Speaker: Ray Simonson, CEO of COREWORX Inc.
More information including video: http://www.marsdd.com/Events/Event-Calendar/Ent101/2008/lived-it-lecture-12032008.html
4. Background
– 1948 - First of ten Children
– 1966 - UBC Honors Math and Physics - Flunked out
– 1967 - Lumberjack BC and Teamster Toronto – 6 years
– 1973 - System Design Engineering at U of W (3.5 Yrs)
– Ran out of money = Dropped out
– 1977 - University of Waterloo Computing Centre
– Building Hardware and writing low level software
– 1979 - Mutual Group of Canada
– 12 years in Technology and 4 years Administrative Management
– 1995 – Partner - Ashburnham Group – Document Tech Consulting
– 1996 – Bluegill co-founder and CTO - Sept 1996 to March 2000
– BlueGill pioneered first EBPP software solution , First commercial XML app
– 2000 - CheckFree – SVP and CTO
– Highest performance Web based Statement application
– 2004 - Tech Capital EIR
– 2005 - CTO Software Innovation
– 2006 – CEO Software Innovation (now Coreworx Inc.)
5. Entrepreneurs
• A person who organizes, operates, and assumes the
risk for a business venture.
• Entrepreneurs are optimistic and future oriented; they
believe that success is possible and are willing to risk
their resources in the pursuit of profit.
• They are fast moving and flexible, willing to change
quickly when they get new information.
• Entrepreneurs are persistent and determined to
succeed, because their own money and ego are at
risk.
6. The Intrapreneur Opportunity
Corporations must innovate to survive;
• the best method is to encourage creative
people to become entrepreneurs within the
company structure (quot;intrapreneursquot;) by
allowing them to earn the freedom and
resources (quot;intracapitalquot;) with which to pursue
their visions (establish quot;intraprisesquot;).
7. Intrapreneur
• An intrapreneur is an entrepreneur within a
large firm.
• For the intrapreneurial employee, advice
abounds. They are advised to be courageous,
moderate risk takers, frugal, flexible, and
creative about their pathway.
• Their task is to put together a team of
enthusiastic volunteers, build a network of
sponsors, and ask for advice before asking
for resources
8. 10 commandments for
intrapreneurs:
• Gifford Pinchot's 1985 out-of print book quot;
Intrapreneuring, Why You Don't Have to Leave the Corporation
to Become an Entrepreneurquot; provides 10 commandments for
intrapreneurs:
• Do any job needed to make your project work regardless of your
job description.
• Share credit wisely.
• Remember, it is easier to ask for forgiveness than permission.
• Come to work each day willing to be fired.
• Ask for advice before asking for resources.
• Follow your intuition about people; build a team of the best.
• Build a quiet coalition for your idea; early publicity triggers the
corporate immune system.
• Never bet on a race unless you are running in it.
• Be true to your goals, but realistic about ways to achieve them.
• Honor your sponsors
9. Intrapreneurship Helped Me
• Technical training
• Financial experience
– Budgets, performance plans, costing
• Management experience
• Personal development
– Communication
– Facilitation
– Personality Styles
• Contacts
– IBM
– Xerox
– Xplor
• 12 Potential new careers
10. ADF - The Transition - 1994
• ADF – Automated Document Factory
(Gartner Group)
• at Mutual Life we had built the most
sophisticated ADF on the planet.
– We merged a traditional in-plant print shop
with the Computer output group, the mailing
machine functions, the copier functions and
some sophistciated computer programming
• This allowed us to create more
sophisticated documents at less cost than
any of our competitors or any of the
service bureaus of that time
11. The Plan
• Sell ADF service to other in the
community
– Economical, Manulife…
• Better Yet – Spin it out
• A team was assembled to plan the spin
out
– Finance
– Legal
– HR
– Management Consulting
12. The Proposal
• After a years work
– Plan presented to TMG mgmt cmte
– Turned Down!
• I decide to leave Sept 1995
– Tried another shot at getting the ADF out
– Working with IBM and a Toronto Service Bureau
we propose to manage the TMG ADF , buying the
equipment, adding more modern equipment and
managing the staff who would remain TMG
employees
13. Consulting
• Working with the Ashburnham Group is fun
• A-list customers
– IBM Printing Systems Division
– Xerox Printing Systems Division
– Commercial Union Insurance
– Private Service Bureas
• Lots of Travel
– UK, Scandinavia, South Africa, USA
• Learned a lot about international business
and running a small consultancy
14. The Decision
• August 1996
• Consulting is fun but hard work and not
as profitable as I would like
• I look at many opportunities
– IBM Consultant
– Industry Job
– Big Printer Mashup Startup
– BlueGill
15.
16. The Beginning
– Founded September 1996 with $400,000
• Hal, Ray, Vinay, Tom Kinnear and 4 Investors
– HQ in Ann Arbor (Hal’s Garage)
– Development in Waterloo (Ray’s Basement)
– Goals…
• Converge Internet Delivery and Document
Production Technologies
• Market leader
• Technology leader
17. The Idea…
• Provide Software Solutions To Transform
Legacy Billing And Statement Systems Into
Interactive Web Applications For Managing
Customer Relationships And Transactions.
• Or turning client snail mail into an internet
application to improve receivables, cross
selling and customer service while reducing
cost
18.
