Ray Grainger is the co-founder and CEO at Mavenlink which provides a modern software platform for professional and marketing services organizations. The company has raised so far $111 million from investors like Goldman Sachs or Carrick Capital Partners. Prior to Mavenlink, Ray Grainger was the Global Managing Partner at Accenture and also had a leadership position at InQuira.
In this episode you will learn:
- Hiring quality people
- The number one thing to look for in new hires
- Who to put on your board
- How to effectively manage boards outside of the quarterly meeting
- The secrets to problem-solving
- The value of being more aggressive in fundraising earlier on
- The importance of being bolder in your product earlier
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.
The Ultimate Guide To Pitch Decks
Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
About Ray Grainger:
Ray Grainger is the Founder and CEO of Mavenlink, where he is leading the mission to reinvent the way businesses do work. He has dedicated his career to helping clients succeed, and brings over 25 years of experience in software and high technology consulting to Mavenlink.
Ray began his career at Accenture, where he spent 17 years honing his expertise in professional services management as Global Managing Partner, consulting for both large enterprises as well as small and medium-sized businesses. During his time at Accenture, Ray also invested in several technology companies through Accenture Technology Ventures, including enterprise knowledge management vendor InQuira. He later became Executive Vice President of Professional Services and Strategic Alliances at InQuira (acquired by Oracle in 2011), where he met his Mavenlink co-founders, Roger Neel and Sean Crafts.
With a career built on tackling tough problems to help organizations work smarter and more profitably, Ray is the embodiment of the Mavenlink Mission: to help companies of any size across the globe conduct business better by combining technology and industry best practices. In his spare time, Ray is a true adventurer. He is an avid diver, world traveler, and has served on two expeditions to Antarctica with the National Science Foundation (for which he earned a congressional medal for Antarctic Service). Ray holds a B.S. in Engineering with distinction from Harvey Mudd College, where he is also a trustee.
Connect with Ray Grainger:
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FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrighty. Hello everyone and welcome to the DealMakers show. I’m thrilled with the guest that we have today. I think that we’re going to learn a lot about strategy, a lot about building and scaling companies, and without further ado, I want to welcome our guest today, Ray Grainger. Welcome to the show today.
Ray Grainger: My pleasure, Alejandro. Great to be with you.
Alejandro: How was life growing up in Southern California, Ray?
Ray Grainger: I enjoyed it. I’m a native. I was born and raised here. I’ve traveled and lived in a lot of places as a consultant with Accenture. I’ve always called Southern California home. It’s hard to beat the weather.
Alejandro: The weather there is unbelievable. By the way, Orange County, I love it because it’s also very residential. So, really great for raising families. Is that right?
Ray Grainger: It was. Yeah. My kids were also born and raised here. They’ve since moved on, but it was just a great place to raise a family.
Alejandro: That’s fantastic. So, what got you into science and engineering?
Ray Grainger: You know, in high school, I had always been interested in science, math, biology, and courses like that. Right after I graduated from high school, I had such an interest in it. I went to work for the National Science Foundation and was on two expeditions to the South Pole. This was about 40 years ago, and spent nearly a year there. So, I just had a high affinity for science. Then when I went to college, stayed in that and studied science and engineering.
Alejandro: Then what got you into consulting? Why did you decide to do your career—you did almost like 17 years. So, what got you into consulting?
Ray Grainger: You know, it’s interesting. When I was in college, I worked on some industrial projects for a company in the health care industry, a medical device industry. What I really enjoyed about that was the business aspect of bringing products to market, solving business problems, and applying technology in that process. When I was in the interviewing process in college, it just seemed like consulting specifically—I did technology consulting, information technology consulting to be specific. It just seemed like a blend of both of my interests and seemed like a natural. I also like the fact that I could learn so much about different businesses, business processes, different technologies, and build a career around that. It just sounded appealing.
Alejandro: One of the things that I see, at least from interviewing people and from getting to know founders is that some of the most successful have come from consulting firms. Why would you say this is the case? What kind of background or experience do you get to prepare you so well for the world of entrepreneurship?
