One Million by One Million | October 23, 2013

Building a VC-Funded Tech Company from Upstate New York: Sinclair Schuller, CEO of Apprenda (Part 3)

Sramana: You established your company and got it funded in upstate New York. That is not one of the entrepreneurial hubs in the country. Can you describe the environment and what it was like to get a company off the ground in that area?

Sinclair Schuller: It was less challenging than we thought it would be in many regards. In terms of getting the company started, we found that we have a very engineering-centric culture here. There are a lot of computer engineering and computer science graduates. If you look at the density of math and computer science PhD holders in comparison to the average US population, you will find that upstate New York has a rich talent base.

That was surprising to us in a good way. It enabled us to find good, strong software developers to bring onto the team. Our biggest challenge was finding investment opportunities. It’s not a hub, so when you go talk to a VC the first question, they ask is why we are located in upstate New York. They were very unwilling to invest in a company from that location.

We started in upstate New York out of pure inertia. We all kept our day jobs while we were starting this company. We ended up being able to raise a $5 million round from New Enterprise Associates, Inc. They really took a bet on us in this region. We had originally intended to move to Silicon Valley once we got the company started, but now we are excited to break the geographic boundary here and help jump-start the entrepreneurial scene in this area.

Sramana: Your seed round came from friends and family, correct?

Sinclair Schuller: Yes. We also had a small regional VC put in $500,000 at that time.

Sramana: What were you able to accomplish as a founding group that led to the seed capital?

Sinclair Schuller: We started with a hypothesis that a software package could be built that large enterprises would want to use which would commoditize all of the complicated workflows and architectures. We invested our own money and time to prove that hypothesis. We worked to get a prototype in place to show that our concept was possible as well as to simplify explaining our goals to potential investors.

We started talking to people we knew inside of enterprises. We took their feedback and incorporated it into an initial build of the product. We then used that initial build of the product to demonstrate to friends and family and give them a view of our vision. We used that same prototype to pursue some seed stage funding.

Sramana: You had a prototype. Did you have customers validate that prototype?

Sinclair Schuller: Not at that time. That prototype was purely speculative based on our work experience. We did talk with some potential customers and we solicited their feedback, but we did not offer them insight into what we were building.