How do you create a visual identity for your business when a sense of style isn’t in your DNA? This was the challenge faced by the founders of RJMetrics, who set out to disrupt an industry where appearance is everything. CEO and co-founder Bob Moore will step through the evolution of the RJMetrics brand from attic startup to SaaS powerhouse. The lessons learned along the way go far deeper than just pixels on a screen.
The 12th Business of Software Conference USA, October 1st-3rd 2018. Boston, MA.
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Robert J Moore, RJ Metrics: I am back. I did a parody of Glengarry Glen Ross last year and basically my responsibility was to yell at the audience for seven and a half minutes, so I’m going to try not to keep that up here.
Really quick, before we begin just a disclaimer of sorts. I am an engineer by training, I’m a big fan of scientists and I hope that all of you really enjoyed lunch. One of the things that happens to people during lunch, is that you eat food and when you eat food it releases blood sugar and blood sugar means that there’s a release of insulin, which leads to uptakes in serotonin and melatonin, which means that you get drowsy. That is a direct quote from science by the way, so it’s absolutely correct.
I’m also a big fan of the study of willpower depletion. I don’t know if too many of you have heard about this. It’s definitely something worth reading up on, but the general idea behind willpower depletion is that, the longer you get away from having slept or rested or eaten, the lower the quality of your decisions over time, and in a way you kind of almost get dumber as time goes by. And if you look at — this is a study done at Princeton, there’s this period in time immediately after lunch where people sustain the steepest drop off in their quality to make — their ability to make high quality decisions.
So, all this to say, if I’m speaking up here and you find yourself getting drowsy, or maybe you get this distinct impression that with every minute you listen to me talk, you’re getting dumber and dumber. This is science okay. This is not anything ever to do with the talk.
Okay, quick, quick show of hands everybody. Who in here would consider themselves to be an engineer or someone with some kind of like, technical ability? Right, pretty much the conference right. So who in here would consider them to be a really world-class designer, somebody with design talent? That’s actually high. Yeah, so that’s why I’m here today because I am one of you. I am somebody that has done a lot of engineering in my career and very little design and I found myself in a situation where, I kind of needed to find a way to make design work for my business in order for it to be successful.
Just really quickly on my business. The company’s called RJ Metrics. We’re a company that’s on a mission to inspire end empower data driven people and we do that by building software that helps some of my businesses get all their data in one spot and then provides tools that sit on top of that centralised data warehouse to conduct analysis and find more valuable customers etc. And the one thing that we all have in common at the company is that we love data. Everybody at the business is there because of their passion relating to data. And I know that there are companies of all different sizes in the crowd today but I think the one common thread among all those companies is that they started out pretty much the same; with one or two, or maybe a small group of people that had some passion and a big idea.
And when you’re lucky or maybe you’re good or maybe a little combination of both, and you’re in that situation and things start working, there is this unavoidable consequence which is that you grow and it — when you ask the question what happens when you grow as a company, the answer that I have found time and time again is that everything breaks. Like, nothing will consistently work at each stage of size in your company and as we think about all the different things that have broken over the course of building RJ Metrics — this talk by the way is going to be super embarrassing. I’m just kind of laying out all these terrible things that have happened to us.
Communication has broken.
We started out with a daily stand-up meeting where everybody stands in a circle. Probably looks familiar to everybody. We were on Yammer for a little while. We’re using Slack now. That’s a photo of General Stanley McCrystal who, rolled out an O&I operation and intelligence call among the US forces in Afghanistan when he took over there. One of our directors of sales is a big fan of his and has rolled out a daily O&I call for us. We are trying a lot of things to make communication work well, but as we grow as a team it just keeps requiring new parameters in order to be successful.
We started out as a very, very flat organisation. Took a lot of pride in that, but quickly learned over time that actually it allowed people to be more effective when their ability to contribute, and their desire to contribute was on an individual basis, and having people actually take a leadership role, which is a lot about what my talk was last year, was actually something that would drive business forward.
Recruiting definitely was something that broke along the way. Compensation definitely broke.
As I lose more and more of my hair my fear of becoming the pointy-haired boss is just becoming more and more a reality and I think like, this was totally us in the early days of growing the business. We were a broke, boot-strapped start-up and we didn’t pay people a lot of money and as we got to the point where you’re a five person company you can get away with that. When you’re a 50 person company, people start to raise an eyebrow and say why didn’t I join the 50 person company down the street that pays twice as much.
Workflows, office space and not just running out of room but just the way you handle noise. I never knew there were so many, so many kinds of noise. There’s white noise and brown noise, there’s also pink noise and violet noise. There are all kinds of different ways to deal with suddenly having a sales team that talks all day in a room full of what was traditionally engineers. Having to deal with that but the thing that I want to talk about today with all of you, is a company’s identity.
Does a company’s identity actually break over the course of its life?
