SM: 1998 you went public with $6M a quarter revenue. What happened after that? SS: The company did well in the public market for a period of time. One of the major changes for us was in April 2000, before the bubble burst.
A true story, which gives you some context about us. I was headed out on a much delayed honeymoon. I had a chance during the flight to read all of our management reports. When you step back you get a chance to see where the business is going. We had acquired into some businesses that we were not executing very well on, things like HR and Procurement.
At that point you can choose to address those issues or you can choose to ignore them. As I went through this, I had a chance to see where we wanted to take the business. I saw we were excelling in the expense management side, we were not doing well in the Procurement or the HR side, and even on the expense side there was limited future on the growth of the licensed software model.
As I thought about it for a few weeks I came back and I pulled the team together. I told them that we owed it to the shareholders to build something that held great value for the long-term. Even if it means we have to go through some pain in the short term. We charted out a business plan that said we would have to move to an on-demand business model. Keep in mind, that back then the idea of an on-demand model did not exist in the tech industry. The concepts and the parallels were there in places like payroll processing, but not in software.
We charted out a path, we made the changes to the business model and the business planning process, we shared our desire to change with our investors and obviously caused a very negative change to our stock at the time.
But I knew, it had to be done, and we did it.
SM: Well, Wall Street is very short term focused. They don’t have the same instincts as the operators when you have to make major changes in the business due to changing market forces.