Rick shares his experiences in building Thingworx – one of the first application platforms for the connected world – from a small team to $112 million exit. When you’re growing a company rapidly what chances and what stays the same?

1. Lessons Learned From
An IoT Startup
Or, how to lose a lot of hair and sleep in just a few short years
Rick Bullotta, Co-Founder

2. A little history
 My background is primarily in manufacturing and industrial automation
 I’m mostly a self-taught developer and a life-long learner
 I have been very lucky to be part of some great companies
 I have had operations, sales, marketing, and technical roles – very important
 Life is an accumulation of knowledge and experiences – get lots of them
 I value the importance work/life balance – Slackerpreneuring

3. What I’m doing today
 My “day job” is primarily:
 Leading our product and technology strategy in the IoT segment
 Supporting corporate development and M&A activities
 Working with our key partners
 Growing and mentoring the next wave of leaders
 Active Investor
 LP in Bolt I and Bolt II funds
 Investor in startups in Smart Agriculture, HR/Talent Management, others
 STEM Supporter
 Mentor for our local IYPT team
 Working to expand technology education in local schools

4. Why start a company in the first place?
 What do you want out of it?
 Wealth?
 Enjoy what you do at work?
 Technology legacy?
 Fame and industry visibility?
 Create jobs?
 Solving big problems?
 Doing good for the planet?

5. It’s not going to be easy
 Make sure to get a copy of Oh, The Places You’ll Go. You’ll need it.
 Not being able to make payroll is a “character building experience”
 Get your family comfortable with camping early on
 Believe in your mission
 Get rid of negative influences immediately
 Know when to hold ‘em, know when to fold ‘em

6. Deciding what’s important and how to
make it happen
 Creating real value for your customers – which you will not likely know at the beginning
 Build something differentiating, not a “me-too” solution
 Big differences between applied technology vs fundamental research
 …and researchers versus developers vs entrepreneurs
 If it isn’t creating/selling/supporting your product, ignore or outsource it
 Early is better than late, but too early can be a huge challenge as well

7. Staffing your team
 Your first 5 hires may well determine the success of your venture
 Your co-founders need to bring different skills than you do
 Apply the “Kevin Bacon” rule – but only 2 levels deep
 William Wrigley was right
 Get rid of bad hires fast
 Co-location helps a lot, even today
 I’m not a believer in starving your key players – each person has different needs
 Be generous with equity, but not too generous. Use your head.

8. Financing your growth
 Revenues are usually the best form of financing
 Must align with your business goals/metrics
 Grow revenues? Logos? Customers? Profits?
 Always takes more than you think (R&D vs S&M percentages)
 SaaS/subscription models put you in the financing business
 Leverage free everything – PR, networking, tools, hosting, space, etc…
 Share costs with your channel early on
 If you take the lean startup/MVP route, focus on Viable – not Minimum
 Building a channel can be far more expensive than building product

9. The importance of channels
and partners
 THE IOT IS AN ECOSYSTEM PLAY. Period.
 The best product in the world will fail miserably if no one knows about it
 50% of a lot is a lot. Share the rewards with your partners.
 Working partners COSTS MONEY. All relationships cost time and money.
 Partners create excellent exit opportunities, but choose wisely.
 Channel partners can give you global reach quickly.
 Reward your partners for “big name” wins and success stories (and require it)
 Most partnerships are useless.
 Your partner strategy will change over time.

10. Knowing when/how to make your exit
 Nothing wrong with building a lifestyle business
 The IPO market is alive again, but requires big upside potential
 M&A activities (OK, actually, business failure) are the most common exit
 Startups have become the innovation engine for establishes companies
 Beware the black swan and consider the competitive threats
 Know your limitations
 Your acquirer won’t value what they bring to the party (GTM, etc.)
 Don’t forget the contributions of the people who got you to this point
 Get good advice. Good M&A lawyers are usually worth every penny.

11. What happens after the exit?
 Usually it’s just the beginning of a new chapter.
 If you’re going to be kept around for a while, make sure it is somewhere you
would want to work.
 Take care of your team – they’re a key reason you were successful.
 Earnouts are usually pretty sucky, for everyone involved. Usually.
 Aim for as much operational autonomy as possible, initially.
 Remember that you might be the new shiny object. Exploit it.
 Decide what you want next. As early as possible. Be honest.
 Create great opportunities for your team.

12. Where are some hot areas in the IoT?
 Security – lots of activity, but tons of work and innovation left to do
 Analytics – deep/domain analytics, analytics at the edge, real-time analytics
 Wireless – interesting opportunities to drive down cost of wireless comms
 Consumer experience – let my grandmother be able to use this stuff
 Data Access and Privacy – highly granular data storage and access
 Data Commerce – monetizing data ingress, consumption, and insights
 Applications – vertical applications/solutions to exploit the IoT

13. Happy to help!
 Twitter: @RickBullotta
 Email: rick.bullotta@gmail.com
 Skype: rick.bullotta.thingworx