Fighting bugs of all kinds: An interview with Bugsense and its journey to success
Sitting in the nice office of Bugsense at coLab Athens for an interview with Panos Papadopoulos and John Vlachogiannis, I felt being infected by a bug: not the type of bug these exciting guys chase in mobile phone apps but another type: that of passion, creativity, madness. Oh yes, madness in a very good sense.
Strap into your seat and read some thought provoking -hopefully- stuff from a crazy team for which good, is simply not enough.
E.N: “Once upon a time there was..” The story of Bugsense and what it does.
Panagiotis Papadopoulos: Well, it was a long journey to be honest. After having worked for two startups, as freelancers, we decided to build our own startup. In our previous positions, we experienced the lack of vision, management dysfunction and other problems. For those reasons we decided that except for software engineers we should become entrepreneurs as well, in order to work within our own conditions. On November 2010 we came up with the “sfalma”’ (renamed “Bugsense” later) idea.
To put it simply, Bugsense is a tool that collects and analyzes crash reports from mobile apps. It is targeted to mobile developers to help them with the building of their mobile applications. Currently the mobile platforms that we support are Android, iOS and Windows Phone 7, while we plan to add support for Mac OS X, Windows 8 and improve HTML5 support. Also, Bugsense integrates with JIRA5 a tool for project tracking/issue management for mobile developers.
E.N: So, after you came up with this idea, what did you do the next day?
Panagiotis Papadopoulos: We worked our idea and we asked for funding from Openfund but we were rejected. So, we traveled to California for a call from the Silicon Valley Greek Seed Fund. All the investors there are of Greek origin. They liked both our idea and our team and they gave us 100K as an initial fund; But their most significant contribution was the good advisors we found to help us on our endeavour.
John Vlachogiannis: More than money, what really counts is having good advisors by your side when you set up your own startup. It is invaluable. Why? Because they will tell you what you shouldn’t do as a fresh entrepreneur, especially when you come from abroad and you don’t have a clue how to set up a company in the US.
Panagiotis Papadopoulos: This is how it really works: concerning a startup, advisors are usually 3-4 people who take a little share of your company and help you out on business or technical aspects of your startup. I would like to add here that Andreas Constantinou, one of our advisors, provided us with invaluable advice and helped us a lot especially at the beginning.
Also, it is very important to take legal advice about everything, if you have a company in the US, like we do. There are many corporate formalities that you must address. For example minutes of regular board meetings that record board actions, are considered legal documents by the IRS and the courts. Best practices require a systemic approach to board meeting minutes and reporting. If you fail to do this and your company is subject to take over, its’ value might drop from $10m to $4m. It’s a well built and strict legal system.
E.N: The headquarters of Bugsense are in San Francisco and the R&D Department in Athens here at coLab. Why did you proceed with that decision?
Panagiotis Papadopoulos: Let me make clear that if we could set up our company in the US, the whole Bugsense team would have moved there. Not only John and I but also the rest of the Bugsense team. The reasons are obvious: in California you have access to a world of investors, entrepreneurs and big clients. Imagine if the situation was historically different and you were a painter living in the 16th century; where would you go? To Florence of course! As El Greco did, managing to evolve to a great painter.
John Vlachogiannis: It’s the same with the movie industry: Why does every moviemaker want to go to Hollywood? Because he/she knows that having a brilliant idea isn’t enough. It’s very important, of course, but not enough. You need the right resources, the right people to realize your dream. Furthermore, the fiscal and law system in Greece sucks! It is complex and it changes constantly. If you put yourself in an investor’s shoes, would you come to invest your money in a startup based in Greece? The answer is no. Also, in the US you can build a company without paying an accountant or renting an office – you can work from your home or even Starbucks.
E.N: So finally what were the reasons for not settling down in the US?
