RJMetrics Co-founder: People Are Making Bets on Philly
Around this time last year, BizPhilly sat down with RJMetrics to talk about the data empire they erected in just a few years, and at the beginning of this month, BizPhilly reported that RJMetrics, in a carefully calculated move, was acquired by the Silicon Valley commerce platform, Magento Commerce.
With the acquisition, the data analytics software startup became Magento Analytics and a new Philly startup, Stitch, was born.
After eight years of operation in Philadelphia, RJ Metrics co-founder and CEO Bob Moore and co-founder Jake Stein, have new roles, but their goal, to help businesses make smart data-driven decisions, remains unchanged. The company will act as the analytics arm for Magento Commerce, condensing data into business performance insights, and Stitch will continue to build data infrastructure for clients.
When I sat down with Moore recently, he said that if you asked him on the day RJMetrics was founded to name the businesses most likely to acquire them one day, Magento would have been one of them. The two complemented one another like puzzle pieces, with matching value propositions from the start.
I met with Moore to get every bit of insight he’s gleaned from the deal and to find out what he’s learned in his new position thus far. In this interview Moore looks back on what he’s learned over the years through RJMetrics and offers his latest observations of Philly’s dynamic tech ecosystem.
BizPhilly: When BizPhilly asked about direction for RJMetrics last year, you spoke about an IPO as an end goal and a market cap of billions of dollars. With this in mind, was the deal with Magento the exit you all envisioned?
Moore: You always want to be swinging for the fences with these things, and a very easy guidepost for that is that billion-dollar outcome, the milestone at which options like an IPO start to exist on the table. This was not a billion-dollar outcome. This was not an IPO. It was an outcome that I’m extremely happy with. It’s kind of like a one-two punch.
There was an outcome that created an exit, created an opportunity for a new company to come into Philly and to provide some liquidity that after having been in business for eight years is very important in a lot of ways. The second punch there is the fact that we got Stitch. It’s very unusual in a situation like that to have assets get spun out or to have the ability to continue pursuing something as a startup. But what we saw in Stitch was the opportunity to build something from the start up. In a lot of ways if you look at how Stitch is performing, it reminds you of the early days, the glory days of RJ as a much smaller company. It’s a great team, at a great moment in time where we see the demand in the market.
BizPhilly: With the acquisition, staff members were moved around and there were some changes in leadership as well. Jake is now heading up Stitch and you’re now leading the Magento Analytics team. How did you all make these decisions about leadership?
Moore: When the Magento deal was coming together, it became clear that I had some very deep attachments to the RJMetrics product that became Magento Analytics. Not the least of which is I wrote the original version of it myself in my attic in Collingswood in 2009, so I am intimately familiar with the code base. The core vision of trying to bring that product to a much larger universe of customers through Magento was something that was very naturally appealing to me and fit really well with where I felt I could deliver the most value.
From Jake’s standpoint, I think it was a great opportunity for him to get a seat in the captain’s chair and really demonstrate to the community and to the company how strong of a leader he really is. Which he is, he’s amazing. It was clear from day one that if we were going to create a structure like this, Jake and I would each go off and run one of the divisions. This is one of the reasons why it’s great to have an amazing cofounder. It creates optionality for situations like that.
BizPhilly: In the past, you said that Philadelphia lacks a vital entrepreneurship cycle in which someone starts a company then employees from the company go off and start their own ventures, and so forth. Do you think that with this deal RJMetrics is beginning or contributing to that cycle here?
Moore: I really hope that RJ Metrics becomes one of those stories. I’m aware of about a half dozen people that have worked here at some point in time and have gone on to found their own business or explore entrepreneurship on their own. Tristan Handy is one of them. He’s our former VP of Marketing and is now running a firm called Fishtown Analytics out of Fishtown. Matt Monihan, who was a long-time product manager here, founded a company that’s building software for traditional manufacturing industries and other verticals. He is now based out of New York City, actually.
There are a handful of others, at least two that I can think of, that haven’t announced yet, but I’m super excited about what they’re working on. You never know where these things will go. You never know how big things will or won’t get. What you can always appreciate is people swinging the bat. When you work in an environment that is entrepreneurial in nature, for some personality types, there’s only so long you can do that before thinking, “Maybe I should start my own thing, maybe I should be running the show.”
I’m really excited by the idea that people who were here at RJ for some time are going and doing that. That’s exactly what helps create explosive growth in the city’s entrepreneurial scene.
BizPhilly: Talk to the broader tech community. What are some lessons you’ve taken away from the exit and the birth of Stitch as a standalone company?
