Shibboleths - how do we get numbers up and keep quality high?

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Permalink Reply by Corey Reid on October 6, 2008 at 2:18pm

"Profit is a necessity, not an objective."

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Permalink Reply by David Irwin on October 6, 2008 at 2:26pm

I guess it depends on who exactly you want to leave out. For a micro-ISV, $10M is a pretty successful buyout! That would allow me to quit my day job and be a full-time micro-ISV owner instead of relying on nights and weekends.

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Permalink Reply by Brian Swanson on October 6, 2008 at 2:31pm

@David Irwin you make a good point, and Neil can speak better to this than any of the rest of us, but... I think the point of this group is not really targeted at those looking to build a company and sell it. It's for those who are building software as a long term business (probably because they love it).

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Permalink Reply by mark stephens on October 6, 2008 at 4:41pm

I care passionately about my business but need to know if the google offer is in cash or shares.....

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Permalink Reply by Brian Swanson on October 6, 2008 at 4:44pm

LOL

mark stephens said:

I care passionately about my business but need to know if the google offer is in cash or shares.....

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Permalink Reply by John Stack on October 7, 2008 at 4:13am

Your enrollment might be enough; however, if Google offered anyone ten million, unless you had FB like success, well, wouldn't we all take it? Personally, as long as it was in cash and not shares (of anything right now), I'd be good.

My first question might be: Are you a travelling man?

Second question: In your travels, have you found that collaboration means personal extensibility? Ultimate extensibility is reflected in terms of profit.

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Permalink Reply by Brian Swanson on October 7, 2008 at 4:49am

It's funny (in an interesting way, not laughable) to me the different thoughts here on the Google Shibboleths...

It appears that some would consider taking it because that would be a great valuation for their company. I'm thinking that if you are truly building worthwhile software that you would not likely settle for ONLY 10 million dollars.

A relevant story in my life...

I started my business full-time almost 2 years ago. We have started as a consulting company, and have always had the goal of transitioning to a software company within the first 3-5 years of business. We've had amazing success thus far, but of course have a long way to go. For the first 12-14 months I was a one-man shop, working out of my house and putting in killer hours. But of course as one person doing consulting you are limited by the number of hours the world has put in a day, and the number of days in a week, weeks in a month, so on...I said to my wife one day half in jest, half not..."When Purple Ant has a million dollar month, I will have the logo tatoo'd (sp?) on me somewhere..."

Her jaw kind of dropped a little, and said "That'll be great if we have a million dollar year..."

I corrected her "No...I said a million dollar MONTH"

She had NEVER FATHOMED that this business I had started would ever get that big...

I mention this story as a matter of perspective for those trying to build a business. I think Neil's original Shibboleth was meant that you aren't building yet-another-quick-win business for Google/Microsoft to buyout. But, I'm extending it also to mean that you don't have your sites set so low as to believe the software your company will build will have a high-end valuation of 10 million dollars. I'm sure there's statistics available out there somewhere, but I'd say a company bought for 10 million probably has annual sales in the 2-5 million range, and well....I'm not setting my goals that low.

There's a HUGE difference between taking 10 million from Google, and having Facebook like success...several hundred million dollar difference...You'll find Purple Ant aiming to be somewhere comfortably in the middle of that range...

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Permalink Reply by Dan Nunan on October 7, 2008 at 12:34pm

"I care about building long term, sustainable, profitable software businesses"
"If Google offered me ten million dollars for my business I would refuse"
"Profits count more than eyeballs"

The first of those makes sense - aiming to build a long term sustainable business is what creates the value, and increases the chances of a successful outcome - whatever that is (including a purchase by Google). I don't get exactly what is wrong with change of ownership.

Of course, the "I'm not going to grow beyond 20 people becuase I don't want to be really challenged" is in many ways worse than the unprofitable, short-term, unsustainable business we can recognise, because it's a wasted opportunity. Employment growth in places like the US and UK is coming from small firms hiring, and as Brian hints at, I think it's good - great even - to have an attitude of "we're small now... but one day this will be huge". It helps keep employees motivated, and keeps the economy ticking over.

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Permalink Reply by David Irwin on October 7, 2008 at 6:14pm

To clarify my point a little - there are a lot micro-ISV folks out there like me who have our own company, but it's on the side. It doesn't make enough money to hire me full-time, so I have another "real" job that actually pays me.

I don't want to sell my company; I'd much rather grow it, but if I got an offer of $10M (or even less) right now, I'd take it. I'd do that because that money would then enable me to quit my day job and start another company on my own that I could actually work full-time on.

Maybe my case is the small minority - folks interested in the biz of software but who don't work for their software company full-time - but I bet there are a lot of others.

To sum up my point, perspective is everything. $10M is nothing to a company of 15 people who have raised $5M in venture capital. But it's a fortune to a bootstrapped micro-ISV with only one employee.

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Permalink Reply by Bob Cramblitt on October 10, 2008 at 3:26pm

I want to build a company that makes some aspect of business better, faster, easier or more economical.

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Permalink Reply by Steve Cholerton on October 11, 2008 at 10:13am

What was it Steve Jobs said ? 'The Journey is the reward'. I think that sums it up, we're in it because we love it

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Permalink Reply by Craig McWherter on October 14, 2008 at 7:37am

"As a general rule, where circumstances do most for men there man will do least for himself; and where man does least, he himself is least. His doing makes or unmakes him." ~Frederick Douglass

Business success surely comes through hard work, persistence, and a little self-influenced "luck". We all certainly care about sustainable business models that lead to profitable businesses. But not all businesses will remain so over time, even with the most intense efforts to the contrary. It seems to me that there are business circumstances in which not taking the 10 million would be irresponsible. Is it possible to, rather than selling out, sell up? Can't you have a long-term plan for your business life that allows for the possibility of more than one endeavor?

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