Bootstrapping a Virtualization Services Company: Chris Grandi, CEO of Abacus Group (Part 5)

Sramana Mitra: What is it about the hedge fund space in terms of work flows or virtualization? What specifically is different in that space versus other verticals?

Chris Grandi: There are really two things that make the hedge fund space different. One is the level of service. Because of what hedge fund managers do and how active they trade, everything has to work all the time. We all know that in technology, that’s not necessarily feasible, but the service level demand of giving them the best technology and the best service around that technology is higher than in any other industry I’ve ever been a part of. Correspondingly, because they’re hedge funds, their economic model is great. Their willingness to pay is higher. From the standpoint of just service levels, it’s very unique to hedge funds. If trading systems go down for 20 seconds, they could lose millions of dollars. You really have to prioritize building not only enterprise class technology, but also the various other redundancies. >>>

Bootstrapping a Virtualization Services Company: Chris Grandi, CEO of Abacus Group (Part 4)

Sramana Mitra: What was going to be the new company? What did you find that warrants doing another company?

Chris Grandi: This is one thing that I always tell the entrepreneurs I speak to. You always hear about entrepreneurs who start a company when they’re super young and don’t have a lot of experience, and they’re successful. That happens but ultimately, I’ve always believed that if you do something long enough, you get smart in it and get domain experience. Your risk of success is much greater.

I saw a better technical solution to the previous company. I believed that the company who does this 10 years from now is going to be bigger than any of the companies in the space. >>>

Building an AI-Driven Sales Optimization Company: Vincent Yang, CEO of EverString (Part 3)

Sramana Mitra: What year did you leave Summit to do this?

Vincent Yang: I left Summit in 2012. I didn’t start the company back then. I actually went to Stanford Business School. I already had the idea. We raised some angel money. It was in Stanford where I started the company. We hired a bunch of Stanford Ph.D.’s in the neuroscience team to help us write very sophisticated algorithms. We hired a natural language processing expert to analyze companies. That was the turning point from having the idea to making things happen.

Sramana Mitra: That was in 2014?

Vincent Yang: We started in late 2012.

Sramana Mitra: What was the premise on which you raised the angel financing? What was the business that you told your investors you were going to build? >>>

Taking On The Big Guys: Chrome River Co-Founder and COO Dave Terry (Part 7)

Dave Terry: Our competitors were historically Concur and the big ERP players who have their own shallow apps and then some of the older generation products. While they aren’t out there actively selling, they are supporting their own customers and attempting upgrades. In that market, the older vendors are beginning to be dismissed by most of the market. IBM, even in the last summer, decided to sunset their product. They’ve formally come out with an announcement. All of those customers are rapidly making a change. We’ve been very fortunate to convert a number of very large IBM customers. >>>

Taking On The Big Guys: Chrome River Co-Founder and COO Dave Terry (Part 6)

Sramana Mitra: At the end of 2013, you put in this $17 million. At this point, you have about $20 million of external capital in the company.

Dave Terry: That’s exactly right. Then we put that to work in the exact same manner. It was really proportional. We now have even more international sales. We are setting up more of a presence in London. We’ve had customers that were international businesses but they were headquartered in the US with 60 to 70 offices around the world. We were now starting to get into accounts that are headquartered in London, Canada, or Australia. >>>

Taking On The Big Guys: Chrome River Co-Founder and COO Dave Terry (Part 5)

Dave Terry: The company had been growing at a really nice growth rate. I think at that point we were in the Inc. 500 list two or three years in a row. We were really funding things out of profits but we had a few investors calling us constantly. We thought that we can keep growing in the self-funded mode, but maybe we should bring in some additional capital. In May of 2012, we decided to take our first round of outside investment. We took $3 million.

Sramana Mitra: What was the revenue at that point?

Dave Terry: We probably shouldn’t say.

Sramana Mitra: If you’re on Inc. 500, that information must have been public.

Dave Terry: Yes. I think we were probably in the order of $5 million to $7 million recurring. >>>

Taking On The Big Guys: Chrome River Co-Founder and COO Dave Terry (Part 3)

Sramana Mitra: Given that was your analysis of the market, how did you get the venture off the ground? Did you raise money? Did you self-finance?

Dave Terry: It was just Alan and me. Our prior organization was an all licensed in-house model. We knew we wanted to build this entire organization as a SaaS infrastructure. We went out and got a very talented CTO who had experience in working with large, high-transaction volume SaaS operations.

Sramana Mitra: How did you get that person? >>>

Taking On The Big Guys: Chrome River Co-Founder and COO Dave Terry (Part 2)

Sramana Mitra: Tell me more about what were the circumstances of starting this new company.

Dave Terry: We had a large ERP system for these large law firms. ChromeRiver does expense reporting. We automate the labor-intensive and error-prone workflow process of expense reporting and supplier invoice management. While I was still at Elite, some of our largest customers came to us and said they wanted a robust expense reporting solution. We, just like all ERP systems, had a very shallow module for expense reporting. You could put in your expenses and it routed to someone for approval. Then, it was off for payment. This was 10 years ago.

There were a number of systems that were starting to evolve. Even with all of our robust resources, we decided to partner with another app at that time. We partnered with Extensity. Our main competitor in the ERP space for these large professional services went out and partnered with another company. In the ensuing years, each of those solutions were leapfrogged by another company called Concur. >>>