If you haven't seen the news yet, the word is out on the biggest Jive news in a long time: we took a $15M round of investment from Sequoia Capital. We're all thrilled about it. It was a great milestone and a nice validation for a lot of hard work, but more importantly, the best path to maximizing a huge opportunity in a rapidly growing market...not to mention, a great way to see how creative journalists can get by using the word "Jive" in their title.
I thought I would send a few thoughts on why we're fired up about this, why we went this direction and how we plan to use the $ ongoing.
Why did we raise the money?
Since the beginning, we have had a vision of open collaboration and how it can fundamentally transform the way a company works. Now the market is starting to agree with that vision and is seeing the benefits.
We're proud of how we have grown this business over the last six years. We've been profitable since inception and have put good money in the bank. We have made our share of mistakes and missteps, but we haven't sacrificed our values and ultimately those mistakes made us stronger and smarter. This year we struck a mighty vein with Clearspace when we launched in February. Now the growth is in high gear and bringing on a funding partner is a step towards becoming the provider of choice in the market.
Why did Sequoia choose Jive to win the space?
Sequoia has a very good handle on the market, and they saw the opportunity in the same way we did - companies were stuck between too much structure (Sharepoint) and too little structure (hundreds of point solutions), and were willing to pay money to have an integrated, community collaboration system for their employees and their customers.
So when they met Jive, and found a company that had real customers, solid revenue, profitability, a motivated team, a great product, and a track record of execution, it was a perfect fit. We want to win as much as they do, and will do what it takes to get the right people involved.
Hands-down, these guys have one of (if not the) best track record of any VC (Oracle, Apple, Cisco, Yahoo, Google, YouTube, etc.). They brand themselves as "the entrepreneurs behind the entrepreneurs," which in our experience seems to be true. There's a lot of operational experience in those walls and they work very hard for their companies. What else?
1. Smart Growth: They allow us to see the world through a longer-term lens. Instead of making decisions in the interest of short-term profitability, we now have the ability to make investments that support our larger goals, such as acquiring a key technology or investing in remote offices.
2. Recruiting: As the growth continues, making sure you get the right people on board is paramount, and a good investment partner can attract great talent.
3. Partners: We've done a great job building relationships with the likes of SAP, Oracle and IBM, but there's a lot more opportunity out there. Sequoia not only knows the right people, but is well-connected to the rapidly changing needs of those potential partners.
4. Mgmt assistance: We've got a great management team in place, but having such a stellar set of coaches helping you out makes a big difference. These folks have seen these challenges many times before, but are still open to creativity and not treating the business plan as a formula.
5. Advisors/board: As we build out the board and advisory board, they can help think through and attract the right folks.
6. Guidance: If we ultimately decide to take the company public, or if the company were to get acquired some day (not in the plans), these guys are the ones we want to have in our corner.
What will change?
Not much. We still have the same values and team. We're still laser focused on solving business problems and creating value for our customers. We've proven that we can grow this business profitably, so there's no "shoot the management team" attitude that a lot of VC's have. And we're still looking very hard for great team members.
What this does mean is that we're going to get a lot more focused on the long-term goal of winning the market, as well as building out the infrastructure to support our rapidly growing customer base. This means investing in international offices (where we already have a lot of customers), building out the infrastructure for support and sales, adding much needed engineers to our R&D team and building out the marketing to make sure we're continuing to meet our customers' demands.
Was it a hard choice?
Definitely. We are proud of our heritage as a bootstrapped company. It's helped to shape a culture of discipline and customer focus, and it's always fun to say that we never raised a dime. Plus, there's a few folks in this office that are a bit suspicious of VC's. And for good reason - there's a lot of bad ones out there who destroy companies in the name of selfish interests or bad management. But this situation is different for several reasons:
One VC: not a bunch in the room arguing for their own needs.
Minority stake: they're along for the ride, not driving the ship.
Great firm: these guys didn't get where they are by forcing bad decisions.
In short, we couldn't be happier with the outcome. We are ready to take this company to the next level, and look forward to a productive relationship with Sequoia.