Sramana: Which firm did you join as an EIR?
Nick Mehta: I joined Trinity Ventures at the end of 2007. That was great because it got me to step away from the singular vision of running a large business unit and opened my eyes to the entire world again. I was meeting with young entrepreneurs and was able to explore my options. I thought about starting my own company, joining another company as an executive, or partnering with someone else.
I remember meeting Drew Houston when it was just him and his cofounder in a little conference room. I met several other individuals who went on to be incredibly successful. In the process I ended up looking at a number of different opportunities to join companies and run them. One of the companies was LiveOffice, which was funded by Summit Partners. I ended up joining them as the CEO in May 2008.
Sramana: That’s interesting. I typically see EIRs spin out their own companies but you ended up taking a different route and joining a portfolio company.
Nick Mehta: It is interesting because that happens a lot. The probabilities that you will find up with a company in the VC portfolio is not 100%.
Sramana: Trinity is a very good firm. I have some close friends there. What were the compelling aspects that made you take the position with LiveOffice?
Nick Mehta: Summit Partners is a growth equity firm. They invest in companies that are already profitable and starting to scale. LiveOffice was interesting because their core business was hosting email. When Google and Microsoft got into that business, the email hosting business went away. LiveOffice needed to pivot its assets into something new.
We sold the old businesses and created a whole new company from scratch. Our business morphed into using the cloud to help businesses store and search data for legal purposes. It is called e-discovery. We became the leader in that category. We grew that company to $25 million in revenue. I ran that company for four years and had a lot of fun. That was my first time running a cloud-based business, and I will probably stick with those types of businesses for the rest of my career now.
We sold the company in January 2012 when we sold the company to Symantec. They bought us for $150 million, which was a great exit. It was a perfect fit for what we did and that was the right channel for scaling the business to the next level.
Sramana: How did Gainsight come into your life?
Nick Mehta: In a way it found me. While I was at LiveOffice I learned a lot of new things. I learned that when you have subscription pricing models, you can’t just focus on getting new customers. All of the post-sale activity has traditionally been a cost center. If you are in a cloud or SaaS company, you have to keep your customers every year. At LiveOffice we had a good renewal rate, but I knew it could be better. We invested a lot of time and money to analyze which customers were really using our service and which were at a high risk of leaving.
After I left LiveOffice, I became an EIR at Accel Partners and then Battery Ventures called me. They had just invested in a company that was building technology to help SaaS companies reduce churn. It was the exact problem I had at my last company. When I met the founder, it was obvious that we aligned culturally and held the same values.