February 12, 2003

Forbes: David Versus Microsoft

My spin: Making only $1 million a year is NOT a David vs Microsoft battle. It's more like a gnat vs a GIANT battle. Blue Tie needs to grow a lot more before we start thinking of it as any significant competition to Microsoft. Most likely Blue Tie will get bought out by someone else.


A 23-year-old founder who's turning away calls from venture capitalists for his software firm? No, this isn't a time warp.
David Koretz guns the engine on his Porsche Boxster. The car fishtails on a patch of ice in Rochester, N.Y., but it doesn't distract Koretz from his cell phone conversation. "Charlie, you're killin' me here. When are we gonna start closing some deals?" Koretz wants Charlie, a computer reseller, to start selling his firm's software. "I just signed a reseller in Oneonta," Koretz continues, referring to a small neighboring city. "Do you know how many people live in Oneonta? Like three. But they've sold a thousand seats!"

He hangs up. "We'll get them," he says, shifting into third gear.

Koretz is all of 23 years old. His company, BlueTie, provides applications such as e-mail, scheduling, instant messaging and contact management to small businesses. Firms with, say, ten employees can get all these tools delivered over the Web for $10 to $20 per user per month.

The young entrepreneur is breaking all the rules: that you can't compete against Microsoft (nasdaq: MSFT - news - people ), that no one wants to rent software over the Web, that no one of sound mind would start a software firm in Rochester. BlueTie's revenue was just $1 million in 2002, but Koretz expects $7 million this year and $26 million by 2004. If he can meet his expectations and continue to grow, he might indeed become a competitive threat to Microsoft in the small-business market. (full story)

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