Frugality Is a Required Habit For Startups

by | Aug 10, 2025

What keeps software companies alive and able to experiment and get through crises is this: Frugality.

Keeping expenses low relative to your sales revenue.

When you sell and don’t spend too much, and you have enough savings and profits for a year or two, you can do the right things and get through the tough spots.

Big funding doesn’t make your software company more resilient.

Go-Big-or-Go-Home VC funding is riskier with worse odds for founders.

Shoanak (Sean) Mallapurkar is the founder and CEO of Recruit CRM, a complete CRM and business management system for global staffing companies and recruiting agencies.

He started the company in 2017 with his father, a technical leader who was a senior executive in large staffing companies.

Sean handled customer-facing jobs in sales, success, and product management. His Dad managed engineering, finance, and marketing.

They started in Pune, India, but both Sean and his father moved to Dubai in 2023 for lifestyle and tax benefits.

RecruitCRM employs over 150 remote employees in India to serve thousands of customers in more than 100 countries.

RecruitCRM revenues grew quickly to nearly $10 million ARR in 2025.

Their product suite includes CRM, billing, applicant tracking, AI resume parsing, financial management, and more.

The company is very profitable and growing steadily (Rule of 70), and the co-owners/co-founders have no intention of selling.

They see a steady path to a $100 million revenue business as an independent company.

It sounds great now, but the first few years were brutally hard, super lean, and very rewarding.

As Sean describes it on the podcast this week:

“The one thing that really worked for us was keeping costs extremely low and having over three years of capital runway. That wasn’t millions of dollars for us. It was $100,000. And we didn’t even spend it. We only spent about $80K before we started selling and got to breakeven.

“When you have enough time, you can you can do more things, you can try more things, and make it happen. If you only have a year to succeed, you’re screwed. Get through the really hard stuff and get to a million in revenue.

“Then resist the urge to raise capital until you are at a million dollars in revenue. Then ask yourself if you need it. If you can resist the urge to raise capital, a lot of opportunities open up to you. And it’s a very different financial outcome than having investors.”

Sean values the company at 10x revenues every year, so that his employees can sell their shares back to the company at a fair price. Most don’t.

That means Sean and his father own almost all of a business worth at least $100 million.

Their business is still growing 40% a year.

But they have no interest at all in selling.

Check out this revealing interview with Shoanak (Sean) Mallapurkar on the Practical Founders Podcast.

Greg Head posted this on LinkedIn on August 10, 2025.

Check out the comments and join the discussion on LinkedIn.

Related Posts

Grow a Bigger SaaS Company with Fewer People Headachess

New software startup founders sell themselves short when they tell me, “I never want more than 10 or 15 employees. I don’t think that would be any fun.” Yet they still want to build a valuable software company that doesn’t rely on the ...

Staying Alive Is a Critical Part of the Growth Game

What do 100% of bootstrapped SaaS businesses that grow to $5M or $10M in revenue have in common? These companies didn't die, and they didn't get stuck along the way. At least half of the game of getting to $10M in revenue is staying alive ...

The Biggest Problem Startup Founders Don’t Know They Have

“Fix our positioning” doesn’t appear on many to-do lists or strategic annual priorities. But the symptoms of positioning problems create daily friction and reduce the impact of any business execution. Positioning is the clarity you have ...
No results found.
Practical Founders eBook

FREE 60-PAGE EBOOK

Win the Startup Game Without VC Funding

Learn how all 75 founders on the Practical Founders Podcast created an average founder equity value of $50 million.