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In April I wrote a post about Rally acquiring AgileZen. I’ve been an investor in Rally from the very early days and am incredibly proud of what the team there has created. As I’ve written in the past, I encourage companies I’m an investor in to continually explore small acquisitions when entrepreneurs have created something that is on their roadmap. AgileZen was one such company and the acquisition has been a successful one for everyone.
Recently AgileZen has topped the leaderboard for TwtPick.in’s survey on tools and services for a lean startup. Ryan Martens, Rally’s founder, thought it would be a great opportunity to do some Q&A with Niki and Nate Kohari, the founders of AgileZen. As I’m spending a lot of time these days talking with first time and young entrepreneurs around the release of my book Do More Faster, I thought this would be a fun interview to add to the mix. And, if you are a software developer using Lean or Agile methodologies, take a look at Rally and AgileZen.
1. Why did you start AgileZen? We built AgileZen because we felt like there were a lot of tools on the market that served large organizations, but many of them weren’t designed to support the needs of small teams and startups. As a software developer, Nate had experience using other project management tools, but none of them seemed to work well for the small teams that he worked on. The original idea behind AgileZen started with feeling that pain. When we learned about kanban and understood how others were applying it to project management, we recognized that it would be a great way for small teams to visualize their work. After showing an early version of AgileZen to a few people, we got some very strong positive reactions, so we felt like we were on to something. We originally built AgileZen with software teams in mind, but the more we talked with people the more we realized that it could be used for any project-based work. We felt confident that there was a large enough market for the product, so we took the plunge and decided to launch AgileZen as a startup.
2. What is your mantra and secret to success? We think our secret to success is an obsessive focus on simplicity and usability, so we make every feature fight very hard to be included in the software. We also think that if the feature can’t be explained in a few minutes, it doesn’t belong in AgileZen. In software it’s often very difficult to say no to unnecessary features or complexity, but knowing when not to do something can be the difference between success and failure.
3. What is your goal with this solution? When we started working on AgileZen, our goal was to build a product that helped people work together to become more productive and that remains our focus today. We feel we’re successful as long as AgileZen makes our users more efficient, regardless of what industry they work in. To this end, we’re focusing on improving the product to make it as intuitive as possible. We’ve got some great ideas brewing and we’re excited to start sharing them.
4. Why did you join up with Rally? After meeting with the Rally team in February, we found that their ideas about company culture and vision for AgileZen matched up surprisingly well with our own, and it felt like working together was the right decision for the product and our customers. With Rally’s additional resources and guidance, we can set our sights higher and achieve our goals faster, so it’s a win for everyone.
5. What would you tell other start-ups about being acquired? AgileZen was acquired about nine months after our public launch. We never thought much about acquisition until Rally approached us about a potential partnership. Acquisition isn’t really something to chase from the beginning because it can distract you from what really matters, which is building something great that your customers will pay for. The idea of a big exit might be really appealing, but it’s more important to consider how well the organization’s values fit with your own. If you don’t agree on where the product is going then an acquisition isn’t going to benefit anyone—least of all your customers. Also, in a lot of cases, you’ll end up working with the acquiring company so you need to make sure you’re on the same page from the beginning.
How could you not fall in love with a company named AgileZen? Today, Rally Software – a company I’ve been an investor in since 2003 – announced that they have acquired AgileZen. If you are an Agile software development shop, or follow ALM, Rally just added Kanban to the mix.
This is the second acquisition Rally has made – the other was 6th Sense Analytics which they acquired at the beginning of 2009. If you follow this blog, you know that I’m a big fan of having established companies I’m an investor in buy smaller companies to help build out their product road map. I’m explicitly not a fan of rollups – I’ve had my share of investments in rollups that didn’t work. But I love targeted acquisitions that build out specific capabilities on an established company’s roadmap or add key people to the team. If you are looking for recent examples of this in my world, two others are NewsGator’s acquisition of Tomoye or Zynga’s acquisition of Serious Business.
Both companies have detailed blog posts about the deal – Welcome AgileZen! and We’ve joined Rally Software. If you are a company operating in one of our themes, don’t ever hesitate to reach out to me if you think you might fit with a company we’ve already invested in – you never know where the conversation might lead.
And congrats to both Rally and AgileZen – I’m excited for you guys.