Bluetail: Spinning out of Ericsson and selling for $150M in 18 months

Jane is one of the unsung heroines of the Erlang story. She was the first entrepreneur to recognise that having a better programming technology gave commercial advantages that could be turned into money.

Jane was the first entrepreneur to recognise the commercial value of Erlang and form a new company that would eventually earn over USD 100 million from Erlang.

Jane knew all sorts of things like how to start a company, how to raise venture capital, how to write a contract, how to sell software. Things that we knew nothing about.
— Joe Armstrong

In 1998, in those heady days before the great IT crash, we formed Bluetail. Bluetail had a strong technical core, composed of the techies who had made Erlang, and Jane. Jane knew all sorts of things like how to start a company, how to raise venture capital, how to write a contract, how to sell software. Things that we knew nothing about.

We knew how to do do techie things like how to write compilers, make databases, make fault-tolerant systems - but not how to turn these ideas into money.

In 2000 we sold Bluetail to Alteon Web Systems for USD 152 million. 

- Joe Armstrong in his blog post Making money from Erlang


Every startup has got to have a Jane!
— Joe Armstrong

...with five of the founding Bluetail team: Jane Walerud, Mike Williams, Joe Armstrong, Robert Virding, Garrett Smith at the Erlang User Conference in September 2016. 

 

Erlang has been used in many successful companies including IBM, Cisco, Visa, Klarna, Facebook, BT Mobile, Whatsapp and Ericsson. 


Joe Armstrong is best known as the creator of the programming language Erlang and the Open Telecom Platform (OTP). He was also a Bluetail cofounder. Read more by Joe: Making money from Erlang and How I got my grey hairs


Extract from The Erlang Factory: 

Jane was a computer science groupie at Stanford. After moving to Sweden (his name is Bengt), she made her living in IT sales and product management, and had a couple of small companies on the side. 

In 1997, Jane started work as Sales Manager of Erlang Systems. It was the perfect job - all those computer science people! - for all of two months, when Ericsson forbade the use of Erlang in new projects. Not enough people used Erlang to keep it dynamic, and Ericsson management was afraid of being trapped in a dying language.


It was impossible to sell Erlang when Ericsson itself refused to use it, and Jane persuaded Ericsson management to release Erlang open source in order to spread its use without sales. That strategy does seem to have worked...
A group from the CS-lab then started Bluetail with Jane as CEO, and sold it 18 months later for 150MUSD. She was Klarna's seed investor and talked the Klarna founders into developing in Erlang.