Founder’s Story: Rick Munden of FMF & Epiphyte

Written by Sean Murphy. Posted in EDA, Founder Story, skmurphy

I first met Rick Munden more than a decade ago when we were both managers attending an Electronic Design Process workshop. I ran into him last December at an SDForum Emerging Technologies SIG meeting and we renewed our acquaintance. I invited him to our Bootstrapper’s Breakfast since he was mulling his new company Epiphyte. This interview grew out of several conversations that we’ve had in the last year. They have been condensed, spell checked, and hyperlinked for your reading pleasure.

Q: You’ve been entrepreneurial since high school. Could you talk about your first company?

My first legal business was a newsstand in Chicago’s Hyde Park neighborhood in 1965 when I was 15. I started it with a friend, Bob Katzman. It was a third kid’s idea but he was not inclined to follow through on it.

I sold my half of the business to Bob after about 16 months (and I was old enough to get a technical job). He grew the newsstand into a chain of bookstores over the following 20 years. Bob has written books about the newsstand and Chicago in that era and blogs at Different Slants.

Q: What were some of the key things you’ve learned from that?

The two things I took away from the experience were a respect for my customers–they are the most important part of any business– and the realization that retailing is not intellectually stimulating for me.

Q: You’ve also been involved in semiconductors, system design, and CAD/CAE for a number of years. What were some of the more interesting problems you had to solve?

I managed design engineering environments from 1987 till 2006, first at TRW in Redondo Beach, CA, then at Acuson/Siemens Ultrasound in Mountain View. During that time, although I had to support everything from chips to systems, including mechanical and software. I was personally more focused on board and system level design and verification.

I found the heart of any CAE system to be the libraries. In a company designing anything but the simplest boards, the libraries must be architected and optimized for efficient data transfer across a variety of tools, often from different vendors. The libraries I designed contained schematic symbols, PCB footprints, electrical information, purchasing information, signal integrity models, functional simulation models, timing information, and traceability information.

Q: What tools or methodologies did you develop that you still use?

The most important thing developed was the simulation modeling methodology. Fortunately, I had some very smart people working with me and we were able to come up with a modeling practice that has needed only a couple of tweaks over the past 12 years. We came up with a coding style based on VHDL/VITAL that allowed us to model a wide range of digital components that we could find no other way to accurately model. VHDL/VITAL was not the first thing we tried but, looking back, I think it was a fortuitous choice.

Q: You also started the Free Model Foundry, can you talk about what led you to do that?

When I was a manager at TRW, one of the engineering problems we had was how to simulate a board in order to reduce or eliminate the number of prototype board spins. Board spins were expensive and consumed way too much schedule. The biggest obstacle to simulation was the lack of models of the parts we wanted to use.

This was in the early ’90s so every tool vendor had their own proprietary simulator and models created for one would not work on any other. I had been writing models for several years but every time we switched EDA vendors I had to start over again.

Then VHDL came out. At first there were compatibility problems and none of the big companies could make simulators that implemented the full language. Eventually, a number of startups succeeded and were soon bought by the major players. In response, Cadence opened up Verilog.

Cadence had Verilog-XL and another product called Veritime that was a static timing verifier that read Verilog models. We thought “wouldn’t it be great if we could write one model that could be used for both dynamic simulation and static timing verification?”

We tried writing some models of small ECL parts in Verilog but could not model all the functionality. We hired some professionals to do the job but they also failed. Then we tried to netlist one of our Cadence schematics to Verilog and found out how difficult that was. We managed to get one design through the process but it was a very bad experience.

About that time, the VHDL/VITAL standard was being tested. One of my colleagues, Russ Vreeland, investigated and suggested we try it. The results were great. We could model our ECL parts easily and Cadence’s VHDL netlister was much better than their Verilog netlister. The next step was to populate our library.

There are a lot of digital parts in the world and people keep designing new ones. TRW did not want to be in the modeling business and at that time, neither did the IC companies. We thought if we documented a successful modeling strategy and published the models we created for our own use, other engineers would join in. Sharing models would be much more efficient than everyone re-writing the same ones. I have been a long time fan of the Free Software Foundation so I suggested we do something along those same lines for simulation models.

In 1995 two other TRW engineers and I incorporated the Free Model Foundation. Because we were trying to solve a problem rather than create a business, we incorporated as a not-for-profit. It took a couple of years to get our tax status set by the IRS and the State of California. In the process, our name was changed to Free Model Foundry.

