• Founded with an innovative funding model.
• Backed by local technology serial entrepreneurs.
• Focused on early stage Internet / Software startups. My forte.
• Based near us on the American Tobacco Campus of Durham, North Carolina. Why? Because The ATC is the place to be.

They are holding a kick-off mixer next Thursday (February 4). You should contact Chris or visit the mixer if you are interested in learning more.

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Bronto's Strategy Framework

Communicating strategy is hard. As the company grows and there are more moving pieces, it becomes difficult to keep everyone on the same page. We’re over 50 people now and with this size, we have to use a good framework to describe how we look at our company, our goals, and our strategy.

We base our strategy framework on one from Jim Collins’ Beyond Entrepreneurship. It’s a great book from the same author as Good to Great. Unlike Good to Great, it is a practitioners guide. So if you are running a startup and transitioning into becoming a real business, I highly recommend it.

As for the framework, we focus on four pieces:

1. Purpose. Why are we in business beyond a paycheck? At Bronto, we are here “to make our customers better marketers through intuitive software and helpful people.” It’s simple. It’s true. It’s a rallying cry that inspires our day to day actions.
2. Values. What do we stand for? This is newer to the framework and we’re going to spend our Quo Vadimus sessions (internal mixed team who we are / where are we going sessions) in February crystallizing this. We have them. Just a matter of articulating them very clearly. Not always so easy.
3. Mission. This is what we are shooting for. Multi-year goal. Our mission is “to become the leading ESP around the shopping cart in 2010 with $10mm in revenue.” We’re almost there — at the least on the revenue side. The leading part is unrealistic at $10mm but we have been consistently building toward that direction so I’m happy with that.
4. Strategy. This is what lets you accomplish the mission. Good strategy says what you are going to do and not do. When you zig and when you zag. We determine this on an annual basis. I just finished presenting this to the company and will explain that process in some future post.

Great strategies win markets. Great strategy frameworks get everyone on the same page, rowing in the same direction at the same cadence so that’s possible. This one has worked for us.

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Ximena is my 7-year old daughter and was born at about the same time that Bronto was founded. In fact, in many ways, her life parallels Bronto’s history. When my wife Karalyn and I became pregnant with her,  I significantly stepped out my efforts to get the company off the ground and registered the domain name brontomail.com. Right before she was born, we moved the company out of my house and into an office. Wise move because as any parent will tell you, newborns and startups don’t mix well! Now their paths cross again.

Ximena is a little entrepreneur — whether it be lemonade, cookies, candles, … If she can make it, she’ll sell from of a table in the front yard. Ever since being read Misty of Chincoteague when she was 5, she has been very motivated to earn enough money to buy a horse. I don’t see a horse purchase any time soon but her motivation is still exciting to watch and encourage. This is where Etsy comes in.

She wanted to extend her reach for her homemade piggy banks beyond the front yard. I told her about Etsy — a great place to buy and sell handcrafts as well as a Bronto client! She was game.

So tonight we set up her own Etsy store. She took pictures of her crafts and wrote the descriptions. I ponied up (like the pun … couldn’t resist) the 20-cent listing fee. Now the store is open and ready for business.

You can find it at ximenacolopy.etsy.com. Check it out and maybe even buy something. The prices are right and she would be thrilled.

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I was recently interviewed by Alice Bumgarner about this principle and how it applies to innovation. The interview was featured on the IdeaConnection blog. You can read it on their blog or inline below:

Innovative Hits, Not Home Runs
A conversation with Joe Colopy, founder and CEO of Bronto Software
February 13, 2009. By Alice Bumgarner

To stay competitive, Joe Colopy of Bronto Software, an e-mail marketing service provider, must keep innovating – or meet the same fate as his company’s namesake.

In the world of email marketing, what matters is making messages stand out, even as inboxes become more cluttered. To meet the challenge, Bronto relies on a combination of strategically targeted messages on the front end and Google-like analytics on the back end. The company’s software superiority has fueled fast growth: Bronto, whose clients include Johnson & Johnson, Lake Champlain Chocolates and Lending Tree, is growing 50% to 100% every year, and the company is currently tripling its office space.

