Steve Loughlin is a partner at Accel Partners where he focuses on AI, collaboration, and Saas startups at an early stage. Prior to Accel Partners, Steve Loughlin cofounded RelateIQ which offered a relationship intelligence platform that allows teams to track, share and analyze professional relationships. The company was acquired by Salesforce for $390 million.
In this episode you will learn:
- The common traits of successful founders
- Steve’s top advice for new founders
- Where he sees the biggest business opportunities next
- How early you need to be hiring for your needs
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 Steve Loughlin:
Steve Loughlin joined Accel in 2016.
Steve Loughlin was formerly CEO and co-founder of RelateIQ, which became SalesforceIQ after being acquired in 2014 for $390 million by Salesforce.
RelateIQ pioneered the development of Relationship Intelligence technology, which enhances the efficiency and effectiveness of sales teams.
Steve Loughlin led Accel’s investments in and sits on the boards of Ascend.io, Clockwise, Ironclad, Productiv, and Split.io.
Steve Loughlin is from Portland, Oregon and has a BA and MBA from Stanford University. Steve Loughlin was a member of the Track and Cross Country Team at Stanford from 1999-2003.
Connect with Steve Loughlin:
* * *
FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrighty. Hello everyone and welcome to the DealMakers show. Today we’re going to be interviewing a founder that has built and scaled and exited his business, and now, he’s on the other side of the table. So I think that we’re going to be able to learn from both sides of the table very, very much. Especially, we’re going to be talking about data-driven applications, enterprise collaboration, machine learning, AI, and you name it. So without further ado, I’d like to welcome our guest today, Steve Loughlin. Welcome to the show today.
Steve Loughlin: Thanks for having me.
Alejandro: Originally born and raised in Massachusetts. How was life there?
Steve Loughlin: It was great. We lived there until I was nine. My dad’s family was from there. When I turned nine, he told me that we were moving to a place called Oregon. We actually didn’t know how to pronounce Oregon correctly when we were moving there. So, going into third grade, myself and my three younger sisters, we packed up and moved to O-re-gon’, soon to learn that it was called Or’-i-gun. We stayed there all the way through high school.
Alejandro: Were your parents entrepreneurs, or what were they doing?
Steve Loughlin: My parents had a lot of characteristics that would have made them successful entrepreneurs in the sense they were great communicators. One of the things that was instilled in us very early was what it means to be a good teammate, to share, and to give. My dad worked at technology companies, including Wayne Computers in Massachusetts and Sequel Computers, which is a mid-market company that moved us to Oregon in the finance realm. He traditionally worked at larger companies. My mom had to deal with the four of us who were all very close in age. What was really neat, and what I’m grateful for was the reward system they set up for us kids. It was all around: you didn’t get rewarded in a soccer game or basketball game; if you scored points, you got rewarded for passing the ball, or you got rewarded for extra hustle, or setting up a teammate, and working hard. This element of unselfishness is one of the hallmarks of great teams.
Alejandro: Then, eventually, you ended up going to Stanford, but why public policy?
Steve Loughlin: Great question. So public policy – I tried four different majors. I started out thinking I was going to be a math major. Then I tried human biology and then tried computer science. The math part, I really liked, so I got into economics. At the time, there was an extra set of classes you could take to get a public policy degree on top of your economics degree, so I ended up taking that and really enjoyed the program.
Alejandro: I guess this is where you developed the competitive side of you. You were part of the track and field team. Is that right?
Steve Loughlin: Yes. I was fortunate enough to be on a team where some of my teammates were on the Olympic team – folks like Michael Stenberg and Gabe Jennings. I think he holds the American record in the Marathon Ryan Hall. They were all teammates of mine. Practices were harder than the meets, but it was a really good team, and there were lots of lessons learned. We had a great coach, [0:05:08], who recruited the top talent and pushed us pretty hard.
Alejandro: You were then one of the early employees of a startup. But what got you into a startup and especially into this company. Walk us through this process.
