Neil Patel

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Manish Sood has taken his idea for a startup to becoming a billion-dollar company. They are aiming to go even far larger than that. His venture, Reltio has raised funding from top-tier investors like Brighton Park Capital, NewView Capital, Sapphire Ventures, and Crosslink Capital.

In this episode, you will learn:

  • The day the FTC cost them $3M a year in revenue
  • Choosing to step aside and hire an outside CEO
  • Using the Rule of 40 to grow your business
  • The 3 things Manish says you need to build a great startup business


For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.

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The Ultimate Guide To Pitch Decks

Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).

Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.

About Manish Sood:

Manish is the Founder, Chairman, and Chief Technology Officer of Reltio, the first cloud-native, software-as-a-service (SaaS) data platform. He oversees Reltio’s Office of the CTO, M&A strategy, business development, long-term product strategy, and innovation. An entrepreneur with a vision of the big-picture ways data can drive business and industry transformations, Manish founded Reltio in 2011 to help organizations accelerate the value of their data and deliver on business outcomes. Since its inception, Manish has led Reltio’s evolution from the concept stage to a high-growth company valued at $1.7 billion with more than $100 million in annual revenue.

Manish previously led product strategy and management for the Master Data Management (MDM) platform at Informatica and Siperian. During his career, Manish has architected some of the largest and most widely used data management solutions used by most Fortune 500 companies today. Manish holds a bachelor’s degree in mechanical engineering from Andhra University College of Engineering.

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Connect with Manish Sood:

Read the Full Transcription of the Interview:

Alejandro: Alright, hello everyone and welcome to the deal maker show. So super exciting guest that we have today. We’re going to be talking a lot about building scaling financing I mean working and dealing with downturns. But really the journey of building a billion dollar company so without further ado. Let’s welcome our guests today Manish Su welcome to the show. Hello.

Manish Sood: A alejandro. It’s great to be on the show. Thank you for having me here.

Alejandro: So give us a little of a walkthrough memory lane because you were born in India in Delhi so how was life growing up in Delhi.

Manish Sood: Um, well, um, as I was growing up. It was you know before India went through its wave of opening up the markets to international players and companies and. It was a closed market. It was lots of people. Um, you know at my age growing up there where most of our parents were working for large government organizations and you know. It was a different time and era at that point in time. So entrepreneurship was not necessarily the top of list item for anybody growing up during that time.

Alejandro: Well obviously top of the list always in India is a really big time degrees and in this case, you know like you definitely follow that path and studied engineering. So why? do you think that there’s that much of a. Social pressure in India around becoming an engineer or becoming a doctor. What’s what’s the deal doctor.

Manish Sood: Um, think think about the time that we were growing up in you know India going through independence you know as a company growing up a lot of the job opportunities were with the government sector and you know. Entrepreneurship as I mentioned was not big on the list. So the best way for anybody to succeed was to go become a doctor or an engineer because those were the jobs that were most sought after and you know, definitely assured a good standard of living. For anybody in that profession. So that was that was a rallying cry for all of the the kids growing up a lot of pressure on how to succeed in that type of a model depended on getting to the a better education and degrees as you move forward.

Manish Sood: Hey Alejandro yeah hold on a second let me fix this thing and see if I can have a yeah yeah, let me let me change that give me just a None

Alejandro: Yeah, it looks like I lost you there. I Think something something on the internet now.

Manish Sood: Hopefully this should work better. Let’s see if you can hear me.

Manish Sood: Alejandro can you hear me now.

Alejandro: Yeah, yeah, can you hear me? well.

Manish Sood: Alejandro.

Alejandro: I Can you hear me? well man can you hear me well can you hear me? well.

Alejandro: It Okay, all right? So so is it working now on your end. Can you hear me? well all right great. So I think that we we may want to edit you know this piece but that’s fine.

Manish Sood: Alejandro, let’s let’s try this. This should be a better connection for some reason of having some difficulty. Guess I can.

Alejandro: So so why don’t we get started again. Why don’t you just walk me through the you know we’ll we’ll piece it together and we’ll edit this piece. But why don’t you go again with with the um with live growing up in inelli without question. So how was how was how was life growing up in the le.

Manish Sood: Yeah, so so alejaro um, growing up in the 80 s the indian economies was not yet open to the rest of the world and you know you ask the question. Ah why Why? such a big emphasis on getting degrees and becoming engineers or doctors in India primarily because that was seen as the safe and the best passage to a secure paycheck longer term and where the growth opportunities were. So most of the kids or the parents you know oriented their kids to think about that as the best career option moving forward. But as the economy started to open in early 90 s and mid ninety s that notion started to evolve and we see a lot of change happening you know today but growing up those options were very limited and few and far and.

