Russell Jurney’s blog post has spurred me out of my blog-laziness to talk about something I’m passionate about - starting companies and helping entrepreneurs. If you haven’t read his most excellent post, titled “The California State of Mind” - stop now and read it.

As a follow-up from his post, I wanted to share something not widely known in Atlanta circles about how Nolan and I funded Appcelerator. Sure, everyone by now around town has heard that Appcelerator was funded by Storm Ventures, a well-known Silicon Valley VC. They’ve probably also heard that we moved Appcelerator from Atlanta to Mountain View, California last summer - almost a year ago now.

But that’s not the full story and I’d short change you if I don’t tell you the rest of the story. How did we get there? So, you know that we moved and that we raised money to follow our dream. But, how did we get there and how did we survive before that?

We had been in business almost a year and half before we raised money and had almost 15 employees when we raised money. The other little known fact - and for good reason - is we also generated just shy of about $1.5M in revenue in ~12 months *before we raised money*. Yes, our little ‘ole poor startup in Atlanta had real revenue from some real customers. Mind you, our revenue was largely services based and was revenue we generated by helping a few select customers implement our technology.

That’s the rest of the story - the back story to the funding. And there’s a lot to learn from that. Of course, as a small private company, I’m not really a big fan of talking about revenue. It’s just not usually fruitful to do that for a lot of reasons. However, it’s easy to misread the situation when you talk about our situation and your situation and the greater situation of the Atlanta startup scene. That’s because, most entrepreneurs get fixated on raising money to build their business - that they forget about what matters: solving real problems for real customers and translating that into cash. Remember the goal of that wonderful startup? Yeah, create revenue. Your cool product idea sucks if it doesn’t somehow, someway, create a path to value - which most of the modern world ultimately weighs as cold hard cash. Facebook’s doing it. Google’s printing it. Even Yahoo, that company we all thought was “dead” is generating billions of it.

The new VC is the old VC and it’s got the best terms on earth: cash.

No equity and no board meetings required. Just build something that they need and they’ll pay you for it.

Do that and you’ll transform your startup. You’ll have lots of options. Worse case, you’ll have a lifestyle business. (I’ve heard that 2 cadillacs and a boat is better than an office at the ATDC these days.)

So, I’m sure I’ve made it sound easy. Well, solving a real problem for a customer that will pay you isn’t always easy. But, guess what, if you can’t do that, you can’t raise money outside of the Bay Area anyway - give it up. And, guess what, the myth is that Valley companies don’t make money. Well, some don’t, sure. But, the pressure here to perform, to measure, to execute … much much much more than Atlanta. Steel sharpens steel.

Here’s what I did to make it happen

I was very, very fortunate to have a few trusted customers that believed in me. That’s right, not too much different than investors. They bought my vision and believed I could help them - and that by doing that, they would also help me (key point). They were willing to take a risk on me and what we were trying to accomplish and that there would be a mutually beneficial outcome.

The mutually beneficial outcome was that if we could help them solve some problems at a certain price and within a smaller than usual timeframe, it would be worth it to them (read: they would pay money). In trade, it would help us improve the product, work to refine our value proposition and give us cash. I love working hands-on with customers because there’s where it matters the most. It’s not as fun as just getting a pile of money to spend and getting in a nice little bubble… but trust me, if you’re not working with customers, you might as well assume you’re doing it all wrong - because you are.

We also tried on purpose to limit how many customers we worked with and what types of deals we did. We were small and wanted to keep it that way. In our case, we didn’t want to build a big services business. We wanted to continue to generate enough incremental revenue to hire 2 more engineers and still have 4-5 months of cash in the bank in case things slowed down. We funded almost 15 souls through around 5-6 full-time billable employees (granted, a number of us were working well over 70-80 hours per week on multiple customers).

But, we couldn’t have done this if we didn’t have great customers that helped. And they were willing to take risks. And we’re forever grateful for that. (One note, our customers weren’t all in Atlanta and in fact, we covered Boston and another area too).

So, why did we raise money?

Nolan and I both have experience in services companies and both have started services companies before Appcelerator. Most service companies are awesome lifestyle business. They’re also feast or famine and very difficult to scale. We’re software guys. I like software - a lot. So, we viewed our strategy as a way to work with customers to help us develop the product and to give us enough runway to figure out how we could scale the product (and really, what the product we wanted to build would be). It always takes a lot longer from the beginning to create “the product”.

We got to a certain point (read: revenue) that we had a choice. We needed to either ramp up considerably given the size of revenue and potential pipeline of new services revenue, or, we needed to raise enough capital to allow us to transition out of the services business to focus on the product full-time. It’s almost impossible, in my opinion, to build out a real product and do services at the same time. We knew that.

