Speaker: Peldi, Balsamiq (@peldi)
[Note: During this talk Peldi asked for part of the talk to be private to only those attending the conference. I did not take notes for this portion of the talk.]
This talk will expose how Peldi truly doesn’t know what he is doing. Balsamiq making $2M in profit off $7M in sales, despite Peldi being CEO.
2008 – The 1st Plan
Started in 2008. Original business plan was to just be a plugin into Atlassian Confluence. No desktop, no SaaS. (Desktop is still the best seller in 2015).
Plan didn’t work:
- Had to do desktop
- Randomly chose price of tool based on what a beta customer said
- In 8 months, grew rapidly to 3,000 customers
- Had to ask wife for help
- Had to hire programmer
2009 – The 2nd Plan
Decided to start hiring people, but no more than 6 people. Got to 6 people and decided he was satisfied and wanted the company to stay exactly the same for the next 2 years.
But customers kept coming. A conflict occurred between his dream and what the market wanted.
Came up with the concept of a “natural size” of a company to solve a problem. The market demanded his company have a larger natural size. He determined the natural size was 25 people, even though he only wanted a 6-person company.
Sept 2010 – The 3rd Plan
Three months into the 2nd plan, the third plan appeared.
- Incoming acquisition offer from a company–custom offer
- During courtship, CEO of other company flew to Italy with his wife for 3 nights to meet Peldi and his wife, and meet the team based in Italy
Peldi asked the team to write down the pros and cons of the acquisition for them and for the company. Even though each team member would be instantly a millionaire, they all listed more cons than pros.
Oct 2010 – The Real 3rd Plan
Came up with a vision for an independent Balsamiq while on the plane to Business of Software 2010 for his first talk.
- In 3-4 years the plan is to reach $10M in revenue, to become as big and well-respected as 37 Signals
- Ship as SaaS
- Ship Reusable Symbols
- Detailed plan involving delegation and specific steps
- Included a counter offer to employees to get 50% of their salary as a bonus if they double-down on their commitment to an independent Balsamiq
When Peldi said no to the offer after his BoS 2010 talk. Scott took notes about why the acquisition process failed as a post-mortem during the dinner.
The 3rd Plan Worked…For About A Year
- 10 people different than 5
- nothing written down
- first conflicts
- started reluctantly to write down company policies
- fired first bad hire…took many months and made him physically ill
- tried to turn this person around
- “Radical Transparency” slowed down
- Team was a sounding board
- Embarassed about how he didn’t know what he was doing
- Stopped sharing salary info
- Stopped sharing roadmap because new customers would complain about features not implemented on a 2-year old published roadmap, even though direction changed
2012 – the 4th Plan
- Read Valve Organizational Charts
- Learned about flat management
- Read The Tyranny of Structurelessness by Jo Freeman aka Joreen
- Structure evolved, whether you like it or not
- If no structure is created, a shadow structure emerges
- That shadow structure can be toxic
- Watched:
- New policies: bit.ly/balsamiqpolicies
- Keep cushion of 18 months of expenses in the bank (currently $2.6M)
- Balsamiq Kaizen
- Continuous improvement
- Monthly meeting where everyone works on the company
- Professional Development
- Team is most important assest
- If team doesn’t continue to learn, the company will go downhill
- Spend time learning & developing
- Exercise Time
- Included in your schedule
Inverted organizational charts – show that the CEO is only there to support the managers, and managers are only there to support the line employees
Migrating off of Flash, since it’s a dying technology. Was originally refactoring, but has turned into a full rewrite. Kept digging deeper. Eventually developed claustrophobia. Finally shipped a complete re-write.
Current Set of Worries
- Fear of getting comfortable
- Reaching 20 people…might have to have managers soon
- Heads down too long, not doing enough inspirational leader thing
- Don’t have another 5-year plan
- Has he reached his limits?
But he has built a great company working with people he loves to work with.
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