Tag Archives: Tim Berry

How did Tim Berry grow Palo Alto software?

I was amused to check in with Quora this morning and find somebody had asked me to answer “How Did Tim Berry Grow Palo Alto Software?” Obviously that’s a question dear to my heart. So here’s what I answered, which seems fitting for this blog today.

Business Plan Toolkit
The first Business Plan Toolkit in 1988

Slowly, carefully, bolstered by good product and reviews that validated, doing a lot of coding and documentation myself, and not spending money we didn’t have.

It started as spreadsheet templates. The first of those was published in 1984 to accompany a book “How to Develop Your Business Plan,” published by Oasis Press. In 1988 I separated from that book, and redid the templates to accompany my own book when I published “Business Plan Toolkit,” released in MacWorld January 1988. All of these early products were 100% my work, my spreadsheet macros and my documentation. It helped to have a diverse background, including 10 years as a professional journalist, foreign correspondent in Mexico City, plus a Stanford MBA. I could write about business so (people told me) others could understand.

Throughout the early years I kept up a healthy consulting practice doing business plans for some startups and some larger high tech companies, plus workshops on business planning for dealers of high tech companies. Apple was by far my best client, with repeat business in consulting on business planning from the beginning until 1994 (Hector Saldana was a steady client for years, and a supporter of the business idea, and informal advisor). The consulting supported marketing expenses. There was no Internet to speak of until 1995, so the early marketing was a combination of small ads in the back of magazines and product reviews in major computer magazines.

It was a major struggle for years.  I was sacrificing consulting revenues to prop up products. The motivator, for years, was “I want to sell boxes, not hours.”

My wife’s role was especially important during those long hard years. She didn’t give up on me. We have five kids and we depended financially on my consulting, but she stick with my idea of “boxes not hours” as I continued to use scarce funds to keep the product dream alive. We had some money to deal with because my role in Borland International paid off in 1986, but we were still struggling, with small houses and used cars. And by the way we’re still married as I write this in 2016.

When we moved it from Palo Alto to Eugene OR in 1992, I had three early equity shareholders (1% each) who agreed to surrender their shares because there was no value in them. My wife and I moved to Oregon because we wanted to. She said to me: “we put up with all the downside of you having your own business; let’s get the upside and move to where we want to live.”

By 1994 I was in deep trouble, with a quarter of a million dollars of unsold product stuck in retail, coming back from channels. The template products never made it. And in the words of Kathy Colder, a key purchasing executive from Fry’s, “Tim, your boxes suck.” At the worst point, we had three mortgages and 65K$ credit card debt.

Business Plan Pro
Business Plan Pro circa 2000

What I did then was decide not to just repackage, but to build stand-alone product instead, dumping templates entirely.  I found a local three-person programming company (Cascade Technologies, which no longer exists; its founder was Ken Barley) to take my templates and my vision and create stand-alone product for Windows using Visual Basic and an Excel-compatible spreadsheet we were able to buy as a tool, and include in the software. It added a complete interface to include the words as well as the numbers, and keep it all, even formatting and printing, inside the one application. I wrote about a third of the code myself, in Visual Basic. My vendor got a low monthly fee for 12 months, plus a percent of future revenue. We were still not able to spend money we didn’t have.

That effort was launched in 1995 and became successful as Business Plan Pro so I was able to stop consulting and dedicate myself to the business. My son Paul Berry joined me in 1998 and developed the web business with downloadable software. We grew quickly to more than $5 million annual revenues by 2000. (Paul left in 2001 and became CTO of Huffington Post in 2007 and founded RebelMouse in 2012).

In 1999 we took on a minority investment from Palo Alto venture capital, RB Webber and Associates. That was our first outside investment. In 2002 we negotiated a buyback with them because after the dot-com crash valuations had plummeted and the company was worth more to me and my family members than what an acquirer would pay for it.

I stepped aside in 2007 and asked Sabrina Parsons to become CEO while I focused on blogging, writing books, speaking, and teaching. She and the team released LivePlan in 2012 and that – a web app, SaaS, browser based has become very successful, having had several hundred thousand paid accounts already. I’m still chairman, and founder, but Sabrina and her team get a pretty free rein to run the company. Market share and awareness keeps growing and we’ve had several years of double-digit growth in revenues again, after the great recession. And it is entirely family owned.

Here is the source on Quora: How did Tim Berry grow Palo Alto software?

10 Lessons Learned in 22 Years of Bootstrapping

(I posted this yesterday on Small Business Trends. I’m reposting here because this is my main blog, and it belongs here too. Tim )

Last week a group of students interviewed me, as part of a class project, looking for secrets and keys to success. They were asking me because after 22 years of bootstrapping, my wife Vange and I own a business that has 45 employees now, multimillion dollar sales, market leadership in its segment, no outside investors, and no debt. And a second generation is running it now.

Frankly, during that interview I felt bad for not having better answers. Like the classic cobbler’s children example, I analyze lots of other businesses, but not so much my own. As I stumbled through my answers, most of what I was saying sounded trite and self serving, like “giving value to customers” and “treating employees fairly,” things that everybody always says.

I wasn’t happy with platitudes and generalizations, so I went home that day and talked to Vange about it. Together, we came up with these 10 lessons.

And it’s important to us that we’re not saying our way is the right way to do anything in business; all businesses are unique, and what we did might not apply to anybody else. But it worked for us.

1. We made lots of mistakes.

Not that we liked it. At one point, about midway through this journey, Vange looked at me and said: “I’m sick of learning by experience. Let’s just do things right.” And we tried, but we still made lots of mistakes. We’d fuss about them, analyze them, label them and categorize them and save them somewhere to be referred to as necessary. You put them away where you can find them in your mind when you need them again.

