Meet the CEO Who Turned His Love of Data Into One of Philly’s Most Successful Startups
What started in 2008 with two data geeks in a stinking hot, non-air conditioned attic in Collingswood, N.J., has blossomed into a business with 120 employees in a slick space on the 15th floor of a Center City high rise. When co-founders Robert Moore and Jake Stein started RJMetrics, they never dreamed they’d have employees playing ping-pong during down time, gain $22 million in investment capital, and become one the Philly startup scene’s leading voices.
The company’s mission is simple: Offer a data analytics platform designed to empower online businesses make smarter decisions. RJMetrics takes a company’s fragmented data, places it into one centralized data warehouse and then offers analysis to help clients better understand how their business is performing. In today’s era of Big Data, RJMetrics has carved itself a very profitable niche.
The company is growing at an astounding pace — from 20 to 120 employees over the past two years. It should finish 2015 in the 140-150 range. After wisely choosing not to take investment capital too early on, the company raised $1.25 million in a convertible note in January 2012. By May 2013, it raised a $5 million Series A from Trinity Ventures and then in September 2014, it raised $16.5 series B from August Capital. After that — and employees earning stock options — the company is still founder owned.
Although they don’t disclose revenues, Moore says the company is “extremely healthy” and has been doubling or nearly doubling revenues and customer count every year.
Despite a demanding schedule, Moore is a fixture at Philly tech meetups (there seems to be one every week) encouraging young entrepreneurs and offering advice to growing companies. RJMetrics even held its own event recently called Data Jawn, a day-long conference where various speakers described how they use data analytics to solve problems. So many people attended that organizers had to bring in extra chairs.
I sat down to interview Moore at RJMetrics’s office, where we discussed the company’s rise, what Philly’s startup scene needs to thrive, and if the company can achieve a billion-dollar IPO. (This interview has been edited and condensed.)
BizPhilly: You and Jake met while working at Insight Venture Partners in New York. Why did you guys start RJMetrics in Philly?
Moore: Philly won on a number of different categories. No. 1, the cost of living difference was pretty substantial. No. 2, I have family here so I knew that if I got tired of eating ramen noodles and peanut butter sandwiches, I could go and have a good meal. Jake had ties to Penn so we could get access to resources and meeting rooms through that network. Philly is a city where we can exist and leverage all the rolodex’s we built in New York. And we could hop on a bus or Amtrak and be there for the day. It’s like you’re based in New York anyway.
Why does Philly’s startup scene get a bad rap?
A lot of people say there’s not access to capital here. I completely disagree with that. If you’re building an exciting, fundable company, the capital will come to you. People say there’s not enough technology talent here. Those people should go spend a couple of months in San Francisco and try to hire technology talent. Tech talent is tough globally. I think Philadelphia is better positioned to have an amazing universe of technology candidates on a per capita basis than many other cities.
How can Philly build its tech and startup scene to a world-class level?
What Philly does not have at scale is a legacy of successful software companies that have exited or have gone through the full life-cycle of cultivating executives or people that can be future executives. There are definitely wins and success stories but relative to other cities, you just don’t have many stories of companies that had a big exit and the founders of that company became the angel investors of the next generation. The VPs of that company became the founders of the next one. The employees of that company became the VPs of the next one — and you build up a whole new crop of people on the front lines. We saw that in Chicago with Groupon that spawned a number of venture capital firms and stoked the growth of the startup system there. You see that in San Francisco over and over again — the Paypal mafia.
If we had one amazing outcome per year for the next five years, I think that it would be more than enough to have a drastic effect on the ecosystem of senior technology leadership that exists in the area.
Who are your customers at RJMetrics?
You’re not going to see many companies in the Fortune 500 in our customer base, although we have a few. We sell to people in growing businesses somewhere in the $1 million to $1 billion revenue range. They’re not a couple of people in a garage. They’re not one of the 500 biggest corporations in the world. It’s everybody else out there, and there are hundreds of thousands of businesses that fall into that category. The common thread is that they tend to have some kind of online presence that is an economic driver for them. If you sell anything on the Internet, you’re a great fit.