Steve Loughlin: I was finishing my senior year. A lot of my teammates were going to keep running for a year or two. I made the decision that I liked running, and I was running times that probably would have allowed me to keep running, but it wasn’t something I wanted to do. I wanted to start the next chapter of my life. About that time, I had some internships where I got to work on some Serum software, which would come back to help when I started a company, learning about all this productivity software and how to do sales, marketing, and customer success. Operationally, I was fascinated. One of my classmates had started the company, and they were looking for the first non-technical hire reporting to a CEO, and who had been an executive in Silicon Graphics. I was literally walking down University Avenue in Palo when he said, “Hey, come check out the office.” I checked it out and didn’t overthink it at that stage in my career because I was trying to optimize for how much I could learn and what sort of experiences and mentors I could get around me. But little did I know about 90 days into my tenure, the company wasn’t doing very well. At the time, I didn’t know what questions to ask like how much cash would be coming out of the bank? What’s the customer attraction? Any of that stuff. I was very green when it came to operating. But one of the things that they asked me to do was to go figure out how to acquire new customers. I ended up signing a bunch of customers at a pretty rapid rate, relative to the previous year of sales. Then I got a phone call from the Chairman of the Board who said, “We’re cutting back resources dramatically, and do you want to run the company?” I had no idea what that meant. I remember I was somewhere in Oregon and talked to my parents about it. My parents said, “If you’re going to learn a lot, you should do it.” The company has some interesting angel investors involved. So I ended up running that company for four years and getting the experience of running board meetings, hiring and firing, managing through difficult financial times. And also, a bunch of tactical things around culture, how to think about the size of the market you’re going after. It was like four years packed with making a lot of mistakes. But eventually, getting the company to a place where we had hundreds of customers. We could run it at break-even. At that point, after four years, I made the decision that I wanted to go start a company from scratch. About that time, one of my close mentors, a gentleman by the name of Bob Cone who co-founded a company called Octel, that was one of the original enterprise voicemail systems and ended up winning that market and selling Lucent. After going public, he told me that I should go back to business school. I said, “Why would I go back to business school when I’ve been managing a company? I think I’m ready to go start something. He said, “You probably could, but it would be great if you went back and got classically trained like some of your peers who went and did consulting or did banking or some of these other things to understand that language. So I ended up applying to Stanford Business School. I got in. About that time, some of my friends who started a company called Palantir, I was helping them with their got to market, and some of their operations, and became an advisor to that company during the course of business school, and that’s where I met Adam Evans, who was going to be my co-founder at RelateIQ. That was the whole progression from school to my first professional endeavor to go back to business school before I started RelateIQ.
Alejandro: Really incredible because I think the valuation of Palantir is pretty much around 40 billion or so. Unbelievable for you to be part of the journey early on. Really Amazing! Typically, from people, the advice is, “Start as one of the employees.” But here, you go from employee to literally running the business, as you were saying. Incredible experience! So what was your biggest takeaway from this experience?
Steve Loughlin: There were a bunch. I think it was where I learned the most. It was a very humbling experience because I had no idea what I was doing. One of the takeaways is you have to be working in a market where you have an opportunity to get big. In this case, we were selling software to universities and trade associations who were going to pay us a lot of money for the software platform we were offering. Our target market was the top 120 universities in the U.S., and we got 80-85% of those in 24 months. We executed really well, but we were executing a really small market, and it wasn’t expanding. Then we had to pivot our revenue model into some recruitment advertising entities and private, professional networks. At the time, LinkedIn was emerging, and they were capturing all those dollars. So just the importance of knowing the problem you’re solving, but also whether that problem has the opportunity to be a big business, and how you can win in that large market. So we were in a small market. I think the other side of it was the importance of culture. If you get the right group of people and the right culture in a big market, magical things can happen. In this case, because I was the founder of the company, I had to readjust the culture. I think we had a really good culture as we moved forward, but it was hard. At some point, you have to have both because we were executing really well. But because we were executing in a small market, we didn’t get the same momentum or tailwinds that some of these companies that grow faster have. As I was thinking about my next company, those were two things that I really wanted to make sure we got right was the culture, but also that we were playing in a big market.
