From Idea to Acquisition: A Conversation with CRMCulture’s Steve Roch [Part 1]
On why he founded CRMCulture and his path to finding the right partner
I recently had the pleasure of chatting with Steve Roch, founder of CRMCulture — a Salesforce SI partner and creator of the popular AppExchange App, ActionGrid. We had a blast talking about Steve’s experience with starting a consulting business, building a successful AppExchange app, and being acquired by another Salesforce ecosystem partner, Conga. Below are some of the insights from our conversation that focus on why Steve joined the ecosystem and outlines his journey creating ActionGrid.
This is the first installment of a two part blog series with Steve, so keep an eye out for the next installment. And be sure to mark your calendar for a live webinar on April 18th (register here) where he’ll share more tips, discuss lessons learned, and explain how he plans to do it again in his new role at SMS-Magic, a text messaging solution for Salesforce that facilitates one-on-one conversations as well as communication automation with workflow rules.
What were you doing before becoming an entrepreneur? What led you to start CRMCulture?
Prior to founding CRMCulture, I spent 14 years as a CIO for software company in Boulder where we went through a few different CRM systems: I built my own, bought GoldMine CRM, and Pivotal CRM to name a few. I was a gearhead and I would stretch these systems to the maximum, so I was constantly that referenceable customer because I could really push the limits of the platforms.
Although I had many other projects as a CIO, I learned that no matter what CRM you’re using, driving a culture of CRM usage was the key to CRM success. Software can make the business better, or even worse, but the culture and organizational behavior is what makes it work.
So this is what I built my brand on as a CIO, and in 2007 I started CRMCulture, a consulting firm that focused on helping our clients drive a culture of CRM adoption and optimization.
Tell me about the early days of your business; what were some early obstacles you encountered?
I founded CRMCulture as a lifestyle business and started out partnering with a very large, well-known competing CRM platform. As a consulting company, we were all about earning gratification from the end users. Even when I was in IT this is what motivated me. There is nothing better than when someone tells me that I solved their problem.
When we started, I had no growth plan and no products on the roadmap, it was all about the satisfaction we got out of making our clients successful. We made a fair amount of money because there was a lot of opportunity to build customizations, but frankly, our clients needed a lot of help to make these other CRM platforms functional. Even though we were making money, I didn’t feel like our clients were truly successful, because these other platforms would break or run too slowly. So even though it wasn’t our fault, the customer would get upset with us — I wasn’t feeling the love that really motivated me in the first place.
I learned that when your partner can’t deliver on their platform, then neither can you.
We didn’t feel like we were driving the value for our customer, so I transitioned the business to partner with another, smaller CRM ecosystem. I knew a lot of the people at this company, and they didn’t have many partners in our space, so I felt like we could knock it out of the park.
So, it sounds like you were primed for success in your second ecosystem. Why did you change course and decide to invest in the Salesforce ecosystem?
The first large ecosystem I mentioned taught me that success is more than the ability to make money, your partner needs to have a strong core product that will make the customer successful. The second smaller ecosystem showed the importance of investing in a partner that has a large customer base and growth. There simply wasn’t enough new customer growth in the second ecosystem and we were rapidly selling to the existing customer base. It wasn’t hard to see the writing on the wall with where the business would go — when your partner isn’t growing their customer base, your ability to grow suffers. They kept losing deals and new logos to Salesforce.
Additionally I noticed that every time I talked to someone, whether in San Francisco, Denver, or New York, they knew about Salesforce. Salesforce had built a strong tradition of customer success and had grown to be the clear leader in the CRM space.
In 2013, I went Dreamforce to see what it was all about. Frankly when I showed up I was a little depressed. I felt like I had missed the opportunity because this partner ecosystem had seen rapid growth and maturation over the previous few years.
If you felt like you were late, what gave you confidence to still move forward with a partnership?
I think the B2B ecosystem space is like the smartphone story, specifically iPhone vs Blackberry. iPhone built this massive ecosystem of apps, while other companies like RIM/Blackberry had to pay people to build apps. Why do some ecosystems collapse and are struggling to have 100 apps, while others can attract 3,000+? It’s because people follow the money. Why do all the people go to where the money is? Because the products are better. So, even though Salesforce had this large ecosystem, which included more competition, I knew it was the right place to put my bets.
Want to learn more about Steve and his story? Keep an eye out for Part 2, and sign up for our webinar on Tuesday, April 18th. Steve will be joining us for, “Winning in the $70 Billion Salesforce Ecosystem,” where I’ll talk with three Salesforce partners to hear about their experience in the Salesforce ecosystem. Register for the webinar here.