Ray Grainger: There are two things. One is preparing for the world of entrepreneurship, but I think first and foremost by joining a consulting firm is the range of industries that you’re exposed to. The business problems faced by different companies. Then the specific projects that you get to work on at a very fast pace. Once one is done, you’re onto the next one. So, over a very short period of time, you accumulate a breath of knowledge and a depth of technology understanding quite quickly. I think more so than you might do if you went straight into industry and worked for one or two companies for a longer period of time. Going into the consulting industry just gives you a broader range of experiences.
Alejandro: I’m sure, for example, being 17 years like you were at Accenture where you ended up becoming Global Managing Partner which is very impressive. You, for example, were able to identify certain patterns on certain companies that worked that had outstanding management and leadership teams and some companies that didn’t work so well. What were some of those patterns?
Ray Grainger: I’ll tell you, the one big takeaway for me is the leadership trends that I observed in the clients that I consulted to and how they managed teams, in particular how they hired leadership teams and other personnel in their business. It really was around team formation and leadership and being exposed to different industries, specifically the technology industry which is where I spent a good portion of my time. It allowed me to have enough breadth of knowledge to venture out and do my own business.
Alejandro: We’ll get to that in just a bit. Why did you decide to make a switch and join InQuira in 2005?
Ray Grainger: Really, I had the idea for Mavenlink, the business that we’re growing today for some time. It was born out of my consulting experience at Accenture specifically consulting into the high-tech industry. I observed a gap in the technology needs of service providers. Having come from a service provider, I understood the domain very well, and then, of course, saw the gap in technology. So, I had formulated the idea for Mavenlink. While I had consulted to a lot of software companies, I had never been an operating executive in one, and I wanted to go build my own company. So, I transitioned from Accenture to InQuira and became an operating executive there to learn a whole bunch of things firsthand by being on the inside so to speak. But it was all in preparation of being able to start my own software company.
Alejandro: That’s really amazing; like very strategic for sure. In many instances, I hear that whenever you make a switch in your professional career. It doesn’t need to be viewed as the end goal. It needs to be viewed as the bridge that is going to get you to the next chapter in your professional career. I’m really glad that you are touching on this. What were some of the key lessons that you learned here?
Ray Grainger: When I went to InQuira, I’d known about the company. InQuira was an Accenture Technologies Ventures investment, and I was part of the team that helped make that investment into InQuira. So, I knew about the company, and it was natural for me to consider joining them when I left the firm. I knew about their business and knew that they were starting to achieve some growth trajectory that it made sense for me to be able to go in and help them. A couple of things that, I’ll say lacked that I knew I needed to learn was really how to operate a product engineering function. How to organize the company for success. Things like where should product management reside? Should it be in marketing? Should it be tied with engineering? Those kinds of things. How to successfully go from an SMB go to market business to an enterprise business. What are the transitions that a company needs to make in order to move to new markets? All of those things were things I sought to learn when I went to InQuira.
Alejandro: Then walk us through the incubation process of you really leading up to giving your notice to say, “Hey, I’m going to go out and do my own thing right now.”
Ray Grainger: You mean when did I leave InQuira to actually say, “Now it’s time?”
Alejandro: Yeah because you already had that thought in the back of your head, so at one point it just hit you that it was the right time to make the move. So, let us be insiders of that.
Ray Grainger: Sure. I had planned when I left Accenture and went to InQuira with this knowledge that I would go do this business at Mavenlink, I figured it would be about a three-year process. So, it was right about that. I had already put a timeline together of when I would think about starting Mavenlink, so I was in that period. I was working with one of my colleagues from my house. We did a lot of great work together at InQuira, and I pulled down my draft of the business plan and what it was all about with a brief description, and I shared it with him. He just gave me a resounding “Yes, I like it.” But also said, “Let’s go do it. I’m all in.” He was seeking to actually join and become one of my co-founders in the business and just gave me a validation that the time was now. He and I had done some great business together, and I felt that he would also make a good co-founder. So, all of that started to come together very quickly. We recognized right away that we would also need a technical co-founder, and I had already had somebody in mind. Then he said, “We need to call Roger.” That was one of our technical colleagues. I had already eyed him too to be a participant in this business. He said, “Let’s get him on the phone.” Roger also gave a resounding “Yes.” Within the first day of describing to them what I wanted to do, we actually had the co-founder team established as well. So, it came together very quickly, but along the timeline that I had anticipated.
Alejandro: Really cool. Did you guys brainstorm a little bit because you were really clear from years ago? So, how was it till you arrived to the final business model and you say, “This is it. This is how we’re going to make money.”
