Neelan Choksi on Tasktop’s VC Round and Austin “Growing Like a Weed”

Tasktop Technologies wants to help improve the operations of the brains behind technology companies: the staff that makes the software.

What Tasktop does is develop tools for customers that allow their developers to make software more efficiently. With the dozens of tools now in use for each part of the software development process, organizations are finding that the process to develop software—code being developed and tested on the way to a final product—has become less productive.

“Now, the tools don’t talk to each other and that’s the problem we solve,” says Neelan Choksi, Tasktop’s president and chief operating officer, who’s based in Austin, TX.

The company’s main product, Tasktop-Sync, supports about 70 tools made by IBM, Microsoft, and other companies, which are used by developers, testers, and business analysts at software firms. This week, Tasktop said it has raised $11 million in venture capital to help the company accelerate the marketing of its products. Among the investors are Austin Ventures and Yaletown Venture Partners, a Canadian investment firm. The funding marks Tasktop’s first dip into the VC pool since it was founded more than seven years ago.

The company’s origins stem from the PhD thesis of CEO Mik Kersten, who suffers from repetitive strain injury and realized the condition was exacerbated not by the coding work he was doing—which he enjoyed—but from the repeated need to stop and search hundreds of classes of code to find the one he needed. That research led to the development of Eclipse Mylyn, an interface that organizes developers’ work by tasks rather than files that must be searched, as my colleague Greg Huang has reported.

“Historically, the way people solved what we do is manual process, e-mail, or spreadsheets or a meeting. That’s to have a tester talk to a developer, or a business analyst talk to to them,” says Choksi, who is also an Xconomist. “In a lot of cases, we’re putting systems in place to replace these processes or for where communication didn’t happen at all.”

The company is based in Vancouver, BC, but has its U.S. headquarters in Austin. I caught up with Choksi this week to talk about Tasktop’s expansion plans, how improving productivity makes for happier workers, and why his team waited more than seven years before taking on venture capital. (More background on Choksi here.)

Here is an edited transcript of our conversation:

Xconomy: The company went from organizing developers’ work by tasks to broader application lifecycle management. Tell me about this evolution.

Neelan Choksi: If you go back 20 years, a big code base was 100 files. In that world, you could use a file browser and folders to manage all of your code. When you started hitting 1,000 classes of complex code, search came along and it made it manageable. We hit another echelon and even search wasn’t good enough. Instead of showing people all 10,000 classes of code, we just show the code that is relevant to the activity you want to do. That was the task interface that turned into Mylyn.

Switching processes completely [to look for code] is actually pretty hard for the human mind. Developers, when they context switch, it takes 25 minutes to recover, to be able to be productive again. This is mind memory vs. muscle memory. [With Tasktop] you can come back and be looking at the exact line in a Word document…where I was when I had to take a phone call. We solved the problem for one particular silo [for programmers].

Other people started approaching us: We really like what you’re doing for developers, bringing all this information for them in one place. I’m a tester; I’m an agile planner, business analyst. So Tasktop-Sync came from the idea that we needed to build something that allowed information to flow from one tool to another tool.

We don’t necessarily see a pivot ahead of this. We stumbled into a really, really big problem. What has happened is that we can prove technologically that we can solve this problem. We support 25 products that we do integrations with. To do this properly, we need to support 40 to 50 different tools. That would give us 80 percent coverage.

X: What are the plans for the funding? Will there be a major ramp up of employees?

NC: The primary growth will be in sales and marketing and business development, managing customers and partners, and getting the word out. We’re going to add some developers to grow out our integrations and breadth of services. We got to 70 people as a bootstrapped company. We envision being closer to 90 by the end of this year, and into the 120s by the end of the next year. Austin will be the fastest-growing office, percentage-wise.

X: You bootstrapped the company for seven years. Is that typical for a company like Tasktop?

NC: It’s not typical to be in bootstrap mode that long. Austin has an incredible bootstrap culture so, from my perspective, it doesn’t seem crazy as an Austinite. It didn’t make sense [to accept venture capital] for the first six years of our existence when we were figuring out what we were going to be when we grew up. You don’t raise funding for that. The problem that we’re solving now, connecting the entire village that it takes to build software—as software is becoming more and more the basis for competitive advantage because of mobile, cloud, all these other macro factors—we felt the timing was right. The business justified the funding.

We needed to grow faster. To be a bootstrapped company, you have to be incredibly disciplined. Our people have to scream about 10 times for me to say, OK, let’s think about a hiring plan for your department. We now felt it made sense to go a little faster, maybe listen on the second scream.

X: There have been a lot of VC raises by Austin tech companies in the last month.

NC: Just the growth in the investment community in Austin in the last three to four years has been tremendous. You have Capital Factory, Techstars, Tech Ranch at the incubator level. Austin Ventures has been around forever, and Silverton Partners. LiveOak Venture Partners is more recent. There’s been a ton of growth in just the number of investor options. The angel network has also taken on a life of its own and can help companies get to a certain stage. There’s more supply of money.

Incubators are creating a scenario where there’s a lot of startups being kicked off. The incubators are helping them become much more savvy, helping them find a business model, some angel investment. Full disclosure: I am a mentor at Capital Factory.

On the macro level, things are pretty good right now. Austin is growing like a weed. The energy that startups bring, as an entrepreneur and a participant in the Austin community at large, it’s good for me.

X: What are the practical benefits to your clients in using Tasktop’s products?

NC: The best example is a client, a large bank, told us they are saving 20 minutes a day per software person. If you think about work they’re doing [before Tasktop], e-mails, spreadsheets, copy and pasting from one system to another, it’s the work they hate the most. The simple measurement of 20 minutes per day is nice. But the bigger value is when something doesn’t get done [an update to the software, for example], what do you lose? In the agile world, two-week and one-week iterations in delivering software are very common. In that world, if the tester doesn’t see the e-mail that a requirement has changed, and they are still testing against the old requirement, that’s a software failure. With our product, the right information is at the right fingertips at the right time.

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