Weebly Seeing a Slow Growth Year over Year

Weebly Seeing a Slow Growth Year over Year

Confidence: Medium
Impact: High
Disposition of finding: Neutral/Unknown

Weebly is a web hosting company founded in Pennsylvania in 2006. It’s one of the first WYSIWYG (why you see is what you get) drag and drop type interface for web applications including blogs, making it one of the lowest barriers to entry of any web application hosting company and therefore quite promising.

While the company seems to be doing quite well and has some rather large backers, with a claimed 20 million sites hosted, it’s not a company that has explosive growth thus far. In the last year I can see a growth closer to 6% year over year. That’s not bad, and there is some room for error in those estimates, but I would like to see something closer to 30% growth in new websites hosted.

Now with a business like this, it can be quite tricky to tackle absolute dollar numbers that a company like Weebly could make. By up-selling services on top of the existing platform it could be quite possible to make a significantly higher revenue number than by hosting alone. It’s not clear why more people aren’t using them – maybe it’s the ever-elusive “cool” factor, or better affiliates for competitive hosting, etc…. Who knows? Either way, I still would prefer to see a larger growth pattern going forward to consider this a promising exit.

Obligatory legal disclaimer.

Meetup Seeing a Flatline of Near Zero Growth

Meetup Seeing a Flatline of Near Zero Growth

Confidence: High
Impact: Medium
Disposition of finding: Neutral/Unknown

Meetup Inc. is a social networking site based in the United States that has seen quite a bit of coverage since it’s inception after the 9/11 attacks. The founder believed it would be a good place to allow people to find like-minded friends to discuss the attack and subsequent aftermath.

Over the last year, Meetup has not seen a terribly impressive growth. In fact, Meetup’s total growth over FY2014 and the beginning of FY2015 appears to be nearly flat. While it hasn’t gone down and there are probably better ways to monetize the existing user base, I’m not seeing enough growth to consider this a good IPO/acquisition candidate.

It’s entirely possible that companies like Meetup Inc. will find ways to draw more users in in times of need, or monetize the existing user base more effectively. For now though, the company appears to be on a very slow growth trajectory with no change in sight.

Obligatory legal disclaimer.

Eventbrite Seeing a Slow and Steady Growth Pattern

Eventbrite Seeing a Slow and Steady Growth Pattern

Confidence: High
Impact: Low
Disposition of finding: Neutral/Unknown

Eventbrite is a San Francisco based mid-sized business focused on the event planning space. They’ve been one of the darlings of the tech community, in part because they were one of the earliest to capitalize on the need to schedule events beyond the walls of a corporate Intranet or simple parties.

I am, however, not seeing the kind of growth that one would expect a company that was poised for success to have. Solid, growth numbers, yes, but Eventbrite seems to be seeing single digit percentile growth from mid FY2014 through Q1 of FY2015. That may have something to do with the fact that many people moved from Eventbrite to similar event companies. It’s unclear why, but I don’t see any hockey-stick curves worthy of note.

In hindsight it makes sense why the founders don’t want to go public. With a slow-steady growth that looks more linear than exponential, it makes for a wonderful boutique/lifestyle business, but hardly the blow-them-out-of-the-water IPO event that their investment teams were probably most interested in seeing when they invested a purported $140 million.

Obligatory legal disclaimer.

Atlassian Sees Huge Growth

Atlassian Sees Huge Growth

Confidence: High
Impact: Medium
Disposition of finding: Positive

Atlassian is a mid-sized software manufacturer headquartered in Australia that has become heavily entrenched in the enterprise development space. With products like Jira, Confluence and Hipchat they have already made themselves a relatively well entrenched player in the enterprise software development space.

Atlassian had seen a relatively large growth at the beginning of FY2014, but then had tapered off for the bulk of 2014 with almost no growth compared to what they had experienced previously. That was somewhat concerning at first glance, until I looked at the last few months when Atlassian enjoyed a massive jump. My estimates put Atlassian’s growth at as high or maybe even higher than 30% in a two month time period. Ideally a company preparing for an IPO would grow that much per year, not per quarter, but somehow they are doing just that. That puts them in the explosive growth category, and possibly well into the exponential realm. Is there a public event in their future? This looks promising.

I wouldn’t be surprised if we saw them continue to grow as they become more entrenched. As permeable as development teams tend to be in large companies, it stands to reason that many developers will leave to other companies and recommend Atlassian products to start-ups and other software development shops where Atlassian will get still further entrenched. My only concern with the products that Atlassian sells is that the industry is still young and there are plenty of players attempting to disrupt the market. For now though, Atlassian appears to be on a pretty dramatic up-swing.

Obligatory legal disclaimer.

Tumblr’s Growth May Not Be As Fast As Predicted

Tumblr’s Growth May Not Be As Fast As Predicted

Confidence: Medium
Impact: High
Disposition of finding: Negative

Tumblr, Inc. is one of the fastest growing social networks in the world. It’s been included in many of the darlings of social websites, including Facebook, Twitter, LinkedIn and so on. However, I’m not seeing the kind of growth that people are suggesting it is supposed to have.

If you look at Tumblr’s homepage it says “221.5 million blogs” as of the time of this post. That would imply a huge growth rate, and would actually be plausible even though the company is only 8 years old. But there are some concerns here. Firstly, I’m only seeing a growth on the order of thousands per month, not hundreds of thousands or millions per month. Now my sample size might be slightly off, but I doubt it is many orders of magnitude off. At this growth rate I’d expect there to be millions of sites, but not hundreds of millions.

In attempting to fact-check this, a Google search like site:tumblr.com which includes a lot of duplicates seems to turn up only 100 million links. Even if they missed a certain set of poorly linked sites, that still seems extremely low. That said, to be fair, Tumblr does have a feature to point domains at their sites but even counting those domains it still doesn’t equal even one percent of their total claim so it can be discounted as a rounding error.

My guess, based on what I can find, is that their growth rate is at most half as much as claimed, and maybe considerably less. This might be due to the fact that they must remove spammy Tumblr accounts and they may not remove old accounts from the total blog count. It’s unclear, but without a sitemap or a list of all accounts it’s difficult to be certain. It could also be inflated numbers completely devoid of reality, but it’s impossible to know for sure.

Either way, I don’t see exponential growth, but rather a linear growth that would make it less likely to be as dominant as other social networking companies in the future. Typically an exponential growth is required for a large exit, and most executives would be wary of exiting a company that couldn’t demonstrate an exponential growth curve.

Obligatory legal disclaimer.