Another great post!

Microsoft paid $1.5B? I guess Visio did have runway.

[This might be interesting to Visio acquisition fans. I already wrote most of it, so am just pasting it here if anyone's interested]

In 1995, I started an effort at Autodesk to acquire Visio. I flew up to Seattle and met with Jeremy, Ted, and Keith for a few hours, we got along great, and they were intrigued. This led to a subsequent meeting at SFO where our CEO Carol Bartz, our COO/CFO Eric Herr, and I met with Jeremy Jaech, Ted Johnson, and Doug Mackenzie who was their board investor from Kleiner Perkins at the United Club meeting room in Terminal 3 of SFO.

Doug was against our acquiring Visio, saying "we have plenty of runway and don’t need to be acquired any time soon" but Carol pointed out that no numbers were mentioned yet, so how did he know?

The next step was a day-long meeting in at the Renaissance Hotel on Madison in Seattle, where I brought with me the Office of the CTO which included myself, Carl Bass the CEO-to-be (in 10 years), and Robert Carr, creator of Framework at Ashton-Tate who headed up engineering at Autodesk after following me there from Go. We also brought our Eric Herr and Chris Bradshaw, the Director of Product Management for AutoCAD LT. Co-founders Jeremy Jaech, Ted Johnson, Peter Mullen, Gary Gigot, and Dave Walter, and a couple of other people whose names escape me represented Visio.

We met for 8 hours. They had recently hired an ex-Autodesk product manager who was moving them towards technical drawing through the clever use of their shape technology to add things like implementing CAD drawing dimensions as Visio shapes, with dimensions changing based on Visio shape relationships rather than CAD-oriented dimensioning, which is more computationally complex and can be confusing to “breadth CAD” users. Their main architect Dave admitted that the number of entities in Visio was limited by their then-current architecture, so we felt no immediate threat from them in terms of scalability to our space. But we thought their user experience was great and their product had the most robust use of OLE outside of Microsoft we had seen so far. In fact, I joked with Jeremy that they were the “Fifth Beatle” of Office (see Murray the K), even though they were outside of Microsoft. In fact, I had heard there was an Office bundle that included Visio in Japan, supporting my argument/joke. My teams were all in on OLE as well, so we loved Visio’s overall approach towards lightweight design tools and Office integration for breadth users of CAD.

The Visio Technical product threat they made towards us was a good strategic move for them, as they saw Visio as a product in the center of a competitive triangle that included: a) PowerPoint adding smart shapes, pushing into their core; b) Adobe IntelliDraw which was eating into Visio’s market share with smart shapes and line snapping; c) AutoCAD LT, our less expensive, non-programmable AutoCAD for technical drawing. Thus, they had one perceived weak direction to go in, and that was to attack us, so they were looking to move towards the Autodesk market for lightweight CAD. This confirmed the original concern that started the build/buy process for our new thrust towards a “lightweight CAD” market; someone like Visio would try to go after these customers, which could be an assault on Autodesk from the lower end. We were correct in our assumption.

We subsequently offered them something south of $200M, which Kleiner declined to support, and I thought undervalued, though I was outvoted by our COO (my boss).

So, Microsoft paid $1.5B? I guess Visio did have runway. That was about 10x what we offered.

Visio belonged at Microsoft anyway. I left Autodesk a year after this, to pursue other things. Visio went public soon after our brief dalliance. Visio later acquired an AutoCAD clone which AutoCAD had to spin out of an acquisition. This created some ill will between Autodesk and Visio, but not much ever became of the clone to concern Autodesk in the long term. The clone is still around, but we outcompeted them.

After I left, Autodesk created a product called Actrix to compete with Visio because of their frontal assault on AutoCAD with the clone. Actrix was interesting, but five years too late. Visio lost interest in our space once Microsoft acquired them, so that threat had diminished anyway. Godfrey Sullivan, the product leader for Actrix (the EVP of Sales, for some reason) became CEO of Hyperion and Splunk, so it clearly didn’t hurt his subsequent trajectory.

We were simply wrong in 1996 – users did not want a consumer CAD product, and Visio would never grow the CAD DNA necessary to compete with us.

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Thank you for sharing.

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