Last Updated on November 16, 2020
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About Thejo Kote
I grew up in the south of India, next to Bangalore. Both of my grandparents were authors, and we had a library of over three thousand books in our home. It was an intellectual environment, filled with love.
I always knew growing up that I wanted to be an engineer, so I studied electrical engineering for my undergraduate degree. I was fascinated by the internet, even back in the 90s. I did my undergraduate studies between 2000 and 2004, when things were just coming out of the big bust in Silicon Valley. This was all captivating to me, and I kept up with everything that was happening.
My first company was a fantastic learning experience, and within a couple of years it became one of the largest value-added service providers in the mobile space in India. Interestingly, we launched a couple of months after Twitter. As a result, it was hard not to compare ourselves to them and wonder why we weren’t doing as well, even though we were seeing fast growth. In the end, I decided that location really matters. Twitter was headquartered in a place that had all the early adopters. That meant that they could go to events like South by Southwest, which put them in the spotlight. I decided that I could better pursue my dream of being an entrepreneur if I moved to Silicon Valley. I ended up going to UC Berkeley, where I got a Master’s degree in 2009.
In 2009, I started Automatic with a Berkeley classmate. Our goal was to answer the question, “Is it possible to study transportation behavior?” We built technology that easily gave you access to data about when you’re driving and how you’re driving. That helped me realize that your car is the most expensive computer, but it’s not connected. Automatic got into Y Combinator in 2011. We launched that product in the market in 2013, and we were acquired by SiriusXM in 2016 for $115M.
As I scaled Automatic, we struggled a lot with spend management. We had to use a variety of tools for the different tasks that finance teams perform, like pre-approval spending and reimbursements. The whole process was extremely cumbersome, it was frustrating to have our growth constrained by internal processes rather than market demand for our product. This experience inspired the idea for Airbase. Our goal was, and is, to change the way spend management is done so companies could grow more efficiently.
The solution that I came up with was to create a single integrated platform for spend management that allows for more transparency and control. With Airbase, finance teams can easily see how money flows within their company through the centralized system. This, in turn, leads to more informed financial decisions for the company and better predictions for growth.It is exactly what I would have needed to solve my problem at Automatic.
How Did You Get Your First Several Customers Or Users? How Many Users Or Customers Do You Have Now?
Automatic started as a consumer product, so we used consumer-oriented marketing platforms, such as podcasts and Google Ads. Once we started marketing to businesses, it was easy to focus since our market was only about 20 companies.
Initially with Airbase, we worked to identify a handful of customers that fit our target market and partnered with them as we built the product to make sure we were building something that would perform exceedingly well in the real world. Networking was key. We asked for introductions through other founders I am connected with, and worked with LinkedIn networks.
At the end of this first phase, we had a strong proof of concept with customers that fit our core target plus the value of their logos as social proof to help acquire new customers.
How Does Your Company Grow And Acquire New Customers?
Now our strategy is to get our value proposition out to our target market as effectively as possible and we use various channels to do that. We work hard to create high quality content and tools to help those in the buyer’s journey to evaluate Airbase.
My belief in community is deeply rooted, I came to this country to participate in a community that is building strong, important companies. This was something that I wanted to do and I have found so many kindred spirits here. It will not be surprising therefore, that Airbase works hard to grow a community of the accounting and finance leaders we serve, whether they are customers or not. Wee support this community with forums, presentations, and introductions to ideas and to others. Our “Off the Ledger” Slack community (https://www.airbase.com/off-the-ledger-finance-and-accounting-slack-group) – a no selling zone and where finance professionals connect between themselves – is approaching 1,000 members. Accounting and finance teams in early stage companies are expected to do a lot with very little, sure, our platform can help them but if they’re not ready for that, we can get the best people in the world to talk to them about crucial issues they face.
What Actionable Tips And Tricks Do You Have For New Founders Who Are Looking To Get Their First Thousand Users Or Dollars?
I’ve implemented a lot of the lessons that I learned building Automatic in terms of capital efficiency, so Airbase was a fully distributed team even before COVID hit. Our team is based all around the world, including the United States, India. Canada, the United Kingdom, the Philippines, Chile, Romania, Singapore, and Sri Lanka. That has been great from the perspective of attracting really high-quality people no matter where they are and doing it in a very capital-efficient way. We’ve made sure that teams have the tools they need for asynchronous communication, and we have taken proactive steps to build a strong sense of community within the company. We also provide tips on ensuring a good work-life balance, which is important for productivity and morale. During the height of the lockdowns, for example, we gave everyone every other Friday as personal time to decompress and adjust to everything that was going on.
A common mistake that a lot of entrepreneurs make, and one that I made early on in my career, is to start building too soon. Building is the most expensive thing you do, so you don’t want to build first and then figure out if somebody will actually buy what you’ve built. You want to reduce that risk by selling as much as possible upfront. Then you can start building so that you don’t have to spend a lot of time, money, and effort creating something that nobody wants.
You also have to focus on the customer pain point, which means really digging into it and examining it from every angle. You should talk to as many people as possible and feel confident that you are working on something that is truly an important pain point for the customer. Forget about all artificial deadlines (like funding at month x) and spend as much time as you need to truly figure out what that pain point is. Once you have that knowledge, it is essential to think deeply about the best solution. For example, we didn’t design a better expense management tool, we eliminated the need for expense reporting altogether. This depth of knowledge is also the only way to l aways design solutions that provide the absolute best user experience.
Perhaps the biggest lesson I learned in the early stages is that if something’s not working, you can’t assume that somebody else will magically come and solve that problem for you. Whatever existential problems that your business faces, you as the founder have to focus on those yourself and find the answers. Yes, you also have to surround yourself with smart people, but some of those extremely important questions belong to you, as founder and CEO. You can’t just try to outsource those to somebody else.
As a new first-time founder, I barely had a network of my own when I landed here in the U.S. I had one friend who worked at Intel who was the only person I knew in the Valley. That was the real value that Y Combinator brought to the table—their network and the reputation boost that you get by being a part of Y Combinator.
What Is Something You’ve Learned That Would Not Be Obvious To Somebody Who Hasn’t Worked In Your Space Before?
It’s all well and good if you see that a market is going somewhere, but that doesn’t always mean that now is the right time to go after it. That’s a big lesson I took away from my earlier experiences. You need to really spend more time on the questions like: Why now? Is now the right time? Are the customers ready? Is the investment community ready? Is it a capital-intensive business that you are setting out to build? If yes, you’d better make sure that the investor community is also at that same stage where they’re willing to put in money into a space.
What’s The Craziest Thing That’s Happened To You (Good Or Bad) On Your Founder Journey?
At Automatic, we started the company with the ambition of selling a physical product in the Apple store, without anyone in the team ever having built and shipped a hardware product or knowing how to do it! Luckily two years later it was selling—the power of belief and perseverance!
What Are Your Favorite Books?
Over the past few years, I’ve been on a science fiction bender, so I’ve been reading a lot of the classics like Isaac Asimov and Arthur C Clarke. I’ve also read some more modern writers like Cixin Liu, particularly his Three-Body Problem trilogy. There was a phase where I was reading a lot of business books, but now I read more to relax. Science fiction is fun, it’s about re-imagining possibilities, something that good founders do.
Anything You’d Like To Plug?
Through the end of the year, you can try Airbase for free and experience first hand how it transforms your company’s spending.
Learn more here: https://www.airbase.com/pricing
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