For a couple of years, we wrote models at TRW and published them. But rather than the ground swell of models we expected to receive from other engineers, we started getting calls from IC companies asking if they could outsource their modeling to us.

It took a while to find the best resources for contract modeling but eventually we did and now model outsourcing has become FMF’s business.

Q: What have you learned about outsourcing? Any guidelines for what kinds of project should be outsourced and what shouldn’t?

I have seen many outsourcing projects go well and a few turn into complete disasters. Differences have been in project scope and the definition of the project deliverables. In general, small, well defined projects are more likely to be successfully outsourced than large poorly defined ones. Communications also plays a roll. The bigger the project, the more important good communications become and the more often it must take place.

I recommend a book titled “Global Software Development” by Dale Walter Karolak and published by the IEEE Computer Society. It covers all the basics in 158 pages.

Q: You are involved in some EDA Open Source efforts. Can you talk about any that you find exciting?

Other than FMF, my involvement with other Open Source EDA efforts is limited to cheerleader and occasionally facilitator. I host a monthly dinner which is attended by people interested in OSEDA.

Q: How would you compare the impact of Open Source vs. Outsourcing on Electronic Design and EDA?

EDA users are a small community. This makes open source less viable for EDA tools than in other areas such operating systems. There are only a few large open source EDA projects going on. I think all of them consist of a single person doing more than 90% of the work and a number of less committed people giving feedback. Smaller projects, such as a Verilog mode for Emacs, work fine.

Projects that are easily outsourced are often also viable as open source projects if they benefit a large enough community. The two examples that come to mind are FMF and OpenCores. These are organized quite differently but they have similar benefits to the engineering community.

Q: For your latest company, Epiphyte, can you talk a little bit about your plans for 2008?

The new company is Epiphyte LLC. It is a platform for exploring various business opportunities. The expectation is that we will try many different things and fail (cheaply) at most of them. The stated purpose of Epiphyte LLC. is for the “rapid exploitation of emerging opportunities”. This roughly translates to “we don’t know what we’re going to do but, we have a lot of ideas”. Among the more likely opportunities are:

  1. Provide IT support for startups, small businesses and non-profits. We serve organizations that require less than one FTE.
  2. Provide outsourcing project management for small HW/SW projects. We advise clients on the suitability of the project, help finalize the specifications, find and contract with the performing engineers or organization, manage the communications between the customer and the performer. The trick is to know what can and cannot be successfully outsourced, how to specify the work, and manage the customer expectation. Of course, it also helps to know competent organizations that can do the work.
  3. Provide contractor management services to companies that desire to keep existing contractors beyond the one year limit HR departments set.

Q: Epiphyte is also supporting “Venture Coding.” What is this and why you are offering it?

We have created a new process to assist start up companies in getting off of the ground that we call “Venture Coding.” Early start up companies often face the dual problems of limited starting funds and the limited engagement (and interest) of short term developers. Venture Coding was conceived to solve both of these problems.

In exchange for equity in a start up, Epiphyte will provide software development resources. This allows a company to preserve precious starting capital and to ensure the continued availability of developer commitment to the success of the start up.s

Bob “GoDaddy” Parson’s Rules for Business Success

Written by Sean Murphy. Posted in Founder Story, Quotes, skmurphy

Bob Parsons of GoDaddy blogged his “16 Rules for Success in Business (and Life in General)” in July of 2006. A question he received at a 2004 speaking event–“What advice do you have for someone who is just starting a business?”–kicked off an effort by the serial entrepreneur to codify the principles he was living by. I have selected what I think are the best half dozen (the full list is absolutely worth reading), preserved Parson’s numbering and lightly edited his text.

2. Never give up. Almost nothing works the first time it’s attempted. Just because what you’re doing does not seem to be working, doesn’t mean it won’t work. It just means that it might not work the way you’re doing it. If it was easy, everyone would be doing it, and you wouldn’t have an opportunity.

3. When you’re ready to quit, you’re closer than you think. There’s an old Chinese saying that I just love, and I believe it is so true. It goes like this: “The temptation to quit will be greatest just before you are about to succeed.