2. We built it around ourselves.

Our business was and is a reflection of us, what we like to do, what we do well. It didn’t come off of a list of hot businesses.

3. We offered something other people wanted …

… and in many cases needed, even more than wanted. You don’t just follow your passion unless your passion produces something other people will pay for. In our case it was business planning software.

4. We planned.

We kept a business plan alive and at our fingertips, never finishing it, often changing it, never forgetting it.

5. We spent our own money. We never spent money we didn’t have.

We hate debt. We never got into debt on purpose, and we didn’t go looking for other people’s money until we didn’t need it (in 2000 we took in a minority investment from Silicon Valley venture capitalists; we bought them out again in 2002). We never purposely spent money we didn’t have to make money. (And in this one I have to admit: that was the theory, at least, but not always the practice. We did have three mortgages at one point, and $65,000 in credit card debt at another. Do as we say, not as we did.)

6. We used service revenues to invest in products.

In the formative years, we lived on about half of what I collected as fees for business plan consulting, and invested the other half on the product business.

7. We minded cash flow first, before growth.

This was critical, and we always understood it, and we were always on the same page. See lesson number 5, above. We rejected ways we might have spurred growth by spending first to generate sales later.

8. We put growth ahead of profits.

Profitability wasn’t really the goal. We traded profits for growth, investing in product quality and branding and marketing, when possible, although always as long as the cash flow came first.

9. We hired people slowly and carefully.

We did everything ourselves in the beginning, then hired people to take tasks off of our plate. We hired a bookkeeper who gave us back the time we spent bookkeeping. A technical support person gave us back the time we spent on the phone explaining software products to customers. And so on.

10. We did for employees’ families as we did for ourselves.

Family members — not just our own family, but employee family members too — have always been welcome as long as they’re qualified and they do the work. At different times, aside from our own family members, we’ve had two brother-sister combinations, an aunt and her niece, father and daughter, and husband and wife.

And in conclusion…

Bootstrapping is underrated. It took us longer than it might have, but after having reached critical mass, it’s really good to own our own business outright. It might have taken longer, and maybe it was harder — although who knows if we could have done it with investors as partners — but it seems like a good ending.

Family business is underrated. There are some special problems, but there are also special advantages too.

Boomer Business Blogger Part 1: Two Year Anniversary

Two years ago this month I started blogging. Just a couple weeks after naming Sabrina Parsons CEO of Palo Alto Software. I remained president, but switched my job to blogging, writing, speaking, and teaching. I guess I should have changed my title to CBO, for chief blogging officer.

I didn’t understand at first …

“I’m a business plan expert,” I said, naively. “I write how-to stuff. It doesn’t work on blogs. It’s static.”

Sabrina, however, insisted.

Set up your Google reader. Start reading Anita Campbell, John Jantsch, Guy Kawasaki, Pam Slim. You’ll figure it out.

What happened? On the day of that conversation I’d posted seven times on my one main blog Planning Startups Stories. As of today I’ve posted 700 posts on that one, plus 460 posts on Up and Running, my blog at Entrepreneur.com, plus 43 on Huffington Post, a couple dozen on Small Business Trends, about a dozen on USNews, and 140 on Planning Demystified. And come to think of it, I’m also posting on Business in General, Email Fail, and some others.

I read a lot of great blogs. Those four above, Steve King’s Small Business Labs, Seth Godin, Bob Sutton. Oh. I just checked. Several hundred links on my Google reader. Better stop listing. I owe thanks to so many others.

I think I get LinkedIn now. I’ve been answering questions in LinkedIn too … I’ve got a good ranking in the business plan category there. I’m connected with people I know and like.

Lately I’m loving Twitter. I’ve tweeted more than 1,200 times. I love keeping up with friends and favorite bloggers, the news in general, a few celebrities, and, my favorite benefit of Twitter, links to Web things that interested the people I follow. My Twitter friends keep me up to date. I love it. I don’t do Twitter clutter: no tweets about what’s for lunch, going home, ball games or weather; I do tweets about links, issues, articles, people, news.

I’m still struggling with Facebook, trying to figure out how to resolve the inherent conflict between use for business, keeping track with business-related contacts, and use for personal, photos from the kids and grandkids, keeping up with cousins and nieces and nephews. I’m a split personality in Facebook.

So for the record, they were right, I was wrong. I did have blogging in me. “And,” they added (flashing back to that conversation two years ago), “your blogging will be good for our company.” They were right about that, too.

I don’t think anybody (certainly not I) realized how much I’d enjoy writing again. Maybe it’s that 30-some years ago, before I got the MBA degree and got into business, I was a journalist. I was a foreign correspondent in Mexico City. I was night editor for United Press International (UPI) there, then I was a McGraw-Hill World News (think Business Week) stringer there, and I freelanced a lot too.

Not that journalism is the same as writing. In my case, I also wrote fiction, got a short story published, wrote a novel that got some second looks, but never got published (no loss, it wasn’t that good). My BA degree was in literature, and I got an MA in journalism too, just before going to Mexico for years, and long before coming back to the U.S. to get the MBA degree.

So let me say that I love it. It’s been great for me. But it’s also been very good for business, too, which is really cool. But that’s another post, scheduled for tomorrow.

Your Business Plan is Wrong

I was reviewing files when I discovered this one — a nice summary of business planning the way it ought to be. This is almost two years old now, so the SBTV series is newer, but I still like this as a good summary of my ideas on business planning. It was created a year before I wrote the Plan As You Go book, but the idea of the business plan is very much the same.

If for any reason you don’t see the video here, you can click here to go to the source.