Turning a Services Company to a $30M Product Company: Bridgeline Digital CEO Thomas Massie (Part 2)

Sramana: By 1999 you had two successful IPOs, and the dot-com market was booming. What had you learned up to that point in your entrepreneurial career?

Thomas Massie: I had learned it was important to stick to the basics. You had to stick to core things like market need, and once you had validated market need, then you had to develop a superior product that had a strong value proposition. Very early on in each of my ventures, I always had a product I could bring to market quickly and that was capable of generating real cash flow. I have never had a business where I had to raise $20 million in venture capital before developing a product for two years. You need real products that attract real customers and provide you with real traction.

As a recap, I would say the lessons learned to that point were market need, a superior mousetrap with a real value proposition, and something that gets traction quickly which can help develop cash flow quickly.

Sramana: In 1999, what happened?

Thomas Massie: Our market valuation grew to $200 million, and we merged with another company. The company moved from Boston to California. I [sat] on the board of directors for MapInfo, which grew from $50 million to $100 million. At the same time, I started Bridgeline Digital.

Sramana: What did you want to do with Bridgeline? When you looked around in 2000, what struck you in the marketplace?

Thomas Massie: That was when the market imploded. There was a lot of panic. I was always enamored with the Internet and all the ventures that were growing rapidly in the space. My first venture dealt with video in multimedia devices. My second venture developed semiconductors for set-top boxes. My third venture, Bridgeline, was a reflection of how enamored I was with the Internet and the web. Clearly, that was a marketplace and a space I could stay in. I saw web services crash when the market crashed because [businesses] did not have the right capital structures. I saw that crash as an opportunity. The market was going to stay, and because all of those companies went out of business so quickly, there were a lot of customers who could no longer get serviced.

That situation also let us start a business at a very low [cost] basis. We bought furniture cheaply, subleased very cheaply, and got incredible talent at very fair market compensations because of the state of the market and the economy. If you had the ability to see through the dust and the carnage of the market collapse, then it was possible to see a reality that the timing was actually phenomenal to start a company.

Sramana: What customer needs were you going to cater to?

Thomas Massie: Today there are more than 250,000 million active websites. We wanted to develop software suites that addressed mission-critical functions and online stores. We provide strong technologies for web business processes. We listened to business objectives and then helped our clients achieve those objectives by leveraging web business technology. Our first four years consisted exclusively of personal services.

This segment is part 2 in the series : Turning a Services Company to a $30M Product Company: Bridgeline Digital CEO Thomas Massie
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