These two echo famous advice from Winston Churchill and Eric Hoffer. First from Winston Churchill’s speech at Harrow School on October 29, 1941:

But we must learn to be equally good at what is short and sharp and what is long and tough. It is generally said that the British are often better at the last. […]

You cannot tell from appearances how things will go. Sometimes imagination makes things out far worse than they are; yet without imagination not much can be done. Those people who are imaginative see many more dangers than perhaps exist; certainly many more than will happen; but then they must also pray to be given that extra courage to carry this far-reaching imagination. […]

“Never give in. Never give in. Never, never, never, never–in nothing, great or small, large or petty–never give in, except to convictions of honor and good sense. Never yield to force. Never yield to the apparently overwhelming might of the enemy.”

And Eric Hoffer in “Reflections on the Human Condition” (aphorism 157) on the temptation to quit:

“Our achievements speak for themselves. What we have to keep track of are our failures, discouragements, and doubts. We tend to forget the past difficulties, the many false starts, and the painful groping. We see our past achievements as the end result of a clean forward thrust, and our present difficulties as signs of decline and decay.”

Parson’s suggests another way to prevent being defeated by your own fears of “undefined consequences.”

4. Quantify what the worst thing could be, with regard to whatever worries you. Very seldom will the worst consequence be anywhere near as bad as a cloud of “undefined consequences.”

This is also the antidote to mindlessly continuing the same course of action, I suggested a similar approach in my review of Seth Godin’s book “The Dip” Save Your Money

The key point is to decide what failure looks like before you start (and unexpected success, which for an entrepreneur signals that a product deserves more investment, potentially even third party investment in addition to re-directed internal resources) so that you know when to quit.

The following are a matched pair as well.

7. Never stop improving. Never stop doing something new. The moment you stop improving your organization, it starts to die. Make it your goal to be better each and every day, in some small way. Remember the Japanese concept of Kaizen. Small daily improvements eventually result in huge advantages.

9. Measure everything of significance. I swear this is true. Anything that is measured and watched, improves.

One of the challenges is to measure the things you have under your control. So while it’s tempting to measure just revenue it’s more useful to include the precursors that you have more control over: sales calls, demos, benchmarks, ads run, forum postings, conference talks, proposals generated. The most important thing for a startup team to measure is how time is spent. Time, much much more than money, is the lifeblood of a startup. Whatever your stated objectives or focus is, make sure that you measure how you spend your time to ensure that you are aligning your efforts with your desired results. If you haven’t blocked out time on the calendar in the next two to three weeks it’s not a priority.

8. Be quick to decide. Remember what General George S. Patton said: “A good plan violently executed today is far and away better than a perfect plan tomorrow.”

Quick decisions are much easier in the context of well thought out strategies. This is clearly one advantage that startups should strive to maintain over their larger competitors. If you dither as a team and concede this advantage you have to be very very good. One key is to discern whether a new development represents a real change in your state of information and really requires a response. It’s probably as important to base decisions on what’s not likely to change as to chase new and probably evanescent developments in your market. Also, one your decide you have to act, and to get your team to act in concert.

By the Numbers: How I built a Web 2.0, User-Generated Content, Citizen Journalism, Long-Tail, Social Media Site for $12,107.09

Written by Francis Adanza. Posted in Events, Founder Story, skmurphy

Last night I attended a BayChi event held at the PARC auditorium. This presentation featured Guy Kawasaki, Founder of Truemors and Managing Director at Garage Technology Ventures. His presentation was titled “By the Numbers: How I built a Web 2.0, User-Generated Content, Citizen Journalism, Long-Tail, Social Media Site for $12,107.09.

You can find the entire PowerPoint slide deck on Guy’s blog.
http://blog.guykawasaki.com/2007/06/by_the_numbers_.html

Since Guy is such a great entertainer, I could not tell if it was just his sarcastic humor or if he was sincere when he said he had no plan when putting this website together. In addition, I was shocked to hear a renowned marketer claim to have spent $0 dollars on marketing. However, his reasoning behind this dollar figure was, so far money has not been necessary. For twenty-four years, Guy Kawasaki has been building relationships, evangelizing, public speaking, and doing favors for others. It took him half his life to become a Silicon Valley icon and now he is trying to cash in on it. He has built up enough branding of his own name, that the fact that he is starting a company is selling itself.

Guy claimed that the website is a place to post comments (rumors) to share real time up to the second information with others. Although there seems to be a wide array of useful information, it seems like most users find the technology to be a convenient way to post jokes and tabloid worthy current events. The website was developed on WordPress making it easy to blog. However, the posts do not seem like true blogs but more like simple pointers to other blogs or websites. In the short time I spent navigating the website, it seemed like most of the posts were vanilla cut and paste excerpts from the original source.