And there’s this common concept, that I probably hear this the most from venture capitalists, but I hear from founders as well, which is this idea of the company’s DNA and the founder’s DNA and I, you know, I very commonly hear, oh that company is going to be amazing at sales because they’ve got sales DNA or they’ve got product DNA. And to me, I think that this is a very flawed metaphor because, unless any of us are involved in some kind of terrible nuclear accident or become a superhero of some kind, our personal DNA is not going to mutate over the course of our lifetimes, but I think that in the case of a company, DNA mutations are actually something that does happen and that are necessary over the course of, of the life of a business. And the story that I’m going to tell you today is, it’s an, it’s n=1. It’s the story of RJ Metrics and our visual identity over time, but what I’m hoping is that as you hear this, you will be able to think about your own company and some of the things that you’ve made investments, or not made investments in, in the course of evolving your own identity, particularly from a visual perspective.
So, this was myself and my co-founder back in 2008 when we started the company in my attic and there was one common thread about what was in our company DNA in that point in time, and that was frugality. We had no money and we were not particularly interested in raising money. I say that now. If we had wanted to raise money I don’t think we could have, so it was kind of a moot point, but we had these amazing experiences in the early days where we made, we made investments of our time, that were just overwhelmingly disproportionate to the value that we got out, because we weren’t valuing it enough.
I remember distinctly, one argument with my co-founder. We needed a paperclip, a single paperclip, and we had to go and buy some from Staples and we probably spent 20 minutes debating whether to get the box of 50 paperclips for a dollar or 500 for two dollars. He was on the side of, okay we get great economies of scale, obviously the marginal cost to paperclip of 500 is way better. I was saying, but you’ve got to consider cost of capital here and you’ve got to understand that the deployment of these paperclips is going to stretch out over so much time. I won that argument by the way and we still have not used 51 paperclips.
The other thing that I think we did that was a huge mistake in the early days around being frugal was, when we had our first few employees, Jake, my co-founder and I were not coffee drinkers, but people wanted coffee and we said okay, just bring your own coffee, we’re not going to supply company coffee. Just as a tip and this is a lesson that I have learned in a really big way. If your employees are volunteering to take a drug that makes them work harder, just buy the drug and supply it in the office. We are way better off with the coffee.
And in the early days, so we started out in my attic in southern New Jersey and we got to a point where the attic wasn’t going to fit us anymore and I, we were looking at our options and this is the Delaware River in the centre of this graphic here. North of the Delaware is the beautiful city of Philadelphia. South of the Delaware is the city of Camden. If you are familiar with Camden, there are a lot of great historical landmarks there. There’s an awesome state prison just north of the bridge. There’s a great county lockup right next to the train station which is great and we went out looking for office space, we didn’t see those. What we saw was, hey 400 bucks a month and it’s got air-conditioning, and we signed up and moved the company to Camden, which for us was awesome. And I think Camden’s done a lot to invest and it’s downtown and for a period in time was good for the business, but it was in line with that frugality in our DNA. And as we will see soon that quickly had to evolve. So that’s what was in our DNA.
Then there’s this other question, what was not in our DNA?
I was fortunate to have the opportunity to speak at a TEDxPhilly back around 2010. If you need a little magnification on this, there’s a tie that’s about going down to my knees. These pants are like; I think they had sat in my dad’s closet for a couple of years before having worn them. Just, style, was not in our company DNA in any really meaningful way.
And this was the last website that I had designed prior to starting RJ Metrics. This was a college project. Ask me about What’s My Image later, I’ll explain, but this was the height of, of my design accomplishments in my life. So, when we do and I want to talk about this in three acts, kind of the story of the RJ Metric’s logo and the question is what do you do if style is not in your DNA ? Right so, there’s just like nothing that you have natively and the answer is you buy it.
You spend money on style and for us a, a broke couple of co-founders, we didn’t really have money to buy a professional designer or hire a full-time designer. So, instead we outsourced it and this is something that a lot of people do. You can go to a number of really awesome services now, 99designs a really good one, we used Elance and I, I, thanks to the glorious tool Dropbox, I have actually been able to dig up all the original iterations of the RJ Metrics logo from this very first time around.
When you go to one of these logo-design services, very commonly what they will do is, they’ll charge you a hundred bucks and for the first round of logos they’ll just drop your company name into a bunch of super generic clip art. So, hundreds of other companies have been proposed these logos and rejected them and now they’re being delivered to us.
We had some common themes here. You can see subtly like ones and zeros in the backgrounds of all these things. A couple of patterns around it, charts and there’s like a plus sign, and a percentage sign, kind of getting at the metricsy thing. We, kind of liked elements of these and you can just stare at these and go blind. The number of back-and-forth’s that we ended up doing over this logo and I just want to, let’s make this a little interactive here. I’m just going to pluck one of these out and I would love to get some feedback from the crowd on just one of these on what is wrong with this logo. This should be a fun exercise. Anybody want to, want to take a stab at does anything look good. There’s like, there’s got to be twenty things. I’m going to go for five. Let’s find five things wrong with this logo. Right, hands
Audience Member: Doesn’t scale.
Robert J Moore: Doesn’t scale. Yes, scales terribly. Yeah.
Audience Member: Yeah, blurry and boring simultaneously.
Robert J Moore: Blurry and boring simultaneously. Two points.
Audience Member: Unprintable.
Robert J Moore: Unprintable. Come on, there’s so much. Yeah.
Audience Member: Gradient.
Robert J Moore: Gradient. Excellent, excellent, excellent. The ability to display this in black and white, for example, was extremely challenging. All right, I’m going for one more. Yeah.
Audience Member: It’s like it was made in Microsoft Word.
