Last week Tableau Software filed their S-1 with the SEC as part of the process to go public. Tableau, a business intelligence enterprise software company, is different from many of the IPO filings mentioned recently in that the company is already profitable, has been incredibly capital-light for their level of success, and is based in Seattle.
Here are some notes from the Tableau S-1 IPO filing:
- Common business intelligence use cases include increasing sales, streamlining operations, improving customer service, managing investments, assessing quality and safety, studying and treating diseases, completing academic research, addressing environmental problems and improving education (pg. 1)
- “Land and expand” business model that starts with a free trial and then grows from there (pg. 2)
- Over 10,000 customers (pg. 2)
- Revenues (pg. 2)
2010 – $34.2mm
2011 – $62.4mm
2012 – $127.7mm
- Profits (pg. 2)
2010 – $2.7mm
2011 – $3.4mm
2012 – $1.6mm
- 17% of revenues are outside the U.S. and Canada (pg. 6)
- Growth strategy (pg. 6)
- Expand customer base
- Further penetrate existing customer base
- Grow internationally
- Innovate and advance products
- Expand distribution channels and partner ecosystem
- Foster passionate user community
- Cultivate exceptional culture
- 749 employees (pg. 16)
- Sales and engineering groups have the most hiring growth (pg. 16)
- 239 orders over $100,000 in 2012 (pg. 20)
- Using NetSuite for financial management and salesforce.com for CRM (pg. 24)
- Currently does not offer a SaaS product (pg. 25)
- Limited use of indirect sales channel partners (pg. 25)
- Class B common stock has 10 votes per share and is concentrated among officers and directors (pg. 38)
- 321 people in sales and marketing (pg. 55)
- Transactions over $100,000 take over three months to close with transactions below that amount taking less than three months (pg. 56)
- 25% of purchase price for maintenance and support contract (pg. 57)
- Insiders took $32mm off the table in 2010 by selling shares to existing VCs (pg. 122)
- Co-founders own 49% (pg. 125)
- VCs own 44% (pg. 125)
Tableau has had amazing growth, especially considering they’ve only raised $15mm total from venture capitalists ($15mm for growth and more than that for insiders to sell their shares). The big wild card is their ability to transition from installed software to cloud-based software. If they can do that, they’ll have even more upside potential.
What else? What are some other thoughts on the Tableau S-1 IPO filing?
One of the trends we’ll be seeing this decade is more intuitive reporting and real-time dashboards. At Pardot we employed LED Scoreboards whereby we had a large TV mounted on the wall with our current quarter’s goals displayed in a Google Spreadsheet that was manually updated daily. From a technology standpoint, we had looked into real-time business dashboards but hadn’t gotten around to implementing one.
Here are the real-time lightweight business dashboards I’ve seen on the market:
- Geckoboard -
$19/month for 20 connections
12 employees on LinkedIn (source)
- Cyfe -
$19/month for unlimited everything
1 employee on LinkedIn (source)
- Leftronic -
$42/month for 2 dashboards
10 employees on LinkedIn (source)
- Ducksboard -
$25/month for 3 dashboards
9 employees on LinkedIn (source)
At a glance, it looks to be a small but competitive market. Real-time lightweight dashboards will become even more common as more and more businesses switch to products in the cloud with open APIs. I’m looking forward to trying them out.
What else? Do you use a real-time lightweight business dashboard and what do you think of it?
Three days ago my new Tesla Model S electric car arrived. After reading so many articles and reviews online I knew I wanted to try one out but I didn’t want to wait six months before I could get one (each car has to be custom ordered and there’s a long waiting list). So, naturally, eBay is the next logical place to look and there was exactly what I wanted — a black one with the extended battery (rated at 265 miles on a single charge) and the technology package.
I can’t say enough good things about the car — it truly is amazing.
- Pure electric (crazy to think I’ll never need a gas station for the car)
- Roughly $1 of electricity to go 30 miles (compare that to a $4 gallon of gas to go 30 miles)
- Unbelievable acceleration (0-60 in 4 seconds)
- Stunning 17″ touch screen in lieu of a center console (no buttons!)
- 7 seats for a large family (mine came with the optional jump seats that are rear facing)
- Smooth ride quality and no noise (the electric engine is basically silent, like a golf cart)
- Great range at 265 miles
- Excellent Google Maps navigation system and Slacker internet radio built-in
- No long road trips off the beaten path (as more electric car superchargers are installed this goes away)
- High price relative to a similar-sized sedan
- No parking sensors, blind spot monitoring, etc (gadgets you would expect in a high-end car)
- Awkward placement of the interior door handles and area to pull the door shut (it’s about six inches too high and too close to the dash)
Overall, the future is bright and the Tesla Model S is now the standard for all cars, electric or otherwise, going forward. Electric cars are going to succeed and be common on the roads within 10 years.