Questions & Answers

Guy spent about 40 minutes answering questions from the audience. Here are my notes on his three most memorable answers.

1. Why do you believe it is a good time for entrepreneurs?

It is so cheap to develop software these days. Look, I did it for 12k and I was not even penny pinching. If you are a developer, you probably could have done it for the cost of the legal fees. If you really wanted to be cheap you could have thrown something together and incorporated after you got traction. Since the dot com meltdown, investors have become much more conservative: we fund acceleration for the most part, not development.

Ideas do not build companies, execution is what builds companies. There are way more good ideas than people who can actually execute on them. We can’t bear the risk of funding an idea. We want to fund a company that needs help scaling and accelerating growth. This is better for entrepreneurs because they can work out all of the kinks in the product and the business. This way when you deserve investment, you get to keep more of the company.

2. What if you have a great idea that can change the world, but you can’t find the money to make it happen?

Honestly, in today’s world with all the resources available, if money is the only thing holding you back you probably are not going to be successful anyways. Look how Jobs and Gates made it happen. They both stole research out of here (PARC) and each created their own operating system. They worked out of their garage and coded on used worn down computers.

Being an entrepreneur is not making an even playing field. You need to find ways to tilt the field in your favor. Beg, borrow, steal, so be it. Part of being an entrepreneur is convincing others to buy into your concept. If your family and friends don’t believe in you, the chances that an investor will are slim.

3. How important do you think it is to have patents?

Patents mean nothing. They are only good for litigation purposes or to add value to the company when you get acquired. As a startup you don’t have to worry about either of these issues unless you are successful. Then if you are successful, you will have enough money anyways. So again it does not matter if you get sued or the company is valued for a few million more dollars.

Founder’s Story: An EDA Acquisition During the DotCom Boom

Written by Francis Adanza. Posted in Founder Story, skmurphy

This is another joint project we did with Ann Marcus because she is such an  effective interviewer. Last month she sat down with Mike Bitzko, currently CEO of CadPlex, to get his founder’s point of view of getting acquired (when he was CEO of Concurrent CAE Systems) at the peak of the dotcom boom and having to make  the merger work during the bust. Mike has some specific suggestions any startup contemplating an acquisition offer.

This is the second in an ongoing series of “lessons learned” stories from founders: if you founded or were an early employee of a software startup and would like to contribute your story, please use the contact form or give me a call and we can arrange an interview.

Interview with a CTO of a acquired small company. 6-19-07

Ann Marcus (AM): Acquisition is becoming a useful strategy for many organizations. What did you see as the benefits of acquisition for your organization?

Mike Bitzko (MB): Capitalization. Concurrent CAE Systems was acquired by ChipData as a dot com in 2000, in the first quarter after the peak. Everything is timing. We had to get capitalization because of the speed that the market was going. We either had to go after funding directly or be acquired by a company that already had funding.

AM: What were the benefits to the organization that acquired your company?

MB: ChipData was getting leading technology that they didn’t have, coming to them “packaged and ready to go.” But the problem turned out to be that they really didn’t know what to do with it.

AM: What aspects of the process did you not anticipate or plan for? And what advice would you give others avoid the challenges you encountered–words of wisdom, tips, gotchas?

MB: In any business situation, there are times to have lawyers involved and to not have them involved. In an acquisition situation, you MUST have good, sound legal advice protecting your interests. You are playing with experts who know how to manipulate everything. If you make the mistake of not having legal advise, you’re doomed.

I’ve never been fond of attorneys, but there are times you have to have them representing your interest. Otherwise you can get into a mess. I did get a lawyer but not with sufficient experience and the advise he gave me was weak. You should expect to pay an attorney who really knows acquisitions anywhere from $5,000 to $20,000 to get the kind of advice you’ll need. You must do this. Look, you pay now or you pay later.

Secondly, do your due diligence on the people behind the scenes of the acquiring company. If I’d done a better job at it I would have realized that there was a problem. Companies are built on different principles and foundations. Different levels of integrity—It’s like the Raiders Football Team, whose philosophy is “Live by sword, die by sword” that spends more time with attorneys than running their business. If I’d really done my due diligence, I would have realized that I shouldn’t have done business with these guys. I shouldn’t have believed in Sevin-Rosen and the fluff about that.

