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Friday, October 29, 2004Businessweek in their Tech's Young Entrepreneurs section writes, Socialtext, Ross Mayfield's Web-collaboration outfit , is the antithesis of the cash-fat startup, but its aims are hardly modest. At first glance, Socialtext doesn't look like a company running on a shoestring budget. Founded less than two years ago, it now has more than 50 customers around the world, including Walt Disney and Eastman Kodak , which use its Web software to help people collaborate online. Yet a peek behind the slick Web site reveals a truly virtual company: no offices, only 10 full-time people -- all working at home, and a chief executive who answers the phone himself.Socialtext co-founder and CEO Ross Mayfield makes no apologies for the threadbare setup. Increasingly inexpensive and ubiquitous information technologies such as the Internet, wireless connections, and cheap computer servers, he says, allow him to run the company with far less money and fewer people than he could have a decade ago -- without scrimping on features or quality. Says the 34-year-old serial entrepreneur: "This is the prototype of the new Internet startup."
Socialtext sells so-called wiki software. Offered as a service over the Web, the software makes it quick and easy to set up Web sites with a simple browser.Anyone in a company or department can post material on these wikis, and anyone else, subject to approval by the creator, can edit or add to them. They've become a cheaper, more flexible collaboration alternative to both overtaxed e-mail and complex groupware such as IBM's Lotus Notes.Essentially, Socialtext's wiki software allows everybody in a group or even a whole company to literally stay on the same page -- that is, on their shared Web pages. That speeds up everything that involves coordination, helping to cut costs.
Socialtext has subsisted on less than $300,000 from friends and other social-software entrepreneurs such as LinkedIn CEO Reid Hoffman and Tribe Networks CEO Mark Pincus. Last month, it got another $300,000 from the Omidyar Network, the semi-philanthropic organization launched by eBay founder and Chairman Pierre Omidyar and several other individuals. That's in stark contrast to the boom, when multimillion-dollar initial rounds were all but mandatory.Surrvival secret -Partly by using his company's own wiki software to get things done. Mayfield does his work on Socialtext's internal wiki wherever his laptop is, from his home office to the nearby café that has free wireless Internet service. So do colleagues in places such as Silicon Valley, Chicago, Indianapolis, New York, Canada, and Taiwan. They also use free Internet-based teleconferencing and long-distance calling services. "The infrastructure costs are a tenth of what they used to be," says Mayfield. "We can do more work with lower cost because of teleconferencing and the Internet." They also use the Net to do all their marketing, essentially for free.
Analysts figure larger companies such as Microsoft and IBM could simply make them part of their suites of software. At the same time, Socialtext's niche is attracting attention from new rivals. JotSpot, a new company in Palo Alto recently launched by Joe Kraus and Graham Spencer -- two founders of the boom-era portal Excite , is backed with $5.2 million in venture capital. Kraus contends that JotSpot has a more ambitious goal beyond mere collaboration, allowing minimally technical people to write customized software The Tech World roars because of entrepreneurs with ideas and initiatives like these. |
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