Giacomo ‘Peldi’ Guilizzoni, Balsamiq Founder and CEO opens our monthly marathon in wireframing applications! Witty and shrewd businessman, Peldi remains a passionate developer and experimentalist. Look behind the stage at Balsamiq – one of the most standout projects we’ve ever met: small dedicated team, antique cash-register, unique marketing approach with a lot of smilies. Continue the journey into Balsamiq headquarters with us and add your own questions!

CIO Happy Hour (CHH): Please introduce yourself and tell our readers and listeners in one sentence what Balsamiq is about.
Peldi: Hello my name is Peldi and I am the CEO and founder of Balsamiq, a small software company focused on adding flavor to web office applications. We like to compete on usability and customer service. Our first product is Balsamiq Mockups. Launched in June 2008, Mockups helps software designers and developers build great software by letting them easily sketch out their ideas, then quickly collaborate and iterate over them. Balsamiq Mockups has netted over $800,000 in sales in its first year of business and is gathering rave reviews.
Ok that was more than one sentence, sorry. ;)

CHH: Playing solo was always your goal and working for a big company was a part of the plan. What valuable experience have you gained working for almost 7 years for US Macromedia and Adobe that helped you lately? Why have you decided to focus on American companies, not European ones?
Peldi: Not a day goes by that I don’t use something I learned during my career at Macromedia/Adobe. Most of what I know about making and selling software comes from there, so it’s hard to give you a specific example.
I went to San Francisco right after graduating to look for a job there because Silicon Valley is “where the future is invented”…for a young programmer it’s still the place to be.

CHH: You’re a great contributor to Web Office idea. How do you see the concept evolution scenario? How and when it may go mainstream? What are the requirements for that?
Peldi: My definition of Web Office is pretty broad: “productivity web applications aimed at knowledge workers”, which of course includes word processors, spreadsheets, presentation tools but also wikis, bug tracking and project management tools, you name it. Basically it’s any the web applications you’d use at work.
While the term “Web Office” hasn’t really stuck with people, I firmly believe that as a whole it’s one of those “no going back” technologies: once you start being able to work from any computer, saving your data to the cloud, sharing and gathering feedback easily, keeping version history automatically…you will never go back to emailing attachments back and forth.
It’s just such a huge productivity booster.
I understand it will take time, my friend and former boss Dennis Griffin always said “inertia is an incredibly powerful force”, meaning that it’s really hard for people to change their way. See, another lesson from Adobe! ;)

CHH: As most of your users are professional UX and graphic designers, many of them would like to have a Mac application. While everyone and everything is moving into the cloud, do you think it’s necessary to invest into developing native desktop applications?
Peldi: We actually get all kinds of users, from the most technical to people who have never used a graphic program before. We are democratizing the process of wireframing! ;)
When I started Balsamiq Studios, I, too, believed that “everything is moving to the cloud,” and that desktop applications were on the way out. Mockups for Desktop, for instance, was not originally intended to be sold, but users practically begged me to sell it to them as a standalone application. And now, a year later, it brings in about 80% of our revenue. Demand for desktop applications is still very strong.
People want the flexibility to work online and offline. We all want the ability to work within a browser when we’re on the go and in a more native environment when we’re at our computers. I think in future every application will need to have a web version, a desktop version and a mobile version. Users should be able to save data both to the cloud and on the desktop. That’s what I’m working towards with Mockups right now.

CHH: One more futuristic question: Web Office will consolidate a lot of features via manifold plug-ins or web applications. In your opinion, there will be a great market for these products. Do you plan to launch new projects in this open niche?
Peldi: Yes. Mockups is our first Web Office plugin, which we are using to build a platform for our future products. All the efforts we’ve taken to integrate Mockups with Confluence, JIRA, XWiki, FogBugz, the Desktop and our own web app will be re-used for our future plugins. I can’t wait, it will be fun!
As for timing, we have no rush. I think we have about a year’s worth of development on Mockups before my vision for it is complete…after that, we’ll see. Our customers continue to give us great ideas for new products all the time! :)

CHH: You stated that you prefer to keep the company small and family-like. What is bad about being big?
Peldi: Oh there’s nothing bad about being big, I just don’t have any yearning to lead a large company right now. I also don’t feel like we need to be large in order to be successful…a small group of highly motivated and talented people can make a huge impact these days.

CHH: If you keep the same growth rate you’ve maintained for a while, by the end of 2009 you will have about 10 thousand customers. That’s a huge amount of work for customer service and support, which, probably, means new people in your company. Is it possible to remain a relatively small company with huge success?
Peldi: Ha! We’re at 8726 customers right now, and we seem to be doing OK. Mockups is such a small little app that doesn’t require too much support. We do get a lot of email every day, but we try to always get to the root of users’ questions and either fix the product or improve our website to prevent them. Valerie, Mariah and I are constantly improving and streamlining our processes, so that we have time not only to answer email, but also make it personal each time.
That said, I can see a day in which we’ll need to scale up our support efforts: we like to compete on great customer support so I’m happy to continue to be a support-heavy organization. I won’t try to save money on that!