AM: Okay, so what went well?

MB: Very little . As soon as my name was on the dotted line, it was downhill from there. They got the acquisition. As soon as I was on the hook, it was a totally different story than the original one.

My advice to those considering an acquisition…First, do your Due Diligence! Validate the integrity of the people you’re doing business with.

Everything went well up until point I put my name on the dotted line. I was foolish that I didn’t have a stronger attorney. I’d be much more shrewd next time. There was writing on the wall, but I was in too much of a rush to unload the company once I saw the indicators that the dot com era had peaked.

AM: Can you cite a particular indicator?

MB: I knew there was a problem when my plumber, who was putting new pipes in my house began advising me on my stock portfolio, telling him how much he was making. That was a key indicator. It was clearly too late in the market, too over-bought and time to get out. But as a result I made some bad decisions.

AM: What other advise would you give those considering acquisition?

MB: Have A Term Sheet in Hand Before You Even Meet. The term sheet has to be complete and have their names on it [as well as your]. Then you have this to refer back to. Otherwise it’s just He said, She said.

Look. It was an assembly of bad timing and…well…not-too-good people…converging in what turned out to be a disaster. The dot com went down hill and those guys didn’t know how to run a software company.

ChipData, the company that acquired Concurrent CAE Systems, claimed to have expert-level management and exceptional funding. They had first round funding of $11 million and subsequent funding brought them up to $33 million. This was an easy trap.

ChipData essentially took the VC’s $33 Million and and my company and flushed them down the drain. You must look at the management of the acquiring organization and find out what kind of business they really do and what they’re capable of. I realized too late in the game that these boys had no business running this business. Because they ran it into the ground.

AM: Had you intended to stay involved after the acquisition?

MB: I had intended to stay involved, and that was what we’d all discussed, but it was obvious that as soon as I signed, things were going to be different. These guys were from Texas and knew everything, so somehow my involvement just wasn’t required once the paperwork had been signed. That why you need to have everything in writing.

AM: What are some of the significant challenges / opportunities that still remain?

MB: I learned a lot from the experience. A good attorney would have told me to figure “insurance money” into the terms along with the potentials. That means that $400, maybe $500…half a million… goes directly into your pocket even if everything fails. That way you walk away okay and you don’t find yourself back on the street having to start a new company immediately.

AM: Is that what happened to you then?

MB: Yes. The new company is CadPlex. It’s a privately held company funded by company founders that provides solutions to bottlenecks within existing EDA Design flows located in the Silicon Valley area and North Wales, PA.

AM: Would you be involved in an acquisition situation again?

MB: You bet I would! I’d be a target for acquisition, but I’d be a much smarter target the next time.

In fact, a fellow wanted to talk about the possibility of an acquisition of the new company. He was coming from the airport, driving over here, when I realized that I didn’t have a term sheet or any names on paper. So I called him and I said, don’t come over…term sheet on desk with the names on it. He said he would send it afterward. I said, no. If you don’t have the term sheet you might as well just turn the car around and go home. And he did. I never heard anything else from him. It was pretty clear that his intention was to get at proprietary information.

So, have a term sheet in your hands before talking to anyone about an acquisition. You don’t know what they’re really interested in. Get it in writing.

AM: Thanks!

Founder Story: Acquisition Integration at 60 days

Written by Sean Murphy. Posted in Founder Story, skmurphy

We have been doing some joint projects with Ann Marcus recently, who is a real pleasure to work with, and a very effective interviewer. She sat down last month with the CEO of a recently acquired software firm, who has asked to remain anonymous due to the candor of his remarks. There are some real lessons here for any startup who wants to understand what can happen in the acquisition integration process by a larger firm.

This is the first in an ongoing series of “lessons learned” stories from founders: if you founded or were an early employee of a software startup and would like to contribute your story, please use the contact form or give me a call and we can arrange an interview.

Interview with a CEO of a recently acquired startup

Ann Marcus (AM): Acquisition is becoming a useful strategy for many organizations. What did you see as the benefits of acquisition for your organization and the company that acquired you?

CEO: Exit was the key benefit. We were only an eight-person company. Being so small we had few resources but had a very good technology. We lost one person actually to the acquiring company just before the acquisition, but now that person is so to say back in the fold.