Ray Grainger: Once we had the idea that it would be us as co-founders, and I had also done a little bit of work to say, “What’s the ideal number of co-founders you want in a business?” Everybody was telling me not to go it alone. That you’d have too few resources to tap into, and you don’t have the breadth of skills to do everything, and that three seemed to be the right number.” Once we had that defined, it was “When? Do all of us join at the same time?” We determined that that wouldn’t make sense, that there were timing issues, and family concerns, and those kinds of things that had to be taken care of separately and individually. We worked out a timeline that made sense for the business when the skills that a particular co-founder had would be able to be brought to bear in the business. That was staged over about a six-to-eight-month period. We outlined where we needed to be. Built a business plan, a timeline, but we had to do everything from the beginning like decide what kind of an entity we would set up. Would it be a C Corp, an LLC, or why would we go one way or the other? What would be the equity splits of the co-founders? Where would the seed capital come from? Those were all the early month or two. Then we spent considerable time coming up with a high-fidelity, call it mock-up and visual identity of the business. That was the first several months, and all that was going well. We reseeded the company. Of course, right when we were getting ready to go do great things, the global financial crisis hit right while we were getting started, and that was other things we had to do to get through that period.
Alejandro: I remember that reading that you apparently sold before that the stuff that you had at Accenture, and that basically was what helped to bootstrap the company. Is that right?
Ray Grainger: It is, and it was a really fortuitous timing because I left InQuira first to get all the foundational work established in the business and build a business plan. Part of that is, of course, seeding the company with enough capital to get us through some critical milestones in the early days of the business, so I sold some of my founders’ stock that I had from our IPO at Accenture. It was just good timing; when the financial crisis hit, all of our seed capital was in cash. The good news about that is, of course, everything got really cheap in terms of contract labor, travel cost, those kinds of things. We were able to extend our seed capital quite a ways during the financial crisis.
Alejandro: How long did it take until you were able to raise capital?
Ray Grainger: Until we raised any, what I’ll call significant capital, and I’ll call it the multiple-millions of capital from outside investors was three years. So, a founder capital, most of it from my own capital was the first three years of the business, so I founded it principally then. I also had the good fortune of a great network of people, friends, and family, many of them were former or current Accenture partners who came in through a friends and family round on a convertible note structure during the financial crisis. They preferred to put their money with me, felt I would steward it better than say Merrill Lynch would for them. So, we were able to raise about a million-and-a-half dollars in convertible notes plus the seed capital that I put in which was considerable and actually three times the amount that I had expected to put in, but that was sufficient to get us three years of product and business development prior to raising outside capital.
Alejandro: Ray, one question that I want to ask you here is someone that has that kind of background—you are someone who is very strategic. You think way ahead. So, there are a lot of people now that are talking about a potential correction. We’re coming out of this really incredible bull run with the markets. From what you’ve learned during this really tough economic crisis, that it really hit when you were building this, what have you learned that in the event that there would be another correction like you would be well prepared, or at least you would have that really in mind to weather the storm?
Ray Grainger: I think certainly for any entrepreneur capital planning seems like it’s a daily process. I’ve been in capital raising for this company since the day we started. Thinking far enough ahead on what your needs are going to be and where your sources of capital are going to come from just always needs to be front and center. The lessons from the early days, it would take much longer for me to raise significant capital than I ever anticipated. In the early days of the business, we were very frugal. It’s not that we’re not frugal now, but I’d say we’re less so now, but we were there by absolute need because I believed that the capital that we had raised would need to go for a very long time. We didn’t know if we would actually go into depression, and I really wanted to do this business and not back away from it. So, we just got really smart at the kinds of deals we did with vendors. We would bring them in on convertible notes and do trade deals on services. So, we just got creative and resourceful in the early days, and I think that that’s continued for us throughout our history. For anybody that’s in a similar situation, it is continuous capital planning looking far enough ahead being very good at how to predict cash knowing that you’re going to make mistakes. Sometimes, you’re going to spend ahead of true product/market fit. So, you’re going to get less efficient than you had planned to be, and you’ve got to be looking out then at the next capital raise well in advance and try to get it done before a market correction.
Alejandro: Got it. For you guys, Ray, what were the early days like?
