Print
Email
Print Edition Stories
Wednesday, September 23, 2009
Born in the Recession
Roger Greene bootstrapped Ipswitch, sans bank funding
By Rodney H. Brown
MHT's Efrain Viscarolasaga: Tech companies may have to wait for stimulus funds
Flash Slideshow: Mass High Tech All-Stars Thought Leadership Roundtable
It was a busy year that saw the founding of Ipswitch Inc.: Among the notable happenings in 1991 was the first Gulf War, the collapse of the Soviet Union, the end of apartheid, and the announcement of the World Wide Web project by Tim Berners-Lee.
That year also marked the end of an 18-month recession brought about by the collapse of a scandal-ridden savings and loan industry. So it is easy to see how a one-person technology company focused on this new thing called the Internet might not make headlines.
According to Roger Greene, the lousy economy’s main influence on his nascent firm was the lack of interest in funding it: “I called a couple banks about getting a loan, and I recall how conservative they were at the time,” he said. “The thought of loaning money to a software company with no track record was just outside of their model.”
That lack of interest turned into a blessing when it came to getting funding, he said.
“We didn’t get any funding, and that was my goal all along. Bank financing was not something I was relying on, but it would have been helpful if I could get it,” Greene said. In addition, with customers still stunned by the recession, the money that wasn’t coming from the bank also wasn’t coming very fast from sales. “Tough economic times made it slower for people to adopt our technology, and I think that discipline of not spending money is something I took to heart,” Greene said.
That first product was a gateway that allowed the Novell Inc. IPX networking protocol to connect with the Internet Protocol, that was rapidly growing in popularity.
Slogging through the recession wasn’t all about downsides, however, Greene recalled.
“I think there wasn’t a lot of money flowing into startups at that point, so we didn’t face much competition from a lot of other companies trying to do the same thing,” he said. Even with little competition, Ipswitch’s products, which had moved from TCP-IP gateways to stacks, weren’t selling as well as Greene would have liked. That is when the company discovered a free FTP product called WS-FTP, and after much convincing, the software’s author, John Junod, agreed to work for Ipswitch.The addition of WS-FTP quickly put the bootstrapped company on the short path to profitability.
“We broke even in 1992 and then in 1993 we made a little money. Around 1996 was when we started to become significantly profitable,” Greene said.
Greene thinks that Ipswitch is now in its best position ever, in terms of growth. “Up until a couple of years ago, I would have said the late ’90s because we were growing really fast then, and profitability was high,” he said. “It really slowed down in the 2000s but in the last two years it has really taken off.”
Still, the lessons learned from starting a company in a recession and thriving for nearly two decades stay with Greene — and one in particular resonates today.
“It’s really easy to forecast expenses and it’s almost impossible to forecast revenue, so don’t spend until you have actual revenue,” he said.
Ipswitch: A customer’s perspective
Bruce McMillan is the manager, emerging technologies, for Solvay Information Services, the Marietta, Ga.-based IT group of Belgian pharmaceutical firm Solvay SA. He uses Ipswitch Inc.’s What’sUp Gold for network and server monitoring in locations around the globe, and has been a customer for more than five years.
What’s the best thing about working with Ipswitch? Some years ago, I got an e-mail saying they were looking for beta testers, and I responded to the e-mail. Their engineering group is about 10 miles from our office and I’ve gotten to know the engineering people real well, along with Roger and the product managers, and I feel like this is partially my product. They’re very, very open to suggestions. I am seeing stuff in the shipping version now that I have asked for in the past. So it’s neat to be part of that process.
What bugs you about the company? I wish the product cycles were maybe a bit closer together. Even that being said, I see progress, and that’s a good thing. It’s not like a different wrapper on the same old program. They might not implement something I want today completely, but there will be baby steps toward it.
What can you say about Roger Greene? The first time I met Roger I was in Amsterdam doing some work and they happened to be over there doing some training for a Dutch partner. I met him and had dinner with him and a couple of other guys on their team. He intently listened to everything I had to say about the product, and that’s always a good first impression.
Comments
If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.
RSS Feeds