Robert J Moore: Looks like it was made in Microsoft Word and it very well may have been for what we paid for it.
Very good. So, there are a bunch of problems with this thing. The colours are terrible. The, the, even like the letter spacing and the kerning are terrible. There’s this weird gradient effect going on and yeah, it does not scale particularly well. It doesn’t really have any unique mark associated with it. It just like doesn’t say anything, so, what did we do with this particular pro’s logo. Obviously, we chose it and made it our logo. So, this is our original website. That was my original business card.
So, we were existing in this software industry called the business intelligence industry that was as old as software for the most part. BI has been around for decades. There are BI products that were built in the late 70s, early 80s and that set the bar for design and user experience particularly low. We benefited from that. The companies that were the established leaders benefited from this effect, which was when their software got built originally a very, very small percentage of people actually had computers in the home.
So, back in the 80s you know, you were lucky if one in six of your employees happened to have a computer at home. So, if you came to work and you saw this kind of thing, then that was your expectation of what software was and that was your sense of how you experience and interact with software products. And if you were lucky enough to go home and have an experience where you interact with the computer. Like this was probably your user experience. I love this game so much.
It was not something that was really comparable to what you were doing in the workplace, but by 2008, our founding year, things were changing and changing in a really big way, because there was this trend known as the consumerisation of the enterprise that was happening. And what that meant was, when people went home from work, all of a sudden they had consumer products that were software products, typically delivered via the web that they loved. That had amazing user experience and that changed their expectations around what software could be. And this was something that was happening in real time in the market, as we were going to market and it was something that we were going to have to overcome, because we were not living in a world where we were able to deliver in the way that Mint was for people. So, we grew and we started hiring and this is the point where I would say that our DNA really started evolving.
In the meantime, speaking of office space and kind of our identity from a geographic perspective, this happened, which Camden was already great. There was some challenges related to the police funding there and it, there’s this common trope when you are building a business that, hiring engineers is the hardest thing to do. As we heard earlier, there is never an engineering team with enough engineers on it and we had a lot of trouble getting applicants for our engineering positions and we wanted to be honest about this and we said okay, it’s easy to kind of throw Camden under the bus and say maybe it’s due to Camden and you know we saw that for our software developer role we had, you know, a single digit number of people applying over a, multi-month period, but everybody has trouble hiring engineers, right?
How do we know that if we were in Philadelphia or if we were in some other location, then, that we could basically do better. So, we decided to answer the question by lying to the general public. We A/B tested our want ads and we put up a, a nearly identical ad, but just said that we were in Philadelphia and we got more than seven times as many applicants in a very short period of time. And what we learned really quickly and this is part of the DNA of evolving a bid is that, few job-hunters are as risk-seeking as the people who start a company and in a lot of ways frugality, which was such a value for us before, we were growing at a pace where we had more salary dollars that we could pay, than people we could get there and the priorities of the business evolved as a result of that.
So we moved to Philly and the interesting side-effect here was that we got an office in Philly that, we happened to move into a building where there was this cool like hardwood floor and a high ceiling and, you know it was not your traditional drop ceiling and carpet office environment. Within a month of doing this, my co-founder and I both moved out of our apartments and moved into nicer places. Not because we were making any meaningful amount of money more, we actually downsized our apartments in both cases. It was because all of a sudden, we realised that we were spending so much time at the office. Not just because we were passionate about what we were doing, but because it was just nicer, because it mattered to us and the extent to which design and aesthetics of what was around us became a priority was very, very clear. Which leads us to Act II: Hired Guns.
So, we were growing. We’re a Philadelphia company.
We got to a point, we were about a dozen or so people, but we still had no designer on staff, but the shortcomings of that logo that you saw before, it only took about two years, we managed to figure out that it was not the ideal. And we had a bunch of really cool clients at this point in time and one of them was threadless. If you have ever worn a threadless T-shirt, awesome, if you haven’t go check them out and buy some shirts there, they’re an awesome online retailer.
They had their website done by a team in Australia called X-Team and we hired X-Team to redesign our website which was in desperate need of a rebuild and we had this afterthought where we thought, hey we’re getting the website done, do you think you guys could throw in a logo along with it? And I, it will come full circle and be evident why this is a bad idea to think of your logo as the afterthought and not the leading thought when it comes to web design, but we had more the sense of who we were as a business. We had this evolving aesthetic. We had a good sense of who our customers were and what excited them. We were able to speak to all these individual attributes that we wanted and X-Team delivered a logo that we loved, that we use, which is this RJ Metrics swoosh logo. A little better, consistent font, easy to do black and white, easy to scale and it was something that we were able to roll out in this, I swear this was a cool website in like 2011. It is, it doesn’t quite hold up with time, but, anyway we got into this place where we had all kinds of collateral and it was at this moment in time where we were building technology that was pushing us forward in a big way and we got into this situation where, we started getting a lot of attention. And part of the attention was, we were waving the flag of being a boot-strapped company in a really big way and we were growing, but the question on the minds of our executive team and of the investors who started calling was, could you be growing faster?