Alice Bumgarner (AB): What is the importance and the role of innovation at your company, given today’s economic environment?

Joe Colopy: Innovation is essential to Bronto, because we’re in the business of developing and selling technology to solve business problems. In tough times like these, people are moving their marketing dollars to email or online marketing. Those with the best ideas, and those who can implement them well, will win.

AB: How is this role reflected at your workplace?

Joe Colopy: I look at innovation as being about fostering an environment of creativity and collaboration, so you can have a thousand small innovations. From the outside, it may look like something is one big innovation. But that’s a ‘lottery ticket’ view of the world. It’s really about creating an environment that allows little innovations to build upon each other and bubble up. That’s why Google allows [engineers] a lot of free time to come up with their own projects. It’s why 3M famously has a long track record of doing that. That’s what I see as the bedrock of innovation – fostering trust and flexibility and allowing hundreds of small things to happen.

AB: What is the most exciting innovation you’ve been involved in developing? What factors made or make it so exciting?

Joe Colopy: I founded the company and built the first software product, so there were thousands of small innovations that enabled it to be successful. But our current innovation is more in our unique culture than in the end product.

We keep things very focused, collaborative, democratic, unique and creative. For example, we have an extremely open, flat organization. I sit with everyone else – in a crappier seat than other people! We don’t have cubes, just tables clustered in sets of two, three or four in different parts of the room, like little islands.

The downside is that you don’t have privacy, and it has the potential to be distracting. But it actually ends up being more productive in a harder-to-measure way. You can easily dialogue with someone in another group. The physical organization sends an important message – people’s opinions are valued.

AB: What, if any, problem solving, creativity tools or innovation software do you use or are you familiar with?

Joe Colopy: We don’t use any specific tools, but we do structure the environment so that good ideas come from everywhere within the organization.

AB: How do you encourage good ideas to bubble up?

Joe Colopy: Social media tools help spark ideas. Employees use Twitter, Facebook and our internal wiki, called BrontoPedia. At the core of BrontoPedia are our weekly metrics, but it’s also the place for marketing plans, YouTube videos, an RSS feed from our blog, articles that people have tagged from Del.icio.us. It’s a democratic, decentralized approach, as opposed to a top-down approach.

We also set up games to help people feel part of things and collaborate. For example, once a month, we spin a big wheel with 36 spots on it. We end up with two numbers, which correspond to two employees, and those two employees swap spaces for a week to work alongside another team. Now these employees have made some connections and new relationships. So when, say, a salesperson has an idea, he can go to the product manager and talk about [it]. Engineers can go to sales folks and say, “Would this be hard to manage?”

It’s easy to get your head down in your own little world. Innovation and creativity are about connecting things that appear disparate.

AB: Do your innovations ever come from consultants or outside sources?

Joe Colopy: Generally, we don’t use consultants except for some specific functional tasks. I believe that the talent is here, it’s just a matter of tapping into it.

AB: What is the most difficult problem you and/or your team have solved?

Joe Colopy: The challenge has been not so much in solving discrete problems, but in the ambiguity surrounding the problem – in other words, do you even know what the problem is versus the symptoms?

AB: When faced with ambiguity surrounding a problem, how do you and your team clarify it?

Joe Colopy: You have to get people to look at the same thing, otherwise everyone is working with a different set of assumptions. When we hold regular meetings about general strategy – to talk about where we’re going, where we fit into the market, what the next big ideas will be – I give everyone a common framework or a way to look at the market, so we’re all talking about the same thing. Then you can talk about whether your solutions make sense.

AB: When teams are working on a problem or developing a product, and they hit a barrier, what do you recommend?

Joe Colopy: To overcome barriers, it is usually best to involve folks in other areas that can see your problem from a different perspective. We also loop in customers quite a bit, and they offer great perspectives too. We just have to willing to ask, which is sometimes tough to do. It’s easier to move forward without using anyone’s opinion but your own.

