Transcript Slide 0

From Invention to Start-Up
Case Study III – iConclude Business Plan
© 2006 iConclude, Inc. All rights reserved.
Agenda
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1
Getting Started
Business Plan Goals
iConclude 2005 January Plan
iConclude 2005 June Plan
iConclude Today
Key Learnings
© 2006 iConclude, Inc. All rights reserved.
Getting Started
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Entrepreneurial “DNA”
• Enterprise Software with 2 previous successful startup experience
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Identifying a compelling market opportunity
• Automating manual procedures in large IT shops – validation done in a project
at previous employer
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Deciding to leave a high paying job and a great career
• Enterprise software company in Sunnyvale, CA
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Picking the team – needed complementary skills
• Strong software development and architecture background
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Validating customer need
• Customer painpoint, gaps in existing solutions, willingness to pay
• 20+ customer discussions – existing relationships, heavy networking
2
© 2006 iConclude, Inc. All rights reserved.
Getting Started (continued)
•
Getting company off the ground
• Naming the company
• Legal
• Office Space
•
Validating & Creating initial Product Concept mockups
• Did not invest too much time in writing code
• 10+ customer reviews and feedback
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Looking for initial funding
• Existing relationship with Madrona Ventures – no-brainer
• Building the initial business plan in a powerpoint
3
© 2006 iConclude, Inc. All rights reserved.
Business Plan & Fund-Raising
Angel = 500K
Series A = 2.5M
• Team & credibility - 2
• Expanded Team - 8
• Customer pain point
• Alpha Product
• 5+ customer
validations
• 2 Early Adopter
Customers
Series B = 9M
•Completed Team
•VP Marketing
•VP Development
•Sales Team &
proven model
•Shipping Product
• Product Mockup
• 20+ Customer
Validations
•4 Paying Customers
• Go-to-market model
•1M+ Pipeline
• Product ship timeline
• Financial Model
•Capital Efficiency
4
January 2005
July 2005
April 2006
1 Week
3 Months
1 Month
© 2006 iConclude, Inc. All rights reserved.
January 2005 Business Plan
Capital Expenditure
.5M to BETA, 3M to Release
Product Shipment/Fit
9 months to release; Product/market fit was unclear
Product strategy was 60% clear
Let customers drive the other 40%
Sales Model
Enterprise Direct Sales Model with Tele-sales model
Product would be plug and play – little consulting
Market Maturity
New market; Uncertain how quickly customers would adopt
We perceived that it would be easy to sell
Market Opportunity
Jan 2005 - VP IT Support – HELP DESK
-Automate Resolution of IT Help Desk Incidents
- Unclear on which infrastructure to focus on
Customer Acquisition
20 customers within 1 year of selling
Bookings
2.3Million in Bookings; Expand 3 deals
5
© 2006 iConclude, Inc. All rights reserved.
January 2005 - iConclude Business Plan
Market Opportunity
Empower Tier 1 support in IT to
resolve complex problems quickly by applying
automation to manual resolution process
Reduces
• IT support costs
• Escalations
• Mean time to resolution (MTTR)
Tier 1 – Help Desk, xOC
Tier 2 –xOC, Specialists
Tier 3 – Experts
Tier 4 - Developers
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© 2006 iConclude, Inc. All rights reserved.
January 2005 - iConclude Business Plan
Market Size
Monitoring
Help Desk
System Management
$1,722m
Application Management
$2,042m
Network Management
Service
Resolution
Service Management
$483m
1B+
$740m
Change and Configuration Management
Asset Management
$907m
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*Gartner New License Revenue
Forecast 2006 © Total:
$6,486m
2006 iConclude, Inc. All rights reserved.
January 2005 - iConclude Business Plan
Customer Validation
“This is exactly the problem area we are trying to address right now”
– Director Operations, Pemco Insurance
“If I had to chose I would buy this thing anytime over a helpdesk tool”
– CTO, Drugstore.com
“This technology will help me bridge the knowledge gap with my outsourcers”
– Group Manager, Microsoft IT
“Purely selfishly, I want to apply this to our networking problems”
– Sr. Network Engineer, Amazon
“Managing IT is not our core business, so let’s automate process and eliminate
the need for people!”
– Sr. Architect, Washington Mutual
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© 2006 iConclude, Inc. All rights reserved.
January 2005 - iConclude Business Plan
Company Milestones
Milestone
#1
Milestone
#2
GA
BETA
Seed
Round
Round
A
Feb
CAB
Mar
Apr
May
Design
Partner
#1
Jun
Design
Partner
#2
July
Aug.
Sep.
Paying
Customer
Funding
Customers
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Product
© 2006 iConclude, Inc. All rights reserved.
June 2005
Where do you apply the solution first?
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Did Customer Incident/Alert Surveys
• Found resolution needed to address broad server, exchange, storage, network stack
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Classic marketing theory told us that we should focus on 1 infrastructure
• Target specific infrastructure (i.e. Exchange), go sell & market to that vertical
• Hard for startups to build a Horizontal play
• We decided to go deep on Microsoft Exchange
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Customers did not resonate with Microsoft Exchange
• Needed solution that could address problems across Networking, Servers, Storage etc.
• They would not buy if the solution was Exchange ONLY
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© 2006 iConclude, Inc. All rights reserved.
