Ravi Mohan: The last company is a company called Analpan. Anaplan is really taking Excel and putting it in the cloud so businesses can plan better and really model any type of business problem. How do I do my financial plans for the year? How do I do my workforce plans for the year? They’ve been growing very well. What’s common in all these three cases?
In all three cases, they had various degrees of product-market fit. In Apptio’s case, they had talked to 15 enterprises and all these enterprises had wanted the solution. We could see a clear reason why the CIO needed this solution. The CIO is getting pressurized that IT costs were increasing. They needed to justify that.
There was another class of CIOs that wanted to transform IT from managing hardware to providing services to their customers and enable their customers to understand what the cost of the services were and help the business make better decisions. We could see the logic in that. We had the logic validated. With Zuora, we could see the rise of subscription services, but frankly, I don’t think we saw it as getting as big as it is. At the time we invested, they had 20 to 25 customers.
Hyperion was building a financial planning system. When I was in India, I built a modeling system similar to Anaplan. I knew the benefits of being able to create multiple plans and have a platform that’s sophisticated. The problem was that the technology wasn’t available to truly deliver that flexibility and scale.
When we invested in 2010, we could see that the compute was big enough and the technology is now available to deliver very flexible planning solutions. The founders were building the same solution for the second or third time. They knew what they were doing. They had an initial set of customers who loved the product. In that case, we didn’t need to validate the need as much.
Sramana Mitra: Very interesting. You just heard the investor perspective about these three companies. We have all three case studies. You can hear the entrepreneur’s perspective there as well. I would strongly encourage you to check out those case studies to get a feel for what their entrepreneur journeys have been like. All three are unicorn companies and very successful.
I would re-emphasize for the audience what we just heard from Ravi. You hear this from us all the time. If you can get to successful product-market fit and the repeatability of the business, that is what investors are looking for. That is what Ravi and Shasta is looking for.
Ravi Mohan: Absolutely. It’s a difficult journey finding product-market fit. It’s something that can be incredibly rewarding and frustrating.
Sramana Mitra: Thank you for sharing those perspectives.