Blog of Roger Greene, CEO

I have a certain respect for people who start businesses with the intent to flip them in a year or two. It shows a clarity of purpose and requires a well thought-out product and operating strategy with excellent marketing and sales. It’s not me, though. It always seemed too risky. We would be betting too much on getting our product right the first time, we would be subject to market timing (IPO or M&A windows) and forces (bubbles, recessions) beyond our control, and we would need more money to meet a market window. Even in the midst of the dot-com mania I had no desire to bet on it continuing. What happens if our product were a flop, or took a long time to take off, or the bubble burst? We would pretty much have to fold the company and start over.

I wanted to create one company and get it right. I knew that might take some experimenting and iterating, with mistakes to overcome along the way. I also knew I had a lot to learn about management. I had worked in a small Internet start-up prior to Ipswitch, but I had never started a company. It felt like then or never, though, so I decided to go for it. No capital, no business plan. Just something to do with IT, the Internet and software. Some might call that a risky path, but I look at it as being more conservative, with more control over one’s destiny. It would take more time, but I would be in a better position to navigate the shoals on which so many start-ups perish.

As it turned out, it took much longer than I had expected – about six years to get to a point where I felt like we had established ourselves as a real company with a real future. When we got there, though, we were stronger, more resilient, and retained control of our destiny. If I had it to do over again, I would take the same approach.

I am listening to Rework, the new book by Jason Fried and David Heinemeier Hansson of 37 Signals. I agree with much of what they say about startups: focus on the idea and the product, not marketing or building an infrastructure; don’t write a long business plan, or even one at all; avoid expensive consultants – do the PR yourself; minimize hiring and other expenses and try to not take financing early on; don’t chase an image of what you think a successful company should be like; no matter how different it seems, figure out what you really need and focus on just that. A friend of mine started what eventually became a large company. His customers were large enterprises, where image can seem important. In the early years, though, he didn’t even print business cards. He just said he didn’t have any on him whenever he made a sales call. Didn’t hurt in the slightest. What mattered was he had a compelling message about his service and team and then followed through and provided value at a reasonable price.

I am still in the early part of the book, but one thing that bothers me is the bias towards small, private, bootstrapped companies. Because 37 Signals’ approach is similar to ours in many ways, I found much to identify with. But I don’t think there is anything inherently superior about such companies. I congratulate Jason and David for figuring out what they wanted and finding a narrow path to get there. For others, a very different kind of company will be appropriate. My advice for starting a company is first figure out your life goals and think about how your company can support them. Then decide what business you want to be in. Then find a path to get there. If you want to build a new car company, or a new type of computer hardware, or start a biotech to cure a disease, or come up with a better CRM package, the models will be very, very different than for many software companies. Virtual or not, capital or not and many other questions can only be answered once you understand your goals, your market and your product.

I’ll write more later about how this relates to starting Ipswitch.

The question we hear most often is how we came up with the name Ipswitch. As with many names, luck and inspiration played an important role. At the very beginning, 1990 and pre-incorporation, I knew I wanted to start a networking company, but hadn’t picked a product strategy. That left things pretty open-ended. I usually find naming companies and products to be painfully difficult. After months of not coming up with any names I liked, I decided to buy some time and pick a placeholder name until we were ready to release our first product. I didn’t want to limit us with this first name, so I chose ‘Context Unlimited’, to be taken literally and also as a pun on companies that add ‘Limited’ to their name.

Then one day Dan Lanciani – the developer of our first generation of products – was driving by a highway exit for the town of Ipswich. Dan looked up at the exit sign and the name was born. We loved it because it both honored Massachusetts and also was a pun about our first product Catipult, which switched between IP and IPX protocols. We added the ‘t” because Massachusetts would not let us use the name without it. With the advent of the web several years later, that ‘t’ became useful to make our name unique for search engines, at least until IP switches became popular.

P.S. Because of IP switching, some people capitalize and pronounce our name to emphasize that. We only capitalize the initial ‘I’ and pronounce Ipswitch the same way as the town.