VCs spend their days going from one appointment to the next. And when they’re not stuck in meetings, they’re frantically scheduling new ones.
“Calendaring is this huge, pervasive pain point,” says David Ladd, a venture partner at Mayfield Fund. “Anyone who’s ever exchanged a dozen emails just to schedule one meeting can tell you that.”
This may help to explain why VCs are eagerly funding new calendaring startups that promise to dramatically improve the scheduling process. VCJ identified at least a dozen startups in the space, six of which have raised a combined $41 million (see table). The venture-backed players are BookFresh, TimeBridge, TimeTrade, Trumba, Tungle and ZocDoc.
“There are several very big companies that have solid calendaring solutions,” says Jeff Hurst, general partner at Commonwealth Capital, which led a $5 million investment in Tungle last year. “[Traditional] calendars are good at helping you keep track of your time, but they don’t really help you be more productive and connected.”
At Tungle, for instance, the goal is not to replace existing calendars, but to make them more useful. The Tungle online service integrates with all major calendaring applications and allows users to share their free/busy time slots and propose times to meet. As blocks of times are proposed, they are synched with the latest availability of meeting participants. Once the meeting is booked, the organizer’s calendar—whether it’s Google Calendar, Microsoft Outlook, Lotus Notes or Apple iCal—is automatically updated, and all participants receive an invitation formatted for their specific calendar.
As useful as these new calendaring applications are, it’s fair to ask if they are viable venture businesses that can generate significant returns.
Calendaring is this huge, pervasive pain point. Anyone who’s ever exchanged a dozen emails just to schedule one meeting can tell you that.”
“You can’t survive just as a neat little calendar application,” says Ladd of Mayfield, which along with Norwest Venture Partners co-led a $4.9 million Series B round in TimeBridge in December. “You might try to make some money by putting some ads around the application, but you’ll never build a big business that way.”
Not Relying on Ads
Yori Nelken, founder and CEO of TimeBridge, thought about an ad-based revenue model for his company, which offers a personal scheduling assistant designed to help busy professionals find a time to meet. But once he launched the company, he discovered something quite amazing. Users didn’t just want to schedule meetings with the service, they also wanted to conduct those meetings.
“Sixty percent of our users we’re already leveraging some form of Web conferencing, so we decided to bring this service into the process,” Nelken says.
Companies spend approximately $10 billion annually on audio and Web conferencing services provided by the likes of WebEx and GoToMeeting. TimeBridge says it can offer those services for a fraction of what other companies charge because it doesn’t have to spend millions on customer acquisition.
“TimeBridge isn’t just a calendaring tool, it’s a gateway to the massive audio and Web conferencing market,” says Ladd. “That’s what makes TimeBridge such an interesting venture deal. We don’t have an outrageous marketing spend, so we’re becoming a truly disruptive technology.”
TimeBridge, which currently has 400,000 users, is also focused on enhancing its core scheduling service and will begin charging a monthly subscription fee for premium functionality. For instance, the service is adding tools that will allow meeting organizers to round up late-arriving participants via SMS. The service will also have document management tools for capturing action items as the meeting progresses.
Sixty percent of our users we’re already leveraging some form of Web conferencing, so we decided to bring this service into the [calendaring] process.”
Tungle, which competes head-to-head against TimeBridge, also plans to make money with services related to its core scheduling service. What is free today will remain free. But later in 2010, Tungle plans to release premium services that will target specific segments.
Hurst of Commonwealth says that the focus at this point is to make Tungle as addictive as possible before turning on the premium features. The company is also forging partnerships with social networks such as Xing as a way to attract new users.
No Need for VC?
And then there’s SocialCalendar, which has not yet raised venture capital, but boasts a head-spinning 11 million installs and roughly 2 million active users, thanks in part to being the go-to calendaring application for a majority of Facebook users. The year-and-a-half-old startup is pursing some very interesting monetization strategies, including the sale or virtual goods. If offers hundreds of icons—like a birthday cake that sells for a dollar—that users can post on their calendars to mark particular events.