Ray Grainger: The early days were a mix of things. A mix of emotions and success I’ll say. Very early on, we maintained just the three co-founders, and we leveraged a lot of partners on contract even for software development. I was a little reluctant in the early days because of the financial crisis to make employment commitments to people. I think once you do that, they’re making big decisions in their lives and their families to join you. So, I preferred to do that on contract. That worked out well for us because while it was an exciting time for us to be building a business, it was also scary because of the financial crisis, and we didn’t have a product that we were bringing to market yet. We were building it. It took several months, probably four months for us to get an initial product out. We delivered a very broad product because we weren’t sure exactly what the fit was going to be. That was really good for us to do that because it allowed us to narrow our focus to what the market specifically wanted and then direct our capital more effectively that way. It was a highly iterative, a lot of work, many, many long days trying to get the product out there, get the understanding of the marketplace, what they needed, and then find the right monetization mechanism as we grew the business. It was a combination of excitement and fear.
Alejandro: Talking about fear, there’s no such thing as a straight-line entrepreneurship, so what have been, let’s say a moment for you guys with Mavenline where you really doubted if you were going to be able to have a tomorrow with the business, and how did the breakthrough to overcome that moment? How was that like?
Ray Grainger: There have been many near-death experiences along the way. But I think the first one came when we released the product. We had the anticipation or at least the desire that we would nail it let’s say. We really thought we had a solid understanding of what the market needed, who the market was, and the breadth of capability in the product that the marketplace was demanding. I spent so many years in this business. I thought I knew it cold. When we got the product out there, we had to redirect a bit. Narrow the focus and redirect the entire design, how it was going to work based on the initial rollout and the clients that were using this model, most of them on an unpaid basis. So, they were not paying us for it, but we’re willing to invest the time and attention to tell us what was going to work and what wasn’t. When we looked at that, we said, “We’ve got a much bigger, deeper product than we had anticipated that the market would require right now and be willing to pay for it. So, we had to ramp up our development efforts at a much higher clip than I had planned capital for, and that’s where I was mentioning that it required me to invest a lot more personal capital in the business than I had ever anticipated. There were many, many months on end where I was writing 100+ thousand-dollar checks to the business and not telling my wife that I was doing that. She had agreed to commit a certain amount of capital, but for three years I’m writing significant checks every month just to keep the business going. I had a belief that we would get there in the end, but it was how long is this going to last that I’m having to continue to fund the business at this level? So, that was a scary time. We had gone out to the venture markets to raise money, but as you may recall, in 2009, 2010 period, it was harder to come by for an early-stage company. Then in 2011, the picture got a little bit brighter. What I had learned was that identifying the right investors who are at the right stage of your business, I think there’s a risk profile that there’s a stage of every investor for every business identifying those early on. Then somebody who identifies with your market segment. Once we narrowed in on that, we were able to raise capital in a much easier way, but it was touch-and-go there in the very early days, and we’ve had that since.
Alejandro: I can imagine. Did your wife finally—you guys were able to get that complete?
Ray Grainger: You know, I’ll tell you. When I raised outside capital for the first time, and the business was sufficiently capitalized let’s say for a couple-year period, I came clean on that one.
Alejandro: I love it.
Ray Grainger: Came clean on that one with her. My wife’s a CPA, and she ended up being the VP of Accounting at Mavenlink for a few years just to make sure everything was on the up-and-up.
Alejandro: Really cool. Talking about fundraising just to follow-up on that, how much capital have you guys raised to date?
Ray Grainger: To date, it’s been considerable. We just closed a 48-million-dollar round, and that brings the total to about 111 million dollars which would be about on par for a company at our stage. As you know or you may know, SaaS businesses are quite capital-intensive to build a recurring base of customers and get that to product/market leadership. So, to date, it’s been 111 million dollars coming off of a 48 million dollar raised a few weeks ago.
Alejandro: Really Cool. Congratulations on that. How have you seen the progress over time like from a strategic perspective and from an expectation’s perspective the progression from financing cycle to financing cycle for Mavenlink?
