The Return of Hummer Winblad

Nostalgia time. Here’s a true story.

Back before the bubble hit — way back in the late summer of 1996, in fact — Accrue (which wasn’t called Accrue yet) was doing its A round of financing. Many top-tier VC firms passed, but many also wanted in, and a number made an offer. Some made two. Hummer Winblad was one of them. One day Ann Winblad visited us in the garage. We do a demo, show her some bad PowerPoint, and sit in our office/conference room and discuss strategy. I was very impressed by how sharp she was. Which is to say, I agreed with her. At the time, the three of us “in management” hadn’t agreed if we were going to go really small (e.g. PC desktop software) or really large (UNIX-based enterprise-class stuff). This wasn’t just about technology, it was about business models. My experience was in enterprise-class software, so that’s what I wanted. Another thought the PC was the right way to go, and the third didn’t have enough data. Ann was able to articulate the reasons why small was a bad idea, and I think she was responsible for the speed at which we decided to aim for the high end. A company turning point from a single visit from Ann.

She also said something else we needed to hear then. One of the team had the idea that we’d build the enterprise app, but to get some operating capital in the door, we’d release a “lite” version first that ran on a PC. Ann cautioned us that a company is often known by its first product, and the cost to erase that image is huge. How true, how true. I knew it from my days at Sun, where Scott hated being called a workstation company. Later I’d hate being referred to as “the company with the web sniffer” when we had half a guy on that and 25 engineers working on real analytics. But I digress.

Around that time, Ann herself was getting a lot of PR as a wizard. I read the articles and thought it was strange that every article mentioned a famous individual she used to date. Whatever.

We wanted her on our board, and we told her so. We already had an offer that was more than we needed for round A, but the investor was willing to take the offer to a level where Hummer Winblad would come in. The only sticking point was the valuation, which was already set. They made an offer. We pointed out (again) what our number was, and convinced our existing investors to bring down the valuation a bit by way of compromise — we used to say “all money is green, but it’s not all the same” — so we could get Ann on the board. They came back with a higher offer, but it was still too low. They were adamant that they had their models and spreadsheets, and would not invest outside of their comfort zone. To them, the whole VC community was jumping off a bridge, but you wouldn’t find them following suit.

Years later, I remember reading some magazine’s Top Something list (investors? movers & shakers?) and in a sidebar was the question – “What happened to Hummer Winblad?” to which the answer was something like they’re sitting out, not making investments, because things are too overheated. The implication was that they were old school investors, and had missed the boat, because other firms were seeing huge returns.

So imagine my surprise when they invested in (the original) napster.com.

What’s the point of this story? Only to point you to an article with John Hummer in Private Equity Week, Hummer: We Are Far From Blowing Up. He admits they made some bad investments, but they are looking forward to some exit events like an Omniture IPO. First I’ve heard of this, but hey, it seems plausible. Josh & co. have been on a roll.

All that backstory just to mention an Omniture IPO? OK, one last thing to bring it full circle. This past weekend, I was reading the newspaper and in it was a “women who are movers and shakers” kind of article. There’s Ann Winblad’s smiling face and accompanying profile, complete with mention of the famous ex-boyfriend.

The Return of Hummer Winblad