Alejandro: So now now in your case you know you work there after your after getting your degree for about 4 years and then eventually you landed here in the Us particularly in this case in Chicago. So how do you end up in the us how was that how was that process like why. Why did that happen? oh.

Manish Sood: Yeah, ah, right around that time you know for anybody who had a background in software technology and there were lots of opportunities that were opening up in the us and. Um I got access to such an opportunity where I was hired by a company in in the us and they offered to move me to Chicago I took that opportunity up there had always been a desire to go explore the world and see. Ah, you know what other opportunities in a place like us would be available. So with that I made the move came to Chicago and very soon I was working on a project in the silicon valley so I lasted about six months in the Chicago winter. Ah, before I was exposed to life in Silicon Valley and after that there was no looking back? Um, you know the the thriving ecosystem in silicon valley the innovation that was taking place even even in early two thousand s was extremely. Amazing and interesting for me as ah as a person working in the software area.

Alejandro: And in your case, you join an early stage company which is always the best way to get your feet wet in the venture world and this company called Siberian You know you were there for quite a while and and you were able to really see the full cycle from the beginning all the way to the Acquisition. So. How is this journey for you like so.

Manish Sood: Ah, the journey at siberian where I started in 2002 right after the telecom west I was I was at a telecom company before that. But you know that sort of forced me to look at opportunities and you know being in Silicon Valley the idea of going and working for an ah early stage startup was really appealing and the best part was that they were trying to productize the type of work that I had done ah with my customers before. So with that in mind you know I joined a team of about 10 engineers who were trying to bring this concept to life. They didn’t even have a name for a category. They were just calling it. You know customer data integration at that point in time. And later on as we went through various stages of growth. It became master data management as ah as a terminology ah that the industry evolved to and you know we we not only worked with lots of different customers in different verticals. But got to see the cycle of you know how do you take a company from an idea None people working on it to you know about None people and then getting acquired by informatica in 2010 and then seeing a little bit of the movie after the acquisition where um. When a large company picks up a small software startup. How do they leverage it in their go to market because they already have a customer base and they’re trying to scale the the go to-market side of the equation with a new product. Capability. Um, you know that entire cycle that entire journey was extremely interesting and also a great learning because having seen that cycle that really informed how I could go about it if I were to embark. On that journey once again and start with an idea from scratch.

Alejandro: Um, now in this case I mean you stayed with Siberia for 7 years I mean that like in dark years is like a None in the startup world. So what do you think? kept you for for that long with the company.

Manish Sood: Um, yeah, the the area of work was extremely interesting the customers that we were working with were large financial institutions insurance companies. Um you know retail and pharma type of companies and seeing how they were able to. Get benefit from something that we had conceived as an idea was extremely fulfilling and every year it was you know the the same type of fulfillment that kept me in that journey for a long time and yes in in the. Software work those are dog years. But again you know that was that was an extremely interesting journey but the the key thing out of it was that every year there was growth personally for me as well. As for the business that I was engaged with. And and that is an interesting aspect that you know it was. It was a lot of learning every twelve months which didn’t really, ah you know I stayed in the game um and didn’t look around for what else was possible so that was that was maybe. Ah, little bit of the blinders on. But yeah, the valuable experience that I gained out of it was the entire lifecycle that you go through in such a journey.

Alejandro: I So then once the company got acquired. You know at this point you have the full you know visibility into what the cycle of ah early stage Hypergrowth company is so I mean incredible experience and what happened next.

Manish Sood: So um, you know we we have been acquired by Informatic and the the journey that I’m starting to see is that there is going to be a lot of effort and time and all for the right reasons. Go sell that product that they’ve just acquired to the 4000 plus customers that they have which is which is a huge market opportunity in that type of a scenario but at the same time The the market was evolving the needs of the customers that I was working with were evolving. And it was very clear and evident that the direction that we were headed in as an industry would require net new capabilities to be brought to life now. The choice was you know here’s something that we have built that will be scaled to. You know, very large proportion by this new company that has acquired us or is it more attractive to go build something from scratch where we can solve the emerging customer problem in a net new way and and that’s where. Ah, yeah, the fork in the road came where I had to make a decision which thing to go work on and what excited me more about the opportunity and in this case I decided that in 2011 I would leave Informatica start Realtio because. The market opportunity that was going to evolve in the next couple of decades was going to be so large that even starting on something that was just an idea and building something for that need would be much more compelling and larger in scope and size.