So, we had options. I had experience raising VC money and I had contacts. Once we got to a certain level, our advisors and Nolan and I started thinking that it would be time to think about bringing in outside capital. We also were lucky on the timing. We timed things just right, and that’s pretty hard to do given where the economy ended up just 6 months later.

My advice to you is simple. And, it’s a slight twist on Russell’s.

Either:

1/ Move to the Valley and shut up.

2/ Stay in Atlanta and stop complaining.

In either case, you’ll need customers. Fund your startup with customers. Build something that customer’s need and will pay for. If you do that, #1 or #2 really makes little difference in the scheme of things.

(P.S. This advice applies to everywhere else outside of the Bay Area too).

Appcelerator vs. Software Interrupted

Last night I got the opportunity to come back to my home town and do the keynote this morning at SoCon09 - a very excited event that we started 3 years ago and is still growing!

Here’s my slides.

The Appcelerator team has been hard at work over the past few months coding away into the wee hours and today we are incredibly excited to announce the preview release of our new product – Appcelerator Titanium™. Titanium is an open source platform for building applications using standard Web technologies (like HTML, CSS, and javascript) that extends functionality outside the browser and brings next generation applications to the desktop and mobile operating systems.

We’ve created a little video about the vision of Titanium we thought you’d enjoy:

When we say extended functionality we aren't messing around. Web applications built with the Titanium SDK can support local file access and storage, native integration with the desktop environment, and both online and offline operation. The Titanium SDK is part of the Appcelerator Platform, so you can even leverage Appcelerator’s message-oriented architecture, pre-built integration with all the leading server-side languages and frameworks, and rich set of UI controls, layouts and themes for building desktop apps. Titanium makes coding super easy, because you can use your existing Web development skills to build apps that can be quickly deployed to Windows and Mac desktops (and in Q1 of next year, Linux). With these traits, we believe Titanium will enable a whole new generation of innovative rich desktop and mobile applications.

Now let's get a little more technical - at the heart of Titanium is an innovative new open source, cross-platform runtime engine that provides application developers with native access to the computer's desktop or the mobile device via a robust set of APIs. Built on top of WebKit, Gears and Chromium, the Titanium Runtime Engine provides developers with a powerful, free and open platform for building cross-platform applications using standard AJAX.

If you are craving more information, check out the following links:

• Titanium Homepage
• Download
• Demo Applications
• Titanium Screencasts
• FAQ

After you’ve had a chance to download and play around with Titanium, please help us out and post your feedback and suggestions to the Appcelerator community in the new Titanium group, or feel free to email me at jhaynie AT appcelerator DOT com.

Code Strong!

(NOTE: this is a cross post from my Appcelerant blog post).

I gave a talk last night (December 2, 2008) at the SD Forum’s Java SIG in Palo Alto, CA.

The subtitle of the presentation was: “How the web has gone beyond the browser and we're headed back to Client/Server”. I’m including the presentation slides below:

I’m going to be presenting the following at the upcoming SF Forum Java SIG on December 2, 2008 in Palo Alto:

The role of Service Oriented UI Architecture in the world of web, desktop and mobile applications.

This presentation will discuss the challenges and opportunities developers are faced with in the emerging area of building applications for a variety of different environments such as Web, Desktop and Mobile.

The presentation will focus on two key methodologies to assist in these challenges: Service Oriented UI (SOUI) architecture and Interactive Use Cases and how they play a key role in developing next generation rich applications.

The presentation will include a live demonstration of writing a simple application based on this architecture and methodology approach. All coding during the presentation will be done live and will show the ability to build an application using Appcelerator that attempts to solve the problems on building and deploying rich applications for different application environments.

Location:

Cubberly Community Center
4000 Middlefield Road, Room H-1
Palo Alto, California 94105

Co-chairs:

Rich Rein, Sudhish Rema, Ovidiu Feodorov

Raffle:

No additional fee to all attendees.

One winner will pick one JetBrains product from:

a. IntelliJ IDEA Personal License.
b. ReSharper Personal License.
c. TeamCity Build Agent (for Continuous integration and Build Server).
d. RubyMine IDE Personal License.

Agenda:

6:30-7:00 Doors open. Networking.
7:00-9:00 Presentations.

Links:

http://sdforum.org/javasig
http://sdforumjavasig.wordpress.com

Price:

$15 for non-members and free for SDForum members. $3 for pizza and soda.

We recently moved from Atlanta, Georgia to Mountain View, California and during the move I had a chance to go through some old boxes I’ve had for years — twenty years to be exact.

Tonight, I decided to open up some of the boxes and try and see if I could find some old pictures after seeing some of my high school friend’s pictures on Facebook.

