RingCentral CEO Vlad Shmunis spoke last week at the Silicon Valley Open Doors technology investment conference. Below is an edited and condensed transcript of Vlad’s views on entrepreneurship, venture funding and business success. Dylan Tweney, the executive editor of VentureBeat, was the interviewer. svod1logo

Dylan Tweney: Can you give us a little more understanding of RingCentral?

Vlad Shmunis: RingCentral is a cloud phone solution. It is like taking your old PBX [private branch exchange] system, doing away with it and putting it into the cloud. It’s for companies that are dealing with a distributed workforce or have multiple locations, designed around the fact that most people use mobile phones. We were also the first company to integrate SMS on work phone numbers.

DT: Who are you competing with?

VS: The big picture is that we are competing with the world’s Avayas and Nortels. When you are a small business, you can work just using your cell phone. Once a company gets larger, you don’t see them giving out their personal email – same goes with phone numbers. The higher-end markets have a tendency to have a phone company as their provider. A company will call a telco and buy a reference box. That’s ultimately where we want to be.

DT: You bootstrapped your company for a long time. How did you keep up the momentum? At which point did you look to take outside investment?

VS: The short answer is, I took an investment once I realized the company was going to be big. I saw the opportunity to build something large, and when I realized that I knew I would need partners. It was about much more than just receiving money.

DT: Did you resist taking investment at first?

VS: Well, I am a conservative guy. There were a few things that I wanted to be sure of before taking an investment. First, I wanted to make sure that the technology worked and that I could prove the concept. Second, I wanted to make sure that we could acquire and retain customers. Third, I wanted to make sure that I was going to attract the right investment. I do not have a venture capital background, so I waited for the right fit.

RingCentral-200d DT: You have a large company now. How do you maintain excitement? How do you keep people engaged?

VS: We look for people that share an enthusiasm for entrepreneurship, those who want to be in a start-up environment. I try to empower people to contribute and I will highlight how their work ends up having results. That is what keeps things going. We are forthright about sharing our performance with employees, as well.

Q&A from the audience

Audience member: I was at a party and I met an investor who told me that he had “managed” to invest in RingCentral. He was so happy about it. What advice would you give an entrepreneur on getting that kind of reaction?

VS: Play hard to get. In all seriousness, you need to be selective and it needs to be the right partner. They need to understand your business and want to be there for the long run. Fundamentally, I wasn’t looking for someone that was trying to make a quick cash-out. Both sides of the party need to have the same goals.

Audience member: When you got funded, what changed in the company culture?

VS: Many things changed, but not immediately. We started out as a small group of Russian engineers, but once we got investment we started to attract different kinds of people in related fields. We were fortunate to get some people from WebEx. We got others from various sort of merchandising companies and early e-commerce pioneers. We were able to attract different people once we got funding – it served as a kind of stamp of approval.