How could such a simple start lead to a company that’s worth about $3 billion on the public market today? Listen to the interview to hear Rajeev tell you his story.
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Next, who’s the lawyer that tech startups trust? You can probably say it with me at this point. You’ve heard it over and over again. Scott Edward Walker of Walker Corporate Law. But don’t take my word for it, check out what Neil Patel, founder of KISSMetrics said about Scott. “Scott is a great lawyer. He is affordable, responds fast, doesn’t charge you for five minute phone calls and always gives you great advice.” WalkerCorporateLaw.com.
If your friend wanted to create an online store, which platform would you recommend? I’d recommend Shopify. Shopify stores look beautiful and they increase sales. So if anyone you know needs an online presence, recommend Shopify.com.
Andrew Warner: Hi everyone. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart and the place where you come to listen to stories of entrepreneurship, how they did it.
How does a home-based business become a $3 billion publicly traded company? Joining me today is Rajeev Singh, who launched Concur Technologies from his apartment in 1993. Concur is a travel and expense reporting software developer that’s branching out into many related areas. In this interview, my goal is to hear the story of how they did it.
Rajeev Singh: Thank you for having me, Andrew.
Andrew: I said that your market cap is about $3 billion. What were your sales last year?
Rajeev: Last year we did a little bit more than $290 million in sales and that was our fiscal year, so October to September. It ended September of last year. Just a smidge under $300 million in revenues.
Andrew: I’m seeing $3 billion here, millions there. It’s so hard for me to comprehend such big numbers. Can you take me back to maybe the first million that you guys at Concur did?
Rajeev: Sure. Actually, our story’s a strange one, but I bet you most entrepreneurs have strange stories about where we started. We started it, as you mentioned, what seems like a thousand years ago in 1993. Our idea in 1993, and this will for so many of the young entrepreneurs watching this seem kind of silly. Expense reporting was a problem that everybody had but no one had really solved how to automate the process.
The three founders of the company are myself, my brother Steve, and our good friend Mike Hilton. All three of us are still with the company today, 18 years later. We decided that we were going to build this expense reporting product, and the expense reporting product was a Windows-based software package that we sold for $69. You had to buy it, you had to download the disks. You had to buy it from either online or you had to go a CompUSA or an Egghead Software and buy it.
Our first million dollars were made selling that package, and we probably sold more through the airline magazines, like the American Airlines magazines, etc. than anything else. That was the beginning of the journey of Concur, and I’d say about a year into it, we realized quickly that we could sell one, two, three user packs of that software, but ultimately, to really gain mass, we had to sell to corporations and that was really the first inflection point of the company.
Andrew: And at that point, that’s when things took off, as I understand it.
Rajeev: I would say this. There’s been multiple inflection points for the company. The first one was right there and what we did, was we decided, okay, we’re not just going to build an end user software package, we’re going to build a package that can service a large corporation or corporations. This was 1996 now. We made our first – outside of starting the company – our first big [inaudible 04:42]. That was all the engineers who were working on that one product called QuickExpense, we were going to move them – basically putting all of our revenues at risk – to build a client server version of that software. We did that and delivered it in 1996, and our business began to grow. We went from probably – and my math is going to be a little bit off here. I don’t remember exactly the numbers, but we went from probably $2 million in revenues to about $6 million or $7 million in revenues.
So we were growing pretty nicely, and then by the time we delivered it, I wish we could have figured this out a little bit sooner. By the time we delivered it in late 1996, we had this sense that, oh, you know what? There’s something coming and it’s the Web and the Web is the right way to deliver a product like expense reporting, where every single employee in the company requires it because they use it or is required to use it. We then, again, we made the second big bet. We took all our engineers and said, “You know what? The Web is the answer here. Let’s go build a Web version of the software.” That was 1998 when we finally delivered it, March of 1998. That’s when our business exploded, and we went from probably $8 million in sales to, in very short order, the neighborhood of $25 million or $30 million in sales.
Rajeev: And then the next giant inflection point came after some pain, Andrew. There’s some pain in the story. We went public in December of 1998. Our stock skyrocketed with every other technology company stock in 1998-1999, but by 2000-2001, the luster had worn off the rose a little bit. There was a period of time there where Concur’s stock traded at about $0.25 on the dollar. We were a $0.25 stock and traded underneath a dollar for, I don’t know the exact time frame, but for well over a year, I think. It was at this point that we made, I think, the final strategic inflection point decision of the company, another bet the business kind of move that Wall Street didn’t totally love at the time. That was we said in 2000-2001, you could see that the best way to deliver this software . . . and now keep in mind that we’ve been through three iterations of what we think are the best ways to deliver the software.