June 2005
Go-to-Market Strategy
Fortune 1000 focus Sales model
• Tele-sales & direct sales model - initial 100 deployments
• SI’s, ISV’s, Systems Mgt. vendors
• Viral Marketing via Online Repair Packs
Licensing/Packaging
• In-house deployment or pre-configured hardware option
• Subscription & Perpetual Licensing
Community Strategy for creating content
• Customer Proprietary Content
• iConclude Content
• Community Content
Still part of 1 year roadmap & Strategy
Not part of 1 year strategy
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© 2006 iConclude, Inc. All rights reserved.
iConclude Today
Alert/Incident Management & Much More
INCIDENT RESOLUTION
Ad-Hoc
Systems
Systems
Monitoring
Monitoring
Tribal Knowledge
Automate
Scripts
Static Triage
Run Books
Diagnosis
Post-Its
Repair
Service
Service
Desk
Desk
Knowledge
Knowledge
Management
Management
Event
Event
Consoles
Consoles
TRACKING
INCIDENT
DETECTION
INCIDENT
DETECTION
Flexible
AutomationINCIDENT
Platform for:
Incident
Management
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Problem
Management
Change/Config
Management
Tools & process
integration
SA Maintenance
Tasks
© 2006 iConclude, Inc. All rights reserved.
Fortune 50 Investment Banking/Financial Services
Analyzed 70% of Alert Volume on Infrastructure Alone
Windows, Linux, Unix, Networking, Databases, AutoSys etc.
High Repeatability – 65% alerts are being automated (> .5Million alerts daily). Savings of $5Million - Labor cost $60 – Actual cost > $100.
DSG Minutes/Dollars
MS Exchange
MS Exchange
Win Services
Win Threshold
Win Pinger
Unix Pinger
Unix reboot
Unix Threshold
Net App
Unix/syslog/pci
Unix/syslog/sbus
Network IP
Network router
Network switch
Network Vitalnet
Network SNMP
Network BGP
Queue analysis and service restarts
Exchange server process stop, restart verify
Verify, Restart, Re-verify
Babysit some and escalate if consistent, for disk space - find usual suspects and
clean
Verify, System type lookup, verify recent reboot, escalate if necessary
Verify, System type lookup, verify recent reboot, escalate if necessary
Verify, correlate, close
babysit and potentially escalate, if disk or page file, then free space or adjust
Just verify and throw away some, remediate others
Verify, count and watchdog escalate and/or open SRS ticket
Verify, count and watchdog escalate and/or open SRS ticket
NSO Minutes/Dollars
Ping, lookup SMS, login to gateway, login to switch, run Cisco command,
open/close ticket or escalate
similar procedure to above
similar procedure to above
Actual Occur.
5 months
8974
7247
13224
16216
7846
31969
14679
6445
28465
71246
29620
(Est.)
Avg. Savings/
Potential
Occur. Annual Incident (minutes) Annual Savings
21538
13
$279,988.80
17393
4
$69,571.20
31738
2
$63,475.20
38918
6
18830
1
76726
1
35230
2
15468
6
68316
5
170990
3
71088
3
Est. Annual DSG Savings
40753
97807
5
37498
17171
10957
9990
9529
89995
5
41210
5
26297
4
23976
3
22870
3
Est. Annual NSO Savings
$233,510.40
$18,830.40
$76,725.60
$70,459.20
$92,808.00
$341,580.00
$512,971.20
$213,264.00
$1,973,184.00
$489,036.00
$449,976.00
$206,052.00
$105,187.20
$71,928.00
$68,608.80
$1,390,788.00
PCO Minutes/Dollars
DB Iwatch
DB Liveback
check
DB Logmon check
DB Repserver
issues
Autosys MAXRUN
Very simple verification/remediation procedure
Remotely log onto DB servers, look in logs, run scripts, potentially kill/start
processes
Logon to machine, check running process(es), restart server process
Verify which of several issues this could be, typically run one or two commands to
fix
Watchdog to see if job completes within acceptable threshold
9362
22469
2
$44,937.60
7192
17261
5
$86,304.00
3156
7574
4
$30,297.60
22724
54538
3
$163,612.80
394850
1
Est. Annual PCO Savings
$394,850.40
$720,002.40
164521
$4,083,974.40
Business Plan Changes
Capital Expenditure
Burnt 500K less than original plan
Product Shipment/Fit
V1 was 2 months late; Great product/market fit
Sales Model
Enterprise Direct Sales Model – expensive & hard
Requires consulting to make customers successful
Tele-sales model is about 2 years away
Market Maturity
Created new market category – “Runbook Automation”
Early adopter market transitioning to early majority
Great momentum – customers have the pain
Market Opportunity
Now – VP IT Operations – Data Center
-Automate Alerts Resolution
-Automating manual procedures
-Automate Change/config. process
Customer Acquisition
Exceeded plan by 5 customers
Bookings
Exceeded plan by .5M
14
© 2006 iConclude, Inc. All rights reserved.
Big Learnings
• It’s all about the team
• Validate & experiment - don’t repeat
mistakes again
• Listen to Customers
• Make changes quickly
• Start selling early - you learn only when
you sell
• Be capital efficient
15
© 2006 iConclude, Inc. All rights reserved.