A Startup with a Stupid Rap Video

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Not long ago, a prospect was kind enough to share their thought process where they evaluated us against a competitor. One thing that stood out to me was an email chain where a consultant they employ positioned our competitor as a large, established enterprise and us as “a startup with a stupid rap video.”

Yup.

The not-so-subtle subtext of the consultant’s email was that their client shouldn’t feel comfortable relying on a bunch of jokers like us. It’s a fair point. We are a (5 year old) startup. We have a rap video. Guilty as charged.

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RJMetrics Raises $1.2 Million From Leading Early-Stage Investors

Today, we are proud to announce that RJMetrics has closed a $1.2 Million financing round from a syndicate of world-class technology investors. Our new investors include SoftTech VC, Lerer Ventures, SV Angel, Zelkova Ventures, Upstage Ventures, Red Swan Ventures, Venture Capitalist Jon Anderson, Wharton Professor Kartik Hosanagar, DuckDuckGo CEO Gabriel Weinberg, and Fab.com CEO Jason Goldberg. Jason Goldberg has also joined our Board of Directors. As a fully-bootstrapped and profitable company, the decision to raise capital was not an obvious one. Jake and I both worked as VCs prior to founding RJMetrics, and that experience taught us the benefits of waiting as long as possible to raise capital. We agreed from day-one that we would only take on investors when we were certain that it would generate positive returns. I’m happy to share why that day finally came.

Why We Did It

Opportunity. In 2009, Jake and I emerged from my attic with a minimum viable prototype of our hosted business intelligence product. Jake hammered the phones and we got our first few customers. By 2010, we had enough revenue to make our first hire. We improved our processes and product by leaps and bounds. Word started to spread and more customers arrived.

By the end of 2010, we had grown the team to four people and moved into a real office in Center City Philadelphia. In 2011, our customer count exploded, our headcount tripled, and our product got even better.

We got efficient. We added automated marketing with Hubspot, CRM with SalesForce.com, customer support management with Zendesk, code control with Github, product management with FogBugz, and (of course) robust analytics with RJMetrics.

Thanks to our own product, we were seeing compelling data about customer lifetime value and retention. This led to the conclusion that the only thing between us and even faster growth was more rapidly iterating on our product and getting in front of even more people. Raising money was the key to going after this this huge opportunity as aggressively as possible.

Amazing Investors. We knew that the right investors could contribute far more than capital. We spoke to a number of institutional investors and angels, and ultimately decided on an angel syndicate because of the speed, flexibility, terms, value-add, and diversity they were able to provide.

We were fortunate to be oversubscribed almost immediately. This gave us an opportunity to be selective about the partners we chose. Naturally, everyone is well-connected, smart, and experienced. If you look closely, however, everyone who invested also falls into at least one of these categories:

  • Actual RJMetrics Users: Almost 100% of this round came from firms or individuals who have used our product extensively. From Jason Goldberg (Fab.com) to Ben Lerer (Thrillist/Lerer Ventures) to Andy Dunn (Bonobos/Red Swan), these investors had done their product diligence without even knowing it. They will bring practical, in-depth insights to our product development strategy from day-one.
  • Stellar West-Coast Investors: Silicon Valley is underrepresented in our customer base, and we see that as a huge market for us in the coming year. Funds like SV Angel and SoftTech VC give us a west-coast presence and bring credibility, strong networks, and valuable regional expertise to the table.
  • SaaS and Lean Startup Experience: Raising money doesn’t mean we’re going to abandon our mantra of capital efficiency. Investors like Mark Wachen (Upstage Ventures) and Gabe Weinberg have personally built and exited technology companies without depending on outside investors to survive. Their expansion-stage experience will be invaluable as we take things to the next level.

Why We’re Excited

We Love Doing This. Every day, we learn something new, interact with the smartest group of people we’ve ever known, and build something that changes the way people think. There is much, much more that we can do and nothing makes us more excited than working to turn those dreams into reality. This funding is only going to make that happen faster.

We Love Philadelphia. As we detailed earlier this month, we are proud to call Philadelphia our home and we’re excited about the emerging start-up culture here. We are also proud to be bringing brand-name capital from both coasts into the Philadelphia technology community. These dollars will be spent on cultivating local talent, creating jobs, and growing our hometown brand on the global stage.

We’re Just Getting Started. Raising a round of capital is not the finish line– it’s the starting pistol. We’ve been working on this company for three years now, but we continue to start each day hungrier than ever. So, don’t say “congrats.” Say “good luck.” And stay tuned.

Why Our Startup is Doubling Down on Philadelphia

2011 has been an outstanding year for RJMetrics. We’ve tripled our headcount, creating eight new high-tech jobs in Philadelphia and filling our Center City office to capacity. We’re proud to have done this profitably and without the use of any outside capital.

