Serial Entrepreneur: Philippe Courtot (Part 4)

Continuing on with the interview, Philippe takes charge of cc:Mail.

SM: Was there an important lesson at this time that helped you take your next turn?
I studied a year with a venture capital firm, I learned a lot. Essentially what I learned was that all of the start up investments which were not doing very well were essentially recycled by bringing in professional turnaround experts. They were re-buying the company at .30 on the dollar, and diluting everyone to try to rejuvenate it. I learned how to rejuvenate a company the American way, and that cash is king.

I was still unhappy with the medical equipment marketplace, and I really wanted to go back into the computer business, but at that time I could see that clearly the market had changed, it was no longer hardware, it was about software. I looked for some software companies, but I did not know anything about software. One day I looked at the Wall Street Journal and I saw an ad for a company, cc:Mail, which was looking for a President.

It was walking distance from my house, and I went there, met with the founder who explained what the situation was. All the VCs who had invested in his company wanted to sell the company, and he did not want to sell. They told him if he could find a President, they would not sell the company. So we discussed, and I was an ideal candidate for both guys, for the VC’s because of my turnaround skills, so for them it was “that’s the guy we need” and for the founder because of my scientific background.

What the VC’s didn’t tell me, well they lied to me like they sometimes do, they did not really want somebody to run the company, they wanted to sell the company; they just wanted someone to push the company so they could sell it.

So, I joined that company, cc:Mail, which had 10 people and $2,000 cash in the bank. What I did was to essentially reach out to our customers, what few customers we had, to see what they needed. All the customers, all the experts, they all said that email was going to be integrated into the operating system, and they were all negative towards LAN based email.

SM: And that was the product of cc:Mail? PC: That was the product of cc:Mail, Electronic Mail. So while the VCs couldn’t care less about this gasping company, the customers would tell me a very different story. They would tell me how strategic it was becoming for them. The main reason they were using cc:Mail was to reduce the cost of fax between international sites. They sent drawings in email instead of faxes. Much like why we are using Skype, to get around the additional telecom charges. So I could see, obviously, what the “pundits” and supposed “experts” were telling me was very different from the customers, and I said “Oh, that’s good news!”

Nobody understood our opportunity. I went back and spoke with other VCs, and I told them the issue and that I needed some money in advance to build, to deliver one key missing component of our software at the time which was directory services at the enterprise level.

As you can see LAN based email needed a small directory. Enterprise email needed stronger directory services. We committed to that and we completed it for a few thousand dollars. I then went to a distributor, and I asked them “If I give you all the customers, would you put some additional orders?”, and they said yes, and we essentially delivered all of our existing clients to them in exchange for some additional orders.

Essentially we got about a million dollars, and that is what allowed us to be a company. So, what is interesting about that? Now, we have Microsoft and IBM, and we are a little company with 10 people, and we are having to compete against the big guys and their shenanigans. Those were the businesses we had to beat to become the dominant player.

And we did, we beat Microsoft, and I can give the details.

(to be continued)

[Part 11]
[Part 10]
[Part 9]
[Part 8]
[Part 7]
[Part 6]
[Part 5]
[Part 4]
[Part 3]
[Part 2]
[Part 1]

This segment is part 4 in the series : Serial Entrepreneur: Philippe Courtot
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