And it’s at this point in time when we started thinking about what it actually meant to have a capital-efficient business when it comes to a business model like ours and this idea of this thing called the j-curve which some of you may be familiar with, but this is basically a reflection of the unit economics that we would have with any individual customer over time. So, if you look at this curve, when we very first start interacting with a customer — we’re a, we’re a company with a free trial by the way, so there is marketing dollars being spent to bring people in the door.
We had built a small sales team at that point in time, so, when a sale closed there was some kind of sales compensation that had to happen in order to pay the sales rep. We were hosting these people during the free trial. Burn, burn, burn, burn, burn on an individual client basis over time until that curve bottoms out there, and you actually start getting money back in the door, because they are paying you and we’re a recurring revenue business and over time as you get paid and you have decent margins on your software, you break back into profitability on that customer and then everything else beyond that is falling to the bottom line. This is a beautiful thing, but the question is, what are the key values on these axes and there are two that matter in a really big way.
One of them is where that curve bottoms out. This is the concept of CAC or the cost to acquire a customer. This is the amount of dollars that need to go out the door before you’ve actually acquired that one incremental customer, and the other is where that line intersects and gets into profitability when it comes to, to time. When your recurring revenue has actually accrued enough such that, you are able to declare success with that customer relationship.
There are a bunch of ratios that people watch from a SASS standpoint. AR over CAC is one of them and it’s basically just a reflection of how long it takes you to get paid back on something like this. And we looked at our data, we’re a data driven company and we realised that we were leaving a ton of growth on the table because we were so broke.
We were still at a point here where the recurring revenue was fueling each incremental higher, where every single dollar that was coming in the door was going out to payroll. Usually within a month or so we were running a pretty, pretty tight ship there and we decided that if we had more capital in the door, we could grow significantly faster as a business. And that’s what we decided to do and so over the course of about a two and a half year period we raised just, just over 23 million dollars from three different venture capital rounds, which is a decision that as a boot-strapped company, was one that required a whole lot of thought, but was a reflection of our values changing over time and our decision to make the biggest impact we possibly could by growing the business and getting in front of as many customers as possible.
Which sees us to Act III, which is the true evolution of our identity as a business and in a way, frugality had kind of given way to efficiency at this point. We were very low capitalised and you know the coffee machine had turned into free meals from seamless web and all of these additional perks that we could offer, were suddenly things that made economic sense and this was a very much a 180 from where we were as a business just a few years before.
We hired a designer, which is probably the most important thing that happened.
This guy by the name of Zach Kosak an amazing designer who pointed out a number of things. Not the least of which is that our logo kind of looked like the Microsoft Dynamics logo. This is like, no comment. Basically, it was time for a change and we had these things at RJ called hackathons that a lot of companies have. They’re a huge part of our company culture and they’re a point in time where for 24 hours all work at the company stops. People can go work on whatever they would like to work on. And while Zach had been screaming we need a new visual identity, we need a new visual identity, we had been making a lot of the kind of product management mistakes that we were hearing about in the last talk, around deciding to do that next incremental thing with regard to design, rather than making sure that we were making the right strategic decision for the business.
In other words, we said no to him. We were not allowing Zach to go design a new identity, a new logo. So, during the hackathon, in a 24 hour period, Zach came back and presented this concept that patterns are what we should really be thinking about when we think about identity and patterns, the things that appear everywhere in nature and they’re things that appear everywhere inside of business as well, and he brought up this idea of these platonic solids. A number of three dimensional shapes that in Plato’s time were used to represent different pieces of matter that existed out there in the world and that these are things like air and wind and fire etc., etc., and there was this one shape the dodecahedron, the twelve-sided three-dimensional object that represented the ether.
It represented those things that could not actually be held or felt, but it was the expansive knowledge that existed and the awareness of mankind and that was really what we were striving to do as a business and he came back and proposed a new logo for us, representing RJ Metrics through the dodecahedron mark. And what it would allow us to do is build out a colour palette that was much more modern and much more crisp look and give us a story that aligned really well with our mission of inspiring and empowering data driven people and being a part that ecosystem. And it had a lot of different ways in which it could be presented and we said okay Zach. We took his hackathon project and we took the hackathon project into our new logo and we rolled it out throughout all kinds of different channels.
One of those channels was Twitter and we buy a lot of Twitter ads. They convert really well for us so, one of the side-effects of buying a lot of Twitter ads and changing a logo is a ton of people see your logo really, really quickly, directly after having made that change, which is when, less than a day after having made the change, I started seeing Tweets like this one: Why is your logo a pair of Y-fronts? And, I did not know what Y-fronts were. We get a lot of replies to Tweets that I kind of ignore, so this was, September third, ’13, I kind of brushed it off. September fourth, ’13, RJ Metrics just appeared as a promoted Tweet. Their logo looks like Y-fronts. Like what is going on here. Couple of days later. Hi, is your logo supposed to look a pair of Y-fronts? This is the moment at which, we’re going to play this game ‘Risky click of the day…’.
So, you and I are going to relive this moment that I had sitting at my computer, on Google image search. I type in Y-fronts, I hit enter. No! Y-fronts are underpants. These kind of underpants to be specific. Now tens of thousands of people had seen these Tweets and we got a handful that said hey, your logo looks like Y-fronts. Not a big deal, but we noticed a common thread among all the people that were mentioning this, and that was they all came from one particular geographic region. Something about people in the UK, led them to see our logo as Y-fronts and we decided we really needed to test this.