Because of the resource limitations, the crew was antsy and didn’t feel that we were moving forward. Also, being 65 I am ready for retirement. So we started looking about a year and a half ago for a company that would be interested in our technology (Design automation solutions using CAD as the output device).  We wanted to find a company that would allow the technology to survive and let the shareholders to get some money out of the company.

There were two CAD companies that were good candidates:

  • The larger of the two candidates ($1 billion+) didn’t show much interest.
  • The other somewhat smaller company (approximately $400 million) did. One of our products fits directly into their product portfolio and allows them to retain their competitive edge over their primary competitor who is offering similar technology.

AM: What aspects of the process did you not anticipate or plan for?

CEO: The heavy involvement of lawyers…I didn’t anticipate that would cost us roughly 10% of acquisition price in legal fees. For a small company, we couldn’t expect too high of a valuation, so for us 10% was a large chunk. That was painful.

I’ve done business in Europe and it’s very different. Europeans honor their gentleman’s agreements.  Here, the lawyers, rather than the business people on each side, negotiated the entire deal and that doesn’t seem quite right. The Acquirer really forced this situation. Our lawyer warned us early on that even if we try to keep things simple, it will still get complicated; people are going to require all kinds of indemnities and there will be all kinds of negotiations. There were. It was painful not only because it was expensive but also because it took so much time.

So I’d advise someone about to embark on this path to be prepared for a lot of business machinations and a lot of attorney involvement. And even more to the point, if your business is doing well and you don’t have a compelling, immediate reason to sell it, then don’t. Keep it going. Sure, you can test the waters, but don’t sell unless the price is really right and you can settle on terms that work for you. Being a small entrepreneurial company can be fun. In big companies, things seem to freeze and don’t go anywhere.

AM: So, you have stayed on with the Acquirer?

CEO: I promised to stay on for one year; the primary techs signed on for 2 years and we have a non-compete agreement for a year after that period. My job now is really to promote our company, its people, and its technology inside this bigger Acquirer…but it seems the techs are already frustrated of the low level of interest. I do what I can to fix this but in reality I’m just waiting to get out as I have a really hard time to get anyone to listen.

AM: Were there other elements that were unexpected?

CEO: I sensed that there were issues prior to acquisition; the business people seemed to take very little interest in our business which seemed odd. And once the letter of intent was signed, that didn’t change. Our lawyer said that part was unusual. It most cases, according to him, acquiring companies want to secure the arrangements and the relationships before the deal goes through so they act as though they are courting them. But in this case there didn’t seem to be a very strong level of interest other than a willingness to go through with the acquisition. And it seemed that even some of the positive pictures the new company painted have turned out to be pie-in-the-sky stuff…they haven’t really followed through on them.

I told them many times that they should bring our people in on their ideas and visions and let them know what expectations they had, but it really never really happened. I asked that there be some sort of forum where the acquiring company would let our people know what they would be doing in the future. As you can imagine in a small company of eight people, everyone has a key position who know that what they’re supposed to be doing and that their contribution is important to the entire team. In my opinion it is very important to understand that when you are buying a company, it’s the people that are most important…not the code they’ve written. It is unfortunate that our people weren’t handled with care. The Acquirer did finally, as an afterthought, create what they called a “Retention Bonus” however to prevent the non-shareholder technologists from leaving.

AM: In what way would you advise others prepare to avoid the challenges you encountered–words of wisdom, tips, etc.?

CEO: You need to have a clear vision of what are you going to do with you own company; something that you can use as a guide to follow up on and measure against.

You need to keep your people as well informed as you can. In our case, we tried to keep our people informed, but then we weren’t getting much information back from the Acquirer, so our people waited and waited but no much information was forthcoming. Since the Acquirer is privately held, they didn’t want to reveal too much.

AM: Did you find that it created uncomfortable working conditions for you and your people?

CEO: Well it has only been two months, and yes, it has been difficult; I am constantly trying to update my new boss on what should be done, what should be fixed, what should be communicated…essentially defending my troops. I should have been better prepared for the changes that were coming…it’s a large company that grows by acquisitions. You would think that they would make integrating people an important part of their process, since they seem to do this all the time. But because the staff is made up of people who have all been acquired, there is little cohesion. And management there is fairly lean. A company isn’t a unified thing, it’s a bunch of people and if those people aren’t prepared, if they haven’t been properly trained to train others and make newcomers feel welcome, then who knows what will happen.

