While the common wisdom says entrepreneurs must always have a clear exit strategy, the German founders of website-building business Jimdo take a different approach.
Travelling through Australia this month for a mix of work and pleasure, 29-year-old Fridtjof Detzner says he and co-owners Christian Springub and Matthias Henze learnt the hard way that it's better to be your own boss than be beholden to the highest bidder, and they've stuck to their word, recently turning down an eight-figure offer.
“Sometimes you have to get hurt in order to feel what's wrong and what's right,” says Detzner about the experience of a failed strategic partnership with German-based global internet service provider 1&1 three years ago.
Jimdo is a website builder that gives customers the tools to create and host their own websites, either for free or with paid bundled packages. It now has more than 6 million users worldwide, and most of this growth has occurred since pulling out of the strategic partnership.
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Before 2009, the trio had self-funded the business with loans and investment from friends and family and grants from European entrepreneurial funds. Keen to accelerate their growth, they sought an investor and ended up signing with 1&1.
But the deal took the joy out of business, and after eight months the trio negotiated to buy back their shares.
“[1&1] was a huge company with 1000 employees, they were always pointing fingers at each other. When you see yourself just doing things for somebody who you don't agree with totally, and you see all your good people give their best for somebody else and not you – it's not that fun any more,” Detzner says.
“It felt so good to buy back the shares. We had to put a lot of focus on getting profitable because we didn't have this funding any more. It was a pretty intense phase of the company's development for us because we had a real goal to get profitable, to get out there, which we managed to do.”
The experience helped the Jimdo founders realise the crucial role that values had in their success, and after the separation from 1&1 they worked with staff to articulate them.
“The only consistent thing you have is values. For us, that's why we stick so much to that. It doesn't matter where your office is, how many people you employ, which programming language you use – it doesn't matter. These values are the thing that binds us together.”
Detzner says the work-hard, play-hard values haven't changed since the three of them started their first business together in 2004 – NorthClick, which Jimdo sprung from – working intensely for 18 months while living rent free in an old farmhouse owned by Detzner's family, with his mother cooking meals for the cash-strapped entrepreneurs.
“It was a pretty cool time. We focused five days completely just working on it, from Monday to Friday nothing else but,” he says.
Detzner says this single-minded focus by a small team led to such productive outcomes that they've re-created it for their staff. Jimdo is a flat hierarchy with no mid-level management and a series of small cross-functional teams.
“We set up these small groups with targets and visions for their own. These small start-up teams are deciding what they're going to do this week and how they're improving on that,” Detzner says. Teams present their work-in-progress each week on a white board so everyone has an overview.
“They are able to go at their own speed, and don't have to rely on interference from other departments. You make them happier because they see what they're actually creating.”
Teams have the option of working at an offsite location for a week at a time to develop their projects, with Detzner's mum's farmhouse being a popular destination.
“She's still cooks for them, she loves it. And now we have people working for us from 11 languages. They cook Spanish food or French food and invite my mum.”
Detzner says having clear business values has also been vital to attracting like-minded staff, and since splitting from 1&1 three years ago Jimdo has grown from 30 to 130 staff, and the business now has offices in San Francisco, Tokyo and Shanghai.
The company's success caught the eye of a top-tier venture capitalist, and earlier this year the trio received an eight-figure offer for investment, which they turned down because they believed this would lead either to a forced sale of the company or an IPO. And an exit strategy is not what these three entrepreneurs are after.
Detzner says they know this refusal of funding will slow their growth, but big dollars are not what motivates them. He says he's never had a 10-year plan for the business, but he does know what his ideal workday looks like.
“The perfect day would be sitting in a company where nobody is relying on me but they could come to me and I could help the teams reach their goals.”
As Detzner enjoys his three-week travels around Australia scuba-diving on the Great Barrier Reef and surfing and paragliding along the Victorian coastline, he is living by some of the key Jimdo values of having fun, keeping an open mind and learning all the time.
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