06 Aug 6 tips for building a $695 million business — Part 1
How did Jos White build, grow and ultimately sell MessageLabs for $695 million in cash? At SaaSGrowth2018, he told us. Now we’re telling you.
In June we staged our first Sales Confidence conference at HereEast, in London’s Olympic Park. We called it SaaSGrowth2018. We had over 200 SaaS professionals in the audience, watching more than 30 of London’s foremost SaaS experts share their knowledge. Even if you couldn’t make it, we want to share the inspiration and education with you through our SaaSGrowth2018 articles.
It was a pleasure to welcome Jos White to the SaaSGrowth stage. What a story! Jos co-founded and built 3 businesses with his brother Ben — RBR Networks, Star and MessageLabs. The last one is the fascinating one. In 2008, MessageLabs was acquired by Symantec for $695 million. Now Jos is an investor at Notion, the VC firm focused on B2B SaaS and Cloud tech.
In Jos’ talk for SaaSGrowth, he shared his story, including 6 pieces of advice if you’re looking to build your startup into a multimillion-dollar company.
1 — Use your luck
Jos realises that he had some lucky breaks on his journey. However, seeing them when they arrive, and taking advantage of them? That’s a skill.
‘We were based in Cirencester, which is funny because it’s basically a farming town. But in Cirencester, there was this place called QA Training. It was one of the top tech training centres in the UK. They train a lot of the top CTOs. A lot of the trainers have full-time jobs, but they come and train part-time, so they can keep abreast of the latest developments. We got our top 3 techies from QA Training. If we, and QA Training, hadn’t been in Cirencester it wouldn’t have all come together in the way it did.’
‘We were humble at MessageLabs about our luck. When you have luck like that, you need to have the courage of your conviction and double down. Throw everything you have at it.’
2 — Raise the right money from the right people
It’s something VCs often talk about at our Sales Confidence events. Not all investors are created equal. Jos puts it this way.
‘We were fortunate that we only actually raised one funding round. We raised it in 2000 just before the dotcom crash. There’s our luck again! We had stars in our eyes. We chased the investor that would give us the highest valuation because we thought it was just amazing.’
‘Now that I understand the investment market better, I realise it’s a combination of the right money at the right valuation, but also the right people.’
‘Our lead investor was a private equity company that knew nothing about tech. We were an orphan in their portfolio. We didn’t have much support from them. It was difficult. When I look back, we didn’t have a lot of outside help or mentors, but I think it would’ve really helped if we had.’
3 — Focus
You can’t be all things to everyone, so concentrate on being the best you can be at your one thing. At least, at first.
‘This is a really obvious point, but we got carried away at MessageLabs about delivering additional services. Our average revenue per user was dipping, so we thought we needed to add new products. We added an encryption service and an archiving service, but they were massively distracting and took us away from our security focus. Security was what we were known for and what we’d built our brand around. It wasn’t the right thing to do.’
‘Focus has become a vague term because everyone talks about it so much. I think it’s important to know what to focus on, but also what not to focus on.’
Great advice, don’t try to run before you can walk. Don’t let anything distract you from your core mission.
Stay tuned for numbers 4–6 of Jos’ tips. You won’t be disappointed.
In the meantime, let’s continue the conversation. When have you been lucky in your business? Let us know in the comments below.