1Mby1M Deal Radar 2010: MangoSpring, Bellevue, WA

MangoSpring, with its philosophy of “social collaboration with a purpose,” makes business collaboration and productivity applications that are offered à la carte or as a suite. It is one of several smaller players in collaboration software to challenge the larger Salesforce.com and Cisco.

MangoSpring, based in Bellevue, WA and in Pune, India, was founded by Anup Kejriwal. Before founding MangoSpring, he founded ThumbSpeed, a mobile messaging company that was acquired by Oz Communications and later by Nokia. Prior to founding ThumbSpeed, Kejriwal led product management and engineering teams at AOL, InfoSpace, and American Mobile, building real-time messaging and community-focused solutions. The idea for MangoSpring came while Kejriwal was running ThumbSpeed. Since half of ThumbSpeed’s team was based in Seattle and half in Mumbai, it took a lot of effort to keep everyone on the same page and collaborate in a meaningful way. Trying to solve this problem of communicating and collaborating was for Kejriwal a priority, but it wasn’t ThumbSpeed’s core business. After ThumbSpeed was acquired, he turned his attention to social collaboration.

The overall target market is small to mid-size businesses and smaller teams within enterprises in a wide range of industries, including technology, media, finance, health, education, nonprofit, and government. MangoSpring defines small to mid-sized businesses as five to 2,500 employees. The ideal customer has more than one physical office and is dependent on e-mail (optionally, instant messaging) to communicate, from PCs or mobile phones, as part of its day-to-day work.

In 2007, when MangoSpring started, no one was talking about social business software, including the company itself. At first, the company was building a better instant messaging system (close to what Google Wave is trying to build). However, as it got deeper into the product cycle, the team realized that it didn’t just need a better way to communicate, it also needed a better way to collaborate. As collaboration doesn’t happen without context or purpose, the team focused on building a business collaboration framework layered around a real-time communication engine focused on productivity. Today, there are dozens of companies (Yammer, Salesforce Chatter, SocialText, Jive, etc.) that play in the overall space of social business software. Many of these competitors are focused on the enterprise market, the Fortune 500–5,000. MangoSpring says that it is focused on the “Fortune five million.”

The flagship product is MangoTalk, a private and secure Facebook for business. Other apps are MangoDocs, for document collaboration; MangoTasks, a collaborative to-do list, MangoProjects, for project collaboration; MangoIdeas, for idea management; and MangoEvents, for corporate event planning and management. They are offered individually or as a cloud-based platform suite. For each app, subscriptions range from free for businesses with up to ten users and 1GB of data to $400 a month for up to two hundred users and 1TB of storage. Custom plans for different combinations of apps are also available. OEM pricing is based on size of the deal, averaging fifty cents per unique user per month.

MangoChat was the beachhead. This was logical from both a product and market perspective. From a product perspective, the company needed to build the real-time messaging core that its collaborative workflow application uses, so exposing that as a platform service to customers made a lot of sense. From a market perspective, all Web services are looking to create deeper engagement with their users, and having real-time chat is a core component of that. At present, MangoSpring serves over 2,000 business networks, some OEM, and some direct. There are more than 1 million users across all MangoApps who do more than 300,000 activities a day.

MangoSpring has raised no outside capital. The team bootstrapped the company in 2007 and continues to invest in it. Says Kejriwal, “it’s forced us to be lean, and it’s also enabled us to focus on building our business the old fashioned way and be prudent with every single line item in the expense column . . . balancing the need for growth with the cost of that growth is one of our biggest challenges.” Revenue is about $1 million, and the company expects it to be $5 million in 2011.

MangoSpring does not have any firm plans for outside capital at this point. Based on its last few months’ growth and new product launches, the team thinks it will be cash flow positive in Q2 of 2011. If it were to consider outside investments, it would have to be a strategic investment that enables the company to tap into existing sales channels and customers and expand its market more quickly.

The company plans to grow organically – one customer at a time. In terms of our product portfolio expansion, “there are more ideas than we can possibly implement in my lifetime while serving the same customer segment,” says Kejriwal.

He believes that, in hindsight, although it was financially rewarding, he made a mistake selling his previous startup. That company was doing critical mobile apps such as mobile instant messaging and mobile e-mail before most people knew what a mobile app was. Looking back, Kejriwal thinks he exited the business far too early. He does not want to make the same mistake again.

Recommended Readings
3 Up-and-Coming Collaboration Suites (from ReadWrite Enterprise)
Deal Radar 2009: MindTouch

This segment is a part in the series : 1Mby1M Deal Radar 2010