What else? What are your thoughts on the Tesla Model S?
Continuing with yesterday’s post, Will the Next Major CRM Provider Please Stand Up, there are a number of trends on the horizon that will have a major impact on CRM. CRM, or Customer Relationship Management, is such a large market that a number of trends, like social media, have already started changing the product landscape. I’d like to talk about three specific trends.
Here are three trends in CRM that are on the horizon and will have a serious impact:
- Decline in Sales People — just like travel agents, as markets mature and web technologies get better, more and more products and services will be bought in a self-service manner online, reducing the number of sales people (sales people will never go away but technology is going to replace a number of them)
- Industry Specific CRMs — one size doesn’t fit all and as more people are exposed to modern, web-based CRMs, the opportunity also grows for a more specialized system that takes into account nuances relevant to that vertical and market (generic systems are already customized to be industry specific, but they aren’t as elegant as a custom built system that achieves a critical mass of customers)
- Ease of Integrating Cloud Apps — AppExchange, and the number of third-party apps that integrate into Salesforce.com, is often cited as one of the main reasons Salesforce.com is such a dominant force in the industry, only now there are a number of robust third-party APIs and cloud middleware applications that make it easier than ever to integrate apps, slowly removing one of the biggest barriers to adoption
CRM serves as the core of many B2B businesses. Over the next 3 – 5 years, we’re going to see many changes and industry trends play out in the market.
What else? What are some other trends on the horizon that will affect the CRM market?
Customer Relationship Management (CRM) has been around for decades. Over the past 10 years, Salesforce.com has risen to prominence as both the largest Software as a Service (SaaS) company in the world and the largest CRM company in the world. Salesforce.com has an incredibly powerful product that is now geared towards the enterprise and over time has moved away from the small and even low mid market segments. Also, at a price point of $65 – $125/user/month (retail), the pricing is more inline with what larger organizations can afford to spend. The product is the most robust and most well integrated with other applications.
Market wise, there exists an opportunity for a lighter weight, more end-user friendly CRM that’s in the $5 – $15/user/month for the small to mid-sized business segment of the market. It doesn’t need to be as comprehensive as Salesforce.com, but it does need to be fairly customizable, and just as important, integrate with a large number of third-party apps (one of the most challenging things). SugarCRM, NetSuite, and Microsoft Dynamics CRM have strong products, but all target the enterprise with products that are north of $30/user/month.
Here are some of the current contenders in the SMB market:
So, the SMB market is clearly healthy with a number of competitors, but talking to other entrepreneurs, no system dominates. I believe over the next 2-3 years another CRM player will emerge as the leading SMB provider, and it’s only a matter of time before the winner becomes apparent.
What else? Do you use any of these products and who do you think will be the next major CRM player?
Atlanta is strong at B2B startups and weak at B2C startups. Why is Atlanta strong with B2B startups? In the late 1970s Atlanta was home to the largest software company in the world, Management Science America (MSA), which in turn spawned many other B2B tech companies. Generally, there’s also a more conservative, pragmatic ethos about the region that results in a let’s-solve-a-problem approach to entrepreneurship. So, should much weight be put on growing the B2C startup community?
Here are a few thoughts on the importance of B2C startups in a tech ecosystem:
- B2C startups, when successful, generate significantly more press and media coverage, on average, compared to B2B startups, which in turn makes it easier to recruit talented people and highlights the city
- B2C startups are riskier and more likely of a binary outcome, making it harder to raise capital, providing a virtuous cycle of few B2C startups (people successful in a B2C startup are more likely to invest in other B2C startups)
- B2C startups are seen as cooler because they generally influence a larger number of people and have a greater chance of changing the world
- Several of the largest tech success stories over the past decade are B2C: Facebook, Twitter, Instagram, Zynga, etc
B2C startups aren’t better or worse than B2B startups but they do have different characteristics and fewer strong ecosystems. My belief is that B2C startups are important to support, yet overall, the best thing to do is accentuate the existing ecosystem strengths.
What else? What are your thoughts on the importance of B2C startups in a tech ecosystem?
The Atlanta Tech Village has been open for 10 weeks now and we’ve been having a great time. Real estate and community building, as an entrepreneur, are very different from enterprise software, but still the same regarding the need to constantly learn, talk with customers, and iterate.
