If you are considering becoming a 1M/1M premium member and would like to join our mailing list to receive ongoing information, please sign up here.

Subscribe to our Feed Playing VC

Posted on Wednesday, Apr 11th 2007

I wrote a piece earlier called Is Bootstrapping Becoming Sexy Again? In that, I made the point that given where the Internet is today, bootstrapping companies has suddenly become very easy, and gobs of venture capital are no longer required to build the vast majority of businesses.

Now, many of the larger companies are actually trying to reap the benefits of this trend. Google and Yahoo have been very vocal about wanting to acquire bootstrapped companies BEFORE they take in large chunks of venture money. In this piece, I will explore how is playing the incubation game by empowering companies to bootstrap.

At the luncheon in San Francisco on Tuesday, I happened to sit next to a couple of guys from a company called Vertical Response. VerticalResponse is an email marketing vendor that is one of the most successful participants of’s AppExchange program, an on-demand application marketplace where vendors can market their apps to customers. This little company was built to profitability with ~$2 Million of Angel money. Since they struck the partnership with, they have recruited 1400 Salesforce customers as their own customers, which now amounts to 10% of their overall customer base. By all measures, a highly successful channel.

Another model that is promoting is a complete OEM offering, whereby app vendors can use their datacenter, their ondemand operations infrastructure, etc. and simply invest on the innovative application that they want to build. Apttus is a Contract Management startup that is leveraging this model. The founders are two domain experts in the segment, Kirk Krappe and Neehar Giri, formerly of Nextance, a Contract Management vendor. They already have 10 customers, and are sincerely hoping to not require venture money to scale the company.

Finally, has built an incubator in San Mateo, which they have invited me to visit. I have to see what’s cookin’ there sometime.

The greatest opportunity that the Company has today is to learn from working with all these innovators, see which ones succeed, and then acquire them. If you fast forward a few years, they could accumulate a comprehensive, integrated portfolio of applications that would constitute a robust company, quite unlike the disjointed enterprise software nightmare inside Oracle!

Hacker News
() Comments

Featured Videos


[…] writes about how companies like are reducing the cost of market entry with a ready made […]

Thoughts from the trench - by Prakash Muralidharan » 2.0 : Strategic implications Wednesday, April 11, 2007 at 11:54 AM PT

[…] Building massively scalable datacenters? True, the computing pricepoint has fallen drastically. But is there something that Sun should learn from’s incubation program? is renting out its infrastructure in exchange of equity to […]

Sramana Mitra on Strategy » Blog Archive » Will Sun Shine Again? Friday, April 20, 2007 at 9:16 AM PT