Editor’s note: Apttus’ product encompasses the complete Quote-to-Cash cycle. In 2015, Apttus was recognized as the Cloud Computing Product of the Year for Configure, Price, Quote. It was also recognized as one of the fastest-growing companies in North America on Deloitte’s 2015 Technology Fast 500 List. The company was bootstrapped for its first seven years. In this article, CEO Kirk Krappe describes the bootstrap/funding journey and shares other advice for startup CEOs. He also shares where the market is headed for software products managing the revenue management life cycle.
How did your company originate — what inspired you to launch the company and what was the original vision/hope?
Kirk Krappe: Our co-founding team spent decades in the software business, through the booms and crashes, experiencing every situation imaginable. So when we found ourselves in typical startup fashion – three guys writing out the values of our company on a napkin in our laundry room – we knew what we wanted to build. We knew there was a need for, at the time, a contract management tool that worked perfectly, and we were sick of selling products for other companies that didn’t function as they should. So very naturally, very quickly, our company came together on the pillars of three core values: Tier 1 everything, 100 percent customer satisfaction, and respect for people. We’ve maintained that trajectory ever since.
What do you mean by Tier 1 everything?
Kirk Krappe: Our Tier 1 Everything core value means we hire the best and we believe we’ve built the best product; therefore, there really shouldn’t be any excuse for not producing the best results. It’s what our customers hire us for. Our commitment to excellence in every facet of the business has engendered a lot of internal passion and fostered a successful culture within Apttus.
Please describe your product and how it changes a customer’s front office.
Kirk Krappe: Simply put, no other company offers an automated, efficient suite of tools that run through the entire revenue operation. There are CPQ tools, there are contract management tools, there are revenue management tools. What we bring to customers is an unbroken funnel that encompasses the complete Quote-to-Cash cycle. We remove the need to hop between different integrations, different solution providers. Streamlining the entire operation increases visibility and makes us a strategic partner to our customers. We bring new levels of speed and efficiency to every facet of the sales process.
Please describe one of your company’s lessons learned during product development.
Kirk Krappe: The emphasis on listening to customers was a completely literal and transformational experience for us. We were just selling contract management until a customer asked us to work backwards and perhaps develop a Configure Price Quote tool for them. Well, we did; and it worked spectacularly. Not long after, another customer asked us to jump ahead in the sales cycle, use our same tools to build a revenue management solution. We pulled it off and, suddenly, we were offering a smooth end-to-end footprint, which has been our calling card and become its own industry at this point. We are absolutely indebted to our customers for setting us on the right path for product development.
How did you find your first few customers?
Kirk Krappe: From the very beginning we built our products in the cloud, on what has become the Salesforce AppExchange. Critically, it allowed us to build a customer base from the very beginning, with the credibility and security of that brand, even in its earliest days. The sixth deal in Apttus history was for over a million dollars; that’s the kind of start that can fuel strategic, long-term growth. It built an incredible blueprint and case study for future customers, and we haven’t looked back since.
You bootstrapped your company for the first seven years. At what point did you decide to seek VC funding? What drove that decision? If you could go back and do it all over again, would you seek VC funding from the outset instead of bootstrapping?
Kirk Krappe: Context is very important here. From the very beginning, we were passionate about building something great, an industry, not just getting in and out when the money was right. By bootstrapping, we were able to avoid giving away significant stakes in the company just to get through some tough times. Funding ourselves allowed us to take calculated risks, go where others weren’t willing to; and that belief in ourselves worked out. It wasn’t easy; and maxed-out credit cards and all, I wouldn’t have done it any other way. It allowed our product suite and staff the time to evolve and mature before the time was right to seize a very real and robust market opportunity.
In late 2013, the time was right to scale the business and invest in a go-to-market engine. At that point, and several times since, we have taken funding and grown our entire team, including sales, their support team, engineering and professional services, and some of the most successful executives the software business has ever seen.
Please share your advice on how to evaluate a funding offer.
Kirk Krappe: Just understand that everyone offering funding has their own definition of success. Align your company with those offers, and you’ll have a fine partner. Some have a short-term focus, some have long term, some don’t care. From the outset, make sure they are on the same page with what your goals are.
What challenges have you encountered in your journey with Apttus that you didn’t anticipate?
Kirk Krappe: Growing at the rate we have, you’re always going to run into challenges. Hiring the right people, building the right partnerships, even how and when to dedicate resources … all these challenges crop up. We’ve been fortunate and well prepared enough to both stay flexible in our problem solving and adhere to our vision. That’s what building a successful business is all about.
You mentioned hiring the right people. What challenges did you encounter in recruiting and/or retaining the right talent?
Kirk Krappe: Before your brand is fully established, you need to provide a clear, dynamic vision for the future. In Silicon Valley, the job market is competitive; showing prospective employees that their own pathway to success matches that of the company goes a long way.
You just don’t know where the right talent will crop up. In our earliest days, we had extremely impressive run-ins with ambitious young professionals that were working other jobs and let them get their foot in the door at Apttus, with great results.
Please describe a tradeoff you had to make in your time-to-market race and how you decided what to do.
Kirk Krappe: When we first built out our Quote-to-Cash footprint, not everyone was convinced it was the absolute right idea (“You’re spreading yourself too thin,” – that kind of talk). But we inherently understood that this was a chance to put our flag in the ground and that if we succeeded in creating this full footprint, we could offer something truly unique. It took time, resources and patience; but ultimately it was the right move.
What was your toughest moment as CEO, and how did you move forward from there?
Kirk Krappe: We faced an interesting challenge shortly after we began growing. Our market opportunity was vast, and we wanted to address as much of it as possible. But at the time, we simply didn’t have the personnel. Veteran talent is difficult to hire en masse, although we pursued that route as well.
Ultimately, we moved forward by creating the Apttus Academy, an eight-week training program across all of our fields for recent graduates and those looking for a new career. It was and is one of the most comprehensive professional educations offered in Silicon Valley, and we paired newcomers with established employees to create good habits. Today, hundreds of the best Apttus employees have come out of that program. We had to get creative, but we turned a dilemma into one of our most shining accomplishments.
What is something you wish you had more time for outside of work?
Kirk Krappe: I’m an avid rower – being up before the dawn, out on the water. It’s an activity I preach to everyone. It’s healthy, it clears the mind, and it’s an experience I share with my family. I highly recommend it.
Please describe how software products managing the revenue management life cycle will change over the next two to five years.
Kirk Krappe: Customers are looking for new ways to make their own operations run smoother, faster, and they want their partners to be a step ahead of them. We have quite a bit to say on this front, not all of which I can disclose just yet. But here’s the umbrella approach, at least at Apttus: We’re incorporating machine-learning and dynamic analytics programs into our solutions that bring something akin to Amazon’s recommended bundles features into the B2B world. It goes well beyond that but it’s an apt comparison – automated configurations about what brings the most profit to our customers.
We’ll continue to grow and build; our customers understand that what we offer makes them more profitable and efficient. That will always have tremendous value.
Kirk Krappe is CEO of Apttus.