True to the 1M/1M mantra, here is yet another story of a high-growth SaaS company that was bootstrapped first, and then has gone on to raise $22 million.
Sramana Mitra: Let’s start at the very beginning of your personal story. Where are you from? Where were you born, raised, and in what kind of background?
Robert Moore: I was born in Annapolis, Maryland but actually grew up and spent the majority of my childhood in a town called Glassboro, New Jersey, which is in southern New Jersey. My journey really begins in high school where I started my first business and really fell in love with entrepreneurship. Everything grew out of that.
Sramana Mitra: Did you go to college or did you start your business right out of high school?
Robert Moore: I went on to college to Princeton University. I studied in the engineering school in a major called Operations Research and Financial Engineering. The general idea is that it combines the disciplines of Computer Science, Statistics, and Economics under one hood. That allows for graduates to do a really effective job of working in a quantitative capacity by leveraging computer science. A lot of my classmates went on to work at hedge funds.
After I graduated, I decided to take a slightly different path and went to work at a venture capital firm in New York in Insight Venture Partners. Insight is a great firm. They invest mainly in software and software-enabled businesses. My job there, by and large, was to find interesting investments for the firm and then help vet them and make sure that they were really worthy of investment of acquisition.
Sramana Mitra: I’m very familiar with Insight. What timeframe are we talking?
Robert Moore: I was there from the summer of 2005 until the Fall of 2008.
Sramana Mitra: What did you do after you left Insight?
Robert Moore: After Insight was when I founded RJMetrics, which is the company that I am building to this day. My co-founder and I started in Insight on the same day.
Sramana Mitra: Both of you were Associates at Insight. Is that how you met?
Robert Moore: That’s right. The title there was Analyst, which is one step below Associate.
Sramana Mitra: What did you observe about the market in 2008 that led to the founding of RJMetrics? What was going to be the premise of your RJMetrics journey?
Robert Moore: There was one thing that I saw very consistently while working at Insight. That was awesome companies. Insight, as a top-tier investor, get to see what’s going on.
Sramana Mitra: Well, they’re late-stage investors. Everything they see is of a certain maturity. They don’t even had to do the early stage valuation.
Robert Moore: That’s right. They really get in after there is product–market fit demonstration. These are businesses that have not only the potential to be big, but they’re already big. They have some significant equity value. They have millions of millions of dollars in revenue. We noticed this trend in all these companies that we were talking to. Despite the fact that they were run by brilliant people and could pretty much hire whoever they wanted, case after case, we saw that the pace at which they were acquiring new data was always faster than the pace at which they could process it.
There was a gap there. It was due to a number of macro factors. The advent of Software-as-a-Service as a technology platform made it much easier for software vendors to capture data about what was going on inside their products that they offered. Retailers had much more insights into repeat customer activity. That just combined with the fact that cheap storage was increasingly available, and led to these mountains and mountains of data being out there.
It was hard for companies to not just process the data, but adapt their strategy as rapidly as the profile of the data was changing. We saw an opportunity to bridge that gap through software products. I did work on due diligence. We got our hands really dirty on due diligence on a lot of these deals. If you think about the due diligence process, if you’re doing data analysis you got to get your hands on the raw data. That might come from multiple sources. It has to get consolidated. Then you need data modelling on top of that. You have to understand what query is going to give me the real revenue numbers that excludes the returns and considers all the other numbers that might max the financial reporting.
Then the next day, the data changes and you have to do all of that again. Once you get to the point where you can run the query, you still have to visualise it. If you think about that process, 90% of that is plumbing and scaffolding—repeatable, scalable processes but are still done by human beings. The idea for RJMetrics was to build a tool for analysts to make their job far less redundant by getting that scaffolding and plumbing out of the way.