19. Management Team
• Hal Davis – Marine Biology degree, Michigan MBA
– VP Marketing ISI – Print & software vendor
– Rock Band Leader
– Employed by Defense Contractor re: nuclear triggers
• Ray Simonson – no degree (yet)
– IS Executive – Large Canadian Insurance Company
– Computer Consultant/Technician – UW
– Teamster & Lumberjack
• Vinay Gupta - Economics and Michigan MBA
– M&A guy for Cabletron – Network Company
– Regional Manager for Asia Pacific – Cabletron
– Small Business – Networking Services Chicago
20. Hiring
• Sep. 1996 Hal, Ray and Shannon
• Oct. 1996 John (Sales) Erik (Dev)
• 1Q97 1997 Steve, Paul, Shannon, Rick,
Tony -Dev
• 2Q1997 Vinay, Mike & Kelly
• Small team until June 1998 ?
21. Business Strategy
• Sell to Internal Document Groups – Print and Mail
– expense reduction
• Trade Shows and Conferences – The
“VISIONARIES”
• Talk to Analysts – To Develop the Market
– Strart small
– Get to Gartner level
• Business Contacts
– Ameritech 1996,1997
– IBM
• Pursue IBM partnership (3 points)
• Create a Product for Service Bureaus (now ASPs)
– Special Pricing, Training, Collateral, Help Sell
23. Market Positioning
• Quadrant I
• “The new product - new market territory is the
classic yet very difficult path taken by
pioneering, technology driven entrepreneurs.
These individual take all the arrows in the back,
often only to have new market entrants quickly
exploit their expensive ground breaking efforts.
• Of course there have been some big success in
this area but their have also been some very
big failures.”
• Michael L. Baird
• Engineering Your Start-Up
• ISBN 0-912045-48-5
24. How do you Build the Market
• Seminars & Conferences
– Offer to Speak as an expert
– Trade Speaking for Booths and Perks
– Run Workshops before conferences
• Partners – IBM - Gerstner
• Use your reference Customers
• Do it Again and AGAIN!
25. Finding Customers
• Partner – Ameritech 1996,1997
• Trade shows
– Moore BCS
• Business Contacts
– Xplor got us to big Insurance and Banks
• Friends Business Contacts
– MBA Network
• Industry specific conferences
26. Channels
• Lasercom
– Small European CSF reseller
– Swisscom, Deutchposte, EDB Oslo
• IBM
– AT&T B2B
– Guardian B2B
– …
• * We Did Most of the Work
27. What Do You Have To Do
• Develop Sales & Marketing Strategy And
Be Prepared to Change
– From Document Group to Marketing Group +
Web Group
• Develop Quickly – To Keep Up With Sales and
Marketing – CitiBank
• Must Keep The Customer Happy
– Close Down Development If You Have To
– High Level of Support – Someone has bet on
you!
• Max Out Your Credit Cards
• Manage Cash
28. Early Funding (1000)
• 1996 – Founders $400 K
• 1997 – Angels $600 K
• 1997 – Employees $100K
• 1997 – ISS $350 K (long night)
• 1998 – Arbor Partners $600 K
• Cash Management: Pay order
– Employees
– Supplier
– Execs
30. 1998
• May
– Had raised about 1.7 $
– Offer to Purchase – Sweetheart Deal
– Also looking at a VC Term sheet for 5.8M
• June 1998 – Accept $5.8m Menlo
Ventures & Morgenthaler Ventures offer
– Started hiring
– Bought better gear
31. 1998 – 20 Customers
• Chase - 45 days - BSP with Spectrum
• CitiCorp - BSP - CMI - Transpoint
• US Bank - CSF
• Capital One
• Cellular One
• Putnam Investments
• Trimark Mutual Funds (Canada) PDF
• Cable and Wireless (UK)
• EdoTech (Barkleys Bank) UK
32. Partners
• Value Added Resellers:
– IBM
– LaserComm - Europe
– Xerox
– EDS
– M&I Data Services
• Service Bureaus
– Moore
– Standard Register
– Vestcom
33. 1999
• 2nd Round $20M – Valuation of
$60,000,000
• BlueGill is “Market Leader” (Gartner,
DocuLabs, GIGA, Forrester …)
– There are Now Some Tough VC Funded
Competitors
• Offices in London and opening Singapore
• 50th Customer By November
• 100 People By Year End
– 45 Development
– 55 Sales, Marketing, Support, Professional
Services
34. December 1999
• Issues With Rapid Growth
– Could No Longer Manage Day To Day
– Development Was Getting “Rayed”
• Hired New Management People
– Marketing EVP
– Customer Services VP
– Development VP
– Product Management VP
• Looked for New CEO – VC Suggestion
35. December 1999
• About to Acquire #2 Competitor
– 1 day
• IPO Planned for Mid to Late 2000
• CheckFree Make an Offer for BlueGill
– Dec 20th – offer accepted!
– April 30th 2000 Deal closes
– Tech Team has to stay
– Everybody is happy and wealthy
36. What worked
• Teamwork and Trust
– Complimentary skills
• Strong Marketing
– BofA visit
• Strong Technology Team – 6 of us beat
much larger offshore competitor
• Local marketing made it easier to hire
• Work hard but have fun
• Go big or go home
37. Company Culture
• Communicate a lot (travel)
• Everyone Knew Everyone
• No Task Was Beneath Us
• Work Hard – Play Hard
– Company parties for employees and
families
– Bumper Ball, Paintball…
• Easily attracted top people in all areas
38. Advice
• Hire The Best Employees
– GH Smart theory
• Hire experienced Lawyers &
Accountants
• Engage the right partners and support
them properly
• Compartmentalize
– Personal vs work
• Never give up