Ray Grainger: We’re in a good capital-raising market first off. It’s been that way for some time now. We had a little bit of a more challenging time let’s say in 2016, but it’s pretty good right now. There’s a lot of capital to be invested, certainly in SaaS as well. So, that part of the market’s good. The expectations of the investors are also very high. What’s changed from a couple of years ago or a few years ago when we last raised with Goldman Sachs which was in 2016. Back there, the theme was more grow at any cost, and grow fast. I’ll say north of 60% would have been a really good growth rate, and to overinvest in sales and marketing in order to achieve that type of a growth rate. In the last couple of years, that’s changed a bit in our industry, and efficient growth has become more the norm. So, looking at still pretty fast growth rates ending up 35% to 45% year-over-year growth rates, but doing so in a more capital-efficient way with an eye on cash flow breakeven at a 40% growth rate would be a healthy clip. So, that efficient growth is now more the norm for SaaS.
Alejandro: Now knowing what you know about fundraising and also with these strategic backgrounds that you have as well Ray, for the people that are listening that are thinking about raising capital, what piece of advice would you give them?
Ray Grainger: I’ll anchor on a couple of points that I made earlier. 1) Make sure that you really know the investor universe and who the right investors would be for your stage of company and for your particular segment. In our case, we would look at late-stage investors who have a minimum check size of 40 million dollars to invest that have enough additional capital in their fund to make a follow-on investment and whose philosophy on growth and efficient growth would be aligned with ours. I would encourage people to look at similar things for their own business to make sure they’ve got first alignment as they’re going out to the investor universe to narrow down the list. It will make it a much more efficient process and higher likelihood of certainty in closure in the timeframe that people are seeking.
Alejandro: In your case, Ray, how did you meet some of these folks. You have Carrick Capital Partners, Goldman Sachs. How did you meet them?
Ray Grainger: It’s interesting. Carrick Capital, one of the co-founders and managing directors of Carrick is Jim Madden. Jim and I, interestingly enough met when I was in college at Harvey Mudd College, and he was with, at the time it was Author Anderson soon to become Accenture. He was interviewing on campus, and I interviewed with him, and I ended up getting hired. So, I’ve known Jim for some time. We had a pretty big couple of decades of gap where we weren’t close, and then I knew he was investing, and I reached out to him. So, my initial investors came from known people. Subsequently, I’ve used investment bankers to help in the process, and have found them valuable when looking at very large capital raises, multi-tens-of-millions of dollars of capital raises. To my point earlier, I think they’re very good at narrowing down the investor universe for you. They work with these venture capital and private equity firms frequently. They know their profile; they know the people and can run a process that optimizes the CEO and the leadership team’s time. So, that’s the last two rounds I’ve leveraged the services of an investment banker for introductions as well as the entire process.
Alejandro: That’s fantastic. How big is Mavenlink today, Ray?
Ray Grainger: So, we don’t disclose revenue, but people can kind of look at their own proxy, but we have about 320 employees. We’re still on a fast-growth clip. We grew last year at 50% on a topline basis, and we expect to do the same this year. I want to say that at least this last round that we just raised with Carrick and Goldman Sachs together, I’m hoping it’s our last round that will take us to the level of growth that we expect and on a cash flow breakeven basis.
Alejandro: I read somewhere that IPO is something that it will be kind of like in the bucket list. Is that right?
Ray Grainger: Yeah. I think that’s a good way to put it on the bucket list. I think it’s always an option for us. We’ve tried to run the business in a way that that would always be an option for us. The advisors we use, the investors that we have, the health of the business. We’ve always tried to make sure that it’s a buttoned-up business. Part of that is when we took the firm Accenture public, the commentary from the marketplace when we were doing that and the feedback was that it was one of the best-run businesses that the marketplace had seen, and I think Accenture’s growth and stock prices are still reflective of that. That always made me feel good. I wanted to be able to create Mavenlink in a similar way where people viewed Mavenlink as a high-quality buttoned-up business. So, that’s what’s required in order to take a company public, especially today when people expect a high level of maturity and predictability in these businesses, and that’s what we seek to offer should we have the chance to do it.
Alejandro: Absolutely, and for example, the companies that are not well buttoned up, the markets are brutal, and they have no mercy. We’re seeing that with some of the different companies that are doing the IPO. To your point there, Ray, of high-quality businesses, and we’ve been talking about people quite a bit. Before, when we were talking about some of the patterns that you saw in businesses that work and businesses the didn’t work. I guess for your business, for Mavenlink, how do you go about really bringing aboard the right people and culture.
