By LAURA LOREK
Reporter with Silicon Hills News
Today, that network, Spiceworks, is one of the largest IT social networks in the world with millions of monthly users, thousands of customers and hundreds of employees. This week, Spiceworks is celebrating its 10th anniversary by taking its entire workforce to see Stars Wars at the Alamo Drafthouse Theater on South Lamar, said Jay Hallberg, one of the co-founders and its CEO.
The other founders Scott Abel, Greg Kattawar and Francis Sullivan are all still with Spiceworks, which recently moved into much larger headquarters in the Westlake area. Hallberg took over the CEO job from Abel last year.
Spiceworks now has 450 employees and it plans to hire another 100 employees this year, Hallberg said. The company has also raised $111 million in venture capital funding in five rounds from six investors. It last raised $57 million from Goldman Sachs in 2014. Other investors include Adams Street Partners, Tenaya Capital, Institutional Venture Partners, Shasta Ventures and Austin Ventures.
The company has had steady growth and never had trouble making a payroll, Hallberg said. When it hired a guy from Dell in 2007 at its second office building, that guy showed up on his first day on the job. A longhaired engineer wearing crocs answered the door to let the guy in and the office, which had heating problems because of problems with the building, was about 55 degrees. Everyone had space heaters by their desks. The guy thought Spiceworks was having trouble paying its heating bill, Hallberg said.
Spiceworks took some deliberate steps to get to achieve a high rate of adoption and growth, Hallberg said.
“Even before we officially incorporated the company, we drove around Austin and talked to IT Pros,” he said. “We asked them what did they like, love and hate in their jobs. In listening to them we realized we could build a product that could help them do their job.”
The key to Spiceworks success has been having a constant conversation with an ever growing base of IT professionals on how Spiceworks could help them do their jobs better, Hallberg said. It seems to be working. Spiceworks fans call themselves Spiceheads and its mascot is an orange T-Rex called SpiceRex. It holds two major events each year for its customers. Spiceworld in the Spring in London and Spiceworld in the Fall in Austin.
Another key strategic move was making Spiceworks free, Hallberg said.
A lot of services and products are free online for consumers so why wouldn’t they be for businesses? Hallberg said.
“We decided to build a great product that people would use and rave about,” Hallberg said. “This community of users grew around Spiceworks and what we were doing.” Spiceworks attracted a community of like-minded people who supported each other, he said.
Spiceworks revenue comes from advertising. Its products include a Help Desk solution, IT Asset Manager, Network Manager, Mobile Device Management, IT Concierge and the Spiceworks Community.
“My thought back in 2006 – this model works for Google and Facebook, why wouldn’t it work for IT,” Hallberg said. “There’s almost no industry in the world that changes more rapidly than IT. It’s 100 times more complex today than it was ten years ago. Networks exist because there are technology companies. It’s the perfect market for an advertising based model. Every month, millions of IT pros are in Spiceworks doing their jobs and they can learn about services to help them do their jobs better.”
Spiceworks launched advertising essentially from day one, Hallberg said.
“We’d rather know from the beginning whether it’s going to work,” he said. “Secondly, though in the spirit of having an open conversation with our audience, we thought it was a lot better to be open from the beginning.”
On July 24, 2006, Spiceworks launched its Beta product, which included advertisements. Its first download came from Australia, Hallberg said. Today, the network is used in nearly all countries of the world, he said. It’s also used on all continents including Antarctica.
And Spiceworks has more plans for growth in 2016, Hallberg said.
“We’ve been cranking away growing the team,” he said. “We plan to build more products and value for IT pros. We’re working on some more interesting ways for IT pros to find the products they are looking for.”