MadCap Offers a Lesson in Bootstrapping, and a Case Study on Offshoring
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later (enabling eHelp’s founders to cash in some of their ownership stake) had strongly supported the 2003 sale to Macromedia. “We were not interested in getting VC money because that was part of the reason why the sale to Macromedia took place,” Olivier says.
After launching Flare in 2006, Olivier says, “In our first month of sales we recouped all of our investment in product development.” Today, according to Olivier, Flare has almost 50 percent of the market in software documentation, competing against RoboHelp and such rivals as AuthorIT, Doc-to-Help, and WebWorks Publisher.
To Hamilton and others, starting MadCap also offered an opportunity to make a fresh start in terms of software development. At eHelp, “We had been pushing a 13-year-old code base forward as long as possible,” Hamilton says. RoboHelp had been based on the HTML format and switching to XML was an obvious change. “We had the chance to spend weeks on a whiteboard, just designing the infrastructure for Flare, before we wrote any code.”
Since then, Olivier says MadCap has had no trouble staying ahead of rival software developed overseas. “The people in India are pretty technically proficient, and they look at what features we have and they can copy those features, but they’re following our lead and they’re not really innovating,” Olivier says. “They don’t have the advantage of living and breathing this stuff. Generally, you get lower costs [by moving software development offshore] but you don’t really get innovation.”
The startup, which has less than 50 employees, generated almost $10 million in software sales in 2008. The recession “hasn’t been as bad as we expected,” Olivier says. “We still had double-digit growth last year—even with the economy. And our revenue last month beat the same month in 2008.”
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