Startable - Healy Jones’ & Prasad Thammineni’s Blog

The SaaS business model is becoming an increasingly important part of the New England technology landscape. It makes a lot of sense that New England technology companies would lean towards the Software as a Service model, since this area has historically been a strong enterprise software innovation center and SaaS is the new way to sell enterprise software. I’m starting a list of some of the SaaS companies HQ’d in New England, with a particular emphasis on ones serving the small and medium businesses market.

I’m sure I’ve left off quite a few - please email me or post comments below so I can try to get a better running list!!

acquia - Acquia is a commercial open source software company providing products, services, and technical support for the open source Drupal social publishing system. They should soon be releasing “Drupal Gardens,” a software-as-a-service version of Drupal that speeds the design and deployment of Drupal social publishing sites for new, non-technical users including small business owners and web designers. The company is funded by Northbridge and Sigma.

Cloudswitch - Some amazing technologists and executives have come together to help enterprises fully capture the power of cloud computing. (Disclaimer, my former employer Atlas Venture is an investor.) The exact business model hasn’t yet been publicly announced but it has the potential to be big…

Constant Contact - THE email marketing company, CTCT is one of the New England’s better known public software companies. CTCT increased revenues in Q1 2009 to $28.1 million, up 55% from Q1 the year before. Gail Goodman, the CEO, has been a local leader in promoting software innovation by offering her experiences and advice to a number of the up-and-coming younger companies.

Carbonite - Seriel entrepreneur David Friend’s online backup company launched in 2006 and has now backed up over 2.5 billion files. The company is a marketing machine. Carbonite is based in Boston and was originally backed by local angel group CommonAngels.

Gomez - A Lexington based company focused on providing SaaS solutions that help companies develop, manage and test their web sites before and after deployment. Customers include Best Buy, Starwood and Wacovia.

Grasshopper - The company formerly known as GotVMail has served over 70,000 SMB customers, providing voice and voicemail services - all without having raised venture capital. People in Boston need to talk about this company more. Read the rest of this entry »

When Scott Kirsner, the Boston Globe Tech Columnist and New England’s Champion of Startups and Entrepreneurs sent me an email sharing details on his upcoming event, What’s Next in Tech, I started wondering what that would be. I came up with few predictions and asked some of the people I respect to validate my predictions. So here are my predictions for what we can expect in the coming years:

Mainstreaming of On-demand Small Business Services

Since late 1990s, large companies have benefited immensely with the SaaS-ification of services. Salesforce.com, NetSuite and many others have built large businesses providing enterprise business services over the web. Enterprises loved them as they did not have to make upfront capital investments and benefited from all the free upgrades, maintenance and more. These services are exhaustive in their capabilities and therefore complex to use requiring a lot of training.

Since 2004, and the launch of BaseCamp by 37Signals.com, small businesses started to get a taste for on-demand services. The success of 37signals.com and FreshBooks.com has shown that small businesses are looking for simple to use business applications that help them become productive, efficient and mobile.

I predict that more and more small business related services will migrate online and will be offered as an on-demand service. Some of the applications you will see include expense management, document management, bookkeeping, tax preparation, and virtual assistant services. Moreover, these services along with those already in the market will move beyond early adopter phase and become mainstream.

Read the rest of this entry »

Has your startup failed before? I don’t mean the exact company that you just founded, but the business idea that you are attacking. It’s not necessarily a bad thing to try to take on a problem that has already gotten the best of other entrepreneurs. Difficult problems can be the most rewarding and can offer great opportunities. But when I was a venture capitalist hearing one of these pitches, it was very frustrating when the founders didn’t realize that there have been other, failed companies in the same space.

If you are pitching something to VCs that has failed before, you need to be able to talk intelligently about what caused the previous failures and how your startup is different. Venture capitalists will want to know that you are aware of the risks in your space and that you are taking intelligent steps to overcome them. Not knowing about other startups that have failed is fine if you are starting a company on your own (I guess), but if you are approaching funding sources you better know if there have been big-time venture funded failures with a business plan similar to yours.

I was always a bit surprised when I knew more about companies that had failed in a space than an entrepreneur trying to pitch me. That really shouldn’t happen. You’d be surprised at how many entrepreneurs present business plans to venture capitalists that have flamed out spectacularly and don’t know it. A little internet research can go a long way, as can some networking in a space before putting together a business plan and starting the fund raising process.

A venture capitalist’s natural response, when hearing about a startup in a space where a number of other venture backed businesses have met an early demise, is to assume that there is something wrong with the particular industry. “It must be a bad market,” goes the typical thinking. Read the rest of this entry »