Here are some observations and lessons learned after having the Atlanta Tech Village open for 10 weeks:
- Community support has been phenomenal and hundreds of people have reached out to see how they can help
- 102 paying members have joined so far (a paying member is someone that has a membership with a desk)
- To have greater density of people, and drive down the per person costs, parking is going to be the limiting factor (we can get to 450 members with our current parking deck and we’re going to have 600 desks once our renovations are finished — many parking decks are in the area)
- Demand has exceeded expectations for people wanting a spot to go to one or two days a week (we thought more people would be in three to four days per week)
- Companies with two or more people prefer a private room instead of being in a large coworking area (we knew that was the case but we didn’t realize to what extent)
- High end, locally ground coffee has been a big hit
- Super short contracts/agreements are a big draw for entrepreneurs
- Serendipitous interactions are already happening and creating value for the community
- Simple programs like Free Food Fridays, where we have catered lunch for everyone every Friday, are some of the best ways to bring the community together
10 weeks in, the Atlanta Tech Village is exceeding my expectations and I’m looking forward to the continued enhancements and changes.
What else? What are some other observations about the Atlanta Tech Village you didn’t expect 10 weeks ago?
Google Reader is one the few products I use every single day. There are a number of blogs and sites I enjoy staying up-to-date with, especially ones related to entrepreneurship and startups (my favorite blogs). Yesterday, like millions of other people, I read that Google is shutting the service down July 1st to focus on their core products.
Here are a few thoughts on Google Reader:
- As a product, it solves a real need in the market, but Google needs billion dollar opportunities, of which it is not
- RSS, the XML format used to share information, caught on in the enterprise but never transcended to consumers
- Twitter, as a way to share and find relevant content, fills the human desire to consume fresh information
- Services like Feedly and NewsBlur are available providing similar functionality
Google Reader is a valuable and useful tool that wasn’t able to meet its owner’s ambitions. RIP.
What else? What are some other thoughts on Google Reader?
Rally Software Development Corp., makers of tools to help software engineers be more productive (agile software development lifecycle tools to be exact), just filed their S-1 to go public. S-1 IPO filings are a great way to really dig into a company and read about all the nitty gritty stuff that isn’t usually covered in such detail. Rally is interesting on a number of levels: it’s based on Boulder, CO which has a good tech startup brand but few public software companies, it’s been around for over 10 years (that’s how long overnight successes take), and it’s riding the trend in software development going from a waterfall to agile methodology.
Here are notes from the Rally Software S-1 IPO filing:
- 154,982 paid users and more than 1,000 customers, including 36 of the Fortune 100 companies (pg. 1)
- Customer renewal rate of 129%, taking into account paid seat nonrenewals, upgrades, and downgrades (pg. 1)
- Agile, as a software development methodology, was introduced in 2001 (pg. 2)
- 13% of revenue derived from international customers (pg. 4)
- Growth strategy (pg. 4)
Increase sales to existing customers
Acquire new customers
Continue to innovate
Expand international presence
Increase market awareness and drive adoption of Agile
- Incorporated in Delaware in July 2001 under the name F4 Technologies, Inc. (pg. 5)
- Revenues (pg. 8):
2010 – $18.4M
2011 – $29.7M
2012 – $41.3M
- Losses (pg. 8):
2010 – $9.7M
2011 – $9.9M
2012 – $11.6M
- Accumulated deficit of $71.5M (pg. 11)
- Primary competitors are Atlassian, CollabNet, and VersionOne (pg. 13)
- 343 employees (pg. 15)
- $12M line of credit with Square 1 Bank (pg. 54)
- Venture capitalists own 76.5% (pg. 106)
Rally has all the makings of a successful IPO with strong recurring revenue and a high growth rate. Losses are high but growth rate is more important at this stage of their lifecycle.
What else? What are your thoughts on the Rally Software S-1 IPO filing?
This past week the term “scout” came up in two different conversations in the context of big companies hiring other companies to help source innovative ideas and startups. Generally, the concept makes sense but I hadn’t ever heard of formal programs with retainers and performance-based fees. Big companies have a hard time innovating internally, which is one of the main reasons startups have such great opportunities.
Here are a few thoughts on innovation scouts for big companies:
- The bigger the business, the bigger the new opportunity needs to be so that it’s worthwhile unless it is a bolt-on to an existing business (e.g. if you’re Google and the new line of business won’t have a billion in revenue in a few years, it isn’t worth their time)
- Many industries have exceptionally long lead times to bring an innovative idea in the fold, like automotive, making for an even larger need to cast a wide net and fill the top of the funnel
- Innovation has a number of false-starts such that it’s even more beneficial for scouts to filter the signal from noise for big companies
Innovation scouts make sense for big companies and I expect there’s more out there than most people realize.
What else? What are your thoughts on innovation scouts for big companies?