No kidding… it all started with a tweet by Box Lead Magician Aaaron Levie:

My first though was:

@ZoliErdos
@levie As long as it’s not only Money Money Money
21 minutes ago Favorite Reply Delete

Then I had this crazy thought of trying to remember more ABBA titles… it took me about 3 minutes to see ABBA’s wisdom … LOL.. I mean to come up with a full startup lifecycle, purely based on ABBA titles:

Click to read full story...

Hm… looks like a broken iPhone.  Get a new one… but is getting a new phone really a life changing moment?

@mgingrasMarc Gingras

Time for a new smartphone.#lifechangingmoment

2 hours ago via Twitter for BlackBerry® Favorite Retweet Reply

For Marc it is.  And I doubt he’ll be using iPhone, now that he is part of RIM.

I first got to know Marc and Tungle 5 years ago, as a selection judge for the Under the Radar Conference, which is where Tungle debuted, so it’s only appropriate that they announce the acquisition exactly five years later, on the very day this years Under the Radar conference is held … in fact  it starts in about an hour, if you’re in the area, you can still catch it

Congratulations to Marc… and let’s hope the excellent Tungle service remains open for other platforms, too. (?).

Click to read full story...

The Art of Pricing

The other day I got into a tweet convo with a Startup Entrepreneur whose product I found interesting, at least at first glance.  But he has a problem: the entry point for one user is $20/month – and then the price scales up.  I tried to convince him to drop the entr

y price point to either free, or $1-$2 – something that allows impulse buy.  He defended his pricing on a value basis.  In principle he is right – but there’s the small problem that nobody knows about his product.  In this case “giving away” value would become his marketing, would allow for growth, and he could scale his pricing as aggressively as he wanted. He badly needs enthusiastic users that become his marketing army.

My friend and fellow Enterprise Irregular Charlie Wood (that was my bias disclosure…) understands this…

Click to read full story...

Two years ago I reported on Atlassian’s initiative to to raise funds for the benefit of Room to Read, an organization that builds schools, libraries in rural communities in Nepal, Cambodia, Vietnam, Bangladesh, Laos, Zambia …etc. Giving away $1,200 worth of software licences for $5 in a 5-day drive, they first planned to raise $25K, then increased the target to $100,000.

@Krishnan and I thought we should put our money where our mouth (pen? keyboard?) is, and both purchased a bunch of licences just to help push Atlassian towards the finish line.  The last minutes were dramatic:

Click to read full story...

It was 2006, the first Office 2.0 Conference in San Francisco and I just met Jeffrey Walker, President of Atlassian. I had followed the company for a while (OK, I admit, had been a fan), met Mike, but this was the first time with Jeffrey, so we took our box lunch to a cozy little place away from the crowd and started to chat. Within minutes a VC Partner joined us, and so the usual “what are you doing” conversation started.  Well, it wasn’t a conversation: Jeffrey talked, the VC listened.  And in 5 minutes he was ready pull out the checkbook (sort of), when Jeffrey dropped the bomb:

We’re actually not seeking funding.  We’re fully funded.  By customer revenues.

Seeing the VC’s face was priceless.  After all, the cliche for startup success was to take funding.   Which Atlassian did – 4 years later.  But they do nothing by halves.  $60 million or nothing!    But I am running ahead.  Back to the early days.

I got to know Atlassian as the Wiki Company – having compared the few early business wikis, I came to the Conclusion that Confluence was the most robust, complete one.  I’m probably not the most pleasant reviewer when I don’t like what I see – but I could simply not find anything to criticize with Confluence – it became the de facto industry standard for others to follow.  That said Atlassian is /was about more then Confluence: their roots are in supporting developers, having started with a powerful bug tracker Jira, and growing to eight (?) products organically and through acquisitions.  Not being a techie, I don’t even understand most of these products – so the root cause of my infatuation with Atlassian was really their business model.

There is nothing wrong with taking VC Funding, but risking everything to your last penny is what Entrepreneurship was originally all about, so it is simply refreshing to see a company to have made it solely on bootstrapping, beating the odds. Add to it great software that’s easy to buy, learn, use, sprinkle it with a good dose of transparency and great service,  and you get a startup worth admiring. I’ve had lots of fun covering their early success and also learned a lot watching them:

• Atlassian taking in the world
• Atlassian Founders Become Australian Entrepreneur of the Year
• Flow vs. Structure: Escaping From the Document & Directory Jungle ( I badly need to revisit this subject)
• Choosing Your Customers: Smart Business or Arrogance?
• Software Startups: How to Sell to Enterprise in a Recession

Oh, and they gave me some of my funnier titles:

• Sell Software – Ship T-Shirts (how come I don’t have them?)
• Atlassian Hiring Chief Heineken-taster
• Business Models and Right-brained Geeks

…’cause they like having fun, and I guess it’s contageous.  But amidst all that fun they can sometimes be dangerous:-)

I tried to help them fill The Dream Job (no, I wanted that job:-)), help with their charitable promotion – hey, even put my http://www.cloudave.com/link/helping-atlassian-stimulus-package-towards-the-finish-line“>money where my mouth was.  Then I had to write the most difficult post in my life, saying goodbye to Jeffrey, Atlassian President, musician, amazing person and fellow Enterprise Irregular.

