Seeking Growth

Return Leaders: Ajay Shah, Smart Modular Technologies Inc.

I have known Ajay Shah for more than 15 years. His success runs counter to the approach of most technology companies in Silicon Valley, and provides valuable insights in today's technology market. Rather than rely on a technology breakthrough to create a large market, he created an innovative business model in a rapidly growing existing market: device memory systems.  Another recent example of a company that had success following a similar market approach is Motricity. The company had an IPO last year and built its business by solving a customer problem for market leaders in a fast growth market - consumer portals for mobile carriers.

Below is an interview I had with Ajay Shah on how he built Smart Modular -the interview was published on SandHill.com last year.

Some leading companies arrived at the top without taking early venture capital funding. Today's market may call on companies to be more prudent in how they apply capital to generate returns. In this continuing series of discussions with founders whose capital-efficient businesses are recognized "Return Leaders," Kennet Partners Managing Director Javier Rojas sat down with Ajay Shah, co-founder of Smart Modular Technologies, to learn how he bootstrapped his startup to create a billion dollar revenues business with only $80,000 of initial capital in just 11 years.

Gurbaksh Chahal of BlueLithium - Return Leaders Series

I was very impressed with the success of G (Gurbaksh’s nickname).  He is a serial entrepreneur that came from humble beginnings but has conquered his obstacles through drive, passion and dedication.  He has honed a great model for bootstrapping companies and is now on his third startup.  This story tells you how he started Blue Lithium and his model for success.

 

I hope his story inspires you as much as it inspires me.

 

http://www.sandhill.com/opinion/daily_blog.php?id=62&post=578

Mark Leslie of Veritas & Return Leaders Series

Mark Leslie: Veritas

In my years of working with entrepreneurs, I think one of the best bootstrapping stories I have ever seen is Mark Leslie’s founding and growth of Veritas:  he and his team created a $1.5 Billion software company with a $4M investment.  His experience repeats many themes we see in capital efficient, entrepreneur successes: the role of corporate partners; a cost effective sales model; and keeping a low burn to get to profits early.  He also shows the importance of reinventing your company when things are going well.   Mark show us that bootstrapping offers many benefits that can build market leading, franchise companies. I have known Mark for a long time and have always been impressed with him and his insights.

I hope you enjoy this story as much as I have!

http://www.sandhill.com/opinion/daily_blog.php?id=62

Return Leaders Series

About this Series

Founders:  I meet a lot of entrepreneurs and a common issue that arises is that they need money to get going. Obviously all businesses need some level of investment but it is amazing how little capital was required by some of the biggest exits.  Even those businesses that were capital intensive, essentially bootstrapped their market entry/development ( Intel with microprocessors: See Innovators Dilemma).  My goal is to interview Founders of bootstrapped high value exits to find out how they were able to build such high value exits for so little capital.  To gauge how capital efficient return leaders are we look at their exit value and divide it by total capital invested in operations.  We ignore secondary share purchases and “hospitality money” – money raised but not invested.  In the interviews I ask the question of how they did it, what they learned and what advice they would give.   I hope you find their lessons as insightful as I have.