AM: What went well?

CEO: Well, we’re just two months into the process. I have been working directly with the Company’s sales people. Money talks. My thinking has been that if they sell some of our products then my team will get more of the focus they need, because the Acquirer will then take more notice of what we’re doing, or trying to do. We are also approaching our existing customers and asking them to discuss our products with the Acquirer’s key sales people. I bring them on sales trips to our customers and of course, the sales people will have an interest in what the customers are doing, what they say and what they need. We’re essentially using our customers to get the company to treat my team well. To do it any other way doesn’t seem to work…

AM: What insights will you take away from the experience?

CEO: If I hadn’t been in the present situation (needing to retire and the company short on resources), I wouldn’t have promoted this option as strongly across my company.

There were signs of problems prior to the deal. I had and still have the sense that there is no real interest in what we are doing, but they just needed us for the competitive advantage. Just another check mark.

Since we had such limited time, when it came to due diligence, the time was used to prepare our stuff for them. We didn’t really have time to do much background research on the Acquirer and find out about the individuals and the company culture. Even when we did request information it wasn’t forthcoming or was delivered in wishy-washy answers.

If I had it to do over again, I would likely convince those remaining to hold on to the company and make a go of it as it was. And if I weren’t retiring and had had more time, I would have been more thorough in having my discussions with the Acquirer’s business people who should have be interested in our people and our technology, rather than just discussing with their attorneys. That way I would have known that these guys really don’t have a sufficient level of interest.

I guess that if situation was different, and I had to do it over again, I wouldn’t

AM: What are some of the significant challenges / opportunities that still remain? 

CEO: My remaining challenge for me is to be the promoter of my people, their skills, and our technology in this larger organization and find a place for them where there is an understanding of their importance.

AM: Thank you!

Is DodgeBall Duo’s Departure A Harbinger For JotSpot Wunderkinder?

Written by Sean Murphy. Posted in Founder Story, skmurphy

Barbara Darrow (Unblog) April 16 entry was by Stacy Cowley “Dodgeball Founders Defect From, Take Shots At, Google”

Google’s habit of acquiring promising startups and then disappearing them into the Googleplex Vortex is no secret — it left Blogger to languish for years, and closed Web 2.0 wunderkinds JotSpot (wikis) and Measure Map (blog traffic analytics) to new users the minute it bought them, with no word about when, or if, they’d ever reopen.

The buy and ignore habit has long irked users and pundits, but now comes a sign of dissent from within.

Two years ago, Google picked up Dodgeball, a mobile social-networking application for the always-wired set. The deal netted Google two talented Web developers, Dennis Crowley and Alex Rainert, who built dodgeball as part of their master’s degree work for New York University’s Interactive Telecommunications Program.

But on Friday, Crowley and Rainert loudly left Google, metaphorically flipping the bird at the company on the way out the door.

You wonder if the dodgeballers mis-read the negotiation process and didn’t get an agreement for a new product or service to be developed based on their technology. Two years is when their Google options probably vest, so if they were on an earnout it couldn’t be based on revenue that Google generated from leveraging the technology. They were in college before the acquisition so Google might just have looked like their first “real job.” The picture where they flip Google off is at “me + alex quit google. (dodgeball forever!!!!)” where they also had this to say:

So…. Alex and I quit Google on Friday.

It’s no real secret that Google wasn’t supporting dodgeball the way we expected. The whole experience was incredibly frustrating for us – especially as we couldn’t convince them that dodgeball was worth engineering resources, leaving us to watch as other startups got to innovate in the mobile + social space. And while it was a tough decision (and really disappointing) to walk away from dodgeball, I’m actually looking forward to getting to work on other projects again.

So, what’s next? Starting today (Monday!) I’m joining the kids at area/code who are knee-deep in building all sorts of Big Games (remember PacManhattan? ConQwest?). Alex is moving on to IconNicholson where he took a gig as a Creative Strategist focusing on mobile and emerging technologies. (And sorry, but I don’t know what Google has planned for dodgeball going forward.)

Another perspective by Jason Hahn is here “Dodgeball Founders Quit Google.”

This occurrence certainly sheds a more somber light on the idea of being bought by the almighty search engine. It seems that not even bucketfuls of money can compensate for satisfaction with a job or product, no matter who is paying you.

So far no real news on Jotspot after the acquisition by Google.

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