Gopal Miglani, founder and president of BitRouter, a digital TV software solutions company, stopped by StartupCity Des Moines yesterday to talk about starting his company and the lessons he has learned along the way.
After graduating from Iowa State University, Miglani worked at Microware, an embedded-systems company in Des Moines. “I consider it my alma mater,” he said. After working as a sales engineer, he grew tired of watching the guy in the suit next to him make all the money on their sales. So, he started his own company and three days later made his first sale. His consulting company (helping the likes of Motorola and Zenith) would later be acquired by Nextel Communications, which became part of Motorola just before the .com bubble burst. That gave rise to his current company, which licenses its software to chip vendors like Intel or Texas Instruments.
Miglani bootstrapped his startups and says “earning and burning cash at the same time keeps you real and keeps you focused.” Starting his own tech companies taught Miglani several important lessons, which may be of interest to any entrepreneur:
- Go into business with people who have a shared vision. Equally important, however, is to be sure everyone at the top understands that vision may need to change when the market demands it. “We have learned we are always wrong and the market is always right,” Miglani said. “We have all of these ideas so we go meet customers and see what sticks.”
- Always be mindful of the bottom line. When the 2007 recession started, BitRouter had 11 projects in the pipeline; within months, all of those projects had evaporated. Miglani scrounged and skipped being paid and tapped home-equity lines of credit to make payroll but eventually layoffs were necessary. That brutal experience changed how they do business. The company now requires a year’s worth of cash plus receivables on hand (including the owner’s dividends) before it will hire anyone new. “We are trying to play it safe now,” Miglani said.
- Your employees are your most valuable asset. Many of those laid off in 2007 later returned to BitRouter. Why? Because Miglani says they make their employees their top priority, even over customers. “Of course, we don’t tell the customers that,” he said. BitRouter prefers to pay a premium for senior people rather than skimp on payroll and be forced to invest heavily in training and mentoring. “We are a small company so we have to be very opportunistic,” Miglani said. “Corporate America has been really great to us. We’ve hired a lot of great people who were offered early retirement.”
- Don’t skimp on professional services. It can be difficult for startups, especially in the early days, to justify spending on attorneys and accountants. Miglani said skipping some of those steps have cost him in the past and he always recommends spending money to avoid costly mistakes.
- Communication is key, especially with remote workers. BitRouter has offices of 1 to 5 people in five different states. That could be a logistical challenge but the company has no problems thanks to a desktop conferencing system and a commitment to frequent communication. “Most technical people just write emails,” Miglani says. “If it’s more than 1 or 2 sentences, it’s worth a call. As an entrepreneur and business leader, you have to be a communicator with your customers and your employees. Everything else comes after that.”