Jack Jia is the founder and CEO of Baynote, Inc. He was formerly SVP & CTO at Interwoven. Also, he was the Founder & CEO of V-Max America. To read more about this upcoming startup with unlimited potential, see their blog.

Baynote was also at this year's Web 2.0 expo, April 15-18, Moscone West, San Francisco where Jack presented a session, "Profit from the Long Tail by Tapping the Invisible Crowd."

What were some of the challenges Baynote faced and how were they addressed?

We faced the challenges that all startups have to face when first starting out and that was how to balance the various "forces" such as innovation with cost control, market development with calculated timing, etc.

We had to answer the questions of how to manage growth. What is the market we are trying to penetrate? And if it is a new market (like ours was at the time) then how do you evangelize
(educate) the market? How to cut down marketing and sales costs which can easily cost 40% of your revenue?

We needed to spend our money frugally because we started off with a "shoe-string budget." Challenging yourselves on how you spend every penny even on the most mundane tasks
such as your business infrastructure (eg. cabling solutions, physical moving, and purchasing of furniture). We did all those things with the goal (in mind) of efficiently spending our money.

What advice can you give to entrepreneurs that are seeking venture capital funding?

Initially, "out of my own pocket" funded Baynote.

Because we managed to spend "our" money efficiently, we only had an A-round of funding to take Baynote to the next level. When it comes to raising money (VC funding), there is an "easy" way and a hard way.

The "easy" way occurs when "you" do everything right to make your startup business successful without thinking of funding. Run your company truly in a way that is your own personal business. Think it as the whole R&D (eg. Market validation, talking with customers
and competitors, cost analysis, etc.). Risk management is a key concern for any Venture Capitalist. I don't call VC's, Venture Capitalists but Very Conservative.

There are two types of entrepreneurs. "Fearless" entrepreneurs who are bold and take risks and then there are "Fearful" entrepreneurs who take calculated risks. VC's tend to look for "fearful"
entrepreneurs as there is a certain level of risk management. Knowing how to take calculated risks and overall risk management is of paramount importance to any entrepreneur that is seeking funding.

The "hard" way is to run your company for the sake of raising money.

On a similar note, every entrepreneur that is starting out asks the question “how do you get to VC’s?”

What I can say about that is, do not send your business plans to their websites’ physical mailbox.

Instead, find other ways to get access. By talking to enough people, you are bound to find a direct contact. VC’s are just trying to test your marketing ability. If you cannot find a way to access them, then how do you plan on getting your customers? That process will be 10 times harder than finding a VC.

My recommendation is instead of a business plan, make a three-slide Powerpoint presentation answering the what, why, and how of your business. What is the problem you are trying to address? How do you plan on solving the problem? Why is your solution the best because nobody else can do it? VC’s have little patience because of the number of business plans they see each day so you have to be succinct, convincing, and catch their attention within the first 5-min.

How did you go about getting big names like Maynard Webb on the board of directors? What is the strategy/approach you use to gain support?

Maynard and I were both on the board of Santa Clara University and so first thing you have to do is create an opportunity to meet/come into contact with these people. In some sense, it is building a community of people to create opportunities. Then get them involved with your
start-up ideas and initial market validation. Maynard did that for Baynote and got excited with the technology and market potential. The rest became easy.

What are the skills you look for when hiring employees? What are the most important qualities/character traits you look for in an employee?

We believe in what is called an "A-squared" hiring approach. In order for a candidate to be "A-squared," they must possess two qualities. One, they must have their own job skills (eg. Engineer - technical skills, Sales - customer selling & service skills, etc) and they must be a team player.

That is how startups can compete with big companies. "A-squared" people are not the "status quo people." They are motivated, innovative, and possess certain attributes that make them "startup people." They have a particular "startup spirit" that we look for. We have always believed that "actions speak louder than words," and so by catching that person off guard, we can subconsciously test their character to find out if they are suitable to work in startup environment.

What do you think is the most effective business model for startups to have in today’s market? Subscription model? Licensing model? Open-source model?

Business model is important but secondary. Focus on what is the problem you are trying to solve and what is the benefit (quantify)? Only after you've answered that question, think about what technology soutions can be developed to solve problem and then what business model exists to deliver the solution?

What are some of the books you recommend entrepreneurs to read?

Being an entrepreneur is all about leadership as one needs to possess such qualities in order to be successful so all the books that I recommend, revolve around leadership.

· "Success Built to Last" by Jerry Porras, Stewart Emery, and Mark
Thompson
· "Break All the Rules" by Marcus Buckingham and Curt Coffman
· "Tipping Point: How Little Things Can Make a Big Difference" by
Malcolm Gladwell
· "Freakonomics: A Rogue Economist Explores the Hidden Side of
Everything" by Steven D. Levitt and Stephen J. Dubner