people and those great ideas. So one
important lesson is that there is a real disconnect between great ideas
and what becomes a great company.”

In other words you can create a good company from an average idea,
but it’s all too easy to launch a bad company on the back of a good
idea.

“A bad company from a good idea is actually like my first company,”
Reddi added, referring to EZPower Systems, a supplier of workflow and
document-management software sold to DocuCorp
in March 1998. “We got a lot of awards, good reviews from Gartner and
we crept up into the upper right-hand corner" – a reference to the
so-called ‘magic quandrant
containing firms with both a complete vision and the ability to
execute, according to Gartner’s air-finger interface experts at least.
"But the problem was that me and my two friends were all doing this for
the first time. We didn’t realise that we needed $20m to do the
marketing of the product. When we raised the first couple of million we
thought that was a lot of money because we’d never seen two million
dollars before. But once we’d built the product we realised it was far
too little.”

As Reddi emphasises, lots of technology entrepreneurs don’t fully
grasp the true costs of starting and then growing a successful
business. Not because they’re not smart, but because they’re not aware
of exactly what goes on in the opaque worlds of marketing, PR and
accounting.

The lesson for budding entrepreneurs, therefore, is to make the
right friends early. When you take the plunge and leave regular
employment to start up on your own, make sure at least one of your
buddies has a solid background in marketing.

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