PBWiki: growing in a recession

Earlier today I had a conversation with Chris Yeh, VP enterprise marketing at PBWiki. He brings an honesty and refreshing spirit to the business of building a startup.
Written by Dennis Howlett, Contributor

Earlier today I had a conversation with Chris Yeh, VP enterprise marketing at PBWiki. He brings an honesty and refreshing spirit to the business of building a startup.

PBWiki is a company that everyone kinda knows but doesn't always see. They're not big on the blah-blah circuit because as Chris points out, you tend to see the same faces and these events have a navel gazing quality to them. I was interested to hear how the company is doing, where its focus is coming from and how it sees the future. Bear in mind the wiki market is crowded yet at the same time wiki represents one of the few areas where you can argue that enterprise adoption has taken a reasonable hold.

Asked about PBWiki's approach to market, Chris had this to say: "You have to say that you're going to solve this specific problem for this specific audience. We have a very specific focus for people who are trying to do collaboration across boundaries. Solutions that you bring in house have a very difficult time dealing with people from multiple enterprises."

Chris cited the example of SAP where they together with CapGemini in the UK are using PBWiki to reach out to customers raqhter than using in house existing solutions. He also said there are instances of PBWiki running inside Google: "How long that will continue is another matter," he quipped. Yet another use case is in the mortgage industry where customers who have been rejected try hopping from one provider to another in the expectation that the providers won't share information. All in, Chris claims that PBWiki now has 5-6,000 paying customers from a total of 400,000 who have signed up, paying on average around $1,000 a year.

Chris's focus the last year has been about moving the company from what was once perceived as a consumer play to more of a business specific value proposition. "In the last year we've grown from a handful of people to just under 30. Most of those are in support and sales plus some marketing. We didn't have any of those functions. We did that because it was obvious there just isn't that much money in ad support revenues." Looking at the company website, it is clear they're doing something right because the company is still hiring. Even so, Chris is not sitting on his laurels: "These things take a long time to come hit you and even though we're continuing to do better and better, you just don't know when or if the recession will bite so I'm cautious."

Asked why PBWiki is adopting a more traditional approach to market Chris noted that once you get to around the $500 to $1,000 mark, people tend to want to talk with someone about the product: "The amount of business we get from California is minuscule. Our primary markets in the US are the east coast, Texas, the mid-west and Europe."

This was particularly interesting to me as I have recently questioned the Gen Y adoption argument. Chris said that while it is true Gen Y'ers don't want to talk with people and that they will buy online, we're a long way off seeing that as a mainstream form of activity. "I'm sure over time we'll move to a model where there are less direct sales people per dollar income but that's a long way out," he suggested.

The more interesting part of our conversation though came from a discussion around business models and attitudes to software creation. "Free is not a business model, it's a marketing device. The Bay Area echo chamber believes it can build its own. Trying to convince our engineering team to use outside products is like pulling teeth. There's a strong belief that every product should be free, anything can be done with open source and whatever we do we're smarter than anyone else. I want profit motive because the company that has to support demanding customers is going to put the best product out there. That requires money."

Looking to the future, Chris said the company is focusing on those businesses that have teams of 5-100 people that have to operate in cross boundary environments: "We put the emphasis on hosted collaboration rather than just wiki because we have to think about how does this interact with the primary collaboration environment which is email. How can we make the two work together more effectively."

I admire Chris's 'what's on the street' practical approach and refreshingly honest assessment of what it takes to build a sustainable startup. Too often I hear startups wanting to change the world when you just know that however smart the idea, they're not where their target market is thinking.

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