In 2001, we said the best way to deliver this is over the Web entirely. So instead of a web-based on-premise package, we were going to convert our business from an on-premise software company that, at the time, probably by then, was doing $45 million in revenues, and we were going to convert to a software as a service company. Because we were public, we had to do that while we were profitable, which wasn’t super simple. There was [inaudible 07:26] and Wall Street certainly didn’t love the story. Software as a service or the on-demand space wasn’t quite as sexy in 2002 as it is in 2011. But we made that move, we made that transition. From 2002-2003, at that point we were probably doing pretty close to $0 in software as a service revenues. Here we are, it’s 2011 and last year, of that $290 million, 99% of that was software as a service revenues.
The story of the company – and I’m sorry to ramble on – the story of the company is a set of inflection points where we had to decide what we thought the customer would want and how they were going to want it and then make big bets in order to get it.
Andrew: All right. I love that summary. Now let’s dig into it and fully understand it. I wish I could do that, actually, with all my interviews, get a quick summary of what their businesses are about and how they built them and then dig in deeper into the details.
Let’s start off with this. I saw an old article from CNN Money where I guess they asked you what do you take with you everywhere you go and you said a Tiffany & Company heart frame with a photo of your wife and kids – aww, that’s sweet. And the second one is a work ethic that you learned from your engineer. Look at how I just passed that up. I said, “Oh, that’s sweet,” now let’s move on to business. That’s it right there? Let’s see it.
Rajeev: There’s the whole family right there. You’ve got it.
Andrew: Oh, wow. How long have you had that with you?
Rajeev: For a long time. Hopefully, my wife will see this interview and she’ll like me more.
Andrew: All right. So then, the other part, the part that the all-business me was thinking of, is the work ethic that you got from your engineer father. Do you have an example of the kind of work ethic that he had and how it manifested itself?
Rajeev: That’s a great question. I’m glad you asked, because there’s nothing nicer than talking about people that you admire. I think there’s this really cool thing that we have in this country that is hard to replicate, and hopefully something that we don’t lose. We could have a whole other discussion about things like the startup visa and the need for immigrants to come to this country and really be able to start businesses and grow. Here was the joy of my story. My father came to the United States in the early 1960s, so before I was born. My brother and sister were both born in India and came over with him.
You have an extremely well-educated man, a guy who’s got his Ph.D. in engineering, who had to start from scratch, and in starting from scratch, went from job to job to job to grow his career. This was a guy who just never said no to opportunities to continue to grow his career because he knew it meant more opportunities for his family. My brother and I would both tell you that neither one of us are as smart as my father is nor could we replicate the unbelievable work ethic he put in to essentially establishing a base for his family to grow from.
You see those kinds of stories where you see the super well educated guy who’s working on the weekends and working every single day and we go from an 800 square foot house in the middle of a rough neighborhood in Detroit to all three of his kids going to college and building their own careers and ultimately it’s based on the foundation of a guy who’s just – and I should not leave my mother out of that story – based on two immigrants who said I’m going to come here and I’m going to do what it takes, I’m going to work as hard as I have to in order to establish that base. You come from that and I think you have this really . . . it’s hard not to maintain some sense of a humble grounding, remembering where you came from. I don’t know if that makes any sense to you, Andrew.
Andrew: It does, and I’m wondering how they passed it on to you. [interference] Sorry, the mic is a little bit funky. I’m wondering how they pass it on to you. Around the dinner table, what was the conversation about? Was it about getting good grades? Was it about working? Was it about finding your way out of the corporate system and going and starting your own company?
Rajeev: You know what?. Wow, these are really good questions. As a first generation Indian immigrant family, I think if there are any Indians out there watching, they could tell you Indian parents will ask you first, second and third about grades, so you better be getting good grades and optimally, hopefully you’re planning to become an engineer or a doctor. But I would say secondarily, the thing that came from a guy who worked at large companies his whole life like my father did was, you know guys, if you have a chance, it would be a lot more fun to do this for yourselves. Take a little risk when you’re young and take a shot at this and take a swing at this.
I was lucky enough, my brother is seven years older than I am, and immediately after he got out of school, he went straight to the Valley and began exactly that journey and so both from the conversations with my father saying, certainly you could go work for a large company, but there’s great opportunity to be exploring your own destiny, and maybe some of his experiences at large corporations led him to push us in that direction.
Andrew: Okay. You started Concur in your mid-20s. What did you do right out of school just before you launched the business?
