I know this might qualify as 'old news' considering that Matt scooped it, but we did in fact invest in Socialtext's B round alongside DFJ. I met Ross Mayfield a couple of years ago and liked him from the start, which is just makes it that much more enjoyable to now say that we are an investor as well as a supporter.
When I first started talking about wikis the conversation typically started and ended on what wikis are, and quite often more than a little skepticism that any company would want to have a tool that enabled "anyone to edit anything". Fast forward to today and the conversation is not preoccupied with what wikis are, it's now about whether or not you can build a successful business around wiki technology. To me this shift is a good thing, it signifies that the market is maturing, accepting the technology, and most important that Socialtext was successful in being far enough ahead of the market swing but not too far ahead to have people say "oh yeah, they've been around for a long time". It's funny how the Valley works...
Can we build a successful business around wikis? I don't know is the honest answer but my money is betting that we will be able to figure it out. More important than the question whether or not is the idea that we are investing in a management team that is fully capable of asking the right questions, building the correct strategy, and executing.
Socialtext has proved beyond doubt that they can get customers with large numbers of users. The full customer list is impressive, but when you dig into the engagements and learn how they are using wikis, the number of users they are ramping to, and finally the hard benefits they are measuring by using wikis, you really are blown away. It's powerful stuff, and this also goes to one of the primary challenges we have to attack, which is building those case studies and quantifying the ROI the company is enabling.
The company is also busy refreshing the user experience of the product, which hasn't benefited from a significant investment the way that the backend does. Given the choice of having a pretty UI built on a shaky architecture, or having a solid backend that is in need of a better UI, well I'd take the latter because that's something that can be solved reliably. Fortunately, Socialtext started a major product refresh in the summer so I'm confident is believing that we're well on the way to overcoming this.
The economics of the licensing and subscription revenues are also an interesting area to focus attention on as it is quite likely that we are really suboptimized on this. In other words, given the amount of value that the company is driving, customers are getting a very sweet deal. I'm interested to see how this develops because I believe that the company can implement a licensing model that not only drives better unit economics but also is a growth accelerator.
Socialtext is one of the most interesting companies we have invested in and it goes without saying that we will do everything possible to support them in their mission.
I can't figure out why they don't have a free limited user model like Jot does.
Posted by: Raj Bala | Oct 11, 2005 at 01:31 PM
I was wondering why recently there were multiple posts using, or pointing towards, SocialText sites.
While signing up to edit the NYC meetup wiki, the annoyance at the long delay in registration reply was quickly replaced by a good experience when I received a personalized reply. Once again, customer service certainly made a good first impression.
Posted by: chris | Oct 11, 2005 at 03:58 PM
the pointers to socialtext sites is probably more a reflection that the company has been doing some cool stuff with public sites lately, like the Entrepreneur Exchange. I'd link to that stuff even if it was from a competitor of a company I'm an investor in. Really.
Posted by: jeff nolan | Oct 11, 2005 at 04:19 PM