New Delhi: Every entrepreneur’s dream and vision is to create a successful startup. AppDynamics founder Jyoti Bansal also had a similar dream. But he took a difficult decision with a stone on his heart. He decided to sell his company for $3.7 billion. In an interview with CNBC Make It, he told that what initially seemed like a great achievement, turned out to be one of his biggest regrets. Jyoti Bansal had decided to sell her software company keeping in mind the welfare of her employees.
In 2017, when Jyoti Bansal sold AppDynamics for $3.7 billion, he made 400 of his employees millionaires. The San Francisco-based India-born entrepreneur described the sale as the toughest decision of his career, but he did it for the well-being of his employees. In 2017, when AppDynamics was preparing to go public, tech giant Cisco offered to buy the company for $3.7 billion.
Who is Jyoti Bansal?
Actually, Jyoti Bansal is an Indian-American businessman born in India. Jyoti Bansal always wanted to become an entrepreneur. He is a graduate of IIT Delhi. He is recognized as the lead inventor of more than 20 US patents. After working as a software engineer in Silicon Valley for eight years, he finally got his green card and launched his startup. He founded AppDynamics to tackle the biggest problems he faced as an engineer. Developed tools to detect and fix bugs in software applications.
What is AppDynamics?
Unlike many software startups, AppDynamics was built with the enterprise market in mind. That is, such big companies that have the capacity to spend thousands, if not millions of dollars every year. Especially the company created a distinct identity by helping big corporations fix their bad apps. Their official website says, ‘Powered by Cisco, AppDynamics is on a mission to help companies look at their technology from a business perspective so they can prioritize what matters most. We are reshaping the observability space and simplifying the digital transformation challenge for the world’s largest enterprises. We help businesses thrive by converting performance into profits.
Why sold AppDynamics?
In her 40s, Jyoti Bansal spent years honing her software engineering skills and it was only then that her ambitious entrepreneurship came to fruition. Her decision to sell AppDynamics was motivated by several reasons. These include the synergy of the company’s software products with Cisco’s portfolio and the potential financial and cultural impact on its approximately 1,200 employees. Discussing the reasons we considered before the acquisition, we said that we can become a part of big platforms like Cisco and their customer base and market. This was one reason. The second reason was culture, what kind of environment your employees get. Cisco gave a great deal of freedom to the AppDynamics unit and credit goes to them for this.
He said that the third reason was economic. Being the sole founder, I was fortunate that any outcome would have been fine for me financially. (But) we had about 300 or so employees who made more than a million dollars after accepting the last offer we got. There were dozens of our employees who received more than five million dollars.
Why does Bansal ‘regret’ his decision?
Bansal described the experience after selling the company as sleepless. He said that some people may think that selling the company was easy, but it was the most difficult decision of his career. He told the media that after the celebration party he realized that he did not even have to go home. He described this moment as full of happiness and sorrow. He said that I completely devoted nine years of my life to this work that we were making there. Suddenly, it’s the end of a chapter.
He said, ‘After the company was sold, I realized that I really loved building the company, creating the product, solving problems, competing in the market, everything related to building a company that I went through. It was very difficult and stressful, but I loved it. I also felt that we did not completely finish what we could have done. However, Bansal acknowledged that selling AppDynamics to Cisco was the right decision given the information available at the time. This deal was also financially beneficial for him, as he held more than 14 percent shares of the company.
They also compared their post-IPO projections to Cisco’s startup valuation to assess which option was financially better. He said that it would have taken a good three to four years of work to achieve a market capitalization of $3.7 billion. He said that this means three to four years of risk which we have reduced for all the employees there. This is an important effect.
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FIRST PUBLISHED : October 17, 2024, 2:44 PM IST