Friday, March 27, 2009

Question and Answer

Posted on was the question 'Will be the last software company to hit $1 billion in revenue?' just passed the trailing $1B revenue milestone 10 years after its founding and, given the economic situation, this attention grabbing redundant question, was fair game.

Three experienced people follow the softball question with affirmative answers from their different perspectives:

1. Bryan Stolle, Mohr Davidow Ventures- With more connected people than ever, the opportunity to create value is larger than ever

2. Bill Portelli CEO CollabNet- An emerging 'cloud' market which IDC pegs at $42B in 20012 is but one area where the next $B company can emerge

3. Scott Abel, CEO Spiceworks- The opportunity for Social Business Applications (defined here on the SpiceWorks blog) is untapped and has many nascent billion dollar segments.

Each of the commentators make valid points, but from my perspective, a post by Bill Gurley of Benchmark, highlighting the way Tencent, a China based company founded in 1998 as an IM based service, has surpassed $1.2B in revenue by branching out from its IM roots by offering related services to its growing customer base. Its growth seems eerily similar to the way Amazon is no longer solely about books; yet has a powerful set of business principles that naturally lead to adjacent markets.

The company concentrates, though not exclusively, on building revenue via sales of casual games, communications services, payment services and advertising. With more than 60% of its employees involved in R&D, and most sales transacted via self-service that does not require salesforce intervention, the firm seems to embrace a blend of a 'Google' culture, within a commerce driven business model. It's a wonderful post (though a bit too virtual good centered for my taste) and worth reading here.

It's been a wonderful question and answer morning.

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