SM: What came after Brightwork /McAfee?
GG: I ‘retired’ to Bozeman, Montana in 1995. I used to vacation in Montana when I was a kid. I did some backpacking trips there. I decided to retire there because I thought it would be a good place to raise my family. We ended up buying a house outside of Bozeman with a good amount of land. It was a lot of fun at first with all of the camping and fishing, but it just wasn’t enough. I didn’t want my tombstone to be dedicated to fishing! I had the talent for starting companies, and I felt that it was unethical for me to waste that talent. I decided to create 2,000 high-paying high-tech jobs in town. I launched an incubator and started mentoring local entrepreneurs. Eventually I decided I really needed to start another venture, which was RightNow. That company has about 700 employees now, so it is almost halfway to the goal of 2,000.
SM: What is the story with RightNow?
GG: We are a SaaS company – our applications are delivered on a hosted basis. We have had eight straight years of revenue growth and a successful IPO. I think it is a good success story.
SM: Can you walk me through the founding and startup phase?
GG: I started RightNow in an extra bedroom in my house in 1998 with $50,000 cash. I had a crazy idea that the Internet was going to change how companies communicated with their customers. Consumers used to communicate about products with retailers, but when the Internet came along they started going directly to the companies. Dealing with this increase in direct consumer communication was going to increase costs for companies. I wanted to see if there was a business I could create to solve that problem.
SM: Can you tell us more about the boostrapping elements of RightNow?
GG: Confucius said you are never in a position to learn until you are totally confused. When I make presentations I tell people there is a process of immersion that is required, and that is where I started. Immersion is done by making a lot of phone calls, so I started by calling companies and asking if the Internet was changing the way they dealt with their customers. What I heard, and I heard it over and over again, was that they were having a hard time dealing with all the emails and inquiries they were getting because the distribution channels where collapsing.
When I asked companies how they were going to handle it, the answer was that they were going to hire more people. That is why I recognized the opportunity. I saw the Internet as the means to help people get immediate access to information. This was just another case of that needing to happen. I came up with the idea of putting dynamic questions on a website which allowed customers to help themselves. It did not require any special software. I wrote down a couple of ideas that I thought companies would be interested in buying and started making calls. I asked “if we had a product that allowed us to put questions and answers on your website, and this product would let all the emails go away, would you buy it?”
Now here is a good lesson in bootstrapping. I did all of this before I had a product. When I asked if they would buy it, they said no. Better to find that out early on! I then asked companies why they said no, wrote their answers down, and moved on to the next phone call. This was an iterative process that took about 400 phone calls to complete, but when I was done I was able to hone in on an initial product. In just one month, which is how long it took me to make those 400 phone calls, I knew exactly what customers would buy. That is when I went and built the initial product which took just 45 days because I did not have to build a huge application, just the pieces that I knew customers wanted.
Our first customer was PictureTel, followed by Time Warner. They paid us almost nothing – I think it was $250 a month, which was $3,000 a year. It did not matter to me. At that point you just have to get the cash started somehow.