Today, we signed a new lease that will significantly expand our office space in The Philadelphia Building at 13th and Walnut. This was not a decision that Jake or I took lightly. 2011 brought with it a number of strategic opportunities, including offers that would have involved moving our company to New York or Silicon Valley.

We turned down those offers and we’re doubling-down on Philadelphia. Not because it is the path of least resistance, but because it is the right path. We believe that Philadelphia is the best possible home for our start-up. Here are five reasons why.

1. Philadelphia is a Lean Startup’s Paradise

We’re huge fans of Eric Ries’s “Lean Startup” approach to building products and companies. If you’re not familiar with this entrepreneurial philosophy, it involves moving as quickly as possible to collect actionable information, acting on that information, and then iterating. It’s not about being cheap– it’s about being fast.

From day one, we were able to acquire actionable information faster in Philadelphia than we could have elsewhere. How is this possible? It’s simple math: time is money and it costs less to do business here. Rent is lower. Beer is cheaper. I live comfortably on a salary that would have me sleeping in a broom closet in New York. With a fixed budget, we’ve been able to conduct more tests, iterate more frequently, and get smarter faster — all without prematurely raising capital.

This effect is amplified when you remember that we sell a hosted product in a world that gets flatter by the day. RJMetrics has customers on five continents, but our physical location has no bearing on what we charge them for our product and what it costs to deliver. This leads to higher margins and more money invested back into growth.

On a budget that would be razor-thin in many other cities, we can provide our employees with a world-class working environment, top-notch benefits, and some of the most compelling personal development opportunities in the region. This is helping us create Philly software jobs that tap into our city’s tremendous pool of local talent.



2. Philadelphia is Rich with Talent

I’ve heard peers complain about a talent shortage in Philly. I agree that one exists, but a shortage of technology talent is not a Philadelphia problem. It’s a national one. We know startups in every corner of this country and the complaint is the same everywhere: demand outweighs supply, prices climb, and cash-rich companies like Google monopolize the top talent.

Yes, there are a higher number of talented developers in New York and Silicon Valley than in Philadelphia. But it’s important to remember that competition for those developers is proportional—big companies will open their doors anywhere they can find clusters of talented people. For example, I wasn’t surprised to see Facebook’s recent decision to open a development office in New York (although I said a prayer for my friends who are running startups there and already competing with each other, the banks, and Google for new hires).

There are plenty of excellent developers in Philadelphia, but it is admittedly a smaller pond than other major tech cities. Developers do not gravitate here, but there are a lot of them here for personal or circumstantial reasons. We have found that population to be rich with ambitious, talented people.

Our proximity to leading universities like UPenn, Princeton, Drexel, and Villanova also allow local companies direct access to top-notch engineering grads. Many of these talented engineers are “in play” every year. As we’ve grown, we’ve seen an increasing level of success with university recruiting.

There are also a number of large technology companies in the area (from Comcast to Oracle to SAP) who have sizable technology teams. Professional recruiters are proactive about syphoning candidates out of these larger companies, and many startups like us have had success tapping into this pool of talent directly as well.

Overall, I would say that the caliber of talent in the Philadelphia area is strong and the landscape of candidates is proportionally lower-volume and lower-competition than in other cities. In other words, the inputs look a little different but the absolute yield is comparatively attractive. We are building a world-class technology team here and see plenty of runway ahead of us.


3. Philadelphia’s Startup and Technology Communities are Thriving

When we moved to Philly in 2008 to start RJMetrics, the startup community was fledgling. An organization called Philly Startup Leaders was picking up steam and we’d often bump into talented freelancers who spent their days at a coworking space called Indy Hall.
In just a few short years, these groups have flourished into nationally-recognized organizations with hundreds of members. We’ve seen events like Philly Tech Week and the Philly Tech MeetUp surge into a successful existence. We’ve also recently gained exposure to some amazing mentoring organizations that exist for later-stage companies.

In my opinion, the diversity of the organizations in the Philly tech community is a great thing. They allow a widespread population of technologists to each find a voice that works for them. For the most part, these groups peacefully co-exist and share the common goal of making Philly a more awesome place for tech and business.

As these organizations continue to evolve and collectively impact the local economy, I think the pieces are moving into place for a coalition of tech players to exercise greater influence on local politics and work together on initiatives to raise outside awareness of the broader Philadelphia tech community. Today’s appointment of Bob Moul to the presidency of Philly Startup Leaders is evidence of this progress. Stay tuned.

4. Philadelphia Companies Have Capital and Strategic Options

One of the many lessons Jake and I took away from our previous jobs in VC is this: there are awesome companies everywhere and, if your company kicks ass, it doesn’t matter where it’s located. You will have no problem raising money and you will have no shortage of options when the timing is right for an exit.
As we’ve grown, this truth has become increasingly clear. Any venture firm that invests in New York or Boston companies will gladly invest in a Philadelphia company. These include funds on both coasts.

