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Current as of 29/05/17 03:40PM NZST
Small Business editor of the NZ Herald

Web design aid catapults students from Dunedin to Silicon Valley

Mike Neumegen.
Mike Neumegen.

George Phillips and Mike Neumegen were a couple of Dunedin uni students when their part-time work as freelance web designers led them to hit on a business idea.

Less than two years later that idea has taken them to Silicon Valley, garnered them customers in Europe and the US and been backed by big-name Kiwi investors like Trade Me founder Sam Morgan.

It's been a wild ride for the pair behind Cloud Cannon, a software company whose solution is aimed at making life simpler for web designers by automating some of their backend work.

"I still have moments where I'll sit back and listen to one of my team talking about why we should be doing something, and how it fits with the company's philosophies, and I'm like, 'Holy crap, this isn't two guys just making something in their bedroom anymore'," Neumegen says.

Phillips and Neumegen were computer science students at Otago University and freelancing for local companies in their spare time when they first hit the pain point their company Cloud Cannon aims to soothe.

As designers their brief was to come up with a web design for clients, get sign-off on it, then create the site itself. At that point clients were thinking the job was done, but in reality the designers then had to spend hours on back-end coding and other work that would then allow the client to edit the site themselves.

The pair began spending their evenings working on a solution. Their initial project looked at solving the core issue, but also aimed to address a whole host of web designers' needs. But the solution ended up being bloated and unusable, says Neumegen.

They scrapped all their code and started over.

The pair launched a pared-back and far more defined solution. After a handful of people started using it, they got a lucky break, featuring in tech industry blog TechCrunch.

"Startup entrepreneurs would chew their own arm off to get on TechCrunch and we just randomly happened to get covered by it," Neumegen says. "Out of that we got a lot of traction, and a few months later we put in a business model, started charging and found people were willing to pay for it." Early last year, Cloud Cannon was among the companies accepted into the Lightning Lab digital accelerator in Wellington. While there the pair met John Holt, managing director of the Kiwi Landing Pad - the government-funded base for Kiwi tech companies in the US. Holt sensed their potential and organised funding through New Zealand Trade and Enterprise to put Neumegen on a plane to Silicon Valley to fast-track networking.

Neumegen returned to New Zealand in time to prepare for Demo Day - the penultimate event in each Lightning Lab intake where companies pitch for investment. Cloud Cannon ended up gaining $650,000 from 16 investors including Sam Morgan, Datacom deputy chairman Simon Holdsworth and early stage investment company Movac's managing partner Phil McCaw.

Among the investors was Laura Reitel, the former manager of the more well-known TechStars digital accelerator in Boulder Colorado, who later mentored Neumegen and Phillips at Lightning Lab.

"The funny thing is I've never made an investment before," Reitel says. "But I found myself thinking, 'If I'm ever going to bet on any team it's a team like theirs'. I've seen a lot of investment activity and I've seen a lot of teams, and you always bet on people who you know you can work with and who really pour their heart and soul and energy into a venture." Reitel says the ever-increasing number of websites being created annually means Cloud Cannon is in a fast-growing market.

"And there's real demand for tools that help make websites more beautiful and easy and intuitive to use." The investment has allowed the company to grow to a team of four and for Neumegen to spend six months in the company's primary markets of Europe and the US.

Growing the number of freelance web designers using its software has been the main focus of the company in recent months. Connecting with those prospects has been made easier because web designers tend to be well-connected and vocal in online communities, Neumegen says.

Another opportunity the company is now pursuing is the enterprise market, and they're currently talking to some large organisations about how they might use Cloud Cannon's solution.

"Enterprises have a lot of websites they're managing and they need non-technical teams to be able to update those websites. That's not something we had really thought of, but once we started looking at it we realised we could solve some big problems for some very big companies," Neumegen says. "And that's a great feeling."

- NZ Herald

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