Alejandro: So at this point you start with Realtio you know which is your your baby. You know the company you you you found it. So so how was I mean especially for the people that are listening what ended up being the business model of the company. How do you guys make money. Yeah.

Manish Sood: That it was well worth the effort.

Manish Sood: So um, we are a software as a service data management platform. Um, we have built this capability from day one not only as a software as a service capability but we have built it on public Cloud infrastructure. And there were some you know foundational elements of the thesis that we um, formed this around we we looked at as the layer cake of innovation where every previous version of the software that had been created in this space had some limitations but at the same time there was this. Baggage of on-prem software in this space which we thought was best solved by leveraging public Cloud Infrastructure New Concepts and infrastructure that were horizontally scaling and with all of that in mind as the technical Underpinnings. We decided that as a software as a service company the way to bring this to Life. We would have to change the paradigm for our customers and in that changing paradigm we would have to go to a monetization model where we have to align our pricing or how we sell. The value that we provide So in our case, you know we take data from multiple sources and unify that data into ah let’s say 360 degree view of customer or product or supplier type of information. That comes from these multiple streams or sources um or applications that are in the enterprise and at the end of how we crunch through that Data. We end up with a unified view of that information from these multiple streams. So We we charge our customers based on the number of consolidated profiles of customers product supplier type of information that they’re managing inside our platform. Ah which is also the core value that they’re deriving. By creating a single source of truth for such information that they run their business on so that that became the commercialization model for us and you know the second part of the commercialization for us was that we always looked at this as a horizontal technical problem. Which applies to every vertical every business that is out there a company of every size large medium or small but in terms of how you bring this to Market. Sometimes you run into the boon and bane of horizontal platform technologies which is that you can.

Manish Sood: Solve every problem in every vertical in every business use case with a horizontal platform. But how do you pick and choose or prioritize which verticals to go after none so even though we designed our platform as a horizontal capability. We made our go-to market more vertical-oriented so we first started talking to customers in life sciences and then after we found some success there. We looked at what are the other verticals that have similar kinds of needs. So that we could expand into similar verticals with the same set of concepts and create high degree of repeatability in our go- tomarket motions. So that’s how we went from life sciences to Healthcare Healthcare to insurance insurance to financial services. Retail and high-tech those are some of the key verticals that we are now present in and work with customers in but at the same time you know some amount of discipline in terms of how you go apply a vertical oriented go to market strategy to a horizontal platform.

Alejandro: And I know that you guys also have raised a quite a bit of money. So how much money have you guys raised today.

Manish Sood: Or product capability that you’re building.

Manish Sood: In aggregate since our foundation we have raised about None our last round of capital ah raise was in November of 2021 and that was None round

Alejandro: And in this sense I know that for you guys the series a took a little bit of time to raise I mean literally we’re talking about like more than 4 years why was that the case.

Manish Sood: Ah, led by Brighton Park capital

Manish Sood: Um, great question. Um, you know when I started in 2011 I had never raised capital before I had never founded a company run it as a Ceo um and not having some of that experience. You know first of all, ah. The only way I knew that I could go build a product around this was to go back and talk to customers. In fact, before we even raised any kind of capital I had signed up customers who were already paying us for the product that we were building in parallel. Um, and some of these early customers were more interested in the vision and the value that it could bring to their companies or to their business and they were willing to pay for that even even in those early stages to partner with us and help shape the the direction of the product and. By the time we got to around you know early 20 late 2013 early 2014 we were generating some durable long-term revenue with some long-term contracts with these customers and we had grown the business to almost cash flow break even and um. You know by the time we got to the end of 2014 at about $1000000 in ar being generated and at that point we thought that it was the right time for us to scale our operations and start building a go- tomarket machine around it. And that’s when we reached out and started to have some serious discussions around fundraising and the other other half of the story was that not having raised capital before um plus the fact that we were working in a. Complex area that wasn’t as easy or as simple to explain to some of the investors who were looking for. Um you know is this an application is this a platform How do you How long does it take for customers to get up and running none of those answers were simple or straightforward or easy. And we had to refine our story of the the product and the capabilities and the value that it would bring to the customers and a little bit of it. We had to actually show proof and examples before some of the investors that we were talking to could really understand the overall concept. And that’s where um, you know a little bit of the maturity. Both of the the market as well as the concept that we were bringing to life and the way in which we told the story all of those 3 things had to evolve before we could get to meaningful conversations.

