I am often asked : "When should my SAAS tech company be profitable?" There are many factors that can influence when you should reach profitability, but the simple rule is that when you reach $100K in profits per employee.
I recently viewed the York Cathedral copy of the 1215 Magna Carta at the Boston Museum of Fine Arts (now moved on).
For those of you who have forgotten your English history, and according to Wikipedia, the Magna Carta (Latin for Great Charter), also called Magna Carta Libertatumor The Great Charter of the Liberties of England, is an Angevincharteroriginally issued in Latin.
The 1215 charter required King John to proclaim certain liberties and accept that his will was not arbitrary—for example by explicitly accepting that no "freeman" (in the sense of non-serf) could be punished except through the law of the land, a right that still exists under English law today. The Witan, Witenagemot or Council of the Anglo-Saxon kings of the 7th to 11th centuries was held from time to time at Runnymede during the reign of Alfred the Great. The Council met usually in the open air. Succeeding versions of the Council influenced the creation of England's 13th-century parliament.
The interesting part for me was clause 41, detailed below, which established the principles of free trade between countries:
(41) All merchants may enter or leave England unharmed and without fear, and may stay or travel within it, by land or water, for purposes of trade, free from all illegal exactions, in accordance with ancient and lawful customs. This, however, does not apply in time of war to merchants from a country that is at war with us. Any such merchants found in our country at the outbreak of war shall be detained without injury to their persons or property, until we or our chief justice have discovered how our own merchants are being treated in the country at war with us. If our own merchants are safe they shall be safe too.
It's amazing to me that nearly 800 years ago, some English nobles codified the principles on which our global supply chains operate.
Swift Navigation, a San Francisco-based startup building centimeter-accurate GPS technology, announced today that it has raised a $2.6 million seed round led by First Round, with participation from Fall Line Capital, Felicis Ventures, Kal Vepuri, Lemnos Labs, Qualcomm Incorporated, through its venture capital group, Qualcomm Ventures, and VegasTechFund.
Swift Navigation provides centimeter-accurate positioning for agriculture, drones, and construction, anywhere on earth. Their products are 100 times more accurate than the GPS in your cell phone – at a tenth of the price of the competition. Swift Navigation is enabling a world where fields farm themselves, drones fly safely, and humans lay the foundations of the future.
“We’re incredibly impressed with what Swift Navigation’s positioning technology could make possible in the very near future,” says Rob Hayes, partner at First Round. “The team is sharp, the early traction is promising, and their products have huge implications for the way we all live and work.”
Swift Navigation believes that making centimeter-accurate positioning systems available at a low cost will open up this technology for many new applications. The company has already seen high demand for its products used for everything from UAVs to autonomous tractors, where existing navigation systems are prohibitively expensive and difficult to use. Swift’s systems are designed from the ground up for machine automation, and come with an open API for easy integration into robotics systems.
“The introduction of affordable centimeter-accurate positioning will open up many new applications for drones and other autonomous systems,” says Chris Anderson, former editor-in-chief of Wired and current CEO of 3D Robotics. “The technology Swift Navigation has developed could go a long way towards proliferating robotics in everyday society.”
According to Angela Shah, an Xconomy editor, Amazon makes it easy to buy a lot of stuff. Gone wants to bring that ease to getting rid of it all.
Today, the Austin, TX-based startup has unveiled its app designed to help consumers sell unwanted items around the house. The service is available in Austin and San Francisco, with plans to expand to other cities in the next few months.
Nicolas Bayerque, Gone’s founder and CEO, describes it as a “reverse Amazon” service: Gone says it will sell unwanted items in about the same time it takes Amazon to deliver new purchases to your door.
Users take a picture of the item they want to sell and upload it to the app, which has an algorithm that provides an instant valuation, offering how much Gone believes a buyer would pay for an item. “People try it with one item and then they can go find more hidden treasures,” Bayerque says. “They then get all of their stuff picked up at the same time.”
Once the seller agrees to the proposed price, Gone will send boxes and packing materials. The startup picks up the boxes and ships them to the buyer. After the buyer acknowledges receipt of the product, Gone deposits a credit into the seller’s account, which can be used to buy more items on the marketplace or cashed out.
Gone makes money by then re-selling those items on marketplaces it has set up on Amazon and other smaller, niche sites. It aims to create a sort of e-consignment store. Some items—like personal electronics—sell almost immediately, while others might take a few weeks, Bayerque says.
“We have a merchant account on Amazon,” Bayerque says. “We take the time and maintain it; we’ve mastered those procedures as we are high-volume sellers.”
The startup does not take a set percentage or fee from each transaction. Instead, Bayerque says the startup’s pricing algorithm determines the market value and calculates the purchase price in order to give Gone a profit margin.
If an item fails to sell, Gone has partnerships with local donation and recycling centers that will accept those items. No matter the product’s ultimate destination, Gone will arrange for the packing materials and shipping.
