Balsamiq is a great example of the model that fresh-start business owners should use when planning and growing their business. The company consists of just 16 people. Seven work out of an office in Bologna, Italy, while the remaining nine work entirely from home in different parts of the world.
Giacomo Guilizzoni (aka “Peldi”) started the company in 2008 after quitting his job at Adobe in San Francisco. His goal was to create an easy-to-use wireframing product that companies could use to improve the skeletal structure of their websites. You can see it here for yourself:
Amazingly enough, this small group of dedicated people have managed to build a mockups tool that is now used by more than 150,000 companies throughout the world, including Apple, Cisco, IBM, and even the company that Peldi left to pursue his dream of building Balsamiq from the ground up in his native country.
Peldi recently submitted to a Reddit Ask Me Anything (AMA). It’s definitely worth your time and attention if you’ve got a business idea but are uncertain of where to start. Here’s how the Balsamiq team is able to bootstrap their highly successful software company.
They Killed The Sales Department.
Rather than rushing out to hire a team of top salesmen, Peldi realized it would be best to start with a product that encouraged word of mouth. To do that, he needed to focus more on delivering something customers could use rather than generating as much revenue as possible before the product was ready for market. He also realized that few could sell Balsamiq Mockups better than the people who knew it inside-and-out: himself and his team.
They Killed The Marketing Department.
That’s not to say they don’t do any marketing — just that they don’t swear by it. Peldi explains: “The marketing I pay attention to is the product itself. It has character, so it has a viral component to it. When someone sees a wireframe done in Mockups, they ask, ‘How did you make that?’ We also try to make it so good and useful that people will recommend it to their friends. Same as our customer support. I believe word of mouth has been our main source of leads so far. Of course, I can’t prove it because I don’t track anything.”
As for the marketing that Balsamiq does do, they outsource most of it to a company called SoftwarePromotions.com, and it’s mainly AdWords-based.
They Killed The Office (Pretty Much).
Peldi knew right away that not everyone could handle the pressures of working from home. People who work a 9-to-5 often don’t realize the challenges of staying self-motivated. They’re not ready for the added work that comes with working in your PJs, and no, that is not a misprint. As someone who’s worked from home full-time for close to six years now, I can certainly see where Balsamiq is coming from here. You have to realize right away that no one is there to crack the whip and make sure you get your projects done on time and on target. You can’t coast for a single paycheck. If the work doesn’t get done, you don’t eat. Peldi managed to find 15 other people who were able to handle this burden. In so doing, he’s pretty much negated the need for an office and tons of business overhead. And before he brings someone else on board, he usually gives them an independent assignment so he can get a sense of how they work without the security of an office to hide behind. While Peldi admits that Balsamiq does have a headquarters and that seven do show up from time-to-time, he also adds that many of the onsite personnel still work from home.
Rent office space, they said. Hire sales people, they said. Market, market, market, they said. It’s the 21st Century. A lot has changed about what goes in to making a successful business. Balsamiq is living proof. Use your creativity to build a better startup in 2014. Start by rethinking the traditional wisdom and figuring out a way to circumvent all the things the experts tell you that you need in order to succeed. Balsamiq is proof that it can be done, and the inspiration for our new piece of traditional wisdom:
Have a reason for every piece of your organization. If you can’t explain why it’s necessary, kill it. Best of luck in 2014!