Ray Grainger: Yeah. You know, it’s interesting. One is I think we have a wonderful team, and I think that people have commented on the high quality of the workplace. One of the real draws that people tell us when they join Mavenlink and stay is the quality of the people. So, we place a really high emphasis on the recruiting process up until—well, it’s been about 1 1/2 years now. I’m not able to interview everybody in the interviewing process anymore, but I do review all offers, profiles, and backgrounds of people. So, a real high attention to the type of people with really good specification of what makes a high-quality person to join the company. I’m also very proud of the leadership team. I think we have a lot of transparency on the leadership team, a lot of engagement, a lot of high grant of authority and people feel there’s some autonomy amongst the leadership team. So, I think we’ve done a good job of that. I also think that we have a really big, exciting market to go after. I think that attracts people and they think they can build a career here and be successful. Then we also have clarity of purpose. People who join Mavenlink know exactly what we’re doing, the market that we’re targeting, the value of the offering that we provide, and I think all of that helps unify the company.
Alejandro: For the people that are interested in the big market in what you guys are up to, is there a must trait that you guys look for in people?
Ray Grainger: I would say number one is people who are self-starters. In building a business, while I think we do a good job of providing clarity of people and what they’re supposed to do, what I’ve always liked is if you share a common vision, and hire people who have requisite skills and aptitude, if they have a characteristic of being a self-starter, they identify things that need to get fixed, or new parts of the product, or new services, or just things that we should be doing, and they’re vocal about it. If nobody’s doing it, they tend to get an initiative going, and that helps build a business. So, we look for people that have some demonstrated self-starter behavior.
Alejandro: On a board level and more on the corporate structure, from a strategic perspective, what were you looking for in those board members that you basically put in your team? After doing your Series E, obviously that comes as well with board seats that you need to give to those folks, so how were you looking at building the board?
Ray Grainger: Number one, I’ve always felt that we needed to have a high frequency of interaction with our board. While we do have quarterly board meetings, we also have a high frequency of interaction on an every-two-week basis to keep them moving along with the business, and also seek their advice. So, I think that’s one; just an operating characteristic of the business. When I look at the forming of the board, number one, when we take institutional capital that is part of the consideration in the early days of who we select as an investor is who they would be putting on our board. We would be seeking people who 1) have operational experience. They know what it takes to build a business, and then the range of their experience is important. So, we would have, like today, board members who, for example, Klaus Besier who is the former CEO of SAP Americas who would have enterprise software experience and taking a company through high growth. When it comes to product, we would have somebody like Richard Campione who’s been a Chief Product Officer for companies mostly in the large enterprise space. We would have other people who have been entrepreneurs themselves, who have walked in my shoes, and can be good coaches and advisors to me. Then others who would be operationally focused on making sure that this business is instrumented in a way that we know what’s going on, that we can report out on it, and we can make adjustments as necessary along the way. So, breadth, depth, experience, and also good advisors and coaches.
Alejandro: What does a successful and effective board look like, Ray?
Ray Grainger: Number one, I think there’s a healthy balance of your institutional investor board members and independent board members. So, we would be balanced towards more including the CEO who would be independent board members versus institutional investors. I think that’s just a healthy dynamic, and all the shareholder interests are being effectively looked after. That’s first and foremost. I think high engagement is really important. Often, I see board members that lack the engagement required to be effective board members meaning that they’ve got to be there for every call, every meeting. Be available on an ad hoc basis sometimes. Stay informed. Come prepared. Come to every single meeting and participate. Sometimes, you would say it goes without saying, but I often see that that’s not the case. Then they’re helping, guide, and coach, and even set the agenda for board meetings so that they’re effective in their execution. I would say those are some of the fundamentals.
Alejandro: Talking about boards, it kind of reminds me about problem-solving and being strategic about problems. Being a founder, just like yourself, Ray, is all about problem-solving and putting out fires. So, one thing that you have is this incredible background from consulting and that you acquired at Accenture. Now, when you have a really difficult, very complex problem, like massive problem that can determine the potential future success of Mavenlink, how do you go about it?
Ray Grainger: I think one of the things I learned very early on is there’s a lot of smart people out there that can help you. So, in nearly every problem situation, I think it’s important to go identify who has some expertise that can help you solve it. As early as you can, put the fish on the table so you’re not hiding it and get it out there for people to one, try and understand, and then participate in solving it. So, it’s usually a group, a solution out there. Most problems do have a solution to them. If you address it early, get the right people around the table to help you resolve it, I think it’s a higher likelihood that you’ll have success in getting a result.
