Pozzuoli advises budding entrepreneurs
On Wednesday, June 17 CryptoWorks21 hosted a talk by Marzio Pozzuoli about the rise of his company RuggedCom and its eventual sale within the framework of the Canadian experience and Geoffrey Moore’s book “Crossing the Chasm”. He opened with a biographical sketch of his life up to leaving a six-figure salary at GE to start his own business, RuggedCom. The talk, A Tale of Canadian Technology Entrepreneurship & Crossing the Chasm, was full of advice for the audience.
Becoming an entrepreneur in Pozzuoli’s experience was much like jumping off of a building and figuring out how to build the parachute on your way down. If you wait until you have everything built, Pozzuoli doesn’t believe you’ll ever take the leap, but warns that it does take some sacrifices, including downsizing your lifestyle. With a couple of other people who invested in the company and refused to take a salary for the first year, RuggedCom built three products in the basement and made $1.1 million after that first year.
Following three years of bootstrapping, RuggedCom found the right venture capitalists (VC) that were interested and received $4 million in venture capital financing. The funders appreciated that they’d been sacrificing for so long without prior VC funding and that they were more interested in profits than finding more funding. Pozzuoli’s advice: bootstrap as long as you can.
With a focus on a specific niche that was underserved by the competition, RuggedCom became a market leader. Pozzuoli advised that entrepreneurs find a niche that’s small enough to conquer, but has large growth potential to cross the chasm. His next challenge: knowing when to go public.
“When you can deliver results, quarter after quarter,” said Pozzuoli, “It’s time.” With 12 record quarters of revenue growth, RuggedCom went public and their shares were oversubscribed by four times. To continue the growth, market and customer diversity were key. RuggedCom was so successful that they experienced a hostile takeover bid by an American company, however they managed to find another bidder in Siemens.
Pozzuoli learned a lot about building a company in Canada through the experience, and he now speaks publicly about how Canada could better help entrepreneurs succeed. One of the issues is the ease with which foreign entities can take over Canadian companies. He believes that Canada should have anti-hostile take-over laws in place as they do in many states in the United States and he worries that there won’t be a Canadian technology giant in the future if things don’t change.