Letting Customers Design The Product: Cornerstone OnDemand CEO Adam Miller (Part 5)

Sramana: Essentially, your angel financing allowed you to build your product and develop your pipeline?

Adam Miller: Exactly. We were also raising incremental money throughout in very small chunks. I was perpetually raising money. I was doing that in parallel with everything else for years.

Sramana: What money did you raise? How did your financing pan out?

Adam Miller: I went to anyone who would talk to me about potentially putting money into the company. For many years we felt that if we just had an additional million dollars, we would be set. I remember feeling that way for seven years. I was constantly out trying to raise that extra million dollars. Over the years we did raise a couple of million dollars but always in very small quantities.

Sramana: Was all of your money from angel investors?

Adam Miller: We had only one institutional investor; all other investors were angels. ASI Solutions was a company that was introduced to me by one of our angels. They were acquired by AEON and we received a follow-on investment from AEON.

Sramana: How much money did you raise in total?

Adam Miller: We raised around $7 million, all from angels and one institutional investor.

Sramana: Once you had a product that was designed for the New York financial community and talent management, as well as a pipeline, what came next?

Adam Miller: In August of 2001 we had a big pipeline and we were ready to go. Then September 11th happened. We thought the business was doomed. We did not have enough capital, we had no signed contracts, and our entire pipeline was financial services firms in New York.

On September 12 we had 28 people. Everybody told me to slash the company, to try and survive long enough to raise money later. I remember that was a very long week for many reasons. On September 15, after thinking about it long and hard, I decided to start hiring. We started hiring people on September 15, and we ended up closing three of the deals we were working on. Had we cut the company we never would have been able to service those accounts.

Sramana: What kind of conversations did you have with those three accounts during that time?

Adam Miller: We had proven ourselves. We had very long sales cycles with these companies. We proved ourselves over that time as being great at listening and being very flexible. Even though we were smaller we proved we were more visionary than anyone else. We built what the market was asking for. Part of that was product management being based on the clients and not our own opinions.

We still follow that same methodology today. We still focus on clients driving our development. When I started the company we had web developers, and we were going to build something for everyone. When we shifted to the large enterprises we still have the same web developers. We built our product for the Internet. Today they call it software as a service. We have been SaaS since day one.

Sramana: How big were the deals that you closed in 2001?

Adam Miller: We closed Smith Barney, AEON, and Washington Mutual. Ironically we have outlived two of the three companies. They were all big ticket deals, over $2 million in annual value for each. Those contracts are how we financed the company afterward.

This segment is part 5 in the series : Letting Customers Design The Product: Cornerstone OnDemand CEO Adam Miller
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