How often do your customers use your product?
Everyday. It’s one of those tools that’s opened up in the tab of your browser constantly. There are two basic usage patterns. One is a consumer who is just looking at the state of the world. The other is a user doing ad hoc analysis. They have a question and want to go find the answer. That’s more the workflow of the data analysts, the quantitative marketer, the person on the product team deciding what direction to go in and how much to invest in things.
Not trying to be weird here, but you have a terrific voice. Did you go to school to be a announcer or something?
Haha. What shaped me most is improv comedy. I’ve been a performer on a house team at Philly Improv Theater called Big Baby. It’s long-form improv in the style of Upright Citizens Brigade, Second City or any of those Saturday Night Live feeder schools. I am so lucky to be on a team with hands down some of the funniest people I’ve ever met. I’m on stage in front of 80 to 100 people every Saturday night.
OK, back to the tech stuff. Is there just too much data out there?
Analysis paralysis is a common trope these days in the business world and I think it’s a very real thing. It’s all about intent and goals. We build an analysis because we have a very specific question we want to answer and we have the confidence that when we find the answer, we’re going to behave differently as a result.
If a customer comes to us and says ‘my investors yelled at me last quarter because I don’t have enough data, I’m gonna pay you guys some money and the data thing is gonna happen right?’ That’s a bad customer for us. If they don’t know how to define success then they can’t be successful.
Something tells me you have a ton of data on RJMetrics itself.
We have a fine grasp of our unit economics as a business. We’re not deploying another dollar toward headcount unless we know precisely how much more revenue that corresponds to. Every new person we add now, we know we’re growing the business more and more profitably.
The data must be favorable since you’ve hired 100 new employees in just the past few years. What kind of culture are you building at RJMetrics?
This is not an environment where people are yelling and screaming all day long. There is a little bit of a zen vibe around here. There is a very meaningful sense of impact and a strong desire to make effective use of the time they have in this world. Our team members want to have their work actually mean something and change the world around them — and they want to learn and grow as individuals.
RJMetrics has secured more than $22 million in investment capital. Does that being public knowledge affect what workers expect from a salary perspective?
We’re sensitive to the harmony between a market salary for a job like this and the risk/reward that comes embedded in working for a startup. You know you’re going to be working extra hard but you know that work will have a measurable impact. Compare us to any other startup in the scene or any other company of any size and we’re competitive on salary.
We increase the upside. Not a day goes by when team members here aren’t becoming worth more for the rest of their careers as a result of this experience. Compare that to larger companies and you don’t get that level of exposure. We’re still a small enough company where I know everybody by name. Interacting with the CEO on a regular basis and getting tuned into the company strategy at that level is really valuable. Plus, every single employee of RJMetrics has a stock-option plan. A very large chunk of the company is now held by the people that work here. Who cares about the $16 million sitting on your balance sheet if your end goal is to have an IPO where the market cap of the business is billions of dollars in size.
I’m sorry, you said “billions,” right?
Look at the IPOs that have happened last year in the software as a service revenue model universe. We’re talking about New Relic, Zendesk, HubSpot, Box, and Shopify. All of those companies went public with a market cap north of $1 billion. It’s totally attainable. The market is very, very kind to recurring revenue businesses right now.
What is the end game for RJMetrics?
We would be foolish not to be optimizing this company to be an IPO-scale business. We are in an enormous market. We have a product that is awesome that people want and are willing to pay money for. The product is only going to get better and the market is only going to get bigger. Is there a competitive landscape? Absolutely. I’m glad there is. If there wasn’t, there probably wouldn’t be that big of a market there to play with. Somebody will build a multibillion company solving precisely the pain points we are solving.
Do you ever get approached to sell?
We get sniffs from time to time but it’s not something we actively consider. We’re swinging the bat hard here. There are businesses that have been able to achieve 10 times the revenue and customer base we have. We won’t stop until we are the best in the world, the best in class.