Red Condor: Why did it run out of Money?

So, I have talked about Red Condor for a week or two now. I joined the company in April of 2010. I knew it was in financial difficulty at the time I joined and we struggled to keep things afloat until the asset purchase at the start of August of 


The company raised over $15M. Where did the money go? Why did the company not do better? What can we learn from it?

If we go back in history, Red Condor was started by Jeff Aguilera, Brien Voorhees and Dave Brounstein in 2003. When the company began, Spam Filtering was just coming to prominence as a market. The Founding Team started the
company to provide a better solution for themselves and then began to work on it as a general solution that they could sell to others.

The company ran on a shoe string and the founders worked for free for a period of time. They went to Angel Investors to have enough money to get build the company through commercial launch. They then raised an A round investment in
2006 and another round in 2007. All of that money should have been enough to build an effective company. I have already posted that the product was good and that there was a number of customers. Of course that 3 year delay from
founding to significant funding created the first issue. Other companies raised money more quickly and had a market lead.

What this led to was a problem of focus. To grow the customer base quickly the management team attempted to come up with new plans to grow the company quickly. The problem was that this meant that the market target and customer
focus was all over the map. So instead of a laser beam, Red Condor became a shotgun. What this meant was that the money was spent quickly on many initiatives that led to not very much because there was not a lot of weight behind them.
The right way to build initiatives was to is to align all the resources required to make them work. Set a plan in place and measure success against the plan. Execute the plan for a reasonable amount of time before changing plans. You might
need to tweak things but starting and abandoning them is a waste. You can't afford throw good money after bad, but it is important that you give a plan enough time to work.

In the end, by the time Red Condor found its mark it was too late. The Spam Filtering market had matured and prices had dropped. The value of companies in the market had declined the investors were no longer going to put money into the
firm to continue it.

What can we learn from this. If your company is having to rethink what it is doing on a periodic basis, there is a significant problem. The worst thing you can do is flail around. It is time to step back and see what you are doing and make sure
that you are being effective. You might need a new strategic plan but acting like an Executive with ADHD is not the solution.

Jim Sackman
FocalPoint Business Coaching
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