Panagiotis Papadopoulos: Two words: Visa restrictions. Even if we were able to start our business in California, it would be extremely difficult to find skillful developers to join our team. Why? Because in Silicon Valley developers do not come to you as easily if your company is not already funded with a large amount of money and because you are a stranger to them; you do not belong in the same cycles as they do; for example you have not graduated from an Ivy League university. The same applies if you are an Italian, Swedish, Spanish etc.
John Vlachogiannis: However, let’s look at the positive side of this; our team consists of skillful developers that are paid according to Greek wage standards, so our expenditures are much lower compared to those of an American company. But visa restrictions remain a huge problem. Let me make it clear: If you invest $1m in the American economy, by building your company for example in Los Angeles and recruit American employees then it’s ok. Still you can’t bring Greek employees to work for you unless you prove they’re indispensable and that you can’t find relevantly qualified Americans to work in their place. Pretty complex, isn’t it?
Ε.Ν: It really is! Tell us about the real hindrances you encountered, in the process of setting up your company.
John Vlachogiannis: When you run a startup, you encounter too many dragons on your way. The biggest one has to do with your mental situation; it’s called emotional rollercoaster. Your company’s progress is like a rollercoaster; you might be at the top one day and the next you’re staring at the abyss due to the high antagonism around you. You have to develop your inner strength, deal with it and above all: be brutally dedicated to what you’re doing.
E.N: “Brutally dedicated” ..Like that.
Panagiotis Papadopoulos: In fact, an investor told us the following (laughing): “and don’t forget that if you take the path and decide to build your startup, it’s very likely you might fail”. The majority of startups “die” in the first six to twelve months. Before Bugsense, John and I had failed in previous projects; we have made mistakes; but we are grateful for our failures: Why? Because failure is an integral part of your future success.
John Vlachogiannis: Do you know which famous basketball player has lost the most last shots?
John Vlachogiannis: Michael Jordan! You see?
Panagiotis Papadopoulos: You should fight. Constantly. Personally, I prefer to be a pirate rather than join the navy! Steve Job’s famous quote!
E.N: And what about funding? Bugsense was funded from an angel investor. What’s your opinion on venture capitals (VC’s) and crowdfunding? Especially the latter, which is in the limelight these days, since Obama signed the Jumpstart Our Business Startups Act, designed to lessen the regulatory burden on small companies looking to raise money, through crowdfunding.
Panagiotis Papadopoulos: To begin with, it’s very difficult for a new startup to be funded from a VC; who in the end will take a high share of your company. Instead, it’s more possible to be funded from an angel investor, like in our case. To be honest, I prefer an angel investor from a VC, because you develop a more personal relationship with them; angel investors help you out, not by giving you money, only, but by introducing you to their network.
John Vlachogiannis: I agree with Panagiotis and I would like to add that as far as crowdfunding is concerned, I don’t have a personal view on the new Jobs Act legislation but I know, for sure, that it’s good for startups, especially those involved in building game applications. A good example is Kickstarter and the enormous buzz it has created. Crowdfunding is not for Bugsense. We have a specific target group; mobile developers. It’s built with a different mentality compared to other small startups that want to raise money from different investors, little by little, and gain publicity through a crowdfunding platform. We want smart money from someone to whom we will be able to address our problems in person.
E.N: So, if you had a time machine how would you see Bugsense in the future?
John Vlachogiannis: Let’s talk about the near future since it’s difficult to predict the condition of your business in the very long term! For the next 3-6 months we plan to broaden our team, from 6 people that we are now, to 12 and provide analytics to developers of how users use their mobile phone. We are really happy to have clients like Skype, Samsung, VMware, Airpush, Trulia, Soundcloud. After our last business agreement, our estimation is that we are going to reach the goal of 65.000.000 devices worldwide and approximately 8.000 developers that use Bugsense.
E.N: Good. Finishing up, would you like to say something to future Greek entrepreneurs?
Panagiotis Papadopoulos: Be strong!
John Vlachogiannis: I would simply say.. Start up or shut up!!
Logo and photos from www.bugsense.com