Alejandro: It’s interesting because typically a real Master’s Degree is when you’re running a business and when you deal with all the issues. Here you are, typically in business school. The final project is perhaps like building a startup and seeing where that goes. You actually built it. You were in it, and then you go back to business school. At this point, you were almost teaching the professors. So what did you learn from the experience here of going back to business school?
Steve Loughlin: I wouldn’t say I was teaching the professors. I think I probably took the classes in a way that as I was evaluating and reflecting on what I was learning, it was, “Oh, if I’d known that, if I had that insight around organizational behavior, of if I knew these studies around marketing, I would have changed. I think business school is a different experience for everyone because everyone’s different, but for me, being able to have that real-life experience to draw amid the lessons a lot was real. Also, the other thing – anytime you’re fortunate to go to an institution that has students from 54 different counties in my class that all had a different experience, you learn from your classmates as well. I felt like I learned a ton in those two years and built skills and tools that I would be able to use later on.
Alejandro: In your case, what were the insights that you were seeking?
Steve Loughlin: How to articulate to solve the market problem. Like how do you articulate a strategy, and how are people classically trained to do that? Bolstering financial skills because they teach you – you’re in classes with kids who worked in private equity and hedge funds. How did they think about the world, and how did they analyze companies? Probably, the most interesting classes for me were around organizational behavior, and all the bias that we have, and how that impacts how people interact with each other in a team that’s trying to accomplish a common goal and just being able to check for those things was extremely valuable.
Alejandro: Here, you met Adam Evans, your co-founder. How did that happen? Were you guys in the same class, or how did you guys meet?
Steve Loughlin: He was at Palantir, so we met the first day I was at Palantir. One of the advisor roles that I took on was helping figure out the health care vertical at Palantir. Adam was the CTO of that group. So the two of us were fortunate to meet each other, and our skill sets complemented each other really well. It was just kind of magic when we’d work on a project together. As far as the level of intensity, insights, different points of view, I think we both had a lot of desire to build things of meaning and impact. We had a level of intensity that just – we kind of fed off each other. That was how we met. Over that course of a year-and-a-half when I was at business school, and he was at Palantir, we hung out all the time. Then there was a moment where we both decided, “We should start a company.” Within the first hour, we both had the Palantir insights around how data was being used to solve complex problems. We wanted to do something that was data-driven but wanted it to be not in the intelligence community or government-related. How could we do something that is enterprise-related? Adam spent time in Affinity Circles, and he’d also had two other entrepreneurial experiences in companies at a young age where he was forced to learn a lot at a health care company, but also in high school, he had a hosting company that he worked on. So we were both in our lives relatively young, but experience-wise we had both had a lot of intense professional experiences where we made a lot of mistakes and learned, but also developed skills that would be highly valuable at selling at enterprise. I still have pictures of this where in the first hour, we said, “Wouldn’t it be amazing if the enterprise systems that were powering the decisions people were making around relationships could have fully automatic population, and then you could do machine learning and insights around the data exhaust that’s coming off of all those relationships to recommend whether it’s a sales prospect, an existing customer, a partner to potentially recruit in the future. But how could we capture all that data so that teams were managing relationships can figure it out. The problem we solved was that all the existing systems in the market, whether it was the legacy CBOL-type CRMs or Salesforce, which was the dominant player at the time, which was cloud-based. The issue with it was people weren’t entering data, and one of the common things you’d hear was, “Oh, did you put it in Salesforce?” So we built a prototype to see if we could solve that problem where we’re taking advantage of all the APIs that had become available with email and calendar to build a CRM that automatically populated itself and then automatically had the history. It would not only be automatic and intelligent, but it would change the way collaboration happened because as the state it would come in, instead of me calling Adam and saying, “Did you follow-up with that customer?”, the data would automatically be inside the platform itself. What we did, and the learning from this, which was interesting, is we started out by articulating the problem, which we said relationship management’s broken for the team. Then we started working through, what is the ideal solution going to look like to solve this problem five to ten years from now? We landed on, all things being equal, we’re going to optimize for making it the most automatic. We’ll have to take advantage of this data in a way that increases productivity for the end-user. We’re going to have to rethink privacy and security, and that’s going to be important as we’re selling to these customers, but also, we’re going to have to rethink some of the models of how automatic data-sharing happens. Then we’re going to have to make the design something that, this was back in 2011, is matching what consumer experiences are going to be. We built the initial prototype, when and validated it with 10 or 12 customers in a three-week period before we started the company just to see if this was what we wanted to dedicate our lives to. I still remember driving back to San Francisco with him where we were pitching like, “The current head of sales from a large company,” and the woman said to us, “Can I buy this?” We got in the car and said, “We need to start this company. The product doesn’t even work yet, but the primitives that we’re hitting on were spot-on for what the market needed. So we started the company in 2011. That was the beginning.