Rajeev: I was like a lot of kids probably ignoring my father’s feedback. I went to college. I studied engineering in college and decided to go to work at Ford Motor Company. I worked for General Motors all through college to kind of pay my way through school. I went to work at Ford Motor Company and was . . . I was miserable. I was miserable in a large company existence. It just wasn’t for me.
Rajeev: I think, like a lot of entrepreneurs, I was pretty certain at age 23 that given the opportunity I could really do something that could have an impact, and, at the risk of sounding naive, change the world. That’s not necessarily what you’re tasked and oriented to do when you’re a 23-year-old engineer at Ford. So for me, that’s what I was doing and I decided, okay, I can’t do this, I’m not going to do this. So what I did, Andrew, is I took my LSATs and decided I was going to go to law school and that that would perhaps be my path in terms of my career. Luckily for me, Mike and Steve called me and said, “Hey, we’re going to go start this company. You should get a deferment from law school and see what happens.” And so 18 years later, I don’t know that they’d still let me in.
Andrew: What was the original opportunity that you guys saw?
Rajeev: These guys . . . Mike and Steve are a cool story. They had started a company that ultimately became a product called ACT! for Windows. ACT!, which was a sales contact management product that eventually got bought by a company called Symantec.
Andrew: Wait a minute. I’m sorry. Your co-founders started ACT!, with the exclamation point, the contact management desktop software.
Rajeev: You’ve got it. They were the guys who wrote ACT! for Windows. You’ve got it.
Andrew: Oh, okay. It wasn’t their company. They wrote the software.
Rajeev: Well, actually they wrote the software and their company was acquired by the company that was eventually sold to Symantec, so it was a kind of a big fish swallowing up two smaller fish along the way.
Andrew: I don’t know how I missed that in my research. I love ACT!. I used ACT! for years. In fact, when I moved to the Palm Pilot, ACT! came along with me. It was that good a program. I was introduced to it by Dale Carnegie and Associates, where I worked for a while, and Dale Carnegie and Associates had a special version of ACT! just to help their people – the “How to Win Friends and Influence People” people – just to help their students stay in touch with their contacts. Anyway, sorry, so how did that lead to the opportunity that you guys saw?
Rajeev: [inaudible 15:45] were salespeople and salespeople have an expense reporting problem. So the expense reporting problem ultimately, they heard about it over and over again from their customers of ACT! saying, “Hey, we have this problem and it’s expense reporting. What are you going to do about it?” Or “Could you help us?” ACT! chose to go in another direction and it was really very focused on sales and kind of customer relationship management, and so we started what became Concur to solve the expense reporting problem. That’s what started it. That was 1993 when we first started having that discussion and thus the rest of the story.
Andrew: What did the first version of the software look like?
Rajeev: You know, I have a box over there. I could show you. We’re literally talking about shrink-wrapped software.
Andrew: You know, I’d love to see the box if you have it there handy.
Rajeev: Let me see. I’m going to have to get up and move around here.
Andrew: Let’s see it. So the connection is still a little bit funky here, but I think we can make out the box well enough.
Rajeev: This is the first version of QuickExpense and, in fact, this is . . .
Andrew: Can you hold it up a little bit closer to the camera. Let’s see if we can spot that. And just a little higher. Yeah. There. I see it.
Rajeev: There it is. That’s . . .
Andrew: “The paperless way to prepare expense reports.” That’s what it says right on top.
Rajeev: The painless way.
Andrew: The painless way. Okay.
Rajeev: That was the first product, Andrew. In fact, I think this is so old that there was both 5.25 inch and 3.5 inch floppy disks in there.
Rajeev: We started there, and each successive iteration from there was ultimately about, 1) determining how the customer wanted to buy, and 2) what was the right technology engine to deliver it. I think, fortunately, we had the courage to keep trying the new iteration, and unfortunately, it took us a few before we got there.
Andrew: I mostly interview entrepreneurs who have web-based software and with web-based software, you could get it wrong on the first version and your customers will give you feedback and you’ll improve, and in time you’ll get it right. But once it’s in that shrink-wrapped box, you don’t have as much flexibility. How perfect did you have to get it? What were the issues with the first version?
Rajeev: That’s a great question. Today, we just released a product that’s very similar to QuickExpense. It took us 18 years to come all the way back around and say we’re going to deliver a product just for individuals who want to fill out expense reports. That’s called Breeze. It took us months to get Breeze done, and it took a year to get that done, largely because you’ve got one chance to get 100,000 boxes put on store shelves. Once they were out there, they’re not coming back. They have to sell, and if they don’t sell, you’re going to get them all returned and you’re not going to get another chance with those retailers in the old days.
