Serial Entrepreneur: Manoj Saxena (Part 3)

In part three of our interview Manoj discusses the various acquisition offers, as well as his exit strategy.

SM: In mid to late 2000 the Internet market started to crash, how did it go for your company?.
MS: In late 2000 it didn’t crash for us; we had about four other offers for acquisitions in the meantime. I continued to want to build this into a large company so we turned them all down. Commerce One had reached out to us in July of 2000 and had given us about a $110 million offer, and I said no to them.

SM: What was the revenue at this point?
MS: Revenue was about $18 million.

SM: So 18 months, 18 million dollars. A huge ramp.
MS: Actually, in 2000 we did about $18 million in bookings, not revenues. Revenues would probably be about $12 million or so.

SM: Still a very good run.
MS: On the other side, one of the things that we found was as we started getting into Q4 of 2000 we found that the sales cycle changed. In December of 2000 we had a $15 million pipeline, and we were expecting to close $7-$8 million of that. Suddenly I started finding that, in December, I started taking a lot of phone calls from the CFOs. We’re talking about them writing a million or two million dollar check, and with all of these dotcoms failing they began asking “How do I know that you guys will be around”?

At that time we were really going gang busters and I started realizing that this was not an issue about my product or my people, it was just an issue of customer confidence. I didn’t want to seem egotistical about it and take it forward no matter what, so I called back Hoffman, CEO of Commerce One and told him if he was still interested in discussing the purchase we should have dinner and talk about it.

So we met for dinner and Mark said he would give the same terms he was going to give back in July. By that time we had even more business. I think we gotten a couple more accounts and stuff. The fact that he approached it with a lot of professionalism, and the right way, I basically came back to the board and said, “Let’s take this offer and sell the company”.

MS: You’ve now sold the company at the end of 2000. Are you staying on as an executive at Commerce One?
SM: We sold it in early 2001. I was staying on to build an enterprise strategy for them. All of their products and sales were in exchanges, and they didn’t have any enterprise sales. So I decided to stay on with them to build out a vertical enterprise strategy solution. Unfortunately I was with them for over a year. I could have left the very next day.

First I decided to stay back six months and make sure that my team was well integrated in the right jobs, the right positions and all. Within the six month period the market had really started getting worse. We’re talking about the middle of 2001. Commerce One’s revenues really started falling off a cliff. I didn’t feel at that time that I should be bailing ship so I stayed on further.

Commerce One had hired another president, Dennis. I had some pretty aggressive proposals that I made to Mark Hoffman, one of which was to take a large portion of engineering and move it off shore. I explored a couple of companies in India for him. For some reason Dennis and I couldn’t see eye to eye on some of those strategies, so I stayed long enough to do the sales launch and left to found Webify.

MS: Where you still based in Austin, did you move to the Valley?
SM: No, I was commuting to the Valley 3-4 days a week. In the meantime my team had taken on more and more prominent roles; they were really the stars in CommerceOne. When I left, Hoffman wanted me to give him my word that I wouldn’t go after their employees, so I didn’t hire a single technical guy. I built Webify with an entirely new group of engineers.

[Next time: Webify]

[Part 7]
[Part 6]
[Part 5]
[Part 4]
[Part 3]
[Part 2]
[Part 1]

This segment is part 3 in the series : Serial Entrepreneur: Manoj Saxena
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