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Jimdo - Pages to the People!

Tue

26

Jun

2012

Thanks, but No Thanks: Passing on an 8 Figure Venture Round

 

 

At Jimdo we've built a rapidly growing business, which has garnered some interest from venture capital over the last few years. We've put it off because we never really had the feeling that money would make us any faster. But sometime last fall we found an area where money might help us grow more quickly: online marketing. We went out, gave our pitch, and had a very good term sheet from a top-tier VC on the table. Valuation, investment amount (8 figures) and the rest of the terms were everything we could have asked for. The discussions were great; they really helped us understand our space better. On a personal level we got along very well - we basically just needed to sign.

 

The round would have given us the chance to become No. 1 in our market in the very near future. Jimdo is currently 3rd behind Wix ($58M raised) and Weebly (rumored $20M). To put the numbers in perspective, we've only taken € 500k in funding and are growing from our own revenue. In comparison, 1&1, whose MyWebsite product is based on an old version of Jimdo, invested over € 37M ( in advertising alone!) in 2011, and the plan is to push MyWebsite even more this year...

 

Why did we say no to this huge opportunity?

Sustainability

By taking a venture round, you basically commit to an exit. There are usually only two ways this can happen: a sale (to a big corporation like Google, Facebook, or Microsoft) or an IPO. Selling (out) to a big corporation is not an option for us. We're building this company for the long run. We want to see Jimdo and everything it  stands for as a proud and independent entity, not subsumed into some corporate behemoth (see Christian's post "Dear Entrepreneurs, please don't sell your company").

 

And an IPO? Well, unless you're an extraordinarily successful company like Apple or Google, publicly-traded and sustainable just don't fit together. Shareholders interests are short-term, looking at the next quarter’s profits. But we believe that decisions made with the long view in mind are better for the business and the company’s bottom line. We think long-term and walking away from venture capital means we keep the freedom to make decisions that way.

 

Fahrvergnügen

What made the decision very easy is that the three of us are not driven by material success. Driving a Maserati or living in a big house wouldn't make us any happier. A big exit to make lots of money doesn’t excite us. For us, Jimdo is a one-time chance: we have a great product, a great team and lots of opportunities ahead. The most fun part is working together with our team and building the product and company! We founded Jimdo on an old farm with basically nothing. We want to prove that we can build a big, innovative company with strong values together with our awesome team. That's what drives us.

 

It's our company

We went through it when United Internet owned 30% of Jimdo (we bought back their shares in 2009 when our partnership with 1&1 ended). Although we got along well with United Internet as an investor, it's a completely different story if you have to justify decisions to a board. Jimdo is our company, and the buck stops here. That doesn’t mean we don't want outside help—we want to make our decisions independently. And there's another side to it: walking through the door each morning knowing this is your company—you’re not just a hired gun.

 

By the way: EFF (European Founders Fund) and one business angel are remaining investors in Jimdo; the three founders hold the vast majority of the shares.

 

Ramifications

With every decision, there are consequences. We won’t be able to outspend our competitors on the marketing side... at least not right now. However, we believe that in the long run, the company with the best product and strongest core values will come out on top. Thus, our mission is to renew our focus on product development—knowing that the amazing and passionate community users in the world will help spread the word. The entire Jimdo team is committed to this mission, and we're all thrilled for the journey.

 

Write a comment

Comments: 12

  • #1

    Clay Loveless (Tuesday, 26 June 2012 17:56)

    Ballsy and awesome. Rock on.

  • #2

    Jason Wiener (Tuesday, 26 June 2012 19:10)

    Good on you! Keep after it #ftw!

  • #3

    Vivian (Tuesday, 26 June 2012 19:29)

    "What made the decision very easy is that the three of us are not driven by material success. Driving a Maserati or living in a big house wouldn't make us any happier. A big exit to make lots of money doesn’t excite us."

    This message resonates so strongly. One thing I won't forget. Thank you for going balls to the wall with Jimdo and owning it to the max!

  • #4

    Massimiliano del Monaco (Friday, 29 June 2012 17:33)