So, there’s this really awesome tool called Google consumer surveys that you can do. It’s very inexpensive and they will inject survey questions right into Google ad boxes all over the globe, you can spread it out by geography. So, we ran a Google consumer survey. What does this object look like to you? and just showed the mark from our logo and got the answers back and lo and behold about 2.6 per cent of people, that’s about one in forty, in the UK saw underwear or Y-fronts, whereas it was 0.2 in the US and in, in pretty much everywhere else on the globe as well and it left us in this spot asking, what do we do now?
Now this was something that we had invested a lot of energy in. We had changed our website. We had changed all kinds of the branding. We had ordered new trade show displays. Do we abandon the dodecahedron? Do we hang our heads in shame? And we decided instead to raise the underpants up on the flagpole and declare victory. And I read this blog post called, Our Logo Looks Like Underpants: A Case Study in Internationalisation, and this, this blog post was maybe the most, we do a ton of content marketing. It was hands down the most successful blog post we’ve ever had.
It went to number one on Hacker News. It was on the front page of Reddit and it was a really meaningful for us, these numbers, to consumer business probably don’t look that impressive but if you’re running a b2b company, getting 50,000 unique page views over a very, very tight band of time is extremely valuable. And if you think about our sales funnel, you can think about that as 50,000 uniques, right. Even at really low quality traffic, which believe me this was, you’re still converting those at a, call it like 10 basis point. So, point one per cent of those turn into actual sales qualified lead, those conversations and for us about 20 per cent of our SQLs ended up turning into paying customers. Our ACV is about 20k a year. That’s 10 clients at 20k a year. That’s 200,000 dollars of incremental annual recurring revenue.
The market is nuts right now and if you’re growing at more than a hundred per cent a year, you can command as much as a 15 times run rate valuation multiple, which means we went and raised our VC round shortly after this, there was an additional three million dollars of equity value banked into our business because of the underpants fiasco. And not only that, I got a call from The New York Times and they said, hey, love that post, this is exactly the voice we need at The New York Times. Which I am still struggling to understand, but there are all these ripple effects, that led to a whole lot more visibility for us as well, which is super cool.
Oh, we also joined like a family of, this is apparently a thing, Watsi really good start up there. And of course Airbnb, which famously – I wanted to keep it PG13. There’s a great, there’s a Tumblr about the Airbnb logo that adds additional accessories to it that you should all check out later. Okay, so anyway, there was this evolution that happened and we found, by the way, by running another Google consumer survey, that by slightly changing the orientation of the dodecahedron and doing the two-deep projection in that way, no one saw underpants anymore. It eventually evolved into, into what you see there. The day was saved etc. and we were able to get some benefits out of it.
One side-effect though, one side lesson here, that I just want to mention is hackathons are for hacking and I think one of the big mistakes that we made was, we relentlessly in the history of our business undervalued and underprioritised design and specifically the design of our logo in a really big way. From spending absolute bottom dollar on its original rendition, from having it be an afterthought when the logo got designed by our outsourced web design team, to basically having our new designer, who had this amazing idea, be forced to do all of the work related to the logo in a 24 hour period during a hackathon.
This is fail, after fail, after fail, but the good news is that we got somewhere because over time, we evolved and we prioritised the right thing. And the epilogue here is all about this idea of having a lot of pride in what we’ve ended up building and if you look at the evolution of the logo over time, you can see the evolution of a business as well and what I would say is that identity to me ultimately boils down to be an output of culture.
Is something that gets mentioned in a lot of situations and a lot of businesses, kind of use it as a throwaway word for anything related to the people at your business or the way that your, your, your, employees stay loyal. I think about identity as being something that should be an output and not an inputted culture, and what I mean by that is that, in the early days, if we had spent all of our money on a great designer to build an amazing logo, I actually think that would have been a mistake as well, because at the point in time it was reflective of what we were as a business.
Inputs to culture are things like how people treat each other and what your core values of business are. The outputs to culture are things like perks and the way your identity evolves. There are no shortage of companies that decided that they have a morale problem and they buy a ping-pong table, or a foosball table or an arcade game and they stick it in the corner and they say, this is what’s going to save culture.
The businesses that have healthy culture, never have those things to begin with until it got to the point where their team members wanted to be competitive with each other in an office environment and demanded it. When you have that foosball table that shows up, because someone brought it in from their basement and not because you decided to buy it because it would make people more likely to stay late and work harder, that’s the moment at which these outputs really start to manifest themselves.
I showed a slide earlier with all the perks that we offer these days. Uber emerged because people were working super late and a lot of people walk home to neighbourhoods that are not that great after dark and it was something that the business required. Same thing with seamless web and food delivery. There’s a MakerBot in our printing room which has nothing to do with our business and is not a justifiable business expense. Someone who won a hackathon, took their hackathon winnings and bought it and just brought it into the office. And that’s the kind of output-driven perk that we really have chosen to centre our business around when it comes to building culture. And it’s been really important to us to not inorganically try to inject these things and perks into the life cycle of our team when they’re not actually asking for them. So, we’ve been able to develop a whole lot of pride around this logo, around our colour scheme etc. and there’s been this interesting effect where if you think about it, if your company is doubling every single year or more you get into a situation, where, at any given moment definitionally, more than half of your team will have been there for less than a year.
