The Odoo story

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I wanted to ... You know how it is when you are young; you have big dreams, a lot of energy and naive stupidity. My dream was to lead the enterprise management market with a fully open source software. <em>(I also wanted to get 100 employees before 30 years old with a self-financed company but I failed this one by only a few months)</em>.</p> <p data-chatter-id="counter_1/section/div/div/div">To fuel my motivation, I had to pick someone to fight against. In business, it's like a playground. When you arrive in a new school, if you want to quickly become the leader, you must choose the class bully, the older guy who terrorizes small boys, and kick his butt in front of everyone. That was my strategy with SAP, the enterprise software giant.</p> <p data-chatter-id="counter_2/section/div/div/div" style="text-align: justify; ">So, in 2005, I started to develop the TinyERP product, the software that (at least in my mind) would change the enterprise world. While preparing for the "day of the fight" in 2006, I <u><a href="http://whois.domaintools.com/sorrysap.com" data-original-title="" title="" aria-describedby="tooltip4245">bought the SorrySAP.com</a></u> domain name. I put it on hold for 6 years, waiting for the right moment to use it. I thought it would take 3 years to deprecate a 77 billion dollars company just because open source is so cool. Sometimes it's better for your self-motivation not to face reality...</p> <p data-chatter-id="counter_3/section/div/div/div">To make things happen, I worked hard, very hard. I worked 13 hours a day, 7 days a week, with no vacations for 7 years. I lost friendships and broke up with my girlfriend in the process <em>(fortunately, I found a more valuable wife now. I will explain later why she is worth 1 million EUR :)</em>.</p> <p data-chatter-id="counter_4/section/div/div/div">Three years later, I discovered you can't change the world if you are "tiny". Especially if the United States is part of this world, where it's better to be a BigERP, rather than a TinyERP. Can you imagine how small you feel <a href="http://slidesha.re/ohc44E">in front of Danone's directors</a> asking; "But why should we pay millions of dollars for a tiny software?" So, we renamed TinyERP to OpenERP.</p> <p data-chatter-id="counter_5/section/div/div/div">As we worked hard, things started to evolve. We were developing dozens of modules for OpenERP, the open source community was growing and I was even able to pay all employees' salaries at the end of the month without fear (which was a situation I struggled with for 4 years).</p> <p data-chatter-id="counter_6/section/div/div/div">In 2010, we had a 100+ employees company selling services on OpenERP and a powerful but ugly product. This is what happens when delivering services to customers distracts you from building an exceptional product. It was time to do a pivot in the business model.</p> </div> <div class="col-md-12 mb16 mt16 o_colored_level"> <h3>The Pivot</h3> <p data-chatter-id="counter_7/section/div/div/div">We wanted to switch from a service company to a software publisher company. This would allow to increase our efforts in our research and development activities. As a result, <a href="/blog/odoo-news-5/our-open-source-business-model-119" data-bs-original-title="" title="">we changed our business model</a> and decided to stop our services for customers and focus on building a strong partner network and maintenance offer. This would cost money, so I had to raise a few million euros.</p> <p data-chatter-id="counter_8/section/div/div/div">After a few months of pitching investors, I got roughly 10 LOI from different VCs. We chosed Sofinnova Partners, the biggest European VC, and Xavier Niel the founder of Iliad, the only company in France funded in the past 10 years to have reached the 1 billion EUR valuation.</p> <p data-chatter-id="counter_9/section/div/div/div">I signed the LOI. I didn't realize that this contract could have turned me into a homeless person. (I already had a dog, all I needed was to lose a lot of money to become homeless). The fundraising was based on a company valuation but there was a financial mechanism to re-evaluate the company up by 9.8 m€ depending on the turnover of the next 4 years. I should have received warrants convertible into shares if we achieved the turnover targeted in the business plan.</p> <p data-chatter-id="counter_10/section/div/div/div">The night before receiving the warrants in front of the notary, my wife checked the contracts. She asked me what would be the taxation on these warrants. I rang the lawyer and guess what? Belgium is probably the only country in the world where you have to pay taxes on warrants when you receive them, even if you never reach the conditions to convert them into shares. If I had accepted these warrants, I would have had to pay a 12.5% tax on 9.8 m€; resulting in a tax of 1.2m€ to pay in 18 months! So, my wife is worth 1.2 million EUR. I would have ended up a homeless person without her, as I still did not have a salary at that time. </p> <p data-chatter-id="counter_11/section/div/div/div">We changed the deal and I got the 3 million EUR. It allowed me to recruit a rocking management team.</p> <div class="text-center"><img height="352" src="/files/news/OpemERP_board%20(copy)2.jpg" width="500" data-no-post-process="1"></div> </div> <div class="col-md-12 mb16 mt16 o_colored_level"> <h3>Being a Mature Company</h3> <p data-chatter-id="counter_12/section/div/div/div">With this money in our bank account, we boosted two departments: R&D and Sales. We burned 2 million EUR in 18 months, mostly in salaries. The company started to grow even faster. We developed a partner network of 500 partners in 100 countries and we started to sign contracts with 6 zeros.</p> <p data-chatter-id="counter_13/section/div/div/div">Then, things became different. You know, tedious things like handling human resources, board meetings, dealing with big customer contracts, traveling to launch international subsidiaries. We did boring stuff like budgets, career paths, management meetings, etc.