    Purtroppo non conosco l' architettura hardware/software di Jimdo, quindi il fatto che voi abbiate investito 500 mila euri non dice affatto nulla...non è che avete presentato un budget plan con la descrizione dettagliata delle macchine e dei software che avete comprato. Posso giudicare, da tecnico, solo in base ai servizi che offrite. Certamente la facilità con cui è possibile creare un sito con Jimdo anche free è indiscutibile, come è indiscutibile la possibilità "user-friendly" per creare un sito. Certo da tecnico non posso dire altrettanto...ci sarebbero svariati punti a sfavore...per esempio non c'è la possibilità più "tecnica" per creare i siti: ASP .Net, PHP, etc...ma forse il vostro target è non così tecnico. Quanto alla concorrenza, conosco Wix ma è lentissimo poi in fase di navigazione del sito. Non conosco nemmeno Weebly, invece di 1&1 posso solo dire che 10 dollari al mese per tutto quello che offrono non è male, ma il fatto che diano la possibilità di utilizzare certe tecnologie come Asp.Net , Linq, PHP, Perl etc., mi fa capire che forse c'è un punto a loro sfavore in fatto di user friendly in fase di creazione (in parole povere, bisogna essere più tecnici per creare il proprio sito...grandi utilizzatori di DreamWeaver CS4). Quindi se Jimdo riuscirà a dare nuovi servizi mascherando le suddette tecnologie (Asp.NEt, LINQ, ) con la propria caratteristica di user-friendly e con la propria capacità di veste grafica giovane ed accattivante, forse non avrà più rivali...tranne ovviamente le web agency che lavorando in maniera artigianale, possono creare delle vere e proprie "opere Artistiche" sul web....ma questo è scontato Golia non vince contro David...in giro ci sono moltissimi casi di Giganti dai piedi d'argilla....nel senso che è quasi impossibile oppure è una pretesa troppo grande quella di voler "industrializzare" un sistema di produzione di siti web che abbia le capacità universale di soddisfare un qualsivoglia utente.....
    Come tecnico vi vorrei dare una mano, parlando con Monica le avevo detto che sarebbe stato meglio, visto che siete un csm per il web, creare una netta separazione tra contenitore e contenuto.
    Lo saprei fare con xml e componenti spry....
    Invece sul lato di creare "Applet" per la creazione di parti del sito, resta anche per me una sfida, data la presenza di svariate tecnologie (interessante per esempio la possibilità di creare progetti di Moo.com con tecnologie Jquery-Ajax) ma anche per la sua intrinseca difficoltà...
    Io pure punterei su tecnologie più light con Javascript e D-Html e non con Flash o altri prodotti troppo pesanti...al massimo punterei su Java e Flash solo per la parte di componentistica...ma il telaio lo imposterei con Html, D-HTML, Javascript.
    Il tutto ovviamente generato da un servizio altamente user-friendly come quello che già avete.
    Ma come dicevo Michelangelo, Caravaggio, Leonardo, per la creazione delle loro grandi opere non usavano strumenti sofisticati....
    Quindi Voi di Jimdo non siete nè come quei grossi nomi i cui padroni "girano in ferrari o maserati o porsche", ma nemmeno quelle straordinarie web agency che a volte creano lavori Straordinari.
    SIete in mezzo...quindi non carne e non pesce...dovreste decidere se sbilanciarvi sul lato "industriale" (per così potervi comprare la maserati) oppure sul lato artigianale-artistico ma lavorando molto di più e puntando più sulle persone/talenti umani....(forse più equamente distribuiti in termini di ricchezza ma con più clienti soddisfatti... )
    ...a voi la scelta, se potrò in qualche modo aiutarvi non mancherò
    Jimdo, Good Luck!

    If you don't understand this text in italian, i'm available to traslate it in English and maybe in German.

  • #5

    Mixoff (Thursday, 02 August 2012 14:03)

    You just described the company I work in the "Sustainability" section and helped me understand WHY "we" were sold to a corporate monster, as well as showing me that what I seek and desire actually exists in the real world.

    I wish you many great years. Thumbs up -- you guys rock!

  • #6

    hedy (Thursday, 13 December 2012 09:53)

    hi,i am Chinese,I visit your company's website,then i learn your company's sprit ,and i like it very much,you say,"sometimes you only know what you want after you've done what you don't want." i also like this sentence .in a word, i am happy to know your company.i support your idea,and can i have this opportunity to join your team?looking forward to your reply,thank you

  • #7

    Dawm (Friday, 01 February 2013 04:15)

    I haven't tried Weebly, but I've tried SBI, Wix, and one or two others I forget now, but I have always come back to my jimdo page. I really love the ease of making the web pages. As soon as I am financially able I am going to upgrade to jimdopro. Keep up the good work. There are a few things I would love to see us able to do like change the backgrounds of individual pages and have a counter available, but overall I think I will just stick with jimdo and keep recommending it to my friends.

  • #8

    Ivan (Friday, 01 February 2013 08:38)

    I was very pleased to read this story. I keep my fingers crossed for Jimdo.

  • JimdoPro
    #9

    Placid Revival (Friday, 01 February 2013 10:31)

    Beeing very brave! I like that! :)

  • #10

    Johsch (Friday, 01 February 2013 11:32)

    Ich bin beeindruckt von euch. Es macht richtig Spaß über die Jahre die Entwicklung von Jimdo mitzuverfolgen!

  • JimdoBusiness
    #11

    Franchi Olivier (Thursday, 17 April 2014 13:31)

    In my opinion, You definitly made the right choice, Jimdo has a really awesome state of mind ! Keep going this way ;)

  • #12

    custom iphone cases (Sunday, 17 August 2014)

    You just described the company I work in the "Sustainability" section and helped me understand WHY "we" were sold to a corporate monster, as well as showing me that what I seek and desire actually exists in the real world.

    I wish you many great years. Thumbs up -- you guys rock!

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