Gone looks a lot like Sold, a Boston-based startup that came out of the MIT Media Lab last year with investments from Google Ventures, Greylock Partners, and others. Last November, DropBox bought Sold and closed it down, just seven months after its debut.
There are other online marketplaces popular with re-sellers. Sites like e-Bay and Craigslist have large followings, and e-recycling startups such as Seattle-based EcoATM and eRecycling Corps in the Dallas suburb of Irving, TX, are creating markets for unwanted cell and smartphones.
Bayerque hopes Gone will prove to be a better option because it takes all the work of pricing, shipping, and selling out of the hands of the users. “All they have to do is take a picture,” he says.
The startup has attracted some notable supporters, raising $1 million in seed funding from investors such as Techstars, David Cohen’s Bullet Time Ventures, Cygnus Capital, Nxtp.Labs, Socialatom Ventures, and angel investors from Austin and the San Francisco Bay Area.
Gone was part of Techstars Austin’s first crop of startups last fall. For the last five weeks, Gone has hosted an invite-only pilot of about 200 users, some of whom have gotten checks for up to $1,400, Bayerque says.
The most popular and lucrative items are personal electronics like laptops and tablets, followed by small home electronics and kitchen appliances. In the pilot, 100 percent of the items offered have been sold and none have had to be donated or recycled, he added.
“Online shopping is leaving us with a lot of stuff in our closets that we don’t use,” Bayerque says. “While the experiences for buying are highly optimized, selling wasn’t quite there yet. We make selling all of your unused items easy—making it easy to get new stuff.”
Repeat after me: There is no such thing as a fully sustainable, risk free supply chain. Nor will there ever be...
As hard as you and your company may try, banned materials will always sneak into the best managed supply chain. Criminals are smart and, like hackers, can figure out how to make that blood diamond into a perfectly acceptable product. The best you can do is settle for second best and work hard to eliminate as many suspect materials as possible.
Here are a few tricks to avoid major mistakes around sustainability and risk management:
1. If the price sounds to good to be true, it is: this is the universal problem faced by procurement managers-relentless efforts from above to control costs can push one to look to to less well documented suppliers. Look at the pet food scandal revolving around imports of tampered animal byproducts from China as a typical example. Cheap often comes with a price.
2.Visit the suppliers: I am constantly amazed to hear how little time procurement managers spend meeting with their suppliers at their locations. A week does not go by when Wal-Mart or others does not find themselves the victim of a supplier who 'outsourced' their contact to a disreputable colleague. Get on a plane, folks.
3. Use on line forums and other reviews to check up on suppliers: You may have set up your own process for reviewing suppliers, but others may be having less than optimal experiences with the same suppliers. Ask the suppliers about other customers and keep in contact with them about how the company is doing. You may be on the path to disaster without knowing it, if your process is missing a key check point.
I often say, 'You will always be a Dad' to new fathers, who are just beginning the lifelong journey of caring for a child (and an adult, in all cases, as being a parent never ends).
I had the realization this morning on my walk that the same applies to founders and their start up. Regardless of what happens, you were around at the birth and were responsible for making it successful (or not) for a number of years. It will always be part of your life.
In that vein, here are a few thoughts on nurturing your 'baby', Dad:
1. Treat it as unique and ever so special: listen to what others have to say about how to run your start up, but realize that, in the end , it is your baby and you need to make the decisions about how best to help it grow up.
2. Realize it will have growing pains, but that you are still Dad: sometimes problems arise, like teenagers mouthing off. You are the one who has to take the deep breath and be the Dad, imparting wise advice (hopefully) to your employees and continuing to be the biggest cheerleader for you company.
3. Push it out of the nest: You can only help your child be successful for so long. The same is true for start ups. Be prepared for the day when your company is ready to fly from the nest, perhaps to new ownership or leadership. Be happy and grateful, as you have had many nice years together and it's time to move on.
Congratulations! You raised your seed series or series A funding and now want to tell the world. Call a local PR firm and find out they want $10K to 'issue a press release'? Gulp. Gee, thanks...but I want to spend the new cash on sales and product development.
There is an easier a better way: PR Web. For less than $500, you can get a release to all major news outlets, including most tech ones. You may have to distribute a few on your own to 'local' new outlets, like the Boston Business Journal in Boston, but it sure beats $10K.
Omnitracs LLC, a San Diego-based fleet management company owned by Vista Equity Partners, has agreed to acquire XRS Corp. (Nasdaq: XRSC), an Eden Prairie, Minn.–based provider of mobile fleet optimization software, for $178 million in equity ($5.60 per share, which represents an 85.4% premium over last Friday’s closing price).
This brings Vista's investment in the mobile telematics space to over $1 billion, including their recent $200 million purchase of RoadNet and the original $800 million purchase of Omnitrac.
Mobile telematics is a hot space in supply chain, with companies trying to compete with Amazon for same/next day delivery of all types of products. Fleet management is a key component of making that happen.