With 2010 revenues in the eight-figure range, security lifecycle management developer Tufin can now relax a bit -- but things weren't always so easy, says CEO and co-founder Ruvi Kitov.
"When we started out, we had no funding for the first several years," Kitov says. "We bootstrapped by doing consulting, looking for the idea for the actual product -- and we got the idea to develop SecureTrack. We took no salaries; all the money went to paying developers."
Founded in 2005 and based in Israel with U.S. operations in Burlington, Mass., Tufin now serves 600+ customers across many industries, including telecom, financial services, transportation, and pharmaceuticals. The company sells direct, but also has 170+ channel partners worldwide.
Tufin has 70 employees worldwide, and employs a handful of outsourcers and consultants. Kitov says the company is cash flow positive, and has been so every year since founding.
Here are Kitov's 15 key ingredients in Tufin's bootstrap success:
Tip #1: For your first product, focus on speedy development.
"We specifically chose an initial market where we could develop an initial product quickly without having to hire a huge staff," says Kitov.
"The mature product now has a lot of technology and represents a lot of man-years, but initially we chose something that could be solved with reasonable effort."
Tip #2: Talk to customers before you start coding.
"We also designed in conjunction with customers," Kitov says. "A lot of software companies sit in the basement and develop without a lot of face time with customers.
"When we first visited potential customers, we just had mockups -- some liked us, some didn't, but they all gave us directions. And some said, If you build this by the end of the year, I'm willing to buy. That's when went out and hired the first developer."
Tip #3: Forget salaries for at least one year.
"All of this was done without any investment," says Kitov. "We were eating up our savings, but it wasn't that much. We were willing to live for at least a year without any salaries.
"It grew organically. The initial sales at the end of that year financed the hiring of more people, and we began taking a very modest salary for ourselves. We didn't have any cash, so we couldn't hire lots of people -- we did everything ourselves."
Tip #4: Avoid investors until you have real results.
"Had we tried to raise capital, it would have failed, I'm sure," Kitov says. "If you come to an investor without a beta product and without customers, it's almost impossible. You have to have some product behind it.
"Several years ago you could call on investors with a great idea, convince people you had the acumen, and you could get funded. Now, you have to show results. Investors expect a product and customer list.
"We did take funding at the end of 2007, but that was when we did have a product and we wanted to expand in a bigger way."
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