CHH: Where are most of your customers from? What impact does it have on Balsamiq development?
Peldi: About 50% of our customers come from the US. Another 30% comes from the UK, Canada and Australia (about 10% each). The remaining 20% is scattered in 72 countries around the World.
I think it’s a pretty typical distribution for software products, and it definitely impacts how we do business. We route most of our sales through our Balsamiq Studios, LLC, which is based in the US, even if the development is done in Italy. Valerie, our COO, Wow! Division, is based in California, to better serve our American customers.

CHH: Do you still have the cash register sound playing when somebody is buying a new license? How does it feel?
Peldi: Yes, we do! It feels great, it’s a great motivator.
The only problem with it is that I need to remember to turn it off at night: our home office is right next to our bedroom, and because of the time difference most of our sales happen while we sleep! ;)

CHH: What’s your secret for keeping the software product simple and providing rich user experience at the same time?
Peldi: Ha! Creating simple products is very hard. The good news is that it can be learned: there’s a wealth of great books about it, and there are tools today that help you iterate quickly on your ideas…there’s one especially which I think it’s pretty good… ;)
Joking aside, my “secret” is to always think twice (no, three times) about adding any UI element to the application. Could the same feature be done without it? In other words, I really like “invisible” features and “progressive disclosure”, where you only see UI elements when you need them. The job of software is to support you in your work while staying out of your way.

CHH: A year ago you were hesitating about going SaaS, and it’s on your to-do list now. What have convinced you to move this direction?
Peldi: Like in most everything we do these days, the input came from our customers!
Many of our current customers want the same benefits they get from working in the cloud. At the same time, they don’t currently use any of the Web Office tools we plug into, like JIRA, Confluence or FogBugz.  We’re building a very light-weight “wiki for UI mockups” for those customers. It’s almost ready, and I’m really excited about it.
The Mockups web app is also a way for us to learn about selling a subscription service instead of license keys, which should be interesting.

CHH: What is your release policy for Balsamiq: you have almost weekly releases including bug fixes and improvements. What is the role of the users in testing and development of the product (we mean improvements, enhancements, etc.)?
Our release policy is to “release early, release often”. We always try to have a mix of bug fixes and little improvements in each release, so that the quality and power of the product go up gradually and together.
We are BLESSED with incredible users. There’s a core group of customers who are always ready to test new, half-cooked features and to provide feedback on them.
They also come up with great ideas for improvements, many of which we have implemented already.
Every time we’re thinking of building a new feature we mock it up and ask the community for feedback – some might say this is “design by committee”, but I disagree: we are the ones to make the final call, but our decisions are so much more informed by the feedback we’ve received than they would have been otherwise.
I want Mockups to feel like it’s a tool built by the people, for the people. We’re no better than any of our customers, we just happen to be the ones with our hands in the code! :)

CHH: You’ve never used a penny on “traditional” marketing and have been best-friends with bloggers. What (or who) was the impulse that made you ditch AdWords from the very start and adopt word-of-the-mouth strategy?
Peldi: I’ve actually started spending a little money in advertising – Google tricked me into signing up by giving me a $50 coupon, and I bit… ;) I’ve also sponsored a blog mostly because I want the author to keep at it. I love to read his blog! :)
That said, word-of-mouth advertising is the best because it’s the most powerful and it’s “real.” It’s also a lot easier for us: we just focus on making a product that’s worth talking about instead of scheming up marketing ploys… :)

CHH: Balsamiq is on twitter, delicious and several other social media resources. Is there a decent social media strategy at Balsamiq? How successful is social media in lead generation?
Peldi: What’s a “social media strategy”? ;) We’re on twitter, delicious and facebook because we like it, it’s part of our lives. We were already part of a community of people who care about designing great user experiences. We still think life’s too short for bad software, and we want to help rid the world of it. In other words, we go where our friends are.
As for how this results in sales, I’m sure it helps. Twitter is one of our top referrers, as well as another channel for customer support, which I know people appreciate.
Can you tell that I’m not too big into metrics yet? I just don’t have time for it, I’d rather spend time improving the product instead!

CHH: Peldi, thank you so much for this live and “real” interview. We are sure Balsamiq will continue its evolution in the right direction with its passionate users. Peldi, we wish you luck in all your endeavors and can’t wait to see the complete version of Web Office by you.

Our readers, please join the conversation and ask any questions you have and give us and Balsamiq your feedback! Meanwhile, we will be presenting another player later on this week.