Having bootstrapped itself for all of its 12-year history and reached $31m in revenues, Cork’s Teamwork is now exploring options, including potential investment, to achieve its ambition to become a global software giant that could rival Salesforce or Microsoft.
There is something incredibly brave about former college classmates Daniel Mackey and Peter Coppinger (pictured above) who founded Teamwork in 2007. They originally began in the late 1990s as a web design consultancy but pivoted in 2007 to become a product company with thousands of paying customers worldwide.
Up until now they have made decisions and followed a trajectory that would make most business owners wince. Before they were a product company that they were eager-to-please consultants who made no money despite working their butts off. There was the time that they decided after trying to buy a piece of software they needed to just build it themselves after experiencing poor customer service and suddenly they had a product on their hands. There was the time that they gambled €500,000 on buying the Teamwork.com domain name even though it was pretty much most of their cash reserves.
“This is quintessentially a very good Cork success story. The next chapter is bringing Teamwork to a $100m or $200m a year software business”
Hard lessons learned and gambles that have paid off, you have to take your hat off to them because they have succeeded so far without taking on a dime of venture capital investment, emerging to become a $31m a year software business employing 244 people (180 or so of them in Cork, opening new offices in Belfast and last year being named EY’s Entrepreneur of the Year. The company even has plans to build its own Apple spaceship-style campus in Cork.
Is this Ireland’s most ‘Saas-y’ tech business?
But now Teamwork is at a turning point. The company is targeting revenues of $50m by 2021 and is exploring options including potentially take on investment to grow further to revenues of $100m and beyond by taking on the giants of Silicon Valley and specifically players like Asana and Monday.com on the world stage. If the company takes on venture capital, which is one option, it could use the funding to recruit seasoned talent as well as market heavily in the burgeoning space for productivity software.
Quintessentially, Teamwork is a Cork success story. An indigenous tech business in a city that is awash with foreign direct investment giants from Apple and Dell to EMC and Trend Micro.
Speaking with ThinkBusiness on a rainy morning in Cork city, co-founder and CTO Daniel Mackey is in a reflective mood and puts the company’s success down to hard work but also a lot of luck. “A lot of young software companies start out by bootstrapping and never get the traction and the rubber never quite hits the road, but we’ve been extremely lucky.”
In the 12 years since Teamwork formally became a business, its product suite has evolved from one product to five, incorporating project management, CRM, document management, helpdesk software and team chat.
Mackey admits that the idea of potentially raising funding is a new idea despite being the chosen route of many of Teamwork’s peers, but it is only one option being examined. The essential point being that bootstrapping and organic growth alone is no longer sufficient if the company wants to play in the big league.
“Legacy is important to us. We’ve been at this since 1999, with eight years of consultancy and now almost 13 as a product business. We have big plans but if we raise funding the only reason we will do so is to get to a point where we will grow faster. The key thing is not to fall behind because the market is changing very fast.”
The company counts global companies from Netflix to Disney and Special Olympics as customers, but the space has become very crowded with lots of new rivals promising to transform the world of work through the consumerisation of technology.
“We could keep going as we are but it will take longer and adds more risk as more competitors enter the fray. But if we don’t change there is the danger that we could find ourselves obsolete,” he warned.
“We’ve seen massive changes in our space in the last 12 years. We are now in the work management space as opposed to the project management space. Our rivals have raised vast amounts of funding and are spending a fortune on marketing as well as forging partnerships and alliances.”
Taking Teamwork to the next level
To counter these threats, raising capital could enable Teamwork to make acquisitions or hire in C-level talent with experience in scaling a Cork company to battle the best Silicon Valley can offer.
“This is quintessentially a very good Cork success story,” said Mackey. “Both Peter and I know where our strengths and weakness are. The next chapter is bringing Teamwork to a $100m or $200m a year software business.
“For many years we went with a low-touch approach with people just coming to the website and putting in their credit card details. But now if you really want to succeed and go to the next level it means putting boots on the ground and working closely with the CIOs and technical departments of large enterprises. With software-as-a-service (SaaS) at enterprise scale it means making sure you are on the approved vendors’ lists and building relationships so it means hiring top tier sales talent, and you can’t do that if you are self-funded. So it is about finding the people, the resources and not settling for mediocrity.”
Unlike many of its US competitors, Teamwork has targeted Europe first and is growing its presence in the US, starting with a Boston office.
Winning the Ernst & Young Entrepreneur of the Year award has opened numerous doors for Teamwork, particularly in terms of access to the EY Entrepreneur of the Year alumni which includes many entrepreneurs that they have admired for years, including Pat McDonagh of Supermacs.
The company has also added Oracle, Salesforce and Marketo veteran Fergus Gloster to its board.
“The vision is to go beyond $100m a year in revenues. We are currently at $31m a year and that’s not where we want to be. Some of our rivals in SaaS have growth rates of 170pc a year. It’s down to realising that bootstrapping can only get us so far and that we now have to take another leap of faith and get the right investors on board.
“We need to get laser-focused on people, process and being innovative. Our key differentiator is that we have a suite of products that all talk to each other and that is what makes us unique.”
Main picture (at top): Teamwork co-founders Daniel Mackey and Peter Coppinger
Written by John Kennedy (email@example.com)
Published: 1 November, 2019