Alejandro: What were the responses or the pattern that you guys were looking for when you were going out to speak with these people with this initial idea?
Steve Loughlin: That’s a good question. Our prototype wasn’t the most exhaustive platform, but it at least visually told the story. We would spend usually the first 15 or 20 minutes asking discovery questions to them about what’s working and what’s not working about their existing system and set the stage for the pain because we felt confident that if the problem was there, there was enough substance in our ideas that we could solve it over time. But we wanted to validate that this was really a problem and that there was going to be demand for us to go after this large market at the time where the incumbents were entrenched. We were looking for pain.
Alejandro: Got it. Obviously, once you got this, and you got back in the car, and you said, “We’ve got to start this company, and we’ve got to start it now,” what happened after?
Steve Loughlin: I remember we drove back to Palantir because we were in San Francisco. We called our corporate lawyer, who was going to incorporate for us, Ed Gunderson. We called him, and we said, “Start the incorporation.” Then we said, “We’re going to start. Let’s pick the date. We’re going to start the company in July, in two weeks.” We had one person who we were going to hire, an engineer named Gary, who we were going to hire. Then an ops hire, Steve. The four of us started at my house. My house became the office. My wife, at the time, was eight-months pregnant. So we started, and we raised a 2-million-dollar seed round from a bunch of individuals, but Accel was the big lead. Then Morgan Taylor Ventures. So we were off to the races. Ping, who’s my partner now at Accel led the seed round. Interestingly, what happened was, I got introduced to him through a mutual friend. When we met, he asked me, “Have you thought about Venture?” I said, “No, I’m starting this company.” He was like, “You should really think about Venture.” Then I told him what we were doing, and then it immediately changed to a fundraising conversation, and we are very fortunate to have him as an early investor.
Alejandro: Were you worried about getting a seed round from an institutional?
Steve Loughlin: I wasn’t, only because I think we were locked in on the customer and the opportunity and the resources that were available. We always wanted to surround the company with the best people possible to help us to achieve our mission, and that was from the outset and something we were dogmatic about. At the time, Ping was leading a bunch of the big data efforts at Accel, and our whole thesis was around the ability to use big data to start to power some of these business applications to go CRM. He was a perfect fit for what we were trying to do.
Alejandro: What was essentially the business model for RelateIQ and how you guys were monetizing it so that the people listening will get it.
Steve Loughlin: Every market is different, but for us, the good news was CRM software was, at the time, straightforward where you’d pay a per-user license fee per month. On the lower end, the basic CRMs were charging $100 for user per month. It got up to $250 to $300 per user per month, and the market was growing at 12% a year. You were having all of these people moving productivity applications into the Cloud, and CRM was one of the largest and fastest-growing categories thanks to the Salesforce pioneering it.
Alejandro: How much capital did you guys raise for this? You raised quite a bit; I believe.
