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Wednesday, July 7, 2010
Is $100M in revenue a stepping stone or milestone for tech firms?
By Galen Moore
MHT's Emerging Technologies Forum: Health IT and the Cloud
UMass Boston launches Entrepreneurship Center
In March, Bill Warner challenged Massachusetts’ IT industry to add 100,000 jobs by 2020. To get there, he proposed a scoring system for Massachusetts companies, in which $100 million in annual revenue is a “triple”; and $1 billion in market capitalization is a “home run.”
We found five privately held companies at, near, or past the $100 million mark in revenue, and asked the following question: “Is $100 million a milestone, or a steppingstone?”
Girish Kumar Navani
CEO and co-founder, eClinicalWorks
“Attaining $100 million in revenues is one of many milestones eClinicalWorks has made and will continue to reach both locally and in the industry. As a private company, we are able to commit ourselves to our customers and employees, making this just part of the journey. We have plans for continued growth well into the future.”
eClinicalWorks LLC
Privately held and bootstrapped, this Westborough maker of health-care software boosted revenue 32 percent in 2009, crossing the $100 million threshold for the first time to land at $112 million.
Milt Alpern
Chief financial officer, ITA Software
“In my view, it’s both. In the context of financial performance, $100 million of revenue is a commonly recognized milestone but should certainly only be considered one of many on the road to greater success. Isn’t it the journey, and not the destination? And on different levels and in different contexts, there are other goals and objectives to strive for in order to differentiate ourselves. Are we addressing previously unsolved problems? Are we generating new business opportunities? Are we delivering expected value to our customers?”
ITA Software Inc.
The Cambridge maker of airline industry software hasn’t discussed its revenue, but in 2006 ITA took in a monster venture round — $100 million in equity from five venture firms. Earlier this year, the company was rumored to have been in talks for a $1 billion acquisition by Google Inc.
Steve Papa
CEO and founder, Endeca
“$100 million is a steppingstone for a true platform company. Over the past 15 years too many ‘feature’ companies have emerged that need to get acquired and be attached to a larger platform. Platform companies require building deep technologies, deep management teams and a consistent long-term track record of customer success. Endeca is proud to be such a platform company and we are looking forward to our continued, and significantly growing, contribution to the Massachusetts’ economy to support Bill Warner’s challenge.”
Endeca Technologies Inc.
With $75 million in venture backing and annual revenues “in the $100 million range,” its founders report, Cambridge-based Endeca makes search software for online retailers.
Todd Cozzens
CEO, vice chairman and co-founder, Picis
“There are so many other factors. Like, what’s your profitability? What’s your growth trajectory? What’s your growth margin? What industry are you in? Assuming you’re talking about a high-tech company in the software business with a high gross margin, it really comes down to your growth trajectory. If you’ve only got a 5 percent growth trajectory, that’s not a great recipe for going public.”
Picis Inc.
From its headquarters in Wakefield, privately held Picis makes health-care software and reports revenue of more than $100 million.
Steve Hafner
Chief executive officer, Kayak
“For us, $100 million is definitely a steppingstone. We crossed that two years ago and are not looking back. We would consider $1 billion to be a milestone — recognizing that only a handful of Internet-based companies get there.”
Paul English
Chief technology officer, Kayak
“I view all milestones as steppingstones. I think entrepreneurs should always focus on a stretch goal — and then do whatever it takes to crush that goal. Once you are at that goal, then raise the bar and figure out the next stretch goal. Our first goal was simply to get people to run searches on our website. I remember us trying to figure out how we could get 10,000 people a day.”
Kayak Software Corp.
With dual headquarters in Canton and Norwalk, Conn., Kayak aims to be the Google of travel search. With a headcount of about 100, the company reports it is doing more than $1 million in revenue per employee. You do the math.
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