I came across a Newsweek magazine in almost perfect shape from almost 20 years ago to the date: October 24, 1988. Spooky?

And on the cover, today’s hero was the wonder kid 20 years ago: Steve Jobs. Yep, that’s right, the man on top of Apple (once again) and by far, one of the world’s most influential technology snobs.

The title: “Mr. Chips”. The subtitle: “Steve Jobs puts the ‘wow’ back in computers.”

How apropos for then, and today.

As an aside, another big box read: “Why Bush is winning: The GOP’s Campaign Machine”. Yeah, that was Bush senior. 20 years later and we’re still talking about a Bush in the white house. But, that’s another story.

Flipping through this issue was literally going back in time. A number of computers advertisements, several cigerrate ads and an article on how “more consumers are ducking the price of perpetual interest by paying off bank cards in full”.

This was the IBM 280 PC. It ran DOS, had VGA graphics, 4MB of memory on the system board, proprietary PS/2 devices and could be configured to run IBM’s OS/2.

You don’t see cigarette ads anymore. This article predicted: “Heads you win. Tails you win.” However, fearing thousands of separate, costly lawsuits from customers with smoke-related health problems, the major U.S. tobacco companies and 46 states signed the Master Settlement Agreement (MSA) on Nov. 23, 1998. The MSA placed restrictions on future tobacco advertising and cigarette sales practices and also provided for a $250 Billion settlement.

The Epson PC? This one was the Equity ET with the tagline: “I don’t need a laptop computer. I need a desktop computer that fits on my lap.” Great vision, terrible execution.

Walmart was on the leading edge of technology stores with this tagline: “Name brand electronics. Always at lower prices: The switch is on to Wal-mart electronics”.

Let’s first start with the cover article on Mr. Jobs - the whiz kid, 33 years old back then.

The article is mainly about Steve Jobs’ comeback after Apple Computer with the NeXT computer. “Love him or hate him, people in the computer world couldn’t wait to see what Jobs had secretly worked on for three years in his Palo Alto headquarters.” The price tag for the initial model (with a university discount): $6,500.

Even Esther Dyson, back then the publisher of the Release 1.0 newsletter, said: “It’s a neat, neat box.”

And Steve Jobs was aimed “where the smart money is going”: the workstation market was $2.5 Billion and broken into the following market leaders:

25.5% - Sun Microsystems
18.6% - Apollo Computer
17.8% - Digital Equipment Corp
17.2% - Hewlett-Packard
17.0% - “Other”
3.9% - Silicon Graphics

Notice anybody missing? IBM, Toshiba, Sony, Dell, Apple?

Notice some that are gone? Apollo, DEC ? I would imagine Sun and SGI together probably own less than 3.9% of the workstation market these days.

The article also had a very familiar name in the article, Bill Gates, with an awesome photo. Back then, Gates was only 32. The article states that Gates is “a virtuoso software engineer with virtually zero charisma, he is the ultimate entreprenerd.” According to the article, Jobs invited Gates to contribute software to the NeXT, but Gates declined, saying there wasn’t enough money in the narrow market Jobs was pursuing. It also has Gates saying: “Steve always yells at me.”

Well, NeXT didn’t exactly take over the computer world, but Steve Jobs did and he did regain control of Apple (along with a number of key people and technologies from NeXT) after Apple bought NeXT only 8 years later for $429 million. Jobs returned as CEO in 2000 and NeXTSTEP was the foundation for the next generation of Apple operating system, OS X.

In this same issue, they outlined some interesting predictions for the future of technology.

Let’s see how we did 20 years later.

Education

Grade school
Prediction: Desktop computers will replace pens and papers.
Reality: Not only do classrooms have desktop and laptop computers, most students now have the full power of a handheld computer in their pocket.

Language
Prediction: Voice simulation will make it possible to learn foreign tongues from mechanical tutors.
Reality: Rosetta Stone, one of the leaders in language tutoring uses voice recognition and a computer to teach foreign languages.

Libraries
Prediction: Buildings full of books will be stored on optical disks.
Reality: Not only stored on optical disk, but stored in the global computer network and instantly available by keyword search thanks to the Google Book Search Library Project.

Programming
Prediction: Flexible software will make it easy for students to create their own computer programs.
Reality: With languages like Squeak, Ruby and HTML, students have a variety of programming languages they are learning way before they reach college.

Business

Design
Prediction: Everyone from architects to dressmakers will be able to make simulations of products - in 3-D.
Reality: Computer Aided Design (CAD) software has become common-place and producers and consumers worldwide can use software provided by companies like MFG.com to work with each other to build just about anything.