Steve Loughlin: Yeah. We raised 2 million bucks in the seed round. Our whole plan in the seed round was: we need to validate as quickly as possible the feature set and which market segment we were going to start with. We had a big vision that we were going to go after and try to disrupt the whole category, but if you try to disrupt the whole category at the beginning, particular in this type market, there are so many features that need to be built for different segments that identifying who our core customer was, was really important. With our seed round, we went from something that was unusable to 20, what we call alpha-beta customers. They were beta customers who were using it, and Accel saw that, and they lead our Series A, which I think we raised 7 or 8 million bucks in that round. Then we grew that number privately. One interesting strategic choice we made was we kept the company completely private. We did not have any public presence under them like a splash page on our website, and we just spent time with customers. It’s important where if you weren’t a developer, you were going deck-side to go learn from how users were using this. We were just iterating the feature set so that we had an army of users who were really excited about what we were doing. We got to about 100 customers. We were private, betas were using it, and we went to them. We could look at the metrics and see that people were loving the product. They were using it. It was their system of record for sales, but it was a very particular focus. It was people that were on Gmail, Office 365 that had less than 100 reps, and they hadn’t built out a whole bunch of workflows on any of the incumbent solutions. So we knew if we went into one of those deals, our product was dramatically better than the alternatives and we. We got to that point, and we raised another 20 million from ADC and launched the company publicly. We were fortunate to get coverage like that and in the Wall Street Journal. We converted all those companies to pay. Then we set the company up to grow. From that point, it was like quarter-over-quarter we’re going to grow; we’re going to grow in this segment. Then the product strategy was to keep adding service areas to the products so that we could increase our adjustable market. Then we went another year operating and growing, spending tons of time with customers. Also, we had taken the time to build out I think a pretty substantial executive team which took a lot of work. That was probably one of the more surprising things is how long it took to hire executives into the company. I think the normal approach to this is like, “Okay. We’re going to light up sales in the second quarter, so we need to hire the salesperson by the second quarter.” But really, you need those people two quarters before to get onboard and everything like that. I would say that was one of my hard-earned learning lessons from that period of time. We then raised the Series C, and then shortly after that, we were acquired by Salesforce.
Alejandro: Very cool, and we’ll talk about the acquisition in a bit, but I want to just touch base on the journey as a whole. Was there one moment where you said, “Oh, my gosh. I think we’re going to die”?
Steve Loughlin: There were a lot of moments. It wasn’t that the company was going to die, the whole process is extremely hard, which is why I think you have to be really passionate about the problem you’re solving and deeply committed to your teammates. We had four values inside the company that we were deeply committed to, which was: people, moments, ideas, and results. The people side of it was, treat your teammates, treat anyone who touches the company with a deep amount of respect because we’re building relationship software, and so if you couldn’t live it offline, how are you going to live it online? I think the neat parts about that is that at one point after we were 60 or 70 people, we had an engineer who unfortunately was going back to Google after being with us for a year-and-a-half and who contributed a lot to the company. We hadn’t really dealt with that before. I was going to send an email out to the company thanking them. One of my teammates came to me and said, “People are one of our values, and this person has delivered a lot of value. Why don’t we send him off, even though we don’t want them to leave, why don’t we send them off the way that our company would want to do that if we really aspire our values.?” So I sent an email out, “All hands meeting on Friday.” We ended up having the person stand up. They got a standing ovation. We got them a gift and thanked them for innovating the company. I think those sorts of moments as a culture are the ones that were not just you’re doing things right, but people are calling each other out and giving feedback even to me, at the time the CEO was so valuable and made those tougher times easier because we were committed to our strategy and our routines. The whole journey was hard. I remember a month in when we moved out of my house because we had our son, Lucas, and it was probably not the best place to have an office. I remember I hadn’t slept in like a couple of days, and we were building desks in our new Mountainview office. I remember just being so delirious like, “I need to get sleep, or I’m not going to be able to make any critical decisions for this company.” Then figuring out how to adjust your routines to make sure everyone’s getting what they need. Those moments happened every couple of weeks because you’re constantly being introduced to problems that you’ve never solved before.
Alejandro: Of course. As you were pointing to, eventually, the acquisition of Salesforce happens. How did it happen? Can you walk us through the process? Was it an inbound that you got, interest, or was it a partnership that you guys were working on? Tell us the process of how this came to fruition.
Steve Loughlin: It was kind of out of nowhere. I think six weeks before, we had announced our Series C, and we were starting to move upmarket and start to get some larger companies on the platform after building out a bunch of our integrations. I ended up having a couple of people reach out to me, saying, “Mark wants to grab coffee with you. Are you open to it?” Through different connections and it was literally an inbound email to go have coffee, and ended up meeting, and getting along really well, and from there, things moved quickly just because these are discussions and things that you don’t want to sit on. Yeah. It was an inbound request, and then an initial meeting.
