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Atlassian: Fully Funded. By Customer Revenue. Oh, and the $60M T-shirt

atlassian mike scott 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 atlassian modelorganically 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:

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

…’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.

mcaccon underwaterBut 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.

dftpc $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?

(Cross-posted @ CloudAve)

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Launch Silicon Valley: 30 Startups Debut Tomorrow

Somewhat late notice, but there’s an exciting startup debut event in Mountain View tomorrow: Launch: Silicon Valley, co-presented by SVASE, Garage Technology Ventures and Microsoft, provides the next generation of emerging technology companies with the opportunity to pitch their products to, and network with, an audience of Silicon Valley’s top VCs, Angels, corporate business development executives, prospective customers and partners, bloggers and media.

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.


Selected demonstrating companies for Launch: Silicon Valley 2010 include:

Company

Application

Web Site

Appbackr

App marketplace

www.appbackr.com

BCCThis

Sticky notes for email

www.bccthis.com

BioVantage Water reclamation www.biovantageresources.com
Breakthrough On line mental health counceling www.breakthrough.com

Jungle Cents

Auction

www.junglecents.com

Convergence CT

Healthcare data

[email protected]

Digital Sun

Water Management

www.digitalsun.com

Electradrive

Electric Drivetrain

www.electradrive.net

Evolver

3D characters

www.darwindimensions.com

GreenPlatform

Data center storage

www.greenplatformcorp.com

Highflex

Flexible photovoltaics

www.highflexsolar.com

jMango

build once, deploy all, app platform

www.jmango.net

Laster

Augmented reality glasses

www.laster.fr

Linqto Many to many collaberation www.linqto.com
Micello Indoor maps www.micello.com
NMBI Painless Injections
Optic Lanes Active traffic management www.opticlanes.com

Pilus Energy

bacteria energy cell

www.pilusenergy.com

RiverMuse

It management platform

www.rivermuse.com

ScanAvert

Food ingredient detection

www.scanavert.com

SDK BioTech

Cell platform

SocialAmp

see what friends are buying

www.socialamp.com

STI-Medical

medical imaging

www.sti-hawaii.com

Taggstr

Location tagging – Make your Mark

www.taggstr.com

TenCube

cell phone security

www.tencube.com

TrueDomain

Anti Phishing

www.truedomain.net

Vizibility

Presearch

www.vizibility.com

Youi Labs

Reduced cost phones

www.youilabs.com

Zikon

Electronic Ink

www.zikon.com


The event starts tomorrow morning at Microsoft’s Mountain View campus.  Here’s the Agenda and registration link.

There’s a pre-event party in Palo Alto tonight at 6pm – you’ll get details upon registration.

(Cross-posted @ CloudAve)

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Woman in High Tech & The New York Times Out of the Loop

Image credit: The New York Times 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?

(Cross-posted @ CloudAve)

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How to NOT Become an Entrepreneur

bae logo 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”.

agenda

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 [email protected]. We will evaluate the submissions and notify those accepted into the program.

I’m so out of here…

(Cross-posted @ CloudAve )

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Helpstream CEO Gone. Or is it the Company? Either Way, We Gain a Great Blogger.

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.

(Cross-posted @ CloudAve )

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Google Apps in a Box. Oh, and an iPad Killer.

What we missed in our Google Apps Marketplace coverage: the Best Poster Award … drumroll.. goes to box.net:

box google

And while at it, their video isn’t too shabby, either:

Wait… is that an iPad killer with a great virtual keyboard at 0:46?

ipad killer

Bias alert: I’ve been watching Box.net from the humble early days starting here:

through here:

box toilet

..to becoming a successful business.    Just sayin’ 🙂

(Update: my secret retirement plan is collecting royalty from Box.net for using Google-in-a-Box )

P.S. On a more serious note, here’s our previous Google Apps Marketplace coverage:

(Cross-posted @ CloudAve )

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Under the Radar: Commercializing the Cloud – Apply to Present / Discount Tix Here

UtR-Iam-Going Under the Radar is Silicon Valley’s most established startup debut platform: a conference series organized by Dealmaker Media, covering business applications, social media, entertainment, mobility..etc.

This year’s conference in Mountain View, CA on April 16th will focus on Commercializing the Cloud – that’s a fairly wide definition, and one that perfectly mashes with our focus over @ CloudAve, so we’re proud to be Media Partners at this event. That means we’ll be covering it before, during and after, and if you decide the attend, we’ll get you in at a discount rate.

