Sramana: What is the background of the founder of Gainsight?
Nick Mehta: He was running another SaaS company called Host Analytics, a SaaS-based corporate performance management product. It is a sizable business with a lot of customers. He brought in a CEO and became the chief customer officer of Host Analytics. His job was to ensure customers continually renewed their subscriptions and bought new services. He realized there were a lot of technologies to get customers to purchase a product, but there was no technology to help him understand his existing customers in terms of what they were using, how satisfied they were, and whether there was a risk level in their leaving.
He founded Gainsight to solve that problem. He wanted to build a technology that was the equivalent of what marketing and sales had that could be used for customer retention. That was the original genesis. He built this as a side project while he was at Host Analytics, and then he bootstrapped the company and ran it very lean for a couple of years.
Battery Ventures heard about Gainsight from some of their portfolio companies. Battery reached out to Gainsight and offered to invest. They struck a deal in February of this year. Battery Ventures introduced me to Gainsight. The first round was $6 million, and a month ago we did a $20 million Series B round led by Bain Capital Ventures.
Sramana: How much traction did Gainsight have when you joined?
Nick Mehta: We had a great product and a small handful of customers. We had 35 customers with some really good brand names, such as Marketo and Informatica. Over the last six months we have launched the company from a marketing standpoint. We were originally called JBara software, and we rebranded as Gainsight in April. When I joined we had a dozen people, almost all of them in engineering. Now we have 65 people. We have built our teams in marketing and sales. We just opened our first office.
Sramana: How did you build the scaling infrastructure for Gainsight? What decisions did you make to enable a successful build-out?
Nick Mehta: My favorite aspect of being a CEO is creating an environment that makes people love their jobs. The first thing we do to scale is define our values and culture. We have been fortunate enough to really grow that. We have three values. The first is the Golden Rule [do unto others as you would have them do unto you]. The second is Success for All. We are trying to build a business where everyone wins. We want to make sure our customers, employees and shareholders all win. Our third value is Childlike Joy. How can we make work not have to be a thing you do be able to have a fun part of your life? We look to find ways to make work and home life become seamless. Our culture has been a key to our success so far.
The next step was to build the team. We were fortunate to bring in a great leader for our marketing team. He was someone I worked with at LiveOffice. I already had my chief customer officers, and Jim Eberlin who founded the company works as the president. Our head of product management is also someone I have worked with in the past.
When it comes to scaling sales and marketing, I think there are several different ways to do it. It depends on the marketing you are in as well as the profile of the customer you are going after. The deal size is important to consider. For us there were a few unique facts. This was a brand new category. We had to go out and evangelize why customers should use us. We decided to go big on thought leadership marketing right up front. We ran a conference about customer success which was a hot topic. We made some heavy bets on content marketing. We have to not only teach people about our technology, but about the category itself.