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Your Personal Assistant: Rearden Commerce CEO Patrick Grady (Part 6)

Posted on Monday, May 25th 2009

SM: At that point, who was helping you to get the company established?

PG: Around that time I did start to create my technology advisory team. There is a saying that you can see further if you stand on the shoulders of giants. We have had so much help building this stack. I thought that this stack would be built on XML so I got John Bosak, who is widely viewed as the father of XML at Sun. Setting aside the business model, Bob Glushko was the first guy to introduce XML in a transactional web world. Charlie Kleiser, who was the head of Ariba at the time, was following the introduction of XML in transactional environments. We got Larry Cable, who is the chief Java architect. Greg Papadopoulos gave me access to a bunch of other guys in his organization and has been a longstanding supporter. I pulled in every advisor I could, and to their credit they hung out with me for a couple of months.

SM: Who was on your actual team?

PG: It was just me at the time. I spent six months writing the business plan, incorporated in November of 1999 and hired my first employee in March of 2000.

SM: Were you financing this yourself?

PG: Initially it was me, and then I brought in a couple million in angel funds. I tell people that we have raised $200 million over 10 years, which sounds like a lot. I raised $2 million just before the bubble burst, and just as we were ramping up R&D we were living payroll to payroll. I put in $3 million of my own money along with the angels and Charter Ventures.

We kept R&D going until the nuclear winter subsided and the Valley started turning green again. Foundation Capital came in and did an expansion. We brought in Fred Harmon and Oak. Vinod Khosla is also an investor and someone I have known forever.

We then brought in partners to ensure we were strategically aligned. American Express and JPMorgan Chase are both very significant investors. It came from the bank itself because we executed a commercial agreement last year under which Chase will market our service under their brand to all of their consumer credit card customers.

SM: Chase is good, American Express is perfect.

PG: They are perfect. First we had to prove to American Express that this is real. We signed up a dozen customers ranging from large enterprises like GlaxoSmithKlein, which has 63,000 employees who use our product every day, to smaller deals and mid-market deals. We wanted to be representative of different market segment opportunities.

SM: You had to show American Express that you could scale?

PG: To teach them how to fish. We executed an agreement with them in 2006 and they started selling this product in earnest in Q1 of 2007. In the first eight quarters of selling, American Express has closed over 2,000 corporations on this product.

SM: The American Express sales force is selling this?

PG: Yes, and it’s a sales force of over 500.

SM: What is the distribution of the 2,000 corporations?

PG: The number is very significant. In terms of users it is inverted because signing one large enterprise account is a 50,000 seat deal.

SM: Have you been able to close the large corporations as well?

PG: Some of the biggest in the world. We are about to close a 200,000 seat deal. We are also down to small deals. We have five people in a garage in the Valley. It is fun because now I have friends at companies who are now using the product. I am now the help desk.

In terms of American Express, as they go so goes the whole travel industry. We also have 55,000 other leading travel agencies distributing the product. They are mostly regional, because not every business wants someone as large as American Express handling their travel.

This segment is part 6 in the series : Your Personal Assistant: Rearden Commerce CEO Patrick Grady
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