We probably spent more time focusing on . . . like any product, we focused significantly on usability and on user experience, were they going to love that experience. We were super lucky, Andrew, that customers really loved it, and so we got great write-ups in the Wall Street Journal and the New York Times. Those write-ups really launched the business.
Andrew: How did you get it so right on the first version? Did you bring customers in? Did you do any tests? I keep prodding with these multiple choice options, but I should just leave it open ended. How did you do it?
Rajeev: We did a ton of testing and by testing . . . this is the joy of startups, and especially on something like expense reporting, everybody fills out expense reports. So we would build our first several, you could call them alphas, then betas, we would sit down with travelers and say, “Hey, here’s your receipts, fill out an expense report.” And we’d just sit there and watch them. It wasn’t too high tech. It wasn’t like a focus group with a two-way mirror or anything. We would just hang out with our friends and ask them to do it.
Andrew: How would you get other business travelers who weren’t your friends?
Rajeev: A lot of times we would ask local businesses. We’d say, “Hey, look, we’ll bring a pizza in. All want to do is if you could just ask your guys to fill out an expense report for us.” And we just watch them do this with the software.” People are remarkably, remarkably receptive to ideas like that, 1) because they want to help and they like seeing entrepreneurs get things off the ground, and 2) because they look at it and think if there’s some value here and I can get it at a reasonable price, that might be cool for me too.
Andrew: How’d you get in so many . . . [coughs] sorry. You mentioned being on so many shelves. How’d you do it? How’d you get on the shelves?
Rajeev: That was just straight hustle, man. That is just a lot of phone calls and one sales guy who we hired to go do that work. Ultimately, what we did was, we banged on doors until people didn’t want to talk to us anymore and said, “We have this really cool idea. Nobody out there has an expense reporting package. You will sell a bunch of this.” And we probably did some pretty aggressive deal making, but I would say more than anything, Andrew, and this is true no matter what stage of our business we were in, if there’s anything that I think is one of the hallmarks of the company, it’s hustle. Don’t get outworked when you’re after something like this.
Andrew: You got into Staples, I think, right? And into . . .
Rajeev: [inaudible 21:22]
Andrew: I just remembered it as you showed me the box, I had flashbacks to walking through Staples and seeing that software aisle. How do you knock on a door and get accepted into Staples and get distribution through them.
Rajeev: It’s in large part pitching the opportunity right. I think what you have to do – whether it was Staples, and we get into Best Buy and all of those guys in the old world of software distribution that today, the only thing they have on their shelves is games –in large part it s selling the opportunity and saying, “Look, here’s the universe.” At the end of the day, what Concur turned out to be from that company doing $0 in revenues to a company that we think can be a billion dollars in revenue one day, bears out the opportunity pitch we were making to that purchasing agent at Best Buy, which is everybody travels or everybody fills out expense reports at some point or another. There is a huge market and a huge opportunity here. People don’t know there’s a solution and you can play a role in fixing that.
Andrew: Okay. You know what? I’m debating whether to ask it, so I’m just going to ask it. It seems so tactical, but how do you even get in front of the right person at Best Buy or at Staples? I’ve had friends who have pitched them and who have done work with both companies, and it’s not easy to get in front of them.
Rajeev: It’s not. There’s no doubt about that.
Andrew: How did you do it?
Rajeev: You know, I think one, hopefully, to the degree you’ve got contacts who can help you get to the right person, that’s a hallelujah. Not everybody has that. I would say the second part of that story, Andrew, is be willing to work through the process that the retailer sets out for you. In most of these cases, they have a means to work through the process, and you’ve just got to go knock on every door. And it means you’re going to do 42 meetings when you think you’ve explained yourself in the first 41 and the 42nd is the one that opens the door. But ultimately, those meetings allow you to build personal relationships and to make your pitch and tell the story and you need both. You need a compelling story, a compelling value prop for that buyer to want to buy, and at some level, you’re going to need to build personal relationships so that they feel a sense of responsibility or obligation to return some of the effort that you’re putting in to deliver.
Andrew: All right. So continuing on with the story, you said . . . [interference] wow, this mic is weird today. You said you had to make a big change. Can you tell me about the decision process that went into that change?
Rajeev: Let’s talk about the single biggest change we made when we said, “You know what? We’re not going to be an enterprise software company anymore. We’re going to make this leap and we’re going to become a software as a service company.” And at the time it was called ASP, or whatever it was called before it was called software as a service or on demand or cloud computing or whatever it might be called tomorrow. That change was a really interesting time for our company, because as we announced that we were going to make that change, or as we even floated the idea, we certainly had a number of people on Wall Street or people in the investment community or people in the technology community saying there’s no proven business model out there that says it can be done. There are not profitable software as a service companies out there. And certainly you would continue to hear that refrain in 2004, 2005, 2006.
