Show #103: Peldi Guilizzoni, founder and CEO Balsamiq Mockups

In this show Bob and Pat talk with Peldi Guilizzoni, founder of Balsamiq Mockups. If you’ve ever wondered, “How did Peldi do it?”, this is the show for you.

In just over two brief years Balsamiq has gone from a one person startup to an 8 person firm shooting this year for $4 million in revenue that I’ll bet they beat.

Peldi walks us,and you, through how and why Balsamiq came to be, his approach to business, development and transparency, why he choose Adobe AIR and more.

Peldi also covers myBalsamiq, their by invitation only, not quite released, new online product.

This is our third show with our new Show Summary feature. Please let us know what you think of it.

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Download Show #103 here: Show #103 Or if you prefer, Subscribe to the podcast in Apple iTunes.

Bob Walsh blogs at 47Hats, is on Twitter at @bobwalsh or you can email him at bob.walsh@47hats.com.

Patrick Foley blogs at PatrickFoley.com, is on Twitter at @patrickfoley or you can email him at patrick.foley@microsoft.com

Jouko’s Startup Success Podcast Guest Page.

Strongly Recommended Video

Relevant URLs:

• Balsamiq Studios, LLC / Balsamiq SRL
• Giacomo (Peldi) Guilizzoni on LinkedIn
• Peldi from Balsamiq on Twitter
• Peldi’s blog.
• Note! Peldi is doing an online question and answer Business of Software Conference Talk March 23, at 10.00 PST, 13.00 EST and 18.00 CET. For more details visit Business of Software Conference.

Show Summary

Show #103: Peldi Guilizzoni, founder and CEO Balsamiq Mockups

Interview starts at: 1:00

Bob Recommends Peldi’s incredibly good BOS presentation. Pat Seconds.

Bob – So how did you go from programmer at Adobe to running your own startup?

Peldi – The short answer is I quit at Adobe. Longer answer is coping with all the new stuff founders have to handle, such as legal stuff, muddle through with the help of various books.

Bob – Let me ask it this way: why did you quit?

Peldi – It was so hard for me to quit – didn’t sleep for 3 nights before giving notice. Bit there were all these signs saying now or never. First my boss quit to go work at a startup, and that let me learn how to manage people – I’d had told my family when I moved to the US from Italy after graduating, I would stay long enough to learn everything I could learn from corporate America about how to make software and then I would come back and start something in Italy.

I was absolutely happy climbing the corporate ladder – I’d happily recommend working in a large software company.

But my manager left, and I got to learn one of the last things I wanted to learn, then my landlord wanted me to buy the tiny 2 bedroom apartment we were in for $1 million or he’d kick us out, my Mom called to say there was a family apartment vacant, and if you want to come back to Italy you could stay there for free, and I had been having ideas about mockups. So I decided, Let’s try it. I couldn’t possibly afford to start a startup and live in San Francisco, so we started saving for 8 months so that we’d have a bit of cushion when we moved back.

I have a son to feed, and my wife – I couldn’t have any downtime. So for 8 months we saved, and I worked a lot of nights and weekends, and I released Balsamiq Mockups 4 days after my last day at Adobe.

Bob – That’s a key difference between you a successful startup and a lot of other startup people, I’d include me: you decided to put that money aside and with very strong disciplined determination you actually did it. The sad fact is that there aren’t that many people who have savings anymore. You took the time to do it, and then you leaped.

Peldi – The credit goes to me being Italian – we do know how to save here. I don’t have any data, but Italians are very conscious about saving and debt is very frowned upon in general.

There are definitely some social differences between the US and Italy. For example I went to give a talk in Italy, and one of the questions was, ‘can I find a cracked version of your software on the Internet?’ – You must be kidding!

Bob – What’s this radical transparency you’ve been talking about?

Peldi – First of all I believe that the Internet is forcing everybody to be more transparent. This is having profound implications for the world. Witness what is happening in northern Africa with Twitter being part of it. The Internet breeds transparency, and which is a wonderful thing. If you can’t hide anything on the Internet, I don’t think you should even try. Because it smells funny – people can tell immediately. You are forced to show who you are, and good people rise to the top. Now when I buy something online, the first thing I look at is the About Us page. Because I want to buy from people who are doing it because it’s their passion, that they are not just doing it for the money.

I think it something that everybody has to do. Period.

Bob – so what do you do that is radically transparent?

Peldi – So I guess what I first did at first is publish my revenue numbers for the first year or so. We did that for two reasons: one, I was incredulous that this was actually happening for me – I had to share this with someone. But mostly I was doing it to gain the trust of my customers – I wanted to make sure they knew that, hey, it is just me but things are going well so I’m probably going to hire someone and we would be around to support the software.

Bob – Didn’t you get some pushback for customers – look at how much money you’re making, why can’t I get a free copy?

Peldi – I never get that kind of pushback. First of all we are very generous giving away licenses to anyone who is doing good in the world [nonprofits]. We really get very very few people saying we should make it free. And the answer to that is, ‘If we make it free, we’d be out of business.’. And people understand that.

On the other hand, I have slowed down on the sharing because nobody is asking anymore and because we are doing really, well and I don’t want to be seen as bragging. We would tell them if they asked.

Bob – Then I have to ask you, how are you doing?

Peldi – We’re doing fantastically well!

Bob – Okay, let’s hear some numbers…

Peldi – My goal for last year – our second full year in operation – the first year I made $160,000. The second year we made 1.4 year and then in 2010, was shooting for 2 million, with a stretch goal of 2.5, and we made 2.8. This year I’m shooting for 4, which is big, but I think we can go over that. I’m so stoked.

Pat – how many employees?

Peldi – 8.

