Emu Bob

Recessions are the Brick Walls We Need to Climb Over

This weekend we were busily packing up our house for an impending move to London. I am moving over for 12 months to help grow Ephox in Europe.

At first glance this may seem like a stupid thing to do given that Britain is facing its worst slump in 60 years. Why on earth is this a good time invest time and money in developing the market there?

The main reason was that brick walls present a challenge that is highly motivating*. I have also had an unshakable belief that great companies are built in difficult times. Warren Buffett has it right when he says to be greedy when others are fearful and fearful when others are greedy.

My wife and I moved to Silicon Valley in August 2002. In the week of October 8, 2002, the NASDAQ composite touched its lowest point of 1,114 and completed its ride down - way down - from its all-time high of 5,132. Over $5 trillion in market value of technology companies had been wiped out.

Was coming to the US at that time a good idea? In hindsight yes it was. The tech market wasn't any easier in Australia at the time and getting a foothold in the Valley was much easier on a shoestring in 2002. We were able to hire staff, rent premises, rent accommodation and much more without resorting to the ridiculous premiums of the dotcom era. My wife was also very lucky to get a job with Qualcomm and had stock options priced at the lowest their stock had been in 10 years. Talk about timing!!

Building a company in a recession can be a good thing for a range of reasons. Many great companies have had their formative years in tough times. I have often said that if we had arrived in the Valley a few years earlier we could easily have raised a ton of VC and long since flamed out. Getting going in the recession really focused our energies on the important things and instilled a profitable growth mentality that most start-ups never get.

Will increasing our investment in Europe - and in the US and Australia - pay off during this recession? Time will tell :)

_____________
*Yes, I have been reading Randy Pausch in The Last Lecture.

Ephox is in Europe

Ephox is now in Europe! I have just signed the lease for our new offices near London.

We are moving into the ground floor of Gainsborough House on Thames Street in Windsor.

The location is superb. The building is located right next to a pedestrian-only bridge over the Thames River. The beautiful Eton is just across the bridge and if you look up you can see the imposing Windsor Castle. There are many restaurants, pubs and shops around. It was almost too picturesque! I am hoping the great surrounds will enable us to build a strong, fun culture.

An appealing thing for me was the office is very close to the train station. Getting to central London involves catching a 6 minute train to Slough and then a 15 minute train to Paddington - very reasonable.

We are now recruiting several account managers to work alongside our CTO Adrian Sutton (who now lives in the UK), our European MD Mark Whitehouse, and, shortly, myself. I am planning to move to London for about 12 months starting in July.

Organizing for Innovation (Part 1) - Why?

Last week I traveled downunder to visit our team in Brisbane. One of my outcomes from the trip, I hope, has been to better align our 'engineering' team in a more market-oriented way.

In the first part of a few posts on this subject, why did I feel this was necessary?

Just because we happen to do software engineering as a critical part of our software company, this doesn't make our focus 100% engineering. I wanted to see our developers get more on the the front foot, to take ownership, of what I called "delivering successful products". To do this, I needed them to expand their horizons to incorporate all of the varied activities that go into creating successful products. This is not to say that they didn't appreciate it previously, but I just felt we needed more.

I am a big believer in software engineering and its' capability to emerge as a profession. But just like being a lawyer might be your profession, it isn't really what your firm does or why it exists. To illustrate my point take a look at the home pages of Silicon Valley's largest firms of lawyers, Wilson Sonsini or Fenwick & West. Lawyers are clearly a profession, yet the closest they come to saying they are a law firm is that they are "the premier provider of legal services to technology and growth enterprises worldwide." It is in the language of their clients' and they are clearly structured around practices that are even more focused. You would see the same at a hospital filled with doctors.

Just like in a law firm or hospital where there are many practice managers for different areas that worry about the issues in a particular field, so I felt we needed practice managers at Ephox who woke up and looked in the mirror in the morning thinking "how will MY clients be more successful today?". To become experts in their respective customers' challenges and goals. To be entrepreneurial.

EditLive!'s success had a momentum that was like a rubber band pulling us back to its' vision and not enabling us to dive head first into new territory. With these changes the team will have a brief that will see us grow into new areas that deliver innovation beyond the editor and, also, to a deliver our existing best-of-breed technology to a range of customers that we previously haven't worked with.

In the next posts I'll dive into what the changes we have made. If you are interested in a preview, Adrian is discussing what his new role will include.