So, we are a company that is seven years old now and today it is true that less than half of our team has been with us for more than a year. And that is kind of like, a little bit of a head trip if you think about it, because it really means that there are people coming in from the outside world, that can bring things with them, that can bring culture with them. And what I am not standing up here telling you is, hey that’s a really bad thing, that’s something that you should really avoid and try to indoctrinate them into your ways. What I’m telling you is that there’s a balance and there’s a nuance to this and a grey area around allowing people to bring good habits and new ideas in the door, without giving up the core DNA of your business.
One of the things we’ve done is developed a team guide book that is something that people get on their very first day. It is kind of the much less boring equivalent of an employee handbook. When you get beyond a certain size and you have insurance, there’s all these policies and things that you need to have, which I hate having, but need to go somewhere. They live in that book alongside all kinds of information about the history of the business, decisions that got made along the way and why they got made. Mistakes that we made, things we did wrong, things we did right, and basically how we’ve evolved as a company. And the point of that is to give new team members the historical context; to give them a lens through which to view the business that they’re joining, so that they can feel like they’ve been along for the ride, even if they’re just somebody who’s joining on, on day one and the habits that they bring with them are ones that are unique to them and very true to them, but also fit into the framework of how we built the business.
We allow everybody who joins, to design their own, or request their own business card logo and this is just a great example of how people choose to add their own little spice to their day-to-day, but still kind of fit within this framework and this design pattern and this visual identity of the business. And it’s a great example of just like the hybridisation of, the individuality of people on the team and the kind of core identity that the business has to build in order to build brand, build value there.
So, all that to say at RJ Metrics again, our mission is to inspire and empower data driven people. We’ve got these amazing products, we’ve got this amazing team, but all of it really is a function of having gone through a really ugly, long period of adolescence as a business, particularly from the design side and I don’t think we’re done. I think we’re surely making a ton of mistakes even to this day, but I think it is something that, now that we have gone through it has really shaped the way we think about who we are and, and why it is that our identity matters in such a big way.
So, I wanted to leave a good chunk of time for Q&A ‘cause I think there’s a bunch of, kind of stories and areas in there that I’m happy to touch on, including venture funding, design and identity, building a business etc., so would love to turn it over to the crowd. Thank you.
The 12th Business of Software Conference USA, October 1st-3rd 2018. Boston, MA.
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Audience question: How does design make it into the product experience itself and if I just use your product, I’ve never seen your logo do I get the same sense?
Robert J Moore: Yes, so excellent question and I think something that, we in the last couple of years since Zach has joined have spent a huge amount of energy on. Zach originally, was someone who joined on the marketing team and very, very rapidly he became a member of the product team instead. And it was because we found these threads inside the product, where there was a point in time where you would go to our website and you would get this very deliberate visual experience related to the design that Zach had done. And that as I mentioned, we’re a free trial company, so you can fill out a form and you get kind of launched into the product to kick the tyres on it and you would have an extremely inconsistent experience once you got in there.
It would look completely different than what was on the website and it became really critical for us to make sure, so that we didn’t have a conversion drop off, that we were focusing as much energy on the design of the product, as we were the design of the core website. And that really, it’s tough to bolt on good design, like really tough because I think a lot of the design principles that make things work well are much more fundamental than a colour scheme or than, you know, having a dodecahedron sit over here instead of a swoosh. So, it was actually really challenging for us and to, to be honest with you if you’re inside of our product, to this day, there are newer dashboards, they’re awesome, we’ve spent a lot of time and energy on them. They, they are consistent with our branding and work really well.
If you move down to like, the deep dark crevices of the admin — you know settings pages, you are going to get way back into like crazy town from the old swoosh days. And it’s partially a function of us choosing not to make incremental investments in upgrading that stuff, and wanting to rewrite it from the ground up, and partially just not having the time and resources to do it. But I think among the universe of mistakes we made with design was like not having the limited design talent that we had infused in the product process from day one. And I think the best thing that we’ve done since then have been related times when we just do ground-up rewrites and have the designer built in from the beginning.
Audience Question: Did you ever revisit the idea of like associating the brand of your company more with you?
Robert J Moore: That is a great question, my ego would love that. It is a — see, my co-founder’s name is Jake by the way, so the RJ is not entirely the, the me, me, me. I think it’s a great — you know — so, now that we are venture-backed there’s this really interesting dynamic where I — if the board wanted to, the board could fire me as the CEO and that actually is like valuable optionality for them. Now we still, like Jake and I still — it’s Jake, myself, an independent and two VCs so, I — the independent is a good friend and we have enough control on the board that it’s not a likely outcome, but I do think that when we think about, okay, do you really want to be the, you know — I’m the, that dude from eHarmony who I, you know, has the adorable thing to say or the guy from Men’s Warehouse that’s going to love the way I look.
Number one I just don’t think, particularly in the early days of the business, I was actually that good at it. And number two, I guess I’d say there’s something a little more, there’s a little more value that you can imply from something that is not anthropomorphised I guess, where we sell our software for a lot of money. And if you were buying something that maybe was going to cost you a hundred thousand dollars a year, do you only buy me or do you want to be buying the ether from, from the platonic solids universe and I think that’s kind of, kind of been it. The short answer to your question though, is no, not really we didn’t think about it too much and I think it’s a combination of, of those reasons. Flattering question though, thank you. I think. Yeah. Sorry.
