Dharmesh Shah at Business Of Software Conference 2008 Part I

Dharmesh Shah graduated from MIT with an M.S. degree as part of the MIT Sloan Fellows Program in Innovation and Global Leadership. As part of his graduate work, he wrote a thesis focused on software startups (more on this below). He is a software entrepreneur and currently the co-founder and CEO of HubSpot , a software company building a revolutionary software platform for Internet Marketing. Prior to founding HubSpot, he founded Pyramid Digital Solutions , an enterprise software company in the financial services sector. Bootstrapped with less than $10,000 in capital, Pyramid went on to demonstrate exceptional growth and was a three-time recipient of the Inc. 500 award. After acting as CEO and chief software architect for the company from 1994-2005, he got the company acquired in August 2005 by SunGard Business Systems , a large $11 billion technology company.

Below is the summary of his tech talk delivered in “Business of Software Conference- 2008” . Thanks are due to Neil Davidson for allowing me to use content from the site.

Ideas are Irrelevant: Your baby is Ugly : Dharmesh calls the idea which he had at the time of starting up his first company, Pyramid Digital Solutions ‘awful’. The first lesson he shares from his successful career is that one doesn’t need a neat idea to build a successful software company. Rather, he suggests to just building your startup, and while you are there, the right idea will evolve. [Indeed Joel Spolsky claims that one doesn’t need a neat idea even after building the company to be successful – Misbah].

Dharmesh then makes the shocking disclosure that one doesn’t need to be in Boston or San Francisco to build a successful software company. [Dharmesh specifically mentions that this holds true for software companies. This is the reason I discourage erecting firmware companies in Pakistan. Suffice to say, its very difficult to obtain the seed capital to build a hardware company. And also it’s difficult to develop an eco system and get the benefits of ‘economies of scale’ – Misbah]

Third suggestion: You don’t even need to know about venture capital to guarantee a successful startup. One of the benefits of not having VC financing is that the entrepreneur doesn’t spend blindly. There is another reason Dharmesh discourages seeking money from VC. Raising venture capital requires the entrepreneur to answer each and every question and concern of the VC, which is cumbersome and tedious. Instead, he suggests utilizing that time in developing the product and answering the queries of customers.

To be Continued………..