Building Successful Startups with Fractional Hires with Praveen Ghanta

Feb 6, 2024

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Episode 010: Building a successful business is often a multifaceted journey, demanding strategic decisions and resourceful approaches. For startups, managing operational complexity requires a keen understanding of growth strategies, revenue models, and investment considerations. Savvy investors, however, are turning their attention to niche startups powered by fractional work.

In this episode of Alternative Universe, Steve talks with Praveen Ghanta, Founder and CEO of fraction. Praveen shares his entrepreneurial journey, from his early days in the dot-com bubble to building successful startups in the fintech industry. He discusses fractional work and how it can be a cost-effective solution for businesses. Their conversation also covers the changing landscape of startup funding, the value of profitability, and the potential of niche markets in the private markets space.

Join us as we discuss:

[01:53] - Praveen's background and journey into fintech.
[02:33] - Praveen's first startup and its acquisition.
[06:21] - The need for transparency in private markets.
[08:20] - Lessons learned from a failed startup.
[11:25] - Praveen's reasons for bootstrapping.
[15:58] - The benefits of bootstrapping and customer funding.
[20:25] - The concept behind the creation of fraction.
[24:43] - The cost savings of fractional workforces.
[28:14] - Increasing profitability and margins in business.
[32:17] - The value of investing in niche tech companies.

Key Takeaways

Startups with a clear revenue model can have more options and flexibility in their growth strategies.
Fractional work can be a cost-effective solution for businesses, allowing them to access specialized expertise part-time.
Fractional work allows for long-term relationships with experts, leading to knowledge transfer and consistent support for the business.
Investing in niche markets and companies with a clear path to profitability can be a lower-risk and more realistic approach than chasing unicorn startups.

Quotes

"Being bootstrapped, what's your funding source? Your customers are your funding source. So, therefore, you've got to meet their needs and grow and adapt with them." ~ Praveen Ghanta

"I tried to start a startup where I didn't have a sales function. I did a hundred sales calls myself. I tried to chase down leads and I realized, that even if the software might be good, this is really hard." ~ Praveen Ghanta

"For investors that are thinking about investing in startups, rather than going after those players that are trying to make horizontal, scalable tech, there are other tech investments that you might make that are substantially low risk because they're operating companies that are either close to or on their way to profitability that are in niches." ~ Praveen Ghanta

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All content on this podcast is for informational purposes of a general nature only, and does not address any particular individual or investment. Nothing in this podcast constitutes accounting, legal, tax, financial or other professional advice. The discussion on this podcast of any entity, product or service does not imply an endorsement thereof, and the podcast participants may have a financial interest, whether through investment or otherwise, in one or more of any such entities, products or services. Please seek independent advice from a financial professional about your investment needs.