And today they taught me another lesson: don’t ever sit on a story.  It expires.  My unwritten story that I’ve been contemplating for a while was about two bootstrapped startups, both in software, amazingly successful that have sailed into IPO zone almost unnoticed.  The second one is Zoho, which I consider to be approaching IPO-readiness, but I seriously doubt they would chose to go that way.  But Zoho is our Sponsor, talking too much about them would look like ***ing up, so I’ll stop here.  The day will come.  But today is Atlassian’s day.

Why would a company that has profitably grown for 8 years need funding now? They want to grow more agressively, both in terms of geography and product coverage. That means acquisitions.  They  want to accelerate growth to above $100M revenue, which is what’s considered “IPO ready” nowadays.

But what drove me to the conclusion they were on the IPO-track even before the funding was deep in their culture.

Atlassian is always hiring, yet it’s difficult to get in. They are picky. It’s a “work-hard-play-hard” culture.  Employees are well paid and  the company spends lavishly on team fun. No wonder their revenue per employee ratio is high.  But the team lives in Sydney and San Francisco, where there is an expectation that after a few years in a red-hot startup you get rich…  The Founders probably no longer live frugally, but how to share the wealth with all employees without an exit?  Funding accelerates the path to exit and my even bring interim liquidity critical to keep the team around. I agree with Ben in that respect.

$60 million is a lot of money, in fact Accel Partners claim it is the largest investment they’ve ever made in the software business.  But there’s a whole world of difference in picking it up as a mature, profitable company or a fledgling startup.  Some of Atlassian’s competitors picked up a third of this amount at early stages and probably had to give up three times as much equity as Atlassian did.  Bootstrapping has paid off, after all.

Oh, about that $60M T-shirt – you really have to read it over @ Atlassian. After all, this is a SFW blog:-)

Update:  I’m speechless.  What’s this? Sour grapes?

Click to read full story...

The event is in it’s fifth year now (Happy Birthday!) and as usual, will feature 30 startups selected from hundreds of applicants in information technology, mobility, digital media, next generation internet, life sciences and clean energy.

Click to read full story...

Out of the loop is the original title of a New York Times article discussing how difficult it is for women entrepreneurs to get funded, or generally to get into the management ranks in business.  A title that backfires … but you’ll have to wait to see why.

The first case discussed @ the NYT is Crimson Hexagon, a start-up founded by Candace Fleming, Harvard MBA, former HP Exec and small business President. Yet despite here credentials potential investors called her “Mom”, asked indiscreet questions and one invited her to his yacht by showing her his photo on the yacht – sans clothes.

“I didn’t know things like this still happened,” says Ms. Fleming, 37. “But I know that, especially in risky times like the last couple years, some investors kind of retreat to investing via a template.” A company owned by a woman, she adds, “is just not the standard template.”

Her solution was to find a fund that specifically focuses on investing in start-ups led by women: Golden Seeds.  They and other angels funded Crimson Hexagon to the  tune of $1.8M.

So while the bigger issue is still very much of a problem, at least all is well at Crimson Hexagon.  That is, until you click the link, where you see this headline:

4.5.2010 Crimson Hexagon Fills Out $2M Series A-2 Round; Names Scott Centurino New CEO

A bit more detail (emphasis mine):

Crimson Hexagon, the leading provider of real time market research, today announced that it has filled a $2M Series A-2 funding round. The round, led by Golden Seeds, was completed through a combination of new and existing investors…

In addition, the company announced that Scott Centurino has joined the company as the new CEO, replacing Candace Fleming who left for both personal and professional reasons.

Oops…  not exactly the outcome the NYT projected.  So now you see why the title backfired: just who is out of the loop this time?

Click to read full story...

I get a lot of junk email that I normally ignore, but this one ticked me off enough to write about:

Major Changes for Bay Area Entrepreneurs Workshop

Changes?  To what?  I’ve never heard about this program before.