Alejandro: How long did it take from inbound to closing?
Steve Loughlin: After that, the process took like six months to get through diligence, and align, and even for us to make the decision that that was what we wanted to do. It was a really hard process because having been on the other side now, there’s a lot of these discussions that happen, and then for one reason or another, they fall apart, and the transaction doesn’t happen. We were fortunate enough to have a great board. It was very supportive and made sure to say, “We’ve got to run the company as if this isn’t happening.” For that six-month period as a management team, we’re running the company knowing that this might not happen just because there’s so much that has to go right for a transaction to happen. So we were very fortunate to have the deal come through, but at the same time, we were running it as if we were going to keep going. As a leadership team, that was definitely one of the harder work experiences we’ve ever had.
Alejandro: Very cool. I understand that the transaction was valued at 390 million, at least reported on the media. So a really good outcome. That’s amazing. Steve, after this, you spent a couple of years with Salesforce, about five years or so. Maybe as part of the transaction, also because Salesforce, as well, is a great company, and perhaps that was great learning for you. But then you went on to Accel. This is Accel Partners. This is interesting because typically founders, they just go and they do it again. Why did you go to the other side of the table?
Steve Loughlin: I think I was very fortunate in my entrepreneurial journey to have great people around the table investors, paying advisors, and outside board members like Bob Cone and Bill Campbell who showed the impact you can have on early-stage companies. So I didn’t really overthink it. I think it was a moment where I was finishing my second year at Salesforce, and I was missing the early-stage company-formation moments. So I started thinking about it and saying, “Wouldn’t it be great if I was spending some time in my free time angel investing and spending time with early-stage companies, but what if I did this fulltime?” So I reached out to Ping and we had the discussion, “Are we going back to pre-RelateIQ?” And all the other partners here are fantastic, so I ended up making a quick decision that “I want to come here, and be a partner, and help work with the world’s best entrepreneurs.” The last couple of years, I’ve been fortunate enough to do that.
Alejandro: Very cool. And, obviously, Accel is very well-known for investments for Facebook and others. In your case, we’re talking about investors and VCs. We’re also talking about pattern recognition. In your case, now being on the other side of the table and having been at this for some time now, what does pattern recognition look like? At what point do you know that a founder has the right ingredients to be successful?
Steve Loughlin: I think it’s hard. These companies take time to build. When you’re investing early, it’s not like there’s a ton of data about the company or the operational progress that they made so far. To me, I tend to look for entrepreneurs who have the capability of being world-class, and not just where they are today, but what is the rate at which they’re growing and learning in their capacity to evolve with the requirements of the job? Because what you’re doing when you’re a five-person company is very different than what you’re doing as a 100-person company, a 1,000-person company. Does the founder have a vision for the future, and do they have the chops to take whatever unique attributes and advantages they have and surround themselves with a great team to go accomplish that? I think the problem set that they’re going after has to be large and feel large, and there has to be some trend that is out of their control, and they have an insight around it that creates a “Why now”? If you put those things together, you can have the opportunity to have a pretty exciting journey in partnering with them. The moments when those things come together, I don’t think they happen that often. Probably the fourth thing for me is, you have to have a connection to the team in a way that you’re excited to work with them, and they’re excited to work with you to go do something really hard.
Alejandro: As you’re talking about connection, there’s one thing that came to mind, and that is the connection between you the founder once the investment has already been made. I guess more connection at a board level. What have you seen from those founders, especially the ones that you have already invested in, from those founders that are able to really manage effectively their boards? What does that look like?