Secretarial work
Predictions: Machines will take calls, write memos and organize the busiest of executive schedules.
Reality: Secretaries? The secretary pool has been retired and replaced by the PC, Gates’ multi-billion dollar Office productivity suite and email. Only venture capitalists are the dinosaurs left that still use secretaries.

Networking
Predictions: Using groupware, machines will talk with each other.
Reality: Not only will machines talk with each other all over the world, called the Internet, but people also communicate in social and virtual reality networks.

Travel
Predictions: Laptops will be small enough to slip into a vest pocket.
Reality: Laptops aren’t quite that small, but full-fledged mobile devices from computer pens, mobile phones and RFID chips are fueling the nano revolution.

Science

Medicine
Prediction: Doctors will walk through surgery beforehand - on screen.
Reality: Doctors, even one’s across the world, can now operate on patients using computers and sophisticated video conferencing systems. We’re even now starting to see biocomputers which can enter the body to perform certain medical tasks.

Technology
Prediction: Sophisticated imaging will revolutionize high-tech design.
Reality: Imaging in all parts of science have revolutionized the world. Pocket cameras and mobile phones have more sophisticated imaging software and lenses than expensive professional photography equipment less than a decade ago. 3D ultrasound imaging can produce an almost photorealistic image of a fetus in utero.

Meteorology
Prediction: Computer “models” will track weather patterns and predict major shifts far in advance.
Reality: Computers have become more advanced at tracking weather patterns and creating more accurate prediction models.

Criminology
Prediction: Police will be able to recreate the scene of a crime - and simulate the moves of the criminal.
Reality: Police are using more sophisticated technology - from chemical analysis to DNA to find and prosecute criminals.

The Arts

Graphics
Prediction: Any artist will be able to do super-sophisticated animation or create images that look real.
Reality: Computer software gives artists the ability to create and mash up music, video, animation and photos and produce and distribute them at very little cost.

Music
Prediction: Compositions will be written and stored on computers.
Reality: Not only are they written and stored, music is distributed, re-mixed and stolen all over the world by millions of people each day with the click of a button or mouse.

Video
Prediction: High-resolution screens will revolutionize the field.
Reality: High-resolution video screens are everywhere, from the football field to the local bar to the airport check-in desk. High-definition television is available in many homes.

Games
Prediction: Home computers will be able to generate sounds and special effects of a “Star Wars” movie.
Reality: Not only have home computer games been able to generate sounds and special effects, the gaming industry has grown larger than Hollywood and music labels combined and has bigger production budgets than most movies. Multi-player interactive games can be played on-line at any time of the day, worldwide.

Alan Kay of Xerox’s PARC fame predicted that “portable computers will require built-in cellular-telephone connections - so you can tap into big data banks while sitting under the apple tree.” (The “apple” keyword has a particular significance today as the Apple iPhone takes a predicted 25% of the smart phone market share after only one year on the scene).

Mitch Kapor of Lotus fame said: “We need to build a national infrastructure that will be the information equivalent of the national highway-building of the ’50s and ’60s”. The World Wide Web was invented by English scientist Tim Berners-Lee one year later in 1989.

Wayne Rosig, at the time at Sun Microsystems, predicted: “It’s a waste to have hundreds of computers in a building that share nothing but AC power.” The article predicted that “Groupware will permit an officeful of people to collaborate on, for example, a magazine advertisement, with artists, copywriters and salespeople all contributing, via computer, to the project. When a writer changes a line of copy, it will instantly show up in the layout on the designer’s computer screen.” Today, we have applications like Google Docs and Zoho that have similar capabilities.

John Seely Brown of Xerox’s PARC fame, envisioned “meetings at which every participant has a computer - and the meeting’s progress appears on a ‘decision spreadsheet’ projected on one wall, on which the pros and cons of the argument are analyzed for all to see.” In most meetings today, it’s not uncommon for everyone to have a laptop and mobile device during a meeting. Today, virtual meetings are commonly held online using services like WebEx.

My favorite prediction was from Lawrence Tesler, then the VP of advanced technology at Apple and now at Yahoo: “Sooner or later, more people will carry their computers around than keep them fixed to a desk.” With more than several billion mobile computer devices worldwide in use today, this was probably the one prediction that was difficult to understand in its impact. In some countries like Japan, there are more mobile devices than personal computers. And, with the price of computer chips, storage and memory continuing to fall and with the advent of modern nano technology, we’re seeing more and more miniaturized computers in all sorts of products.

And, as a final bonus, the political carton section from this issue:

Even then, Donald Trump ruled the world. After a rise, and fall, and rise again, he’s back on top just like Steve Jobs. Funny how much things have changed, and in some ways, they’re still the same.

What will the next 20 years bring us? Any predictions for the next 20 years you’d like to share?