Alejandro: Then talking about results, in a world where the vision of Mavenlink is fully realized, what does that look like?
Ray Grainger: We’ve got a broad vision and mission for this company. While today, we provide this really excellent business management software for the professional and creative services industry, and it does just a bang-up job of helping them become higher performers. The other dimension of our aspiration is to change the nature of the service provider industry itself where all of these thousands of companies today who use Mavenlink and may lack the specific expertise to grow their company. Their demand may be a little bit spikey, and they don’t always have the necessary resources to deploy to clients this idea of having a networked services model where all of these providers can tap into other providers that are already using Mavenlink in real time and identify availability of talent in a network, so they don’t have to rely on hiring or acquiring companies in order to grow would be the vision that we would have, so all of these service companies can act as if they had unlimited capacity to grow their businesses. So, it goes beyond just a SaaS product into creating a new model for services delivery.
Alejandro: Really cool, and also for the listeners that we have and many of them, I’m sure they’re doing SaaS, where do you think SaaS is going as a whole?
Ray Grainger: Well, it’s not early days. It certainly is still in the rapid-growth stage of a technology shift from on-premise software to a software as a service. I think it’s still evidence. It’s just shocking to me, the growth rates of these companies that are still quite large that are public and are still growing very, very fast, 30+, 40+ percent year-over-year growth clips at billion-dollar businesses. So, I think it’s just evidence that it’s still early on in this technology shift. I also think it’s an enduring technology shift. We’ve gone from mainframe to midrange to PCs. From client-server now to web-based software as a service. I’ve yet to see what the next model will be. It hasn’t emerged yet. So, I think SaaS as a delivery model still has quite a long way to go.
Alejandro: That’s amazing. There’s one thing that I always ask guests that come on the show, and I’d like to ask you the same, Ray. Knowing what you know now, it’s a tremendous run that you’ve had, not only in corporate, but then also now with Mavenlink, so knowing what you know now if you had the opportunity to go back and talk to your younger self and give yourself one piece of business advice, what would that be and why?
Ray Grainger: I like the question, so let me think for a second. If I look back at the early days, I would have been much more aggressive, frankly, in raising capital right at the outset of the business. I would have made sure that we would have had several more million dollars in the very early days of the business, and I would have been a bit bolder in what I would have done with the product. I was more experimental in the early days, and it took about three years to say that we’ve “found it.” Where we ended up was exactly where I thought we would be, but had I been a little bit bolder and surer of myself, I think the financial crisis maybe shook me a little bit that I would have powered through that a little bit faster. I think the business would have been better served by moving more quickly.
Alejandro: What does being bold with the product look like?
Ray Grainger: We had a very clear vision right from the get-go. I think I spooked a little bit in the early days because we put it out there and the marketplace told us to narrow it down which we did, and that was the right call. Once we made that decision, I would have moved faster then. We would have gotten more feedback from the marketplace. We would have begun hiring software engineers much faster. What we did was use contractors which were more expensive, but I did that in experimentation mode. When it was all said and done, we ended up being exactly where we knew we would be from the product, and could have been there faster, could have taken market leadership faster, and I think probably been two years ahead of where we are now. I would have been more confident I would say. I lacked some of the confidence, and I think we got spooked by the product narrowing during the financial crisis.
Alejandro: It’s just like what they say, Ray. You don’t know what you don’t know. Right?
Ray Grainger: Exactly. That’s why with hindsight, that gives you that courage. Right?
Alejandro: Oh, 100%. Ray, for the folks that are listening, what is the best way for them to reach out and say hi?
Ray Grainger: I think the best way is to come to our website www.mavenlink.com or contact page www.mavenlink.com/contact. Please reach out if you’ve got some interest either about the company, or personally, if there was something that intrigued you about the podcast and you want to know more about, just through the contact page and that message will get to me. Then if you’re interested in the product, we have live chat, and people can serve you that way. Then we’ll get back to you at a convenient time.
Alejandro: Amazing. Well, Ray, thank you so much for being on the DealMakers show today.
Ray Grainger: Alejandro, my pleasure, and thanks for allowing me to share a story.