MySQL Journey to 1 billion USD
MySQL Phase 1 – Building the Product and User Community
Key Innovation 1: Building Great Technology
Monty began the development of the MySQL server in the 1980’s. In 1995 the first solid product version was ready and Monty, together with David Axmark and Allan Larsson, decided to found a company around the product.
There were a few key reasons why the first MySQL version was received as a “Killer app” product:
- The product was designed for genuine customer needs: Product development had proceeded, since the very beginning, with real customer use cases in mind and by solving common pain points, not by copying other products in the market.
- Extreme focus was paid in development to guiding principles of Performance, Reliability and Ease-of-use: All completed work was continuously analyzed with these criteria in mind.
- There was a relentless drive for quality: Developers were resolved to make the product free from bugs.
- The product hit at a mega trend at the right time: The Worldwide Web was at a peak growth phase and MySQL filled a crucial need as other existing databases were not optimized for the web.
- Name similarity to a popular product eased product acceptance: The MySQL name resembled msql, which at the time of the release was a fairly known database brand.
Key Innovation 2: Building a User Community
The MySQL founders decided to innovatively drive for product popularity by releasing MySQL as Open Source and free of charge for most common uses. Key factors powering the user base growth were the following:
- The 15 minute rule: One could download, install and start using MySQL in 15 minutes, compared to many hours required with some of the main database alternatives.
- Policy of quick response rate: Reaction to emails and forum posts was rapid.
- High-quality online user manual: The user manual was constantly updated.
- User manual was constantly improved: Any new question in an email or in the forum which was unaddressed in the manual was typically responded to by improving the manual, and then sending the link there as response.
- Active co-operation in the open source community: This led to many new technologies adopting MySQL as their default database. The prime example is the LAMP stack (Linux, Apache, MySQL and PHP/Perl/Python) for building web entities.
- The Internet explosion: The majority of websites powered by the LAMP stack rapidly grew the user base to significant numbers.
In parallel with user base growth, many people also began using MySQL for applications other than pure web-properties, greatly enhancing MySQL’s role in the IT infrastructure market:
- Companies began to use MySQL for their internal business solutions.
- Many software vendors and open source developers started creating a large ecosystem of solutions built for MySQL.
- Commercial vendors embedded MySQL within their shipped products.
By the late 1990s, the company had achieved a remarkable user base with its great technological solution. However, the business remained primarily based on support, services and selling licenses to embedded use of MySQL, restricting company size to around 10-15 employees and about 1 M€ in revenue.
The founders realized that with the excellent product performance and enthusiastic adoption by a user community, which counted in the millions and continued to expand, there was true potential for building a scalable global business. In 2000, with the help of Ralf Wahlsten, the founders developed the first extensive business plan, strengthened the Board of Directors with John Wattin as Chairman, hired Mårten Mickos as CEO, and conducted investment round A with, among others, Holtron Ventures, Industrifinans, Scope Ventures and Sirius Consulting.
This started Phase 2 of the MySQL success story, building the global business.
MySQL Phase 2 – Building the Business
Mårten Mickos led the MySQL business from a small company of about 15 persons with around 1 M€ in revenue to a large global industry player employing over 500 persons with some 50-100 M$ in revenue. Mårten’s excellent leadership skills were complemented by the exceptional management team he assembled, and boosted by the positive company culture. Four major investment rounds with leading venture capital firms and strategic investors fueled the company’s rapid expansion.
Growing into a global business creates turbulence and demanding challenges. However, MySQL was successfully able to solve such challenges using the talent and expertise of people such as, to name but a few, Larry Stefonic and Mark Burton in Sales, Zack Urlocker in Products, Edwin DeSouza and Jeff Wiss in Marketing, Ulf Sandberg and Tom Basil in Professional Services, Dennis Wolf in Finances and Kaj Arnö in Community, all under the balanced guidance of the CEO. (Editorial note: Some names chosen here as examples, since listing all persons with significant influence on the success of the company would easily fill the whole page.)
When reviewing the fundamental reasons for MySQL’s business success, two innovations stand out as key drivers for the rapid growth.
Key Innovation 3: Achieving the Right Product Offering
MySQL worked on the Product Offering over several years to create a Product Offering that customers would actually be happy to pay for, and not just be content to use for free. Development involved constant improvement of the Product Offering based on learning what worked and what did not work. The hard work paid off, as the Product Offering achieved a right mix of:
- Additional software products provided to customers
- Support and professional services
- Services rapidly fixing any problems the customer experienced with their MySQL software
- Rights to deploy and distribute MySQL software under non-Open Source licenses
Developing the right Product Offering did not end there, as learning to present, explain and thus sell the offering to customers was also essential. However, constant learning and improvement led to success also in the arena.
A key lesson learned from building the MySQL Product Offering is that there is simply no blueprint to follow for creating the right Product Offering: Constant learning, improvement and development are crucial to define the Product Offering that fits with the exact dynamics and customer needs per market segment.
Key Innovation 4: Process For Identifying Customers Within The User Community
MySQL had a clear advantage in its large user community over traditional software companies, as by smartly managing community relationships, it is possible for the company to identify potential customers as well as generate and scale sales at much lower cost than otherwise possible.
MySQL developed a specific “Lead Generation” process during the last few years prior to the exit, which played a vital role in securing the company’s strong revenue growth until and after the acquisition by Sun.
The core of the lead generation process lies in logging the interaction that users have with your online offering in all possible places (like downloading, attending web seminars, accessing technical whitepapers, posting questions, etc) and identifying the users who demonstrate an interest in your commercial offering. Then you can contact these users discretely and non-obtrusively and inquire whether they would like to learn more about how your company can help them. Very often the users have a genuine interest in learning more and start paying for additional services.
The above description of the growth phases and key innovations at MySQL represents a limited summary of what lessons we learned when developing the company from 10-15 persons and minor revenue to the global leader in its field. We are enthusiastic to discuss these lessons in more detail with the entrepreneurs we work with, and utilize these to the fullest to create future success stories.