SM: A lot of people from Harvard Business School came to Silicon Valley and created a lot of problems during the gold rush years.
ZR: There was a program we started in 2001 called WestTrack, where we are bringing in students to look at companies. The first year we did it was in 2001, and we had 7 people come here. A few years later there were 700. There were a lot of gold diggers. People were doing really crazy, stupid things at the time. I felt it was important to also show you could do software the old fashioned way with strong technical infrastructure and a strong business model. Longevity could be a good thing; you could build it to last versus building it to sell. I like the vision of creating impact for the long run.
The other thing that helped was that there was a group of us who really worked together for a long time and we really wanted to continue to work together. There was that element of social network. It is great to do big things with people you respect and appreciate.
SM: What about the business idea? Where did that come from?
ZR: In the beginning, we did not have an idea. We knew we wanted to have a company and we wanted to work together. In the beginning it was a little bit of a think tank because we had to figure that out. We looked at a lot of different things, and reviewed a lot of opportunities. We had a very good network.
SM: Can you talk about that exploratory process and how you arrived at the idea?
ZR: It is like an incubator but you have to leverage the results. It is like you have to incubate yourself. It was a combination of generating ideas, listening to ideas, and a lot of brainstorming sessions. It was about developing prototypes from a technical point of view to see what is working and what is not. Over time we honed in on the idea of how you develop the next great software and how you develop the next great platform and the next great applications.
SM: What is the value proposition of Model N?
ZR: For the last 6 years we were focusing on a business problem we call revenue management. If you think about the focus of enterprises over the last 25 years, companies had a single focus which was to cut costs, and to become lean. Companies did this via business process engineering and automation and implementation of packaged software. They spent very little time thinking about how they manage their revenues and because of this most of them manage their revenues in a spreadsheet or in a word document or some time on home grown statements.