Manish Sood: Um, with some of the early investors who did participate and led the series a around for us in 2015

Alejandro: So So during during obviously those different cycles that you guys have gone through you know, obviously as they say every financing cycle goes in parallel with a lifecycle you know of the of the business that you are looking to unlock. But. In this case, you know as an entrepreneur you’ve had the highs you’ve had the Lows. So How do you really push through and have the right type of determination to really tackle. Whatever is in front of you.

Manish Sood: Well, there are there. There is never a straight line to this growth. We have gone from 0 to 1 ah hundred plus million dollars of arr in the last ten years ah but at the same time. Um, you know every company goes through its highs and lows. There. There were some hurdles in how we raised our you know got to our Cda and cdb round of financing. Um, it wasn’t straightforward. It wasn’t easy. There was a lot of effort that was put into it. You know lots of ups and downs in those. Even the customers that we were working with. We had some situations where um beyond our control beyond the customer’s control. You know. For example, None of our earliest customers that we had ah was a combination where None extremely large companies are. $45000000000 business and a $25000000000 business. They were coming together in a m and a transaction and realtio was chosen as the data platform to combine the data for customers products suppliers that they were working with across 2 companies. In this kind of an m and a situation and that was going to drive hundreds of millions dollars worth of synergies even before the m and a ah was to consummate but and you know it was one of our largest deals. It was revenue. That was $3000000 a year in the early days but somehow we ran into a situation where the um federal trade commission stuck that m and a down they rejected it and that caused. That revenue stream for us to disappear and you know when you’re when you’re in the early stages of your lifecycle haven’t really raised any capital and you lose $3000000 worth of annual recurring revenue that is a big hit to the company. But. You know is the is the product that you’re working on wrong or is the go tomarket wrong in those in that case, none of those things were wrong, but we still had a revenue head that we had to work through and survive so those types of highs and lows happen to every business. You know you also run into situations that you have never thought would happen such as you know what everybody had to go through in the covid type of a scenario. You’re never prepared for those situations but you have to figure out a way through those.

Manish Sood: And the only way you can do that is by believing in the core concept or the direction that you’re working on and maintaining the path towards that notstar while making sure you’re protecting your business by managing the finances by managing you know the. The team that you’re working with and keeping them committed towards the not start Direction. We had to do the same thing and you know that is how we’ve been able to work through these ups and downs that almost every business encounters you know during their journey.

Alejandro: And you know here we’re talking about cycles and you know obviously faces and stages. So at what point for you after being the Ceo of the business for 9 years do you realize? it’s time to bring you know someone else and and for you to.

Manish Sood: And that’s that’s been no different for us as well.

Alejandro: You know, take more of the Cto role and and and for someone you know that perhaps has the right type of experience for whatever the company has in front of it. You know for them to take the rainside. What point do you realize? that’s the moment to look for someone.

Manish Sood: So Alejandro in in this journey very early on when I started realtio I thought that I could you know given the market opportunity and size if we do things right? then I would be able to take it up to $100000000 in arr. But you know the market opportunity is much larger so we would really have to think about at every stage. Do. We have the right team that would be able to execute on it and as I as I looked at the nine years of my journey that belief that we have to have the right team. Ah, at every stage of growth became um more concrete and that belief drove me to think about that. It’s not just the the people that I’m hiring but at some point in time I may have to replace myself because the opportunity that we have in front of us. Is much larger than my ability to continue to be the ceos and in this case I used the hundred million dollar arr as sort of the milestone where um, the once once a startup process that threshold. Um, you really have to think about what are the next five years going to look like and how you’re going to go from none to a billion dollars in revenue and once again, ask the question. Do we have the right team the right skill set. The right aptitude and attitude available around the table that will help us make that next breakthrough and that led me to the conclusion that I had to look for somebody who brought in that operational experience of having run businesses at scale in that. You know half a billion to a billion dollar type of a range and get that skillset at the table in the team. Um, you know right around that mile marker of $100000000 Era so that that drove the thought process. And that’s how I got started with the search for you know who would be the successor in this type of situation for me.

Alejandro: And that is a really big deal. So I mean what is typically the process for bringing someone like that and making sure that it’s the right fit.

