Balsamiq Studios is “a fresh little software company, focused on adding flavor to your Web Office suite.” The company page describes Balsamiq this way…
Micro-ISV Yes, a couple of guys in a studio
Profitable and Well Funded We’re in this for the long haul
Clear Focus We only bite off what we can chew
Outstanding Advisers We are so lucky!
Contagious Passion We absolutely LOVE this!
Giacomo ‘Peldi’ Guilizzoni, Founder and CEO of Balsamiq, used to be a Senior Software Engineering Lead at Adobe. He recently wrote a post about why he’s blogging less and how Balsamiq Studios is growing and maturing as a company. In it, he says…
I am trying to build what DHH calls “a little italian restaurant on the web”…so while it’s good to know the owners and know that they are doing well, that shouldn’t be the reason you go eat there: it’s the quality of the food (ehm, product) that matters most.
We liked the sound of that and decided to interview Peldi about Balsamiq and the choices the company has made (e.g. focusing on small problems, eschewing outside investments, being in it for the long haul, etc.) Here are his answers…
How did you start working on Balsamiq?
In 2001 I moved to the US with a 5-year plan: learn as much as I could about how to make software from big corporate America, then move back to Italy to start something on my own. After 6.5 years at Macromedia (then Adobe), a confluence of factors made me decide that the time was right to make the jump.
Some of these factors were personal (I describe them in detail in this what’s your story? post), but others were more technical:
- I saw the power of “web office” (being able to save and edit your data from anywhere, revision history, native collaboration abilities and all that good stuff…) and I was hooked. It’s a paradigm shift, which meant loads of opportunities suddenly opening up.
- I couldn’t find a good enough solution to a problem that I had (i.e., early stage collaborative wireframing), and the solution I was dreaming of happened to both require my skill set to implement and was small enough that I could do it all on my own.
- I also read Bob Walsh’s Micro-ISV: from Vision to Reality and Erik Sink’s The Business of Software, which showed me that being small is OK, and of course Getting Real, which provided me with a real example of a new generation of software company: small, ambitious, transparent, fast, daring, fun. It painted a pretty compelling picture: if you guys were doing it, why not me? ;)
Why do you choose to focus on small problems?
From the beginning, I wanted to do it all myself for a while so that I could really understand every aspect of running a business. In fact, figuring out all it takes to bring an idea to market was one of my main goals in starting Balsamiq Studios. As a professional programmer in a large company, I was only peripherally involved in “the numbers,” design, marketing, sales and support issues during my career, but I was always fascinated by the business-side of things. I contemplated going to business school, but was lucky enough to be surrounded by great advisors (Erik Larson, Fang Chang, Michael Fitzpatrick, all MBAs, and my bosses Dennis Griffin and Robert Tatsumi) who talked me out of it. Instead, they pointed me a bunch of great books to read. And read I did! (Here’s my bookshelf if anyone’s interested.) After a few months, I realized that reading would only take me so far. If I was really going to learn it, I was going to have to do it. I had about a year’s worth of saving, so I jumped.
Did you ever consider taking money from investors? Why or why not?
I only considered it briefly, but not until 6 months after launching. To learn what it takes to do it all meant I had to first learn what “it all” is. I suppose I was also trying to prove to myself that I could do it. I made sure to choose an idea that was small enough for me to do alone and went with it. I was also absolutely terrified that it wouldn’t work (you know how you read that “98% of all startups fail” all the time), so I didn’t even consider asking anyone else to join me in my crazy endeavour.
In January it became apparent that I needed to hire someone to help with development while I focused on customer service. I was afraid that bringing someone on would mean another family unit would depend on my actions for income, so I considered raising some funds to get a peace of mind about making payroll, even if it meant having to answer to investors about my decisions. I wrote to Dharmesh’s Shah asking for advice, and he talked me out of it. As usual, he was right. Revenue shot up that same month and now we have enough in the bank to pay for our salaries for 5+ years. We also sell enough each month to cover payroll for another six months or so. Thanks so much Dharmesh!
When did you start to feel like Balsamiq was a success?