</p> <p data-chatter-id="counter_14/section/div/div/div">2011 was a complex year. We did not meet our expectations: we only achieved 70% of the forecasted sales budget. Our management meetings were tense. We under performed. We were not satisfied with ourselves. We had a constant feeling that we missed something. It's a strange feeling to build extraordinary things but to not be proud of ourselves.</p> <p data-chatter-id="counter_15/section/div/div/div">But one day, someone <em>(I don't remember who, I have a goldfish memory)</em> made a graph of the monthly turnover of the past 2 years. It was like waking up from a nightmare. In fact, it was not that bad, we had multiplied the monthly turnover <span style="line-height: 24px;">by 10</span> over the span of roughly two years! This is when we understood that OpenERP is a marathon, not a sprint. Only 100% growth a year is ok... if you can keep the rhythm for several years. </p> <div class="text-center"><img height="413" src="/files/news/turnover_updated4.png" width="500" data-no-post-process="1"></div> </div> <div class="col-md-12 mb16 mt16"> <p data-chatter-id="counter_16/section/div/div/div">As usual, I should have listened to my wife. She is way more lucid than I am. Every week I complained to her "It's not good enough, we should grow faster, what am I missing?" and she used to reply: "But you already are <a href="https://accounts.openerp.com/blog/OpenERP-Blog-1/post/Three-Awards-for-OpenERP-in-2013-139">the fastest growing company in Belgium</a>!" (Deloitte awarded us as the fastest growing company of Belgium with 1549% growth of the turnover between 2007 and 2011) </p> </div> <div class="col-md-12 mb16 mt16"> <h3>Changing the World</h3> <p data-chatter-id="counter_17/section/div/div/div">Then, the dream started to become reality. We started to get clues that what we did would change the world:</p> <ul><li>With 1.000 installations per day, we became the most installed management software in the world</li> <li><a href="http://amzn.to/P4lRmE">Analysts from Big 4 started to prefer OpenERP over SAP</a></li> <li>OpenERP is now a<a href="http://bit.ly/T2Y6IF"> compulsory subject for the baccalaureate in France</a> like Word, Excel and PowerPoint</li> <li>60 new modules are released every month<em> (we became the wikipedia of the management software thanks to our strong community)</em></li> <li><i>In 2013, we had 2.000.000 users worldwide</i></li> </ul><p data-chatter-id="counter_18/section/div/div/div">Something is happening... And it's big!</p> </div> <div class="col-md-12 mb16 mt16"> <h3>New Financing in 2014</h3> <p data-chatter-id="counter_19/section/div/div/div"><span style="font-size: 17px; line-height: 23.99997329711914px;"></span>After years of rapid growth, we achieved another amazing goal - we secured a new round of USD 10 Million of financing, jointly provided by leading venture capital firms XAnge (France), SRIW (Belgium), Sofinnova (France), and the management team.</p> <p data-chatter-id="counter_20/section/div/div/div">The new financing will support the acceleration of the outstanding growth the company has seen over the last years, enabling the doubling of the commercial force and increased R&D staff - already 100+ people strong. </p> <p data-chatter-id="counter_21/section/div/div/div"><span style="font-size: 17px; line-height: 23.99997329711914px;"><span style="color:#FF0000;"></span></span></p> </div> <div class="col-md-12 mb16 mt16 o_colored_level"> <h3>The Rise of Odoo</h3> <p data-chatter-id="counter_22/section/div/div/div" style="text-align: justify;"><span style="font-size: 17px; line-height: 23.99997329711914px;"></span>After having disrupted the ERP market, OpenERP moved far beyond the boundaries of traditional ERP players. <span style="line-height: 23px;">The integration of business activities is not anymore restricted to sales, accounting, inventory and procurements</span><span style="font-size: 17px; line-height: 23px;">. </span>In June 2014, we released version 8 with awesome CMS & eCommerce, a Point of Sale, an integrated Business Intelligence engine and much more. (and 3000+ modules)</p> <p data-chatter-id="counter_23/section/div/div/div">Our exceptional technology allowed us to move to newer markets (CMS & eCommerce) and propose a product that disrupt existing open source players (Wordpress, Magento, etc). The OpenERP CMS is so good that even top competitors admited it publicly when we released the beta version.</p> <p data-chatter-id="counter_24/section/div/div/div">If current open source players have a real technical challenge to follow us, we also have a huge marketing challenge. Wordpress has 22% of all internet websites. We were the leader in management software, but we start with 0% of the website market.</p> <p data-chatter-id="counter_25/section/div/div/div">To move forward, we raised USD 10 million in May 2014 in order to boost marketing and sales activities. In order to support our vision, we had to change the name that is not restricted to ERPs functions. We needed a name that allows to support our ambitions; build business solutions like CMS, eCommerce, Business Intelligence and, who knows, even sky rockets or driverless cars in the future...</p> <p data-chatter-id="counter_26/section/div/div/div">In May 2014, we renamed the company and product to Odoo. And a new story just started... a few years later, we became the most used management software worldwide.</p> <p data-chatter-id="counter_27/section/div/div/div"></p> <blockquote> <p data-chatter-id="counter_28/section/div/div/div/blockquote">Fabien Pinckaers<br><span style="line-height: 1.42857;">Odoo Founder & CEO</span></p> </blockquote> <p data-chatter-id="counter_29/section/div/div/div"><span style="line-height: 1.42857;"></span></p><section class="s_embed_code text-center pt64 pb64 o_colored_level" data-snippet="s_embed_code" data-name="Embed Code" style="background-image: none;"><template class="s_embed_code_saved"><iframe style="border-radius:12px" src="https://open.spotify.com/embed/episode/1rwWMTqlp2TaQan3CfTg2M?utm_source=generator" width="100%" height="352" frameborder="0" allowfullscreen="" allow="autoplay; clipboard-write; encrypted-media; fullscreen; picture-in-picture" loading="lazy"></iframe></template> <div class="s_embed_code_embedded container 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