Steve Loughlin: I think the ones in particular, they’re early and they’re just getting started, that they have the ability to really communicate what they’re trying to accomplish in a way that allows the company to operate. I’ll give you an example. We’re fortunate to be invested in a company called Ironclad. The CEO and founding team, Jason and Cai there – when we met them, I think it was an 11-person team. They had 10 or 12 customers that were using the product, but they hadn’t built out any of the functions yet, and they hadn’t really put together – it was in their heads, but they hadn’t put together what are the pieces that are required to grow this thing year-over-year. But they had the capacity to do it. So we partnered with them. One of the things we did early on was agree on what the plan was, what the mission of the company was, what the values were, how they wanted to interact with each other. They articulated that in a really distinct way that is a winning plan, and we’re there as investors to support that and that connection and the ability to agree on, “Here’s what they’re trying to accomplish. Therefore, here’s how we can help you,” is, I think a healthy thing. For me, I look for that, which is, “We need to figure out how I can help you and what you’re trying to accomplish. You need to be able to articulate that, not just for me but also for the people you’re going to hire, for your customers.” The best founders I’ve been able to work with or even observe are really good at that. They’re really good at articulating what they’re trying to do.
Alejandro: Now that you’re looking at things from the investor’s side and thinking in terms of trends, what has the biggest potential down the line. What are you looking for? What are the industries or the things that you’re seeing that have the biggest amount of potential down the line?
Steve Loughlin: I think we are still in the moment where a lot of the applications we use at work are transforming the way we work. So now that there’s this explosion of SaaS apps inside companies that every team has their own SaaS app, and also our ability through APIs to connect with those SaaS apps, we’re able to change the way people work and make them dramatically more effective. But I think it’s also creating a whole bunch of data that can be utilized, and I think we’re still at the beginnings of going from automation to real intelligent applications. I think we’re going to see a lot of that over the next five to ten years. You see that in our investment in a company like Productive, which is helping companies understand what productivity apps are being used, and how they’re being used, and how they can adjust the platform that their employees are working on to the growth of companies like Scale AI, which just recently launched a new financing where there’s such a demand for training data to build these intelligent applications and workloads. I think we’re still scratching the service of the impact that data and data-driven applications are going to have on the way that we work.
Alejandro: When we’re thinking about data and also AI, now everyone seems to be doing AI. How do you filter through the noise?
Steve Loughlin: We’re still very early in that, and I think we’re building the foundation to be able to have those things impact how companies run and the way people work. But today, it’s still, a lot of the applications are just capturing the training data and the behavior that’s going to be used to build more intelligent and AI-driven applications. We looked for companies like in Ironclad that I mentioned earlier where they’re managing all the workflow around contracts inside the enterprise, so the red line’s going back-and-forth, while clauses are being changed. They’re effectively building a training data set that can be used in the future more intelligently create and collaborate around contracts. That actually isn’t in the product yet, but they’re positioned to do it given where the state of the end-users are and where the training data is.
Alejandro: Got it. Now that you have been on both sides of the table, if you had that opportunity to go back to that moment were you were brainstorming with your co-founder at RelateIQ, with Adam Evans, about that company, or thinking about doing it or not, knowing what you know now, what would be that one piece of business advice that you would give to yourself before launching a business and why?
Steve Loughlin: I think the thing I would reinforce is, you can’t skip steps. I think as you’re developing your company, you have to first validate the problem, and then you have to do all the testing on the solution, and then you have to pick your segments, and that all takes iteration. You want to do things as much as you can in parallel, but there are certain things you can’t graduate to the next step until you finish it. That would probably be one thing. Then the second thing would be just really reinforcing and doubling down on culture. At the end of the day, if you’re solving a problem that means something in a market that is really going to develop, it’s all about the team and the people that you bring on that journey. It’s just, keep your focus on getting the right people and creating the right environment for them to work in.
Alejandro: Got it. That’s super powerful, Steve. So, for the folks that are listening, what is the best way for them to reach out and say hi?
Steve Loughlin: [email protected]
Alejandro: Amazing, and any Twitter or LinkedIn that you are using as well?
Steve Loughlin: I’m on there, but I’m pretty responsive on email.
Alejandro: Alrighty. Well, fantastic. Steve, thank you so much for being on the DealMakers show today.
Steve Loughlin: Thank you very much. Thank you for having me.
* * *
If you like the show, make sure that you hit that subscribe button. If you can leave a review as well, that would be fantastic, and if you got any value either from this episode or from the show itself, share it with a friend. Perhaps they will also appreciate it. Also, remember, if you need any help whether it is with your fundraising efforts or with selling your business, you can reach me at [email protected].