The calendar app also allows users to make gift wish lists through Amazon and distribute the lists to friends and family. What’s more, users can add movies to their SocialCalendars, and can see show times and even buy tickets directly. SocialCalendar has even partnered with 1-800 Flowers.com to offer users the ability to easily send flowers for a friend’s birthday or special event.
SocialCalendar representatives did not respond to requests for comment.
It’s reasonable to assume that if a company like BookFresh can build a stable constituency of paying customers, it will make a very attractive acquisition target.”
Despite promising signs from the current crop of startups, the calendaring market is rife with cautionary tales. In 2005, a Seattle-based online calendar sharing startup called Trumba raised an $8 million Series B round from August Capital, Kleiner Perkins Caufield & Byers and Oak Investment Partners. Less than three years later, it slashed the majority of its workforce and scaled back its effort.
Trumba’s former CEO and current board member, Jeremy Jaech, told the Seattle Post-Intelligencer newspaper that the company “just doesn’t feel like a venture business.” He called it a “nice small business growing at a moderate rate,” but added that this type of growth is “not the definition of a venture-backed business.” Jaech also said he would be surprised if the company, which raised nearly $13 million in total, ever made a venture-type return for its investors.
Ikordo is another calendaring company that crashed and burned. The U.K.-based startup, which made a Web application for arranging meetings, shut down last year after failing to secure a new round of investment.
“Sure, the calendaring market has its share of roadkill, but without knowing specific details, it’s hard to say what went wrong,” says Armand Nicholi of Hatch Ventures, an investor in BookFresh. “It could be buggy software, or a lack of leadership or a poor marketing strategy.”
Though he doesn’t know why others failed, Nicholi says he has a good idea why BookFresh will succeed. The service is targeted at the roughly 20 million sole proprietors in the U.S.—including house painters, massage therapists and dentists—who need a lot of help managing their appointments.
Traditional calendars are good at helping you keep track of your time, but they don’t really help you be more productive and connected.”
“This is a great market to go after,” assures Nicholi. “As a consumer, I’m on my Blackberry and laptop all day. The last thing I want to do is pick up the phone to book an appointment with my personal trainer or haircutter. If I can go online and see their schedules, that’s a huge convenience for me.”
The local pet groomer, for its part, pays about $20 a month to embed the BookFresh calendaring service on its website. Typically, when a client books an appointment, an e-mail confirmation is sent to both parties.
BookFresh currently faces stiff competition from a startup called TimeTrade, which operates a similar service called TimeDriver.com. The company just raised $5 million from Ascent Venture Partners and others.
TimeTrade has made serious inroads with several large customers, including Sprint retail stores and Sears Portrait Studios. In the past, Sears photographers would have to answer phones and juggle their own schedules, which took time away from snapping family portraits, especially during the busy holiday season. Now, customers can schedule appointments directly using with TimeTrade, which has resulted in cost savings for Sears and a better experience for its customers, says Brian Girvan, a general partner at Ascent.
Girvan is extremely upbeat about his investment in TimeTrade, not least because he sees a real exit opportunity for the company. He points to the successful IPO for OpenTable, which makes scheduling applications exclusively for the restaurant industry. “The OpenTable IPO was not a factor in our investment decision, but it certainly was a breath of fresh air,” says Girvan.
But can a calendaring startup really expect to go public, especially in the current economic environment? “There are not going to be any Google-like exit opportunities here,” notes Hurst. That said, there are plenty of companies out there that would be happy to acquire a calendaring startup like Tungle, he insists. “Any large company with a social network or its own calendaring system would be a very logical acquirer,” he says.
“The good news is the total adjustable market is huge, so there’s more than enough room for several competitors,” says Nicholi of Hatch Ventures. “I think it’s reasonable to assume that if a company like BookFresh can build a stable constituency of paying customers, it will make a very attractive acquisition target.”
Are you listening, Google?