Manish Sood: Yeah, it’s the it’s not easy. It’s not straightforward there. There are no books that describe a precise formula and there is no precise formula for it. So it has to you know to a large extent. Depend on what you have built out as the cultural foundation of the company because culture drives strategy strategy and in this case, you know we had to make sure that we had a strong cultural foundation. We had the market opportunity in front of us that would. Allow us to make such a change and also look at the skill set that was inside the team versus where we needed to go out and complement it with the person who would come in and leave the company. So a combination of those factors. Led us to Chris Highland who you know I’ve been able to partner with and he’s now leading the charge as the Ceo at realtio with the operational experience that he brings to the table after having been at companies like citrix at Intuit where he’s. He’s run teams at scale and the size of the business. You know that the aspire to be and that that is helping us at realtio to move to that next milestone that we have in front of us.

Alejandro: Now for the people that are listening to get an idea on the scope on the size of realty today I mean anything that you can share in terms of number of employees or anything else that you feel comfortable sharing.

Manish Sood: Yeah, we are at about None employees worldwide. Ah we have teams that are spread across the us Europe and India and we are north of $ 100000000 in subscription. Annual recurring revenue at this point in time. Um, and our goal is to you know, get to the ah to be a rule of 40 growth company as we move forward because we are trying to drive profitable growth.

Alejandro: And if in the event let’s say you were to go to sleep tonight and you were to wake up in a world where the vision of realty is fully realized what would that world look like.

Manish Sood: For our business as we look ahead.

Manish Sood: That word would look like where every company out there every business out there has realtio as the core operating system for data that their business runs on because today. As you know you know, even even a business. The size of real here runs none plus different applications to engage with the customer audience that we are working with because think about the lifecycle of ah you know the marketing sales. Um. Finance support all of these different areas touch any given customer that we work with but the customer information is spread across all these different applications and in order to really drive the end to end business synergies where we can drive growth drive efficiency. And you know also meet all the compliance type of requirements requires us to have a comprehensive end-to-end view of who our customer is and what we are doing with that customer at any given point in time and that is a critical need for every business out there today but the. The hurdles standing in the way are also the same multiple applications that cause fragmentation. You know the need for digital and cloud transformation that every business is going through requires data to be the core enabling capability in the center. Off that business ecosystem and that’s that’s what we are providing and that’s why we believe that every company every business out there will need a relative type of a data platform capability as we look at the next None to 10 year type of a time horizon and that’s.

Alejandro: So you’ve been at it now for about 11 years with realtio I mean it’s quite um, a good amount of time and if I was to ask you or let’s say if I was to put you into a time machine.

Manish Sood: That’s the opportunity that we are playing for.

Alejandro: And bring you back in time with all the incredible lessons that you’ve that you’ve learned you know throughout this journey with realtio and and being able to have that opportunity of having a discussion with your younger self. Perhaps that managed that was still. You know as hyperian and and figuring you know the whole Silicon Valley Hypergrowth you know type of thing of startups. You know, right? before you were to give that notice or right before you were to think about launching a business imagine you were able to have a chat there with that younger manish and give that yoga man niche. None piece of advice before landing a business. What will that piece of advice be and why give in what you know now now.

Manish Sood: Um, 3 3 things that come to mind the first one is our business. We are. We’re in the software business. There is no capital equipment.. There is no factory out there where we are stamping out. You know some kind of a product through a machine. Our core foundation is based on the people that we hire to help us fulfill our mission and that that is a key part of the focus that we have to go and look at so bringing in the right people bringing creating the right Mindset. Ah, creating the right cultural foundation becomes extremely important because this is all about the people. The intellectual capital and creating the environment where these people can do the best work off their lifetime is the type of environment that we need to create so people. Culture and the None thing that I would mention is we all go through cycles of you know the valuations are extremely high or the valuations are extremely low Valuations. Don’t matter what matters is what is the durable business revenue that you’re creating. As you grow your business and in order to do that You have to you know the the best principle that I have come across is the rule of 40 growth company so that you can drive responsible growth for your business because you will have situations where your investors depending on the flavor of the day. Or the month in the market related to valuations may come to you and say spend like crazy to drive growth or be ultra conservative because the market is you know, not yet ready to see that kind of emotion. But the thing that I’ve found consistent and durable across all of the the different cycles that we’ve gone through is this notion of a rule of 40 growth Company. So Those are the 3 things that come to mind people culture and rule of 40 as the durable advantage that you can build for your business.

Alejandro: Amazing Well manish for the people that are listening. What is the best way for them to reach out and say hi.

Manish Sood: Ah, they can reach out to me on Linkedin um, or um, you know the easiest way is maneesh at real dot com happy to connect.

Alejandro: Amazing! well well myies thank you so so much for being on the deal maker show today. It has been an honor to have you with us.

Manish Sood: Well thank you Alejandro this has been great to be on the show and thank you for the opportunity.

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