Moore: One of the things that I am really happy with in the story of RJMetrics is that we were able to build a business here that had a global customer set, with investors from the biggest technology hubs in the world. And this company exited to a company with offices and customers around the globe and we did it all from right here in Philly. All of our employees were always right here in Philly. Our offices were here in Philly. We operated out of this city. It’s where we found mentors. It’s where we found introductions to customers and investors. It’s where we recruited the many amazing team members that made building this company possible.
That’s not going to be the case for every business, and I don’t believe every single company should be based in Philly. I actually think it’s a really specific business model that works extremely well here and we happen to fit into that. I think it makes a whole lot of sense for companies that are selling to big brands and media companies to have offices in places like New York, and it can make a lot of sense for consumer brands or fashion brands to exist in cities where there are big presences there.
BizPhilly: What kind of business model do you think does well in Philly?
Moore: Warby Parker was a Philadelphia company, but there’s a very specific thing that they had set out to do and frankly, they should’ve been in New York and they were in New York. That’s not a mistake, and I don’t think it’s a loss for Philadelphia when a company has a business model that’s better suited to another city.
But for us, [it was about] building a business that was in a lot of ways serving our customers virtually. We didn’t do a lot of in-person meetings with customers. We didn’t sell face-to-face. We sold over the phone and over the internet. We needed to build a really strong technology team and a sizable customer success organization. We had to be able to do that affordably and be very strategic about how we spent money and how we raised money. Philly was an amazing use-case for that. And I think when you look at other companies that have been really successful here, it tends to be in that B2B, selling to other companies, not necessarily doing the getting on planes for every single sale kind of thing. Or the selling to millions and millions of consumers thing, either.
BizPhilly: How can companies apply this knowledge to their practice?
Moore: It’s really great to see more and more companies getting founded here. I think there are more startups than ever. I think it’s important for those startups to realize that you can go through that entire life cycle right here in Philly. Honestly, if RJMetrics had stuck around for another few years, we probably would’ve ended up with an office in San Francisco. We probably would’ve had offices in other cities and there’s absolutely nothing wrong with that. But what’s exciting is you get to see that you can plant your roots in the city and build something meaningful. The world is at your fingertips. That doesn’t put a ceiling over what you can do in terms of building a business. And you need only look as far as companies like Curalate where you’re seeing offices pop up all over the place and the growth be really fantastic, but with roots that are right here in Philly.
This is less advice and more encouraging data points. If you build a great business where you have customers and you have revenue, and you inspire people, be it your customers or your team, then the availability of resources is quite vast and they’re not limited to what city you happen to exist in. We’re in an era of accessibility in terms of the resources you need to build a business. That’s super exciting, and Philly’s a great spot to plant roots.
BizPhilly: Do you think Philadelphia’s tech scene has evolved over the last year? If so, how?
Moore: It’s exciting to see the diversity of companies and founders in town. It’s diversity in the traditional sense—I think we’re seeing a lot more female founders and minority founders. Still not nearly enough, but I think a far more diverse landscape than we might have seen five years ago for sure, but then also just the overall volume of companies. If you went to the Entrepreneur Expo maybe just three or four years ago, or you went to the PSL Summer BBQ, you’ll realize now that the sheer magnitude of these events has gotten so much larger than before.
I think it’s a function of a lot of people making bets on Philly. That is individual people choosing to start a company here, or organizations like Venture for America, which has brought a lot of people from other towns who have worked at startups and founded other startups here in town. There are incubators and accelerators, and even all of the co-working spaces that we are seeing pop up. The fact that Philly can sustain so many different co-working environments simultaneously shows the growth. And I would say, “Are we in a co-working bubble?” But every time I go inside one of those places it is absolutely packed, and half the people in there are in the beginning stages of starting a company. That was nonexistent when we started RJ.
I think there’s a lot of active investment in our entrepreneurial community being made by very smart people. It makes me so happy to be able to walk into one of those events, and I used to know every single person in the room and now I probably know 20 percent. There are going to be some amazing companies and amazing entrepreneurs who come out of that group. I couldn’t even name them for you because the community has gotten too big. I love that. That makes me very happy.
BizPhilly: And for you personally, are you married to data? Is this where you see yourself in the long run?
Moore: As it relates to Magento, I am really excited about the opportunity that’s presented itself with being able to marry RJ with Magento in a very deep way. As far as I’m concerned, in the near term, that’s my focus. And I think we’re going to be able to do great things for our customers, our team and our community by doing that. So I’m gung-ho in that regard.
I think in terms of data as a category, long term, if I were to start another business someday, there’s not a guarantee that it would be some kind of data analytics startup. There are a whole lot of things that interest me that I’d be curious in exploring. A lot of it is in data and in doing business and helping businesses become more efficient and effective. You need to be as lucky as you are good in this business. And sometimes it’s a matter of timing and having the right idea and the right team that meets the needs of the market.
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