So we all sat down as . . . I would say that Steve, Mike, myself, and a core group of the rest of the executive management team of the company, and I recall this meeting to this day, saying, “Guys, at some level, we have to pick a lane. We all believe that this is the way that the technology industry is headed, and we can be a $45 million company that becomes a $50 million company next year or a $55 million company next year, but that’s not what we set out to do. What we aspired to do was build a great business, one that we thought could scale beyond where we were all the way up to what could potentially be a billion dollar company. If we still believe that that’s who we are and that we can go do that, then we’ve got to make this choice. If we’re not willing to take the risk, then we don’t have to make the choice. It’s not like we’re going to go out of business tomorrow, but we’re never going to reach the goal we set for ourselves. So do we want to or don’t we?”
Andrew: Why did you want to? I’ve talked to so many entrepreneurs here too who have had the opportunity to either go public or sell and they said, “You know? We might as well sell because we’re going to have to learn to be a whole new business after we go public anyway. Let’s sell.” Or who have had smaller offers than you must have gotten. What was it about building this big billion dollar company that just pushed you to keep going?
Rajeev: I think probably a couple things. It’s a question that we answer on occasion. I’ll tell you, I was 23 when we started the company. So this is more fun than I would have ever expected to have working for 18 years in the same job. I think, one, we have a group of people who really love what they do, and I think when you tie that in the context of travel [inaudible 26:37] booking and expense reporting and the answer is, well, yeah, partially we kind of like what we do because we like our customers. But the other part of that story is building teams and getting teams to do stuff that nobody else is doing and winning in a marketplace and delivering great value to your customer and really delivering innovation that other people either aren’t capable of or aren’t actually doing is massively rewarding.
Andrew: But you can do that on a small level and really feel the reward of giving somebody something they never saw before. It takes a certain kind of person to say, “I want to go to a billion and I know that it’s going to be tough and I know that every step of the way I’m going to have to learn something brand new. I could fail and I’m still willing to do it, but I’m doing it because . . .” For you it was what?
Rajeev: I think [inaudible 27:32] and somewhere in there you said every step of the way I’m going to learn something new and potentially I could fail. We have this conversation internally as an executive team all the time. We don’t choose the low risk path. We’re growing our business at double-digit growth rates. We expect to grow at a double-digit growth rates into the future, and we think we can grow even faster if we can execute well on the things that we’ve got in front of us – not faster than double-digit growth rates, but even faster than our current growth rate. Those are all new challenges. So every single day, you’re learning a whole new set of skills and you’re applying them with a group of people that you totally trust and you care deeply about and you’re doing it in an industry that you really understand exceptionally well, that also happens to be changing.
To me, there is a fun part of this that is . . . yeah, I do remember, absolutely, the challenges we had as a 5-person company or as a 10-person company. And then there were a different set of challenges at 250, and here we are, we’re at 1,400 and it’s a totally different set of challenges. What we remind people here all the time is, “You know what guys? No one’s done it before. There aren’t that many 1,400-person software as a service companies out there. You’re solving problems right now for the first time. There are a lot of people out there who are going to follow down your path, the path that you’re blazing, but you’re looking at a set of data and making a decision and you could be the first person to solve that problem.” How cool is that? There’s just not that many fun opportunities like that for us that we would trade this for. There may be a day, Andrew, where there’s something that comes after Concur for all of us, and it’ll be fun to go do that too. The joy of this place is the freshness of the opportunity every single day.
Andrew: The other thing I was wondering earlier in your story, when you had a shrink-wrapped business, why not continue it and find more places to sell your software and then say now that we’ve got this pipeline, we have an in with our customer, what other software can we bring to them and how can we start to control more of that shelf at Best Buy and Staples and more of the hard drive space that our customers have or the floppy drive drawers that our customers have? Why not go that way instead of going up the chain to corporate?
Rajeev: I think the answer to that was a straight economic one. We couldn’t grow at the clip we wanted to grow by going one box at a time at Best Buy. Had the Web existed at that point in ’93-94, had we been able to sell over the Web the way that we can sell over the Web today, I think we might have made a totally different choice.
Andrew: I see. Interesting.
Rajeev: Meaning we might have stuck with that end user buyer and been very focused on small business. Like I said, 18 years later, last year we delivered a small business and end user version of our expense reporting package called Concur Breeze. That is sort of full circle from where we started. At the time, the distribution model just wasn’t economical for us to grow at the clip we wanted to grow.
