TMCnet News
Ten Questions With RightNow's CEO Greg GianforteCatching up with the CEO of the hosted CRM pioneer.
By DAVID SIMS
TMCnet CRM Alert Columnist
Hi Greg, thanks for taking time out with us today. You've already tried retiring once, if you leave RightNow would it be to retire or start something else?
I'm not sure the whole concept of "retirement" as we generally understand it is really valid. We all have skills and resources, and it's really our responsibility to use those skills and resources in a worthwhile manner. Putting them on the shelf doesn't seem very appealing or even ethical to me. What I'm doing today at RightNow is providing software that helps companies take better care of their customers. Before that, I was providing companies with software that helped companies better manage their technology. While I can't predict the future, I'd assume it would involve providing software that helps companies do something else.
There are those who say the on-demand space is a three-way horserace between you, salesforce.com and NetSuite. If one of you comes to dominate, what will that company have done the others didn't? The big issue isn't who is going to dominate the on-demand space. It's the fact that the on-demand space is going to dominate the enterprise software market as a whole. So instead of looking at on-demand as a single market that the three of us are battling to dominate, it's probably better to see on-demand as a business model that's completely replacing an old-fashioned, low-ROI model that is becoming another artifact in the history of information technology. Based on that view, it really won't impact our ultimate success if, within the context of an on-demand market, salesforce.com does well providing sales automation solution to SMBs -- because we're delivering a complete CRM solution for the enterprise.
SAP and Microsoft are getting ready to jump into hosted CRM. Nervous about being bought out or driven out of business?
There is nothing to be nervous about. These companies are simply recognizing that the hosted model we've been delivering more effectively than anyone else for almost a decade now is the way to go. Their problem is that they can't possibly beat us at our own game. SAP, for example, would have to completely re-write all of its applications from scratch in order to build a multi-tenancy architecture to match ours. And, from a business perspective, they would have to replace this huge services ecosystem they've developed over the years that thrives on complexity and difficulty.
Microsoft faces similar hurdles. Enterprise applications are something you have to sell direct, which they don't do. And Microsoft's customers are in IT -- not the business unit, which is where the on-demand buyer is.
Also, these big software companies like to take the money and run. They have no idea what it's like to depend on a subscription model where you must satisfy your customer to get a renewal. We do. That's why our renewal rate is 90 percent.
So the dinosaurs of the software industry can make all the noise they want to. To really come after us, they'd have to completely cannibalize their existing business. They can't afford to do that, and Wall Street won't let them.
What's the best music to listen to at work?
I work at work, so I'm listening to my team and my customers -- not music. However, when I'm not working, I listen to country-and-western music.
RightNow has quite an innovative employee charitable contributions program. Why is that an important part of the RightNow corporate culture?
It's a sad day when people are just working for a paycheck. I could talk about Maslow's hierarchy here, but suffice to say that higher purpose and a sense of mission are essential for human happiness. Plus, I believe both individuals and organizations have a responsibility to the community in which they exist. That means giving time and talent, not just money. So, in addition to matching our employees' charitable contributions, we also encourage hands-on participation by paying them for up to 40 hours of volunteer work per year. With 500 employees, that means we're pouring thousands of hours of effort into very worthwhile endeavors everywhere our business operates.
You've bootstrapped a leading high-tech firm in Montana from your spare bedroom to a campus full of buildings, which just proves it can be done anywhere, I guess. Are there times your location's a disadvantage, like recruiting executive talent from the coasts?
Bozeman is actually a great location for building an organization. People here have a great work ethic, we have a high retention rate, and our office costs are obviously a fraction of what they'd be in Silicon Valley. We've overcome any recruiting issues we might have had by starting our interviews with two questions: What's your favorite winter sport, and what small town did your spouse grow up in? We even had one candidate who declined our offer of a hotel room, because he said he'd rather camp out for a few nights. It turned out we had a pretty bad snowstorm that week, but he camped out anyway. Needless to say, he took the job.
Speaking of bootstrapping, for which you're a pretty vocal advocate and poster boy, when would you advise someone to look for funding?
If you get to a point where you could really use additional capital to build your business, that's fine. The problem is that a lot of business owners are short of money because they haven't really figured out their business yet -- and that's why they're not making any money. When that's the case, borrowing money just further delays confrontation with your core problem. From my experience, too much outside funding too early in the game just allows people to run a sloppy business and avoid the hard work of actually delivering value to customers. On the other hand, when we bootstrapped RightNow, we doubled our revenue and employees every 90 days for two years. That's because we were actually giving customers something they wanted at a price they were willing to day.
Over the next few years, what are CRM customers going to be asking vendors for, or expecting, that they're not now?
A lot of CRM initiatives have failed because people mistakenly believed that you could "manage" your customers. Actually, customers don't want you to manage them. They want you to serve them. They want you to understand their needs when you market to them, sell to them and provide them with ongoing service. So companies that want to apply CRM technology in a way that provides competitive differentiation are going to want solutions that make them more responsive to their customer and give them more complete and granular visibility into what their customers need.
The other thing is that CRM buyers want to measure their success against very specific goals. They're not so interested in vague, high-level promises about customer relationships. They want to achieve quantifiable productivity improvements in their contact centers and see concrete revenue growth as a result of their CRM investments.
My editor was intrigued by your saying 80 percent of the improvements in your products come from users, and 20 percent from "the Big Idea." Can you elaborate on the Big Idea? Do you mean what y'all at RightNow think, or the accepted wisdom in the industry about what's coming?
Every so often in the development of your business, you get to the top of a hill. What you have to do then is find a bigger hill to climb that's adjacent to the one you're on top of at the time. That's the next Big Idea for your company. For us, the first hill was web self-service. Once we became the leaders there, we turned our eyes to delivering a full eservice suite. Then we entered the contact center market. And now we're establishing our leadership in end-to-end CRM. The key to finding the next hill is to understand what the market wants and where your internal competencies can take you. So, while your current customers can tell you how to improve the solutions you're delivering today, they're not going to necessarily give you the vision of where you should take your company tomorrow. That's a strategic management exercise that you have to do internally, with the best possible intelligence you can get about the outside world.
Why hasn't the tater pig caught on nationally yet? I'm sure it's just a matter of time.
We're not sure we want the tater pig to catch on nationally, actually, because it's an important recruiting incentive for us. In fact, we have attorneys and lobbyists currently working around the clock to establish ironclad legal protections that would prevent any culinary establishment anywhere else in the United States or overseas from cooking any form of sausage whatsoever inside of any potato or other edible tuber.
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David Sims is contributing editor for TMCnet. For more articles by David Sims, please visit:
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