Alumni of Bronto Software striking out on their own [The News & Observer (Raleigh, N.C.)]

Sept. 01--Bronto Software founders Joe Colopy and Chaz Felix say employees who attend the email marketing company's all-hands-on-deck monthly meetings are getting an MBA -- a Master's in Bronto Administration.

In recent years those MBA students have been striking out on their own at an impressive rate.

At least a half-dozen local startups have been founded or co-founded by alumni of the Durham company, including three that were created by a two-person team of ex-Bronto-ites. Bronto alumni also have started companies in California and Miami.

"As you have more successful companies here in the Triangle, this is going to happen more often," said Jason Caplain of Raleigh venture capital firm Southern Capitol Ventures. "There are some great people coming out of that place."

Since Colopy and Felix are themselves alumni of Raleigh software giant Red Hat, Caplain views the companies formed by Bronto grads as "the grandchildren of Red Hat." Caplain, himself an ex-Red-Hatter who co-founded Southern Capitol, counts a dozen or so startups headed by Red Hat grads. Many of them, however, are based elsewhere.

The number of startups with ties to Bronto is all the more impressive because the Durham company is a fraction the size of Red Hat, which generated $1.1 billion in revenue for the fiscal year that ended in February.

Bronto, which started out a decade ago in Colopy's spare bedroom and in recent years has broadened beyond email marketing to social and mobile campaigns, posted $17 million in revenue last year, up 54 percent from 2010.

The company has continued to expand in 2012 and today has about 140 employees, up from 118 at the end of last year. It currently is looking to hire 20 additional workers.

None of the companies formed by Bronto alumni are breakout successes -- at least, not yet. They're mostly early-stage companies whose best years are ahead of them if things work out as planned, which is far from a given in the risky world of startups.

Some of the startups are targeting markets similar to Bronto's, although they're not direct competitors. But others have ventured far afield.

The Bronto grads now running companies of their own say it's no coincidence Bronto has spawned so many startups given the company's culture and its focus on hiring ambitious up-and-comers. They also say that being part of a young, expanding company was contagious.

"They encourage people to be creative and problem solve," said Darren Pierce, co-founder and CEO of Cary startup etailinsights. "So it's a natural progression for them to start their own companies." He's a former director of business development at Bronto.

Company culture

Likewise, Colopy and Felix, Bronto's chief operating officer, theorize that their company's open culture -- including quarterly discussions about the company's revenue picture and monthly analyses of wins, losses and challenges -- has played a role.

"I think we have been transparent about how we have built our business," Felix said. "People see how we have done it."

However, Felix speculates that as Bronto continues to grow, the outflow of startups could slow down.

Although that's counter-intuitive, Felix noted that in its early years Bronto tended to hire "generalists" who could do a lot of things well, which is an essential trait for entrepreneurs. As the company has expanded, however, it has shifted to hiring for "more specialized roles."

Matthew Davis, who last year co-founded Zeek, which is marketing a digital fundraising tool to community organizations, said when he worked as a salesperson at Bronto he was always encouraged to try out new ways to approach prospects.

"I picked up a lot of marketing best practices, a lot of the foundation of what we are trying to do," Davis said.

Alumni support

Although some companies choose to sever all ties with ex-employees, Bronto has been supportive of those who have started their own businesses, ex-employees say. Bronto has even partnered with one of the companies formed by alumni and is a customer of two others.

Colopy and Felix say that although they'd love their best employees to hang in for the long-term to help Bronto grow, they're proud of what their alumni have accomplished.

"We want to support the local entrepreneurial community," said Colopy. "We want to establish Durham and the greater Triangle as the place to be if you are going to do a technology startup."

Pierce, of etailinsights, also applauded Bronto for doing a good job of fostering relationships between employees in different departments. One way it does that, Pierce said, is by sponsoring an annual game of "Assassin."

The rules: Each employee is assigned to assassinate -- with a Nerf gun -- a colleague whose name is drawn out of a hat. Assassinations must be executed, pun intended, outside the workplace. If you succeed in assassinating a colleague, you inherit the kill assignment of your victim. And on and on until one person is left alive and kicking.

Pierce said he befriended a software engineer, Marty Wesley, after he snuck into his Chapel Hill home and assassinated him.

"A year later we started our own company together," Pierce said.

Ranii: 919-829-4877

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