Andrew: I’ve heard you say that a few times – to grow at the clip we wanted to grow or “we had a vision for how much revenue we were going to get. What kind of goal setting do you personally use? It seems like you’re a goal setter.
Rajeev: We are definitely goal setters. There’s no doubt about that.
Andrew: How do you do it on a personal level?
Rajeev: For me, specifically, I am extremely . . . I am perhaps a little retentively goal oriented. I need a mission and so, on a recurring basis, at the outset of a year, I will set goals for what I think we need to achieve as a business that translate into the things that I think need to happen that I’m responsible for making happen, and I try to hold myself accountable to that on a monthly basis, meaning, are we making progress towards those things. Not every month we do. But not too many months in a row we don’t. I would say from a professional perspective that’s true.
You know what happens as well, Andrew . . . and I noticed on your Twitter profile that you’re married. Somewhere along this path you get married, you have children, and you have to set goals for how you’re going to allocate time so this job doesn’t consume and destroy the happiness that you want to create in another part of your life. For me, I set goals that relate to Concur. I set goals for personally what do I want to do. I’ve probably spent more time in the last five years trying to figure out how I want to give back because I’ve been so lucky and then how am I going to make sure that I get time with my son and my daughter and my wife to make sure that I’m doing that part of my life right as well.
Andrew: I’m fascinated by this. Olivia and I – my wife – we did this just a few blocks away from here, I think at the Ritz Carlton Hotel. We got some food there. We sat down with our iPhones and we wrote out what we want to do for this year. How do you do it?
Rajeev: Family wise?
Andrew: Yeah, actually. Let’s go personal.
Rajeev: Family wise, it’s pretty interesting. The way I think . . . for example, Andrew, I coach my son’s basketball, football, he plays flag football. I’ll coach all their teams, whether I’m an assistant coach or I’m the head coach, we tend to alternate between myself and a group of guys in our neighborhood. For me, we set goals around what do we think it’s important for our children to achieve this year. As crazy as it sounds, they’re 8 and 7 years old, but how are they going to spend their time and how are we going to make sure that we’re allocating our time appropriately to get them to where they want to go? I’ll routinely make that a focus of my schedule, meaning how do I change my schedule in order to get more time with the kids to get to those goals?
Andrew: I see. So I want my son to do well at Little League. How do we make sure that he’s one of the top two teams? We spend more time practicing. That kind of thing?
Rajeev: Yeah. Or maybe less about what team is he going to be on and more about am I going to be there at night to be able to play catch with him? For example, in the last several years, Andrew, I’ve changed my schedule, which is super . . . I’m a night person, so this was super painful. But I do conference calls from 5:00 to 7:00 in the morning. We’re a global company, and so I wake up about three days a week and do conference calls from 5:00 to 7:00 in the morning, and I do calls from 8:30 to 10:30 at night on a couple nights because the kids are asleep. I can do these calls and then from 7:00 to 8:00 when the kids before they go to school, I get that hour with them where I can hang out. Or I can get home by 6:00 so I can hang out with them for two hours before they go to bed, and then I can go back to doing the work that we’ve got to do.
A part of this is, from a family perspective – not to sound too trite – is basically saying that at some level if Concur is going to consume as much as it does because it’s still super exciting and hugely fulfilling part of my life, then I’ve got to give up some of the . . . I have less beers with the boys than I used to, I promise you that. I don’t catch as many ball games as I used to. But I am getting that time with my kids that I think is super important at this stage of their life.
Andrew: Sorry to spend so much time on this, but I’m inspired by the way that you work. Just the fact . . . it just occurred to me right now. You checked out my Twitter profile to get a sense of who I was before the interview. You checked out the website, you told me. You saw some of the interviews before you came on to do this interview. Most people don’t have that time. Most people don’t have that patience. Most people don’t even have the awareness that they should just look into the person who they’re about to talk to. I’m just curious about how do you find the time to do it? How do you do it? I guess you know what’s coming up on your calendar and you say, “I’m going to go online and look up this person and find out who this Andrew is”?
Rajeev: Andrew, I think . . . here’s what I think. First off, the Web has made life a lot simpler to be educated about the people that you’re interacting with. I’m a huge Twitter fan. I get a lot of my news that way now. I don’t know if you’re a Flipboard user, but I’m addicted. Those tools are actually this really interesting means of saying if you want to learn about somebody that you want to meet with, it’s super easy to do it. I would say the other part of that story, which I appreciate you remarking on, is there’s a level of common courtesy involved. If you’re going to do a little research on me, I should know a little bit about you so that we can have a conversation that’s constructive for your folks, for the people who are watching. I think people appreciate that in their interactions and it’s how you build relationships.