For a very long time the feeling was of pure incredulity: how could such a little tool make so much of a splash? We still largely feel that way… in fact I hope we never loose that feeling! We still get excited and yell “yippee!” every time our ‘virtual cash register’ goes “ca-ching!” after each a new sale. :)
Personally, I am only just starting to digest what’s been going on a bit more. In November, Balsamiq was reviewed on ReadWriteWeb, which got syndicated by The New York Times. I also got a call from Leo Laporte and Amber Macarthur for an interview on the Net@Night podcast. I remember feeling like I was the next “Joe the Plumber,” thrown in the limelight for my 15 minutes of fame. But then the attention didn’t really go away, so I guess we must be doing something right. I mean, come on, I’m getting interviewed by 37 Signals, that is just beyond ridiculous! ;)
Who are your advisers and how did you join up with them?
Ha! My advisers are the best, here’s a list with photos.
My former colleagues might not know this, but I spent many years studying their every move, trying to learn from them: I loved what they did and how they did it. When I went solo, I asked some key influencers if they’d meet me once a month over Skype to continue to share their knowledge with me. They all very graciously agreed, and I couldn’t be luckier.
Michael, Sarah and Karen are former colleagues of mine. Michael and Karen are product manager / business types, Sarah Allen is more technical and one of the people I look up to the most in life. (She is now a Ruby developer and making some waves already!) Jason is a long time friend with lots of startup experience and Rob is a good friend and a wizard of the mysterious world of marketing/advertising/branding.
I’m really looking forward to our upcoming first ever Advisors Dinner, a finger-licking crab dinner in San Francisco, and I can’t wait!
You wrote you are trying to build what DHH calls “a little italian restaurant on the web.” Why does that appeal to you more than other options?
I never really understood the concept of building a company with the goal to sell it, or why one should have an ‘exit strategy.’ I just don’t get it. If you’re doing what you love, why would you want to ‘exit’? Maybe it’s because I am Italian, but I see nothing wrong with a business staying small in the long run. As long as we do great work, are happy to do it, and make people happy with it, I see no reason to change anything.
There’s this idea that you want to get rich quick so that you can “do whatever you like” once you have the money. As Guy Kawasaki would say, that’s bull-shiitake: what’s wrong with doing what you’re passionate about from the beginning, and being able to earn a comfortable living while doing it?
You’ve been open about sharing your revenue numbers. Why? What impact has sharing this information had?
I did it mostly to gain my prospective customer’s trust. Would you buy software from a one-person company knowing that there’s a 98% chance that it won’t stay in business long enough to take your support call? Sharing my numbers was a way to assuage that fear.
What I didn’t expect was the enormous amount of attention those blog posts gathered. I may have had to do with timing: the economy is in shambles, people fear losing their jobs and thirsty for good news. I can see the appeal of a story about one guy with a laptop making a good living with his little tool. It’s the same as when we hear about all the blockbuster iPhone developers.
You say you’re “in this for the long haul.” How does that impact how you run Balsamiq?
One thing that I learned from this Balsamiq adventure is that long-term-value trumps any big launch, buzz, first-mover-advantage or any short-term marketing promotion. Our mantra is “life’s too short for bad software,” and we are committed to doing whatever we can to help people design better software and websites. It will take time, and software features are only a small part of it. But this is what we care about and love to work on every day, so why rush it?
How much do you plan out where you want to go in the future?
I’d say nine to twelve months, but I’m always ready to adjust priorities as we go. We don’t have firm deadlines; it’s one of the perks of not having investors breathing down our necks. As long as we do good work at a good pace, I’m happy. I plan on spelling out my current “grand vision” for Mockups on our site soon. It’s a 9-12 month project to complete. After that, we’ll see. We will obviously continue to collaborate with our awesome customers on where the product should go.
We have a lot of ideas for future products, and customers send us great new ones all the time, so we’re not worried about running out of things to do.
What has surprised you most about being an entrepreneur?
I continue to be amazed at how successful Balsamiq is and how fast things are going. In the revenue forecast I made before starting, I expected to have a total of 150 customers after 2 years in business…we just passed 5000 in less than 11 months.
A huge surprise was the demand for the Desktop version of Mockups, something I didn’t plan on selling at first, and now, it accounts for 77% of our revenue.
The media attention has been very surprising as well. I’m sure there are hundreds of successful micro-ISVs / Indie development shops, and small companies who have been doing this for a long time, right?
Last but not least, I am amazed at the incredible community of people that formed around the product. They cheer us on via Twitter and blogs, and help us design each new feature via GetSatisfaction. It’s really touching and quite extraordinary. We are so thankful!