What service offerings does Leonid Systems provide?
Leonid creates enterprise software solutions for SaaS unified communications providers – phone companies, cable companies, and web-based providers.
What inspired you to found your start-up?
I was running the professional services business at BroadSoft, which is a leader in cloud telephony and unified communications app’s. That was around 2005 and there was a huge amount of disruption and flux among service providers – phone companies, etc.
The service providers were working with BroadSoft to update their services technology. To leverage the new technology, they also needed to update their product offerings, their operations, staff and IT support, to sell and support these new services.
I started Leonid, originally ‘Leonid Consulting’, to go work on those other areas: consulting on changes to products and operations. I did have the idea that if we saw compelling opportunities to develop IT applications, we’d go do that, and pretty quickly we did. Two years later we renamed the company ‘Leonid Systems’ since by then we were mostly in the software business.
How did you finance your business?
We raised it the old fashioned way – working! Leonid is 100% bootstrapped. We reinvested cash from the consulting business into software product development.
It wasn’t much money, particularly at first. But that turned out to be a good thing- it (mostly) kept us from building things that we thought were cool but our customers didn’t actually care about or want to buy from us.
What went as you expected? What surprises/bumps in the road did you run into while launching Leonid Systems?
Leonid operates in a pretty distinct segment that the team’s been in a while; so while it’s been a lot of work and small experiments to validate what’s working for the customers, I can’t think of any real big surprises. If I was going to pick something, it would probably be the extent to which a software product, particularly one that would be deployed on an enterprise model (at the customer’s premise vs. operated by you in the cloud), is about so much more than the software itself.
A lot of what makes one product work vs. another is your program around the product: your ability to articulate how it implements best practices, go where the customer is and help them understand if/how to do those things; training, documentation, support, stuff like that. It’s not like I didn’t realize that, but the extent of it still surprises me some.
Tell us how you got your first customers, and how has that changed now?
We got our first few customers through relationships and people we had worked with in the past. Then we started getting them through references- other customers. Now we get a lot of them through channel relationships, partners we work with on sales and service of the product.
That was a good progression. It allowed us to learn the right recipes for customer engagement and then transition those to an indirect model when it was a better deal for the customer to buy our stuff through an existing vendor.
Tell us about your future expectations for Leonid Systems.
Fundamentally, it’s the same thing that got us started- a keen and practical interest in the problems facing our customers and how to deliver them better alternatives. We keep learning about that, across a larger and larger customer base. Also, we’re constantly updating our technology infrastructure to take advantage of the best of what’s out there.
Tell us what you learned that you would now do differently, had you known ahead of time.
I wrote a book about it- ‘Starting a Tech Business’ (Wiley, 2012)! Probably, the top thing is consistently following a process where you get intimate with customer problem scenarios, figure out why you think your solution to those is going to be better than what the customer has, and then have explicit (and time-boxed) criteria for validating that. Leonid’s best executions have always followed that pattern.
I publish some materials about that online called ‘Venture Design’ and teach classes around those.
Tell us what advice you would give to new start-up entrepreneur thinking about a start-up.
Be madly dedicated, but to problems and people, not solutions. Running a startup, you have this extremely difficult pairing of urgency and uncertainty.
The best way to manage through that is by having an adaptive but explicit plan where you stay focused on the customer instead of entrenching yourself in a particular solution, which, odds are, you’ll need to tweak a few times to really connect with demand.