File-sharing facilitator doing fine, thanks

Staff WriterSeptember 21, 2010 

When Jesse Lipson considered starting ShareFile five years ago, most of the people he consulted advised against it.

Other companies already made it possible to share large and/or confidential files over the Web, they pointed out.

In addition, Lipson hadn't devised any obvious competitive advantage.

But Lipson forged ahead, calculating that increasing customer demand and "executing well" would be enough to create a thriving business.

Raleigh-based ShareFile has thrived so well that it recently was ranked No. 104 on Inc. magazine's annual ranking of the nation's fastest-growing private companies over three years. The 35-employee business generated revenue of $4.3 million last year, more than double that of the year before.

Not too shabby for a company that has never taken a dime from outside investors.

"We're anticipating a pretty large amount of growth again this year," said Lipson, who declined to be more specific.

To help with the increased workload, he anticipates hiring as many as 10 employees by the end of this year.

Lipson, 32, came to the Triangle from Baltimore to attend Duke University - where he majored in philosophy - and never left. He caught entrepreneurial fever during the dot.com boom and taught himself computer programming so that he wouldn't have to rely on others.

Lipson credits ShareFile's success to its "extremely customer-centric" culture. Lipson personally monitors customer feedback, andevery week or two the company updates its technology to address problems that have arisen or to add features that have been requested.

"They have definitely stayed on the front edge of enhancing a file-sharing program," said Joe Schmidt, co-founder and general manager of Canvas On Demand in Raleigh, which has been a ShareFile customer for more than two years. "They constantly are coming up with new enhancements that are just ahead of us thinking of wanting them," he said.

Canvas on Demand, which was recently acquired by California-based CafePress, is a 65-employee business that transfers photographs to canvases suitable for framing.

Schmidt said ShareFile's system "is very streamlined and very simple to use, especially since we're dealing with end-users and regular folks who don't know a lot about computers."

ShareFile has 12,000 business customers, mostly small businesses who pay a monthly fee that ranges from $30 to more than $500 - based on their size and other factors. A typical client is a business with five to 20 employees.

What's the appeal for those customers?

"Traditional e-mail isn't encrypted," said Lipson. "The analogy people use is it's kind of like sending a postcard. You don't want to put sensitive information on a postcard."

In addition, e-mail "isn't designed for very large attachments," Lipson said. "Giant attachments can clog up ane-mail system or can even be rejected if they exceed a system's limits." Many young technology companies turn to venture capital funding to accelerate their growth. But Lipson, who owns a majority of ShareFile, isn't eager to go that route.

"We have a lot of venture capitalists calling us lately, especially with our Inc. 500 ranking," he said. "But we have been pretty resistant to it thus far because ... we are really committed to growing responsibly.

"We are profitable and doing well now. We definitely would need to be convinced why it makes sense. We don't want to raise venture capital just for the sake of raising money."

david.ranii@newsobserver.com or 919-829-4877

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