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 US$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.