Audience Question: Hi there, what are some examples of ways that you use your own products within your company and what are some other products that you’ve outsourced and realise like, okay we can’t build a recruiting platform, let’s say.
Robert J Moore: Yeah, absolutely. So we, we eat our own dog food in a really big way. RJ Metrics is used rampantly throughout the company. Our business users in customer success and marketing use the product primarily to do a lot of the work around understanding the cost to acquire customer and the most efficient acquisition channels all get driven through RJ Metrics so, one of the biggest challenges in building a kind of customer-generation machine is the dispersion of data. So, Google Analytics knows a few things. Mixpanel knows a few things. Our backend database knows a few things. After people have converted, Zendesk knows a few things about how we interact with them and that data lives in a bunch of — every single one of those is its own silo.
So what the RJ platform is able to do is actually combine all that data into one centralised data warehouse and then our business users are using that to, on a day-to-day basis, keep an eye on what’s a customer lifetime value of people coming in through different channels. What is our AR over CAC look like if we break it down by all these different dimensions that we now know exist within that data? And our data science team uses the pipeline product which is our other product which is just the infrastructure.
So, what pipeline does is just pulls all that data in and just dumps it into a database and you can go do whatever you want with it. So, the people that want to write queries can just go write queries and we have that to. I think we are big proponents of buy versus build, when it comes to anything that’s available as a, as a SASS tool. So, we love Slack internally, it’s been a really big success for us. We use a tool called Jazz formerly known as The Resumator for recruiting and hiring. We do use Zendesk as a customer success platform. We use Salesforce for CRM. I pretty much, you know, your standard portfolio of SASS tools. It is a major budget item for us, but when you compare it to engineering head count, it’s just an absolute no-brainer for us to use tools like that assuming that they work well. Cool. Yeah.
Audience Question: Hi, can you talk a little bit more about your transition from a flag company to a more org chart?
Robert J Moore: It was — I think I can say this with, with certainty and I may eat my words later, but I am pretty sure I can honestly say that I have never regretted a decision that resulted in more organisational structure at my company. Which is a, like a super controversial statement to make, I know, and one that I would have had a very allergic reaction to if I’d heard somebody say it four or five years ago. But I think one thing that, for us, ended up coming up as a recurring theme was just that as the company got bigger and bigger, we have amazing people who are — we would call them generalists on the engineering side. But when you’re a, a generalist from an engineering perspective that doesn’t mean that you’re also excellent at interacting with customers, when a customer support ticket comes in. Or dealing with, you know, responding to an investor, who has a data driven request that requires, you know, running a query on our, our RJ data warehouse.
There is a generalist then there’s like a generalist, generalist, and for a very long time even I made this mistake where, and that was kind of the theme of my talk last year, was, I was a, a CEO that was in title only, for a really long time. I was an engineer on our team, that I contributed code with 80 per cent plus of my time up until about 2013, when we raised our first funding round. And by definition every single engineer we hired was a better engineer than me. So, it, continuously over time I was the worst engineer on the team and it’s as, as more and more people added, my percentile of talent just got lower and lower and lower.
And it, it really took this moment of, it was an engineer, originally, it was almost like a coup. There were multiple engineers that I was doing reviews with, who said look, Bob, you know you can, you can like go run the company, you know. We got this, we got this. And partially they were saying, hey we want somebody actually running this thing and steering the ship. Partially they were saying hey you’re bad at coding and slowing us down at this point, and both of those things kind of dovetailed within each other and it became really clear that I had to put the keyboard down and go and actually start running the business.
And that’s around the same time when we started doing big things on the venture capital side and when growth really started to skyrocket and I do, I do really apply some causation there and I think you see that happen again and again and again within the org. Hiring in outsiders in VP roles, seems like a terrifying thing and we brought in a VP of sales from the outside, a VP of marketing from the outside. You worry that the people that are on the team are going to get really mad and that they are going to be furious about having not been promoted up and you feel this. I’m a super loyal person and I feel this sense of guilt whenever somebody gets promoted over somebody else. But the reality was consistently time and time again, no one in our company has ever quit because somebody got promoted over the top of them or somebody got hired over the top of them.
A big part of professional development for any individual is accepting the fact that there are people who are going to be better than you at what you want to do, and accepting the fact that spending time with them on a day-to-day basis and working under them, will actually be the most valuable thing for you from a professional development perspective. And I think if you can sit in a room with somebody and you tell them that and they disagree with you or they don’t understand it, to me that’s in, that’s in direct violation of, kind of the core values of my business and I think that that’s a person that probably doesn’t, you know, isn’t going to be on the team for very long.
But fortunately, we’ve hired people that just don’t behave in that way and because of that we’ve made a lot of hires above people. We’ve imposed a lot of structure and people are just more effective and efficient at their jobs and people are not leaving because of it, people are happier in their roles.
