I had this burning desire to make a difference in the world. I envisioned... You know how it is when you're young - you're filled with grand dreams, boundless energy, and a touch of naivety. My ambition was to revolutionize the enterprise management sector with a completely open-source software. (I also aimed to reach 100 employees before turning 30 with a self-funded company, but fell short by just a few months.)
To ignite my drive, I needed a rival to challenge. In the realm of business, it's akin to a playground. Just like in a new school, if you aim to swiftly establish yourself as a leader, you must confront the class bully - the older, intimidating figure who preys on the weaker ones - and assert your dominance in front of all. That was my approach with SAP, the colossal enterprise software entity.
Therefore, in 2005, I initiated the development of the TinyERP product, the software that, at least in my perception, would revolutionize the enterprise landscape. In preparation for the impending "showdown" in 2006, I acquired the domain name SorrySAP.com. I kept it reserved for six years, anticipating the opportune moment to employ it. I held the belief that it would only take three years to diminish a $77 billion company solely because open source and Python (the language we utilize) are exceptionally formidable. Occasionally, maintaining a sense of self-motivation requires avoiding reality...
To drive progress, I exerted immense effort—day in and day out. For seven years straight, I toiled for 13 hours each day, seven days a week, without taking any breaks. Along the way, I sacrificed friendships and parted ways with my girlfriend. Thankfully, I've since found a more precious partner in my wife. I'll elaborate on why she's worth 1 million EUR later on...
After three years, I realized that it's difficult to enact significant change when you're perceived as "tiny," especially within a world dominated by entities like the United States, where being a BigERP holds greater sway than being a TinyERP. Just imagine how insignificant you feel when facing directors from companies like Danone, who question the value of investing millions of dollars in a small-scale software. Consequently, we rebranded TinyERP to OpenERP.
As our diligent efforts persisted, progress began to unfold. We were actively creating numerous modules for OpenERP, witnessing the expansion of the open-source community. Moreover, I reached a point where I could confidently cover all employee salaries at the end of each month without any apprehension, a challenge I had grappled with for four years.
By 2010, we had established a company with over 100 employees, offering services on OpenERP alongside a potent yet visually unappealing product. This is the consequence of being diverted by service delivery to customers, which detracts from the pursuit of crafting an exceptional product.
It was time to pivot our business model.
The Strategic Shift
We aimed to transition from a service-oriented company to a software publishing entity. This shift would enable us to intensify our focus on research and development endeavors. Consequently, we revamped our business model, opting to discontinue our customer services and concentrate on establishing a robust partner network and maintenance offerings. However, this endeavor required significant financial investment, leading me to raise several million euros.
Following several months of presenting to investors, we received approximately 10 Letters of Intent (LOI) from various venture capital firms. We ultimately selected Sofinnova Partners, the largest European VC, along with Xavier Niel, the founder of Iliad, which is the sole French company to achieve a valuation of 1 billion EUR in the past decade.
I signed the LOI, oblivious to the fact that this agreement had the potential to leave me destitute. (With a dog already in tow, all I lacked was losing a substantial sum of money to become homeless.) The fundraising was contingent upon a company valuation, but it included a financial provision to reassess the company's worth by up to 9.8 million euros based on the turnover over the next four years. Additionally, I was supposed to receive warrants convertible into shares upon achieving the turnover goals outlined in the business plan.
The night before the notary was set to present the warrants, my wife reviewed the contracts. She inquired about the taxation implications of these warrants. Upon contacting the lawyer, it turned out that Belgium is likely the only country where taxes are levied on warrants upon receipt, regardless of whether the conditions for converting them into shares are met. If I had accepted these warrants, I would have been subjected to a 12.5% tax on 9.8 million euros, amounting to a tax bill of 1.2 million euros due within 18 months! Therefore, my wife's worth is estimated at 1.2 million euros. Without her intervention, I would have faced potential homelessness, as I still did not have a salary at that time.
We renegotiated the terms, resulting in me receiving 3 million euros. This enabled me to hire an exceptional management team.
As an established company
With these funds at our disposal, we bolstered two key departments: Research and Development (R&D) and Sales. Within 18 months, we expended two million euros, primarily on salaries. As a result, the company's growth accelerated even further. We established a partner network comprising 500 partners across 100 countries, and commenced signing contracts with six-figure values.
Subsequently, our focus shifted. We found ourselves occupied with mundane tasks such as managing human resources, overseeing board meetings, negotiating significant customer contracts, and launching international subsidiaries through travel. We also engaged in routine activities like budgeting, developing career paths, and conducting management meetings.
2011 proved to be a challenging year for us. We fell short of our expectations, achieving only 70% of the projected sales budget. Tensions ran high in our management meetings as we grappled with our underperformance. Dissatisfaction loomed over us, accompanied by a persistent sense of having overlooked something crucial. It's a peculiar sensation to create remarkable accomplishments yet not feel proud of our achievements.
One day, someone (I can't recall who, my memory is fleeting) created a graph illustrating the monthly turnover of the past two years. It felt like emerging from a nightmare, but in reality, the situation wasn't so dire. We had actually increased the monthly turnover by tenfold in about two years! This revelation led us to understand that OpenERP is more of a marathon than a sprint. While achieving 100% growth annually is acceptable, sustaining that pace over several years is the true challenge.
As usual, I should have heeded my wife's advice. She possesses a clarity of thought that far surpasses mine. Each week, I would lament to her, "It's not good enough, we need to accelerate our growth. What am I overlooking?" Her consistent response was, "But you're already the fastest-growing company in Belgium!" (Deloitte recognized us as the fastest-growing company in Belgium, achieving 1549% turnover growth between 2007 and 2011.)
The Emergence of Odoo
Then, the dream began to materialize. We began to receive indications that our efforts were poised to revolutionize the world. With 2,000 installations per day, we emerged as the most widely installed management software globally. We achieved a user base of 2 million and developed 4,000 apps.
In version 8, the scope of business activity integration expands beyond sales, accounting, inventory, and procurement. Version 8 encompasses an Open Source CMS & eCommerce, a Point of Sale system, an integrated Business Intelligence engine, inbound marketing applications, an exceptional Open Source CRM, and a variety of other features. Additionally, we introduced a new cloud offering that enables users to create a free website.
With the introduction of these diverse applications, we transcended the limitations of traditional ERP providers. We no longer wish to be categorized solely as an ERP system. Thus, we rebranded from OpenERP to Odoo, a name I had registered back in 2008 (I had deliberated between Odoo and OpenERP, and unfortunately, made the wrong choice). Twice I erred in selecting a name with significance, and each time it took us eight months of marketing efforts to recover, as evidenced by Google Trends data.
We required a name that could embody our aspirations: to develop comprehensive business solutions such as CMS, eCommerce, Business Intelligence, and potentially even groundbreaking technologies like skyrockets or driverless cars in the future.
One thing remains certain: there is still much to be accomplished. This is merely the dawn of the tale...