How Part Analytics Built a Category-Defining Platform Without Traditional VC Backing: A Midwest Startup Story

Building a B2B software company outside Silicon Valley means writing your own playbook. In a recent episode of Category Visionaries, Jithendra Palasagaram, founder of Part Analytics, revealed how being based in the Midwest shaped their unconventional path to success.

Starting from the Inside

Unlike many startups that begin with a pitch deck and VC meetings, Part Analytics grew from deep industry experience. “I working at a large multinational corporation, pretty much doing the job of our prospective customers,” Jithendra explained. “I was in their state managing electronics commodity, a large medical device manufacturer.”

This insider perspective proved crucial. While coastal startups often rush to market with minimal validation, Part Analytics had the luxury of understanding their customer’s pain points intimately. They saw firsthand how major manufacturers were still “spending a lot of time managing our data and collaborating with internal stakeholders or with our suppliers using spreadsheets and email.”

The Midwest Advantage

Being outside the traditional startup hubs presented initial challenges. “We were based in the midwest, we’re not based in coastal region,” Jithendra noted. “Really kind of finding the right fit from investor standpoint and making sure they understood what we are going after. It took some time.”

But this geographic constraint became a strategic advantage. Without easy access to venture capital, Part Analytics had to focus on building real customer value before seeking investment. They couldn’t rely on the typical Silicon Valley pattern of raising large rounds based on vision alone.

An Unconventional Funding Journey

Their breakthrough came through an unexpected channel. “You never know where your first check might come from,” Jithendra shared. At a demo day, they connected with an investor who couldn’t invest – but who introduced them to someone who could. This roundabout path to funding taught them a valuable lesson about network effects in the startup ecosystem.

Building Through Customer Success

Without the pressure to scale rapidly that often comes with venture backing, Part Analytics could focus on customer success. Their work with ITW, a Fortune 500 manufacturer, exemplifies this approach. They delivered “5% cost reduction their spend, reduce their shortages by more than 70%,” creating powerful case studies that attracted both customers and investors.

This customer-centric approach became their primary growth engine. “What’s been really working well for us is our customer testimonials and customer referrals,” Jithendra explained. “Our customers that use a product really love it and they really see value from it.”

The Power of Patient Capital

When they did raise funding, their focus was on finding the right partners. “Be thoughtful about who you raise money from,” Jithendra advised. “Because it’s not just the check or money, it’s more about what value they bring to the table… having that in mind and picking the right call on investors that can bring you some introductions, whether it’s to customers or advisors.”

Looking back, Jithendra’s main regret isn’t about staying in the Midwest or taking a slower path to funding. Instead, he wishes they’d moved even faster once they found their groove: “Probably I would have done it even faster and sooner… when you have something, you really need to go at it with full speed.”

For B2B founders outside the major tech hubs, Part Analytics’ journey offers a compelling alternative to the traditional Silicon Valley playbook. Their story suggests that building from deep industry expertise, focusing on customer success, and being strategic about fundraising can create category-defining companies anywhere – perhaps even more effectively than following the conventional startup path.