Bob – Asked if Peldi was using Getting Things Done (GTD)?

Peldi – I’ve only read a little about it. It seems to me you it requires you to have an incredibly methodical system and that’s not for me. I have a combination of paper notes, and using Pivotal Tracker, even for my personal to do, which I can’t recommend highly enough.

Pat – Why did you choose Mockups?

Peldi – This was a problem I had at Adobe. We would make software, and always had to come up with new features and think about them and plan them. We would have these big meetings, and I’m a visual person so I would always want to use the whiteboard to draw what we were talking about. And then we had to put a big ‘Do Not Delete’ on it and at the end of the day try to copy it or take a photo of it. It was a mess.

And so then, that was a little painful. And then I would be working with brilliant product managers who didn’t have a tool to show the vision they had in their brain, so they would try and do it in PowerPoint and get frustrated. In the end I saw all these compromises being made because there wasn’t a tool that was easy enough for non technical people to use and powerful enough for developers and designers to adopt. And I had been in too many meetings when people would spend time on what icon to use, so I absolutely wanted to make something low fidelity.

It was a problem that we had, and while I was building the software it quickly became my favorite way to wireframe and I thats when I knew I was on to something good.

Pat – I want to get to some of our listener questions. Christian asks, “How much was it important to be U.S.-based?

Peldi – I think 51% of our revenue comes from the U.S. We have a company in Italy that does the R&D, and then we have a company in the U.S. that does the selling. It’s definitely important to have people in the U.S. because that were people buy software – it’s as simple as that. And a lot of people – and companies – want to mail a check in dollars. That said, if you are in Europe, and don’t know anyone in the U.S. who can sell your software for you, my suggestion is to try and go through a software reseller. This was another big surprise to me. If a large company wants to buy a variety of software, they go through resellers. It’s worth a shot.

Bob – Another question we got from Michael was “How do you get the most from your team?”

Peldi – Good question! Because most of us work from home. So I have adopted ROWE – Results Orientated Working Environment. There’s a book about it. Basically, I don’t care where you work, when you work, how you work – as long as you get the work done. That’s sort of my philosophy. We don’t have schedules or vacations policies – just tell us when you are going to be out for a few days. We don’t have deadlines – and that’s definitely nice.

So how to get the most out of people? I always try to give people their dream job. Good benefits – everyone has the best machine they want. Joel Spolsky said it’s the CEO’s job to come in and ask one thing – what do you need? I love that approach. So if you get senior people that can self manage, if you get amazing people, then you sit and watch, take out the garbage, remove the obstacles somehow, do a little coding and enable these people to work.

Pat – So tell us about myBalsamiq.

Peldi – so myBalsamiq is our SaaS, subscription based online version of Mockups. And this is something I didn’t want to do at first, and I didn’t want the stress of maintaining a hosted service. I knew very well the pain of running a web app. But our customers wanted it as their #1 requested feature. But now that we’ve grown, and we’ve moved it all to Amazon infrastructure, so that fear went away. We have been working on it for a long time – since 2009. I made the mistake of thinking it could be done in our spare time.

It is pretty much ready, we have our first 8 paying customers, but it’s still not live. I came up this thing called gamma, because that’s what comes after beta, it’s not a beta because it’s not free, and it’s still by invitation only. What I want to do is test all the payment integration and account management in a way that is not stressful to use. So it’s by invitation only. Once we hit 30 happy paying customers, we’ll put up a sign up page and open it up. But I really like this gamma idea – it takes the stress out.

I saw this from WPengine – Jason Cohen’s new startup – I was a paying customer for several months before they launched. I think everybody should do it.

Pat – Tell me about your backend infrstructure.

Peldi – It’s built in Grails. So Grails is the Java version of Rails, and the language is Groovy – Groovy on Grails – it sounds like a bad coffee! Groovy is very nice, and fast to write. And Grails is a lot like Rails. But it’s completely interoperable with Java. That gives us two benefits – One if we don’t have a library that we can’t find in Groovy, we can find it in Java. The main reason we went with this technology is that many very large companies want to host myBalsalmiq behind their own firewall. We wanted to pack this in a way that eventually could be packaged as an installable.

Pat – You’ve been using AIR from Adobe for your desktop edition, have you been happy with that decision?

Peldi – We’ve been extremely happy with AIR, It allows us to share 95% of the code between the web app and the desktop app and I don’t know of any other technology that will let us do that so quickly and easily. The vast majority of customers don’t care. While there were some installation problems, but those problems are going away.

(Pat, Bob and Peldi speculate why so many people hate AIR.)

Pat – Technically Microsoft is a competitor – with FlowSketch. Do you consider them a competitor?

Peldi – No. The are at a much higher price point with Visual Studio. I see us as complementary – because our software is so cheap so you can use it on the side because we are faster for some things, and because we focus is on early stage wireframing from idea to first wireframe, its more a sketching tool than a prototyping tool.

(Pat points out there’s also a philosophical split.)

My tool is something everybody can use. The other tools need an expert to use, who hands that off to another expert to make into real code. It’s something that you have to learn, that you have to study – that’s your job title. I wanted to build a tool that everyone on the team could use.

Bob – Gaurav asks, how much of a role did social media play in Balsamiq’s initial success?

Peldi – I don’t know, but I know it’s important every day. The vast majority of our marketing is really word of mouth. We spend very very little bit on AdWords, and we sponsor a few events, but mostly I want to see them succeed.

Social media is super important I think maybe part of our success was that I live and breathe Twitter and Facebook. Do we have a social media strategy? I don’t even know what that means. It’s just how we live, and where the world is today, and we are there to support our customers.

Interviews ends at 49:44.

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