In a little-noticed press release two weeks ago, the board of directors at the software company Good Technology announced that CEO Brian Bogosian was out “effective immediately,” replaced by a board member, King Lee.
To many, Bogosian’s ouster marks not only the end of a seemingly interminable chapter in the history of Visto, which was renamed Good Technology last year; it may also signal the beginning of a new era for the company, one that already has private equity firms including Silver Lake and General Atlantic interested in becoming major stakeholders, say sources.
Whoever strikes a deal will be joining an astonishingly long line of previous investors. “[Good] is like the Baskin-Robbins of venture capital,” says one of them, noting that the company has already attracted more than 30 different firms over its now 14-year history — most of them washed out.
Indeed, the company long ago became something of an inside joke in Silicon Valley. It wouldn’t quit, or die, despite that by 2007, it had burned through more than $250 million in capital without turning a profitable quarter.
In fact, when Oak Investment Partners first came on the scene in 2003, the then 7-year-old company — initially funded by Bessemer Venture Partners, New Enterprise Associates, Trinity Ventures, and roughly a dozen other firms — was practically out of business. Oak recapped it at a valuation of zero, then proceeded to pour nearly two hundred million more dollars into the company, with help from Meritech Capital, Draper Fisher Jurvetson, and others that still own part of the company.
It’s not clear if the newest PE firms’ interest was contingent on Bogosian’s ouster. One former investor with knowledge of the situation tells peHUB that Bogosian “crossed [Oak managing partner] Bandel [Carano],” who liked the term sheets he was seeing less than Bogosian. In a fit of overenthusiasm perhaps, the investor goes on to characterize the situation as “mafia-like stuff.” Another, who speculates that a battle between Bogosian and Carano had been brewing for some time, calls Bogosian “relentless, sometimes at the expense of personal relationships.”
A third source close to the situation tells peHUB that Bogosian was pushed out primarily because “the company isn’t operating as leanly and efficiently as it should, and it never has.”
Adds this person, “My opinion is that this should have happened a long time ago. The board was complicit” in Bogosian’s spend-big mentality, and “it’s ridiculous. If I were on the board,” he says, “this would have happened years ago.”
Whether the shakeup comes too late remains to be seen, but investors — and potential ones — have reason to feel encouraged.
Though Visto began life as a Web service called RoamPage, it later began working with wireless operators like Vodaphone, providing subscribers with e-mail and access to other mobile information services. As recently as 2007, that was a tough business to be in, given the lack of success that carriers had in convincing customers to spend more on costlier data services like email. Visto was also up against a tough competitor, RIM, which already had the corporate mobile email market virtually locked up and was moving into the consumer sphere with the Pearl.
Still, Bogosian, who joined Visto as CEO in 2000, told me in 2007 that, “We’ve created a very complex product. It’s taken us longer than we thought to get our services out into the market, but we think we’re at an inflection point now.” Broadly speaking, Bogosian was right, too. The smart phone market has since exploded and along with it, easy access to email.
Yet sending secure email via wireless carriers has become a commodity business. Despite a rich intellectual property portfolio — one that Visto successfully used to extract hundreds of millions of dollars from RIM along with other companies — that new reality might have spelled doom for Visto if not for a golden opportunity last year. It was then that Motorola — which hit its own stormy seas after procuring the enterprise email leader Good Technology in 2006 — agreed to sell Good to Visto for an undisclosed amount.
Visto immediately renamed itself Good.
“Visto was looking for a forward strategy and a migration path to larger markets; the [acquisition] made a lot of sense for all parties,” says Andrew Borg, a senior research analyst at Boston-based Aberdeen Group.
Indeed, given the proliferation of new mobile platforms like the iPhone and Android, along with the ensuing rise of employee-owned devices, the market appears to be playing right into the hands of Good. (When, for example, an employee downloads Good’s technology on to his or her iPhone, Good begins to save and encrypt its data. That person’s employer can then remove that data if the device is lost or stolen; it can also wipe it out if the employee leaves the organization.)
Says one former investor, “The mobile world has changed and people — not the carriers — decide what apps people run. So basically, [Good’s] technology finally makes sense.”
As for those PE firms and Bogosian, who did not return a call seeking comment, “The board didn’t want to wait to see how this thing rolls out” with Silver Lake and General Atlantic, says this person. “They were done pretending to get along.”