Andrew: It’s working with me. I’m loving you right now. The goal of these interviews is to hear your story and to learn along the way. Maybe you can help me with a shortcut. What makes you you? Why have you and how have you been able to get where you are? Why do you think it is?
Rajeev: First off, I will say this. Concur is not me or Steve or Mike. Concur is a group of super, super talented people.
Andrew: Okay, but it’s led by you guys. Your personalities are all over this. You guys fought for this. You guys didn’t sell when you were a penny stock. You guys didn’t sell when you were a zillion dollar stock. You came up with the ideas.
Rajeev: I would say once you get through the sort of . . . it’s a group of really brilliant people. Why are we in this position, or why am I in this position? I would say, Andrew, one, for whatever reason, and I don’t know why this is, from the beginning, this has been about a mission, meaning we started this with the idea that we wanted to build a great company. We didn’t start it with the idea that when we got to $10 million, we’d get a good offer and we could sell it because we did get good offers along the way. But the idea was we really believed that if we applied the principles that we thought were right about building a company that you could be super proud of and that people would enjoy working in, then we could build something great and enduring at some level, as naive as that sounds. A part of the reason we’re here is because we all believed that from the get-go, and so the acquisition discussions or the times when we’re a private company or otherwise where we got offers where people said, “Hey, are you interested?” We said it was going to take a lot to move us from where we are because we love what we’re doing and we’re in this for the long haul. So that’s one.
Two, I think we spent a lot of time building culture here or talking about culture and who we really are and why we think we can be successful long term. A part of that culture is that we’re trying to build a group that’s not a bunch of rock stars. We don’t want this cult of personality built around a guy or a woman or this so-called sort of “brain” that is the vision of everything we do. Instead, what we want is a group of people who are focused around this idea of building a great team and that’s sustaining, I think.
Certainly it would be great to have a genius like Steve Jobs who showed up in the corner office every day. But the idea of a team believing that this level of success that they’ve achieved over the last 10 years that isn’t attributable to one guy is massively sustaining and super energizing for people. But it takes time and it takes patience as a company for you to build it, and not many companies have that patience. We have that patience and we believe in it.
If I were thinking about it from what role do we play in this story, what role do I play in this story, I’m committed to the long-term vision of the company, for one, and what we really want to achieve. Number two, I’m committed to the culture of the place. I really believe that we can do this as a group and that culture will sustain. And then finally, I love what I do, man. I just love doing this work, and I love interacting with the people in these hallways or around the world and I think if you do, people get it. People know that you’re genuine and that you care and that you don’t just care about whether we’re going to make the numbers this quarter, but you care about whether these people are going to be happy next year because you’ve been here for 18 years and you show up for work every day with a zeal to go get it done.
Andrew: When you first took your software online . . . [interference] I’m dealing with the mic again. When you first took your software online, what were some of the early mistakes that you guys made?
Rajeev: Oh man. When we first go to the Web, that was 1998 and jeez, the list is endless, Andrew. The list is endless. There were so many things we could have done better. When we went out originally, we were super focused on UI and usability because we’d been that focused on that, as I’m pointing at the software box. We had been super focused on usability as it related to the Windows version. Say what you will about the Windows OS, but in 1998, the Windows OS was a more mature operating environment in which to deliver user interface elements.
The single biggest mistake we made in 1998 was we delivered a product that was totally focused on usability, but lo and behold, to deliver all those UI elements, it would take a year and a half for our pages to load. And so we got some valuable beatings from our customers that got us to fix things fast. We had to learn that there was a new medium, and the new medium required a new method for delivering that value to the customer that was different than the last one, and we might have, in our haste, applied principles that didn’t apply to the Web in 1998.
Here’s the great news. In 2011, those principles do apply to the Web, and the mobile devices are making usability sort of the battle cry of the next 10 years. If you’re not wicked simple to use, I don’t care whether you’re an enterprise application or a consumer application, you’re dead.
Andrew: So you guys now are making the shift towards mobile more and more, right? TripIt seems to be mostly a mobile company, the company that you guys bought earlier this year for $120 million, I think their website said.
Rajeev: That’s right.
Andrew: What are you finding in mobile?