Audience Question: Hey RJ. So, going back to 2008 it sounded like you guys started out as primarily a group of engineers and it seems like in retrospect, you wish you would have had design as more of the process of building your product from day one. I’m curious, what exactly you think that could’ve looked like, given that you were boot-strapped, your limited resources, your engineers? What could you, what did you think were good options that could’ve been on the table?
Robert J Moore: Yeah, so, I, this kind of related to the reason why I programmed for so long was this, kind of like a logical fallacy that I think we subscribed to where, we always needed engineers. We always needed more engineers. To this day if you go to our jobs page, there’s no shortage of open positions for engineers. Man, I always had this logic in my head that was, okay, well I’m an engineer. I can spend my time doing that and it’s the most valuable thing I can do for the company. And in the early days, we had very, very similar logic around hiring which was, we know we need engineers.
We had this laundry list of two hundred things we want to do inside the product to make it marginally better. And because of that, when we finally have enough money, to you know, drastically underpay someone, another incremental person, that person’s going to be an engineer and we’re going to get him in the door. And it created this kind of vicious cycle where we would just get to a point where we onboard the next person. We get a couple more customers, we attribute that to the great work we’ve done in engineering and not, you know, or market pool or any kind of, you know, zeitgeist that we were tapping into in the market. And we would hire another engineer, and say okay let’s, let’s repeat on that.
And the, I think the things that could’ve changed if we had a designer earlier on, really relate back to the question earlier related to just how infused is design and user experience within the product. And we went through a period of time of before we raised money where, historically one of the biggest problems for RJ Metrics’ as business has been churn rate. Like losing customers and for a SASS business that sells to companies in the mid-market, you know, we, we add enough customers to drastically offset churn. But if you look at churn in isolation, we lose a lot of people because the product doesn’t stick, because in the early days people don’t actually get onboarded in the most valuable way and that’s a user experience problem.
And you can hire people, and you can throw bodies at that problem and you can do onboarding and training calls and everything else, but if the core of the product is not something that is implicitly useable and addicting, then you’re going to have churn as an issue for the business. And it’s really only been in the last year or two that churn has come down really substantially and it’s not to me because of investments that we necessarily made in the human side of the process, although our humans that are awesome and absolutely necessary, it is investments that we’ve also made on the product side to make things much more useable and understandable.
And if we’d of had that from earlier on, admittedly we are not one of these unicorns that’s out there popping the bubble, you know. We’ve seen good growth, we’re really proud of what we’ve done, but we are, we are not a Slack or an Uber and it is these little force multipliers in the early days that, you know, from a user experience perspective made Slack so extremely successful and so addicting. And I think, being able to tap into that and make sure you’re really converting as many people as possible, it could have been a very, very different story with regard to our early growth and could’ve changed a lot. So, I definitely think that I would make a different decision doing it next time around.
Audience Question: How many engineers and how many UX designers do you have right now? Or the ratio of engineers to UX designers?
Robert J Moore: Yeah, so it’s still awful. I, we have an engineering team of about 24 people and we have two UX designers and I think, yeah, that’s the answer. That’s the answer.
Audience Question: So, I have a question about identity. You talked about you shouldn’t, you wish you had invested in identity earlier, but then your entity, identity would’ve evolved, and so the question is I assume you’re dabbling every year, your identity is still evolving. What do, what actions do you take so you’re understanding what your new identity is?
Robert J Moore: Yeah, I think it is — there, there’s so much value in, that mission statement that I mentioned a couple of times and I, speaking of things that four years ago, I would have cringed at to hear somebody say, like the idea of — you hear, you read unlimited Jack Welch books and hear about core values of a business and the mission statement of a business and I, I can honestly say that, that our mission is to inspire and empower data driven people is such a rallying cry for our team, that it actually really gets people extremely fired up, particularly when we’re doing these hackathons and events that are dedicated to innovation specifically.
It’s really important to us, our hackathons are — I know I said hackathons are for hacking, but not just for hacking. There are a lot of people within the business in sales, in marketing, in customer success, who stay all 24 hours and build amazing things during those hackathons, that have nothing to do with code in a lot of cases. It’s new processes. It’s new go-to-market strategies. It’s new ideas around sales scripts and how to close deals. It’s new training processes. It’s ways to make the business better, generally and because of that we get a little window into what could be, down the road and it’s something that’s kind of coming from the collective intelligence of the business. So, I think you couple that as one input. You have what you’re seeing in the market as another input and you have the state of your DNA at the moment as a third input and those come together to kind of paint the picture for what’s coming down the road.
Audience Question: What inspired you last year to do the Glengarry, Glen Ross speech?
Robert J Moore: I’ve been, I’ve been looking for an excuse to do that for like a decade. I have always been a huge fan of that talk and pretty much had, my biggest worry when doing it was that I would accidently say the Alec Baldwin version, which is much more profane than the one that I did.
Yeah, I think it really boiled down to, I, right around that time was only shortly after I had put down my keyboard and that talk, the theme of that talk, was like keyboards are for coders only. And the idea there was that technical founders kind of need to find within themselves the ability to really step up and lead their business. It’s like totally just the story of me having taken a really long time to make that decision, and immediately after having made it, knowing that it was the right one and that I’d waited way too long to do it. So, I think it was a little bit of learn from, learn from my mistakes, act a little bit sooner and hopefully learn something along the way.
Cool. Thanks everybody.