And doing business from Philly is easy. We have a major US Airways hub that provides easy access to the west coast and Europe. We also have extremely close proximity to New York, Washington DC, and the rest of the the eastern seaboard.

Recently, Philly has seen big exits like Invite Media (to Google), Boomi (to Dell), and MyYearbook (to Quepasa). We have also seen major investments made into companies like Monetate (from First Round & Openview) and DuckDuckGo (from Union Square). Don’t be surprised to see more announcements like these soon.

5. We Love It Here

Philadelphia is an awesome city. It’s rich with history, has one of the best restaurant scenes in the country, and is full of great people. The arts scene is incredible. We have great sports teams and even better cheesesteaks.
We are proud to call it our home. Stop by anytime.

Business Intelligence Rap Video

[Follow our blog posts, obsession with data, and original articles on Twitter @RJMetrics]

Most people know that we build powerful business intelligence dashboards here at RJMetrics, but now that we’ve moved to Camden, we figured we ought to take advantage of the long weekend and make a rap video as well. (Unfortunately, the odds are stacked against us– Jake’s favorite rapper is Bo Burnham and I’m so tone deaf that I crashed the auto-tune plugin when we recorded this song.)

Anyway, in what may prove to be the dumbest PR move ever, we decided to augment our dope beats with some unsolicited free advice to tech startups. This was our chance to point out some of the most absurd startup behavior over the past few years. We should know–most of these lines are based on things we’ve done.

Lyrics are below the video. Enjoy!

Big thanks to Adamack from Open Minds Entertainment for the beat, John Keating for his help with the vocals, and my brother James Moore for the studio time and production.

Click Here to download the MP3

Lyrics after the jump.

Lyrics:
This recessionary period ain’t messin’ around
I got depression-era economics gettin me down
The internet it ain’t immune, man, everybody’s gettin’ screwed
And yeah it’s true you know, web two-dot-oh is dead in the ground

VC’s drying up, M&A? outta luck
And the rub is you’ll be strugglin’ if your company sucks
Stuck scratchin your head? You’ll be dead in the water
Here’s a couple signs that you’re gonna get slaughtered:

Your six-month peak was a TechCrunch mention
Your churn rate’s deep, you got no retention
You join AdSense and declare success
But your cloud tag’s only got one word: “test”

You built a couple widgets and a wiki that scales
And then you paid your people double cause they did it in rails
But, how you doin’ in sales? I know it’s probably slow, yo
‘Cause I need some aviators just to look at your logo

You got no revenue
Burnin’ cash is all you do
You raised your Series A
Twice-preferred, participating
You’re throwin staff retreats
Better check your balance sheet
Everyone’s convinced
You need business intelligence

See you lata, public beta, do a real release
The whole long tail couldn’t even save this piece
Got a social app? Well, it’s a disgrace, look
‘Cause Facebook can’t even make money on Facebook

You got a podcast, but the point you’re missin’s
Your vision’s so weak, ain’t no one listenin’
SecondLife sales? Man, that plan is the worst
I think you shoulda made a dollar in your first life first

Meet-Ups every day, when you go, pros scatter
You’re LinkedIn to 500+ but none matter
Tryin’ to be distributed, you wanna unbound
But you know nothin’ bout computing, get your head out the cloud

Your API’s slow, it’s a bit too RESTful
Quit tryin’ to grow at a clip, was too stressful
Debt breakin’ covenants, they’re rollin’ it back
Yeah you got all of your investor’s tryin’ to call in a MAC

Not grabbing market share
Market isn’t even there
You think you’re doin’ fine
In stealth mode since ‘99
You’re tweeting constantly
LOL @bankruptcy
You don’t know SEO
You paid for links but they’re nofollowed

Had millions in the bank
Still have no Alexa Rank
Burn out or get acquired
Either way you’re gettin’ fired
Your angel round is gone
Blew it on a favicon
Everyone’s convinced
You need business intelligence

You signed a 10-year lease
I wouldn’t give you 10 weeks
You Loved “Who Moved My Cheese?
Retire, please

Your dedicated server farm is bladed, thats slick
Although you probably woulda made it on an 386
Because your invite-only system, dude it’s hurtin’, it’s flawed
See, all those people you invited ain’t returnin your calls

And it’s only 9-to-5ers who surround your scene
Because Adultfriendfinder’s where you found your team
Tried to hire talent but you screwed it up, didn’tcha
‘Cause your wanted add said you were hirin’ ninjas

Yeah we know we’re hypocrites for doin this song
And then promotin’ it by posting on the company blog
But a new day is dawnin’, the strong they can sense it
Darwin is comin’ to the ‘net with a vengeance

If you’re sittin on a winner, yo, you wanna be strapped
So if you want to push it harder, best be trackin your stats
And I ain’t talkin’ bout your traffic, man I’m way past that
Wanna fatten up your stacks? Let’s chat…

Business Intelligence… (repeat)