Rajeev: Here’s our audience. It’s people who fill out expense reports and book travel and so, by definition, people who are on the road. When you think about . . . here’s what our software does. We help you book your travel and then, up until the sort of mobile revolution of the last five years, we’d help you book your travel and then we’d have that data flow through to your expense report which you could fill out when you got back to the office or if you had a good connection on the road. Well, enter mobile and now we can automate that last part of the business trip.
You would book your travel and then you’d go on the trip and we couldn’t help you at all when you were on your trip. Today, we can, and we can do that and TripIt is obviously a huge part of that story. TripIt will help you manage all your itineraries. We’ve invested in a company called Taxi Magic that will allow you to book your taxis and have those expenses. You can pay for them using your credit card right from your cell phone and then have it flow through to your expense report. More and more, we’re going to automate the tasks that you perform when you’re on the road and help you get that data down to your expense report because that makes your life easier.
Andrew: I see.
Rajeev: Today, already, whether it’s when you think about the combination of TripIt and Concur, we now have upwards of two million mobile users. It gives you some sense of the type of reach that travelers have and our opportunity to reach even more of them and deliver new stuff for them.
Andrew: All right. Finally, how about some advice for other entrepreneurs?
Rajeev: First off, my hat’s off to you. It takes courage to go after it on your own. Especially in an economic environment like this one, it’s not super simple to make those risky choices of saying I’m going to go out. No matter how much VC money is out there and I know the Valley is crazy with dollars today, it takes a certain type of person to make that leap. So before I give you any advice, I would say to that group, congratulations, you’re a special breed.
I would say that if there’s any lessons I could take from what we learned at Concur, it’s one, you have to be able to take risk, not just starting the company, but risk about making your choices in terms of what your business model is going to look like. It will evolve, especially if you’re in the mobile space or in the social space or in any of these new markets where revenue models are not totally fleshed out. You’re going to have to figure it out fast, and that means you have to be able to take risk and a corollary to taking risk is fail fast. Try stuff, learn and fail, and if you fail, start over and get going.
Maybe a second corollary to this risk point, beyond fail fast, is that indecisiveness is worse than any sort of disease that your company could deal with. We don’t know what’s going to happen from a technology perspective in a lot of the spaces where entrepreneurs are trying to make their mark, but sitting and doing nothing while you try to figure it out is the worst possible disease you could infect your company with. That’s advice number one.
Number two is, there’s going to come a moment somewhere in this pitch, in this battle where you’re going to know you are done and that you can’t make it any further. I would say for us that was when our stock hit $0.25 and we thought, “Man, we’ve put eight years of our life into a company that’s now worth $8 million on the open market.” There was guys working at Microsoft in 2000 who probably had spare change they could have bought our company with. For us, we hit that moment and we said, “You know what? We’re going to fight through this minute, and we’re going to take it one day at a time, one step at a time, but we’re going to fight through this moment.”
And until you’ve hit that moment and fought through it, you haven’t really given it everything you’ve got. That’s my opinion. You’ve got to hit that moment where you think you can’t go on anymore and fight through that one time before you decide that you really can’t make this work, because most great businesses go through that moment at least once.
Then I would say that the third is, man, you’ve got to be having fun, so you better love the people you’re with. You better love, love, love the entrepreneurs that you’re starting this business with, because if you don’t, this is going to be a miserable battle for you. It takes all types to get going, but I would say the number one thing that I think is representative of most of the great businesses that I’ve studied who got started from the ground up, is that the people really genuinely cared about each other and they genuinely liked working together, and that genuine care allows you to get up in the morning and work those crazy days.
Andrew: Do you and your brother still spend time together away from work? Still go on trips?
Rajeev: We spend so much time together at work that we don’t get much time together outside of work, but, yeah, we do. As a matter of fact, our families along with my sister, who is not a part of the business, but hopefully is still a shareholder. My sister and her family and my brother and his family and myself and mine all went skiing together a couple weeks ago. Yeah, we absolutely hang out.
Andrew: Sorry, we lost the connection there for a moment just as you were saying someone was no longer in the business.
Rajeev: No. Sorry, I was saying that my brother and I and our families and my sister, who is not a part of the business . . .
Andrew: Gotcha. Okay.
Rajeev: . . . who’s a shareholder, our families all went skiing a couple weeks ago, so we absolutely do hang out.
Andrew: All right. Well, thanks for doing the interview. It was great to meet you.
Rajeev: Andrew, it was a real pleasure meeting you as well. I hope there’s some kernel of value in here for your audience, and if there’s anything I can do for you in the future, you let me know.
Andrew: A ton of value. Thanks for doing the interview. I hope to meet you sometime in person.
Rajeev: All right. Take good care.
Andrew: Cool. See you online. Thanks, everyone. Bye.