AB: What are some of the obstacles that prevent teams from creating innovative products?

Joe Colopy: You can’t be too tightly measured or you’ll measure yourself out of innovation. It’s important to spend some part of your business experimenting. Innovative products are often found in the journey of experimentation. That’s how Bronto started. If you focus too much on having ROI justified at the beginning, then you’ll never go down the path. If the benefit were obvious to everyone from the outset, then it probably wouldn’t be innovative.

AB: Are you familiar with virtual collaborative innovation communities and networks such as IdeaConnection.com that bring together experts, facilitators, and product developers for confidential collaborative creation?

Joe Colopy: No, I’m not. I am interested in idea communities that companies form with their customers to drive ideas. SalesForce has one that I think is cool, and it’s something that we might implement.

AB: What good books, articles, blogs or other media on the topic of innovation have you read? Are there any that you recommend to employees?

Joe Colopy: Often I get good ideas by reading books and articles about completely different industries. For example, how does Zappos approach customer service? They have a completely different product than us – shoes vs. hosted software – but we have a lot of common approaches. You can find plenty of parallels if you look around.

AB: Do you have any other thoughts you would like to share about innovation?

Joe Colopy: We have a saying here at Bronto: “Hits not home runs.” I see innovation as being not necessarily one big idea but rather a thousand small ones that lead to something truly great.

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The startups are broken into two groups — commercial and social. I judged three teams from the social side — startups with a strong social mission. As judges, we reviewed the startups’ business plans beforehand and listened to their 15-minute pitch followed with a short Q&A session.

Here are the startups with my quick and dirty analysis.

• CREW — Proposal to offer an afterschool crew program to an underserved Durham public high school. Noble idea but the logistics, upfront costs, and the student team’s light experience on the requisite operations.
• Optimal Learning — Startup that merges a biofeedback mouse with software to lessen test taking anxiety for teenagers. More promising and business plan was well thought out. Biggest risk is startup run as a research project versus business.
• Macedonian eLearning Center — Online website / community to teach the Macedonian language. Lots of passion and interest by the founders but fundamentally challenging because the potential market is very small.
• Peace Umbrellas — Startup selling umbrellas painted with a peace sign and sunflower. Although the management team come across as some quirky folks, I can see success of this company succeeding. Founders seem gritty enough to tough out the hardships of starting a company, see their product and business evolve, and build a strong genuine and unique brand over time … over a long time. Bit reminiscent of the folksy roots of Ben & Jerry’s or Burt’s Bees. But, there are a lot of ifs there.

After all the votes were tallied, Optimal Learning and CREW moved onto the next round. We’ll see where it goes it from here. In the end, a startup’s success (especially non VC-backed ones) is very dependent on the drive and persistence of its founder(s). I suspect that if any of these startups go anywhere then persistence will be the reason.

The finals for the competition are April 19th with prizes of $15,000 for the best commercial and social venture. As a past supporter of Dukakis and Mondale, I have a unfortunate history of always backing the wrong horse. Hopefully, this time it’ll be different.

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The product team has been hard at work this week as well. We have the Winter 2008 Release of our product coming out this weekend. There are a number of compelling features like typed fields in there which will make many of our customers very happy. The roadmap going forward is even more exciting. As of  now, the Spring 2008 Release is going to add some compelling features related to email automation and transactional messages and the Summer Release is going to add some key integrations with Omniture for web analytics and ReturnPath for email inbox rendering. All very exciting.

Finally, the interesting item of the week was that I won an award for entrepreneurship. I was named a recipient of Business Leader’s 2008 Triangle Impact Enterpreneur award. Thanks to Bronto’s marketing and Crossroads PR for submitting the entry many months ago. As an added plus, I was number four on the list of recipients. My wife explained that it was because the list was sorted alphabetically. I beg to differ and I’ll take my victories where I can.

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