Wishing On A Cloud

Published 10 years ago
Wishing On A Cloud

When Peter Bauer was nine years old his mother asked him a question that would change his life. That question was “Do you want to get a bicycle or do you want to get a computer?” He chose the computer and today he is the co-founder of Mimecast, an email management company worth $300 million with offices in South Africa, the United Kingdom and the States.

Garth Wittles runs the South African operation. Two months ago the company secured $62 million worth of funding which brings the tally to $95 million since they launched in 2003.

Bauer and Wittles, 11 years apart, met in Cape Town as techies. Their paths crossed throughout their careers and eventually they went into business.

“Peter stood out as a unique individual very quickly in many facets,” says Wittles.

Bauer had started working in the tech industry straight after high school.

“I knew, I guess, from about age 14 that I wanted to go into business.”

He got his first job at 19 running a procurement company out of his business partner’s garage. By 23, he had decided to team up with some friends, Simon Andrew and Craig Fullerton, to run a tech company in Cape Town.

Soon afterwards, a buyer from Johannesburg approached and almost charmed his way into a bargain buy. He wined and dined Bauer and Andrew in Camps Bay, but luckily Fullerton hadn’t made it to the dinner.

The following morning, a hungover Bauer and Andrew were ready to accept an offer of R30,000 ($3,390) for the company, but fortuitously a sober Fullerton said no.

“… It sounded impressive you know, three ways that’s 10 grand each,” laughs Bauer.

“Craig said, ‘No, hang on a second… The only number we will accept to do this deal is R40,000 ($4,520)…’ [The buyer] said, ‘I’m afraid not…’ 11 months later we sold the company to Idion for R20 million ($2,3 million). Ja, we felt rather stupid,” he laughs.

After making millions, Bauer tried his luck and moved to the UK with his family.

Here, he met Mimecast co-founder Neil Murray, a fellow South African techie in London. They saw a change in computing and didn’t want to be left behind.

“We noticed that inside corporate email systems is the holy grail of corporate information and hugely valuable stuff and I always thought, ‘If you take an email system and you steal it from a company and print everything out and you sift through these piles of paper and you read everything, you’d pretty much know about everything to do with that company, what it does and how it operates’. So, we were really interested in this change in computing model, addressing the complexity around corporate email and figuring out how to turn corporate email into a corporate asset,” says Bauer.

Mimecast manages corporate information by storing it in an internet-based cloud. It sorts through emails to eliminate viruses and spam before they reach the recipient.

It has won a number of industry accolades but has also suffered headaches.

“It took quite a few years to build this platform. I remember promising Neil, and some of the other techies we recruited that in about 12 months’ time we would be making good money. I probably believed it, but it took many years. Both Neil’s and my wife had married these young South African millionaires and we’d moved to the UK… And over the years downgraded literally to the point where we lived like refugees… It took some conviction but we believed very strongly in what we were doing, we just understood that it would really take time and persistence,” says Bauer.

In South Africa, Wittles saw the vision that Bauer and Murray had for Mimecast and he wanted in.

“I remember him talking to me on the phone and [he] said, ‘I like what you’re doing. Can I set this up in SA?’ And I said, ‘No’, and eventually in 2004 Garth said, ‘Look, I’ll do this thing. Give me the technology support and I’ll crack the SA market.’” says Bauer.

Wittles had the go-ahead, now was his chance to turn the vision into a business.

“In 2003 and 2002 the concept of cloud computing was only emerging internationally, so the business [here] was very very early into that space,”

says Wittles.

While Bauer and Murray were establishing Mimecast in the UK, a first world country, Wittles was facing tougher times.

“Bandwidth was one of the biggest challenges for establishing Mimecast as a business in SA. In 2003 there wasn’t much of it, and what there was extremely expensive and that in some way was a little bit of an inhibitor for organizations locally,” says Wittles.

Money would be the biggest inhibitor of all.

“Essentially what you’ve got is a piece of paper that outlines a plan or a vision. You don’t have any track record, you don’t have any customers, you don’t have any revenue. Raising money in South Africa was really difficult… The only way that you can really raise funds, I suppose, is to finance it through debt… Run it out of your garage and really put your house on the line. So, it created an environment in the early days… that failure cannot be an option because if you do fail, your life is down the tubes,” says Wittles.

Today, Wittles is the senior vice president of Mimecast. Some of his customers include Anglo American, Pick ’n Pay, Dimension Data, MTN, Aspen and the University of Cape Town.

Bauer is the CEO and is heading the US operation, while Murray, the chief technology officer (CTO) is running things in the UK. The close-knit company has 330 employees worldwide and around 10 of them are Bauer’s high school mates.

In 2010, they recruited American email pioneer Dr. Nathaniel Borenstein as their chief scientist.

Borenstein was the first man to send an email attachment, he is also known for co-founding MIME—the protocol formatting multimedia internet electronic mail 20 years ago.

Their next plan is to expand into what they call the information bank industry, putting value to information like banks do to money. Once again their heads are in the clouds, only time will tell if they are ahead of the pack once again or will end up living like refugees.