In this American Idol of startups typically 32 finalists are selected, who are grouped in categories of 4 each and each has about 15 minutes to present in two parallel tracks. They get grilled by the judges and audience, and at the end of the conference the winners of each category are announced.  A few years ago I participated in the pre-selection of startups, and I remember having checked out hundreds of companies to come down to the finalist set.  At the moment 19 finalists are announced:

AppDynamics, AppFirst, Aprigo, Cloudant, CloudShare, CloudSwitch, Conformity, CubeTree, Fonolo, GoodData, Layerboom Systems, Makara, MaxiScale, Neo Technology, NorthScale, Reductive Labs, RiverMuse, SaaSure and SendGrid.

This means two things:

  • A dozen or so slots are still open
  • The Selection Committee will likely sift through another 100+ applications to fill those slots.

So if you consider your startup a (future) leader in Saas | Collaboration | Business Apps | Development Tools | Compliance |  (and more!), don’t waste time, apply here to be a presenter.

A personal note: the roster so far is quite infrastructure-heavy, which I’m sure makes Krish happy… but as the dumb non-techie business guy, I’d love to see more Business Apps, too 🙂

Past presenters include: Heroku, Get Satisfaction, Marketo, Eucalyptus, Zuora, Box.net, Ribbit, Hubspot, Twilio, New Relic, CloudKick, Jive Software, and many more.  Many (54%) of the UtR participant received funding, some grew to fame, others disappeared… but disappearance is not always bad  – as is the case of 2008 Under the Radar graduate 3Tera, which just got acquired by Computer Associates. 🙂

And if you’re not presenting, you sure would like to attend 🙂 CloudAve readers get $100 off their tickets here!

Under the Radar is not only a great startup showcase, it’s perfect good networking and and deal-making forum in Silicon Valley. Stay above the clouds – see innovation in its earliest stages – and get deals done; one handshake at a time. Mingle with 350 VC’s, journalists and C-level executives seeking to find, connect and partner with startups who’s products, technology and teams fit strategically into their road maps.

Remember to use our discount – and see you there!

(Cross-posted @ CloudAve )

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Startup Bloodbath in Social Media?

Image credit: Evil Fish Google announced their own URL shortener. Great.  But some startups may be panicking.  The TechCrunch title says it all: Bit.ly Just Got Fu.kd: Facebook And Google Get Into The Short URL Game.

Of course bit.ly is not the only possible casualty, but they are the dominant one in the URL shortening space – or at least they have been so far…

But what most commentators haven’t noticed is another feature from Google: FeedBurner social, which might very well kill TwitterFeed.  Yes, why bother with an intermediary when we can now have FeedBurner send our blog post to Twitter directly?  Check out the URL for this very post on Twitter: it’s the shiny new goog.gl variety.

And it’s not over yet.. just as we’re absorbing what all this means, here’s news of Twitter testing business features, including the ability of multiple users posting on behalf of one organization..  Somehow I don’t think CoTweet, HootSuite and a bunch of others are too happy about it.

Are they all doomed?  Not necessarily – right now they all offer additional features (multiple accounts, scheduling, stats..etc), but nevertheless, it must not be very comforting when the Ultimate Giant enters their space…

Oh, yeah, I know … we’ll soon see the statements from all these startups welcoming Google, validating their markets…etc. 🙂

(Cross-posted @ CloudAve )

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Startup CEO Who “Won’t Take VC Abuse” Is Now a VC Himself and Blogs About Both Sides of the Table.

Valleywag  named Mark Suster, then CEO of Koral “one entrepreneur who won’t just take VC abuse”  for his blog post  “slamming one VC partnership for tardiness, inadequate preparation, and bad Blackberry manners.”  That was late 2006…

Not long after the “incident” his startup, Koral received funding, which, in hindsight was probably unnecessary: a few months later, barely out with a beta product Koral got acquired by Salesforce.com.

A few months later the “anti-VC” (not really) CEO has become a VC Partner himself.

Read more

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Business Planning on Twitter

As with all-things-Twitter, you should read this bottom-up:

 

And the text summary – again, read from bottom up:

  • amandagbeals @bencasnocha love the biz idea but dont leave out the gays!!! they wld be ur biggest clients!
  • zolierdos @bencasnocha On second thought, this business model is one of the oldest, although not limited to kissing 🙂
  • djnotfound @bencasnocha but… but can they get pregnant by kissing?
  • zolierdos @bencasnocha Haha, will it be bootstrapped or VC funded? 🙂
  • constantmotion @bencasnocha I have to ask, did a specific experience lead to this idea?
  • jeffnolan @bencasnocha you could rely on craigslist as your go-to-market strategy
  • msimonkey @bencasnocha Who decides whos the expert?
  • bencasnocha Business idea: create a kissing school where people pay to practice kissing "expert" instructor of opposite sex and get immediate feedback.