Lowering the price of the Workshop by $500 to $1,000

Ouch!  Lowering?  And then it’s still $1,000?  Now I really have to check it out…

The Bay Area Workshop is a series of weekly, 3-hour long presentations, 8 in total for a “discount” price of $1,000, or $175 per individual session.  The “Team” consists of the CEO.  The Agenda focuses on Business Plan building, culminating in an investor presentation, and the presenters are “named” illustrious experts like “Start-up consultant”, “Go-to-market consultant”, “Marketing consultant”, “Angel investor”.

Most impressive, isn’t it?  Wait, here’s a preview: you can watch a 46-minute embedded webinar here.  No, your video did not freeze, you really are staring at one single slide (long live Powerpoint!) for close to two minutes. Never mind that you can’t read the small print and full-screen toggle does not work…. I’m sure there’s value in there … somewhere

Oh, boy. If I wanted to be cynical, I’d say this program is a tired, half-cooked attempt at delivering recycled presentations by a retired executive at a premium price. But I don’t want to be cynical, so I’m not calling it a rip-off… All I am saying is: I’m not sold, and buyer beware.

OK, here’s what I really think:

If you are in a corporate job thinking of becoming an Entrepreneur – save the money, these courses will not “make you” an entrepreneur. You should probably keep your job.

If you already are talking to potential partners, are busy building an early stage product, then you already are an Entrepreneur.  You have the drive, you did not “get it” from a bunch of expensive classes.  You may or may not get funded one day, and sure, there’s a lot to learn, but you can pick it up along the way.  There’s probably no better place to start than reading Mark Suster’s series.  Sage advice from an Entrepreneur-turned-VC.  By all means, network: go to events like SF Beta,  the New Tech Meetups in SF or the Valley, Meet real VC’s at events hosted by SVASE – wherever you start, one event will lead to another, and you will make real-life connections.

Most events will cost you $20-40, some a little more expensive, but whenever you see a 3-digit price-tag, run the other way!  And don’t even think of spending a thousand bucks just to hear from unknown instructors how you should put a business plan together.

As for The Bay Area Workshop, I saved the best for the last.  If you really have a thousand bucks to throw away, would you expect to just sign up and attend?  No, you have to apply and “qualify”:

To apply for all eight session of BAE Workshop, send your business summary to apply@baeworkshop.com. We will evaluate the submissions and notify those accepted into the program.

I’m so out of here…

Click to read full story...

Hm… I think I know which website they may be talking about:

No kidding… yes, I know it’s April Fools Day, but this is real – an accounting SaaS provider , no less.  I once speculated on a brave new business model: Ugly Service taking commissions from the sunglasses industry… but this is beyond imagination.  Ziki, the company I wrote about back then came to their senses – wonder how long it will take for Brightbooks to become … hm.. less bright? 

Click to read full story...

You heard the good news here first, so it’s only appropriate to be the first to follow up: Bob Warfield is likely out as CEO of Helpstream, a Social CRM SaaS provider.  The company website still lists Bob as CEO, but his blog post this morning implies news not yet officially announced:

My Startup Track Record

Success.  Success.  Failure.  Success.  Failure.

That’s it, that’s my story.  It’s been my heartbeat.  I’m a Serial Entrepreneur with a 60% track record, which is comforting, except that I’m coming off my latest failure at Helpstream.  60% is way in excess of what most any VC ever gets.  It’s way better than anyone I know, in fact.  But nothing is ever really very comforting at a time like this.

There you have it – but let’s quickly add, my post is purely speculative, in fact I don’t even know if it’s management change, or the entire company… (will update when I hear details). Instead of further speculation, let me add a bit of personal touch – who I know Bob to be:  an immensely experienced software Executive with great vision, an amazing thinker, who shares a lot – as time permits.

He is a fellow member of the Enterprise Irregulars, an invitation-based small think-tank of software execs, analysts, consultants, bloggers.  The posts you see on the blog are just the tip of the iceberg: we have a lot more, often intense debates going on in a closed discussion group.  Participation is very time-consuming, but rewarding. Everyone learns in the process.  But while quite often we can only afford 2-3 liner quickies, every single contribution by Bob is a complete essay, full of learnings – I’ve often told him he should just convert his group emails into blog posts

As they say, every cloud has a silver lining – well, here’s the “good news” for us:

Fortunately, the recharge doesn’t take me long.  I get bored easily.  I start talking to people, networking, and pretty soon the Startup Energy is flowing in my veins again.  In the meanwhile, I will have time to be an active blogger once again.  This is a happy synchronicity, because I will have a lot to say.  While it’s fresh, I want to go over my latest learnings from the Helpstream experience.  It’s good therapy for me, and perhaps just a little bit helpful for you, dear reader.  I wanted to pen this initial story for the series on my first work week day of unemployment.

I’m sure it will be a fascinating series, we all will learn a lot – and Bob will no doubt be back in business soon.

Click to read full story...