One of my favorite times for me in the life of a company is when it finds its sweet spot and really turns on the juice. Over the past year, we’ve had a number of our Boulder-based investments find this magic moment, including Trada and SendGrid. The most recent Boulder-based company to really hit its stride is Gnip.
Gnip is around three years old and is a testament to our belief at Foundry Group that it often takes several years for a brand new company to really find its mojo. While Gnip is building a business based on the idea that led to its creation, like most firms breaking new ground it has had its share of bumps along the way.
The first version of the product was based on an architectural approach that didn’t aptly satisfy all players in the ecosystem and wasn’t flexible enough. This led to a reset of the business, including a layoff of almost half the team (who were quickly absorbed into a number of other local Boulder companies, including several that we funded) and a different approach to the product. This approach worked much better, but by this point one of the co-founders was frustrated with the customer dynamics (all business facing) and decided to leave to start a new consumer-facing business (he left on good terms, we are still good friends, and he’s much happier today).
At this point, the other co-founder, Jud Valeski, stepped up to be the CEO. Jud is an extremely experienced CTO / technical product manager and developer, but had never been a CEO. The investors in Gnip committed to supporting Jud in any way he needed and he’s done a spectacular job of building the product, growing the team, negotiating several significant deals including the first Twitter data resyndication deal, and unleashing a very compelling set of products on the world. His one-year CEO anniversary is approaching, and things are going great.
The last three months have been pleasantly insane. Gnip has been adding customers at rate that any investor would be proud of, is executing flawlessly on the product and operations side as it scales up, and is posting month over month growth numbers that put it in the “they are killing it” category. Oh, and they are hiring as fast as they can find great people; across the spectrum (business, sales, & engineering).
I’m super proud of Jud and the team he’s built at Gnip. I expect we’ll look back on 2011 as the year that Gnip went from a highly product development focused company to a company that was firing on all cylinders. And Boulder will have another substantial software / Internet company in the mix.
I’m super proud of my friends at Gnip. Last week they announced that they had closed another $2m investment from Foundry Group and First Round Capital and signed a deal with Twitter to become Twitter’s first authorized data reseller.
Via Gnip, you can now get three new premium Twitter feeds in real time for non-display use:
Gnip provides access to over 100 other social media feeds but has spent a lot of time in the past six months optimizing and tuning their system for Twitter-related data.
While Gnip has had its public ups and downs, including a reset of the technical approach and parts of the team about a year ago, co-founder and CEO Jud Valeski has done a magnificent job over the past two quarters of accelerating the business with real customers, adding huge depth to the technology stack, building a team that is continuing to scale nicely, and solidifying a long term relationship with Twitter that has been in the works for a while.
If you haven’t look at Gnip recently or didn’t know they exist, sign up for a free trial and take their social media API for a spin for 72 hours. Or just contact them directly if you are interested in any of the new premium Twitter feeds.
My first company, Feld Technologies, didn’t have contracts. Instead, we had a one page PSA (professional services agreement) that spelled out in English that we charged $X per hour, would do our best, and our invoices were due upon receipt. We never had a single legal issue with a client, although we had a number of tense moments which we almost always solved successful by “doing our best.” There were a few cases where this wasn’t enough and our clients effectively fired us, but we always made it easy for them to walk away if they weren’t happy.
Since I started investing in 1994, I’ve been on the giving and receiving end of an endless number of contracts which often include SLA’s. I’ve seen every type of agreement you could imagine and at this point have become completely numb to the dance of a buyer and a seller of any type of product or service trying to get to a legal contract. As I’m sure many of you have experienced, the business terms are simple to work out, especially between rational people that want to work together. But once things get into “legal” or “procurement”, it’s a whole different issue.
The other day, I was on an email thread between Gnip and a new customer. Gnip recently launched v2.0 of their service and it rocks. They’ve held off on adding new customers for the past few months as they relaunched their service and are now starting to add new customers at a steady clip. In the email thread, they quickly agreed on pricing with the customer who then asked “what’s your SLA.” Eric Marcoullier, Gnip’s CEO, responded with the following:
Our SLA is fairly simple (and I’m happy to write it up for you in more official language):
- We can’t control data publishers’ availability, but if they’re up, we’ll get the data.
- Machines and clouds fail, even on EC2. If Amazon is up, we’ll get the data.
- The best way to guard against machine failure is duplicate hardware. We offer highly discounted backup boxes.
- You’ll always have my cell phone number — if our software breaks, you can call me 24/7 and I’ll get my team on it.
- If we aren’t living up to our end of the relationship, you can cancel the contract with no penalty.
The customer’s response was “You are class act! I wish all legal issues can be handled like this.”
Now, Gnip is young so Eric is in a position where he can still talk to any customer that wants to talk directly to him. However, as they grow, I expect this tone will exist throughout the business since it’s Eric’s style. Basically, keep it simple, be clear about what you will do, be available, and take responsibility for your service. I’m sure more formal contracts will find their way into the business but wouldn’t the world be a better place if more business was conducted this way?
Gnip has completed the latest version of their schema and is now about to embark on a campaign to integrate at least 100 services by mid year. They’ve decided that rather than simply choosing them by themselves, they’d crowd source the process.
There are currently over 350 web services in consideration with more being added every day. You can vote on which ones you’d like to see integrated by going to https://gnip.uservoice.com. This will be a dynamic process with Gnip tagging the web services that are either in process or completed.
If you build web apps for a living, consume data, or just like to vote on things, come help Gnip prioritize the next services to integrate.
Kevin Kelleher’s article on GigaOm this morning titled 2009: Year of the Hacker made me think back to the rise of open source after the Internet crash of 2001. In the aftermath of the crash, many experienced software developers were out of work for a period of time ranging from weeks to years. Some of them threw themselves into open source projects and, in some cases, created their next job with the expertise they developed around a particular open source project.
We are still in a tense and ambiguous part of the current downturn where, while many developers are getting laid off, some of them are immediately being picked back up by other companies that are in desperate need for them. However, many other developers are not immediately finding work. If the downturn gets worse, the number of out of work developers increases.
If they take a lesson from the 2001 – 2003 time frame, some subset of them will choose to get deeply in an open source related project. Given the range of established open source projects, the opportunity to do this today is much more extensive than it was seven years ago. In addition, most software companies – especially Internet-related ones – now have robust API’s and/or open source libraries that they actively encourage third parties to work with for free. The SaaS-based infrastructure that exists along with maturing source code repositories add to the fun. The ability to hack something interesting together based on an established company’s infrastructure is omnipresent and is one of the best ways to “apply for a job” at an interesting company.
We are thinking hard about how to do this correctly at a number of our new investments, including companies like Oblong, Gnip, and a new cloud-computing related startup we are funding in January. Of course, many of our older investments such as NewsGator and Rally Software already have extensive API libraries and actively encourage developers to work with them. And of course, there are gold standards of open source projects like my friends at WordPress and masters of the API like Twitter.
If you are a developer and want help engaging with any of these folks, or have ideas about how this could work better, feel free to drop me an email.