GrowthCurve Episode 24: RJMetrics

August 23, 2020

An interview with Bob Moore and Jake Stein, co-founders of RJMetrics, a local data analytics startup that cemented their success with a so-called triple lindy, a three-pronged victory that started with their acquisition by Magento in 2016.

GrowthCurve Episode 24: RJMetrics

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After working at the same venture capitalist firm in New York City, Bob Moore and Jake Stein decided they no longer wanted to spend their time calling and working with business owners and entrepreneurs – they wanted to be on the other side of the call. 

In the first of a three part series featuring Bob and Jake, we’ll explore the rise of RJMetrics from a small 4-person office in Camden to their 100+ person fast-growing startup in Center City Philadelphia, and how they were able to land unthinkable deal terms to set them up for decades to come. 

Credit: Philadelphia Business Journal

Back to the Beginning

“We were just very lucky that [our first job] was extremely relevant and kind of sat inside of what would be the zeitgeists of this market in the next couple of years.”

Jason: Bob and Jake, it’s awesome to have you guys here on GrowthCurve today.

Bob: Great to be here.

Jake: Yeah, really excited.

Jason: I’ve known you guys for a while now. I think probably going back to like 2008, I want to say.

Jake: Probably.

Jason: You actually pitched at Spark and I think that’s how we got connected, I remember.

Jake: Wow. Oh, yes.

Bob: That timeline checks out, yeah.

Jake: Yes.

Jason: Yeah, we were running all kinds of crazy events back then. And thanks to and just checking in every here and there, I’ve been able to track your progress for a while, so. But I want to go back from 2008 till now, how you guys connected in the first place and how RJ  Metrics came to be.

Bob: Wow, yeah.

Jake: It’s deep.

Bob: I guess the origin story, it goes all the way back to 2005. When Jake and I were both still in college. We did not go to the same school, but we had the same summer internship one year. We both worked at a firm called Insight Venture Partners in New York City. And our jobs there were basically, well, it sounds flashy and impressive to work at a VC firm, we were basically sales guys. We were cold callers. Only what we were selling was money.

So we had to basically call entrepreneurs, get them on the phone, learn about their businesses, discover whether or not they were interesting enough to potentially invest in. And then if they were kind of pass them along to the senior leadership of the firm. And we met and connected well over that summer internship, we both got offered full-time jobs there and accepted them and then worked together at that same firm in New York for about a year and a half, two years after we graduated.

Jake: Basically, while we were at Insight, we had two parts to our job. One was the sales part that Bob mentioned, which was cold calling, cold emailing, trying to talk to a whole bunch of entrepreneurs, find out about their business, figure out which ones that would be a good investment for Insight, and then convince them to raise money from us and not from other people. And then once you did that, step two of your job started, which is due diligence and deal execution. And due diligence, there’s a whole bunch of kinds of due diligence.

There’s like financial and accounting stuff to make sure that the books aren’t cooked. There’s market analysis, we did that background checks on the founders to make sure they weren’t crooks. And then Insight had a real focus on data analysis for due diligence, and they were a little bit ahead of the curve from a lot of other VC firms around this because they weren’t early stage. They were like companies that had some traction. So we were doing things like customer lifetime value, cohort analysis, retention curves, things like that.

And this is all before the lean startup came out, the term data scientist had not been coined. So like applying data and analytics to the job of building a startup was like still not a super common thing at that point. And so as we spent time doing that analysis and it was super manual. It was really time consuming. It was all like getting shipped DVDs of database backups and things as glamorous as that. We’d boil all the analysis down to a PowerPoint deck, present that to the partners, the ones who made the decision to invest or not.

And then if we did the deal we would give the same presentation to the management of the portfolio company and say, this is what we learned when we were thinking about doing the investment. This is maybe where we can help. This is a problem area we want to flag. This is an area where you’re better than anybody we’ve ever seen, and just being super transparent. And to our like, honestly surprise, but delight, they were blown away by it. And these were people that were really accomplished, that had started successful companies or typically much more experienced than we were. We were like a year or two out of college.

Jason: And you guys were like learning on the job at this point, right?

Jake: Oh, yeah.

Bob: Big time, yeah. I had an engineering degree, so I knew how to write some SQL queries and kind of move and shift data around. But I honestly, like the term cohort analysis when I first heard it at Insight I thought the guy at Insight who hired me had invented it. Like I thought Ryan Hinkle made up cohort analysis.

Jake: He might have.

Bob: Yeah. Knowing Ryan, he might’ve. But yeah, a lot of this stuff was just like our first exposure to it. We were just very lucky that it was extremely relevant and kind of sat inside of what would be the zeitgeists of this market in the next couple of years.

Stronger Together

“And this RJMetrics idea, what was beautiful about it is that it was just sitting there, like punching us in the face the entire time. We had all this evidence that fast growing companies needed it, and we were uniquely good at it and had unique exposure to how to do it and how to execute on it well, and we had a universe of potential customers from day one.”

Jason: So you guys were working together doing the due diligence, doing the sales. How did you start developing this interest in working together? Like did it click for you at a certain point? Do you remember that?

Jake: Yeah. So, my memory of this is that, when I started working at Insight, VC seemed like the most interesting thing in the world to me. I definitely wanted to like spend my career doing venture capital. And after two years of doing that and talking to entrepreneurs every day and like ask them about their company and figuring out their challenges, I realized I was just, I wanted to be on the other end of that phone call. I was much more excited about their job than my job. And I’m super grateful for that experience, it was really educational. I met a lot of awesome people that I’m friends with to this day.

But I knew I wanted to make that switch. And so I started thinking about various ideas. I took some like learn to code classes at nights. The nice thing about working in VC is that if you’re thinking about joining a startup, your job is also recruiting for your next thing, but I didn’t really find anything that I was super excited about and partially because it’s hard to just like know and feel like from your gut, that this is a person you want to work with, or this is an idea you’re really excited about.

So my recollection is that Bob had been off on his own journey, working on things and like was, I think quite a bit further along than I was. But he one time during like lunch or dinner together with the other members of our analysis class he told us all like, “Hey, I think I’m going to quit and work on this idea of basically productizing some of these analysis we’re doing for due diligence.” And he laid out the market and laid out what he thought the opportunity was. And I thought, I was like, oh shit, this is a much better idea than anything I’m working on and I love Bob and this would be great to work together.

So I followed up with him the next day and just kind of cornered him at his desk and was like, “Hey, you’ve got a pretty good idea. It would be an even better idea if WE had this idea.” And yeah, I think we just kind of started talking about it from there.

Jason: And Bob, what was your feeling at that point? Were you ready for a partner or was it too …


Bob: Very much. So my backstory on getting to RJ was a little different in that I knew the day I started at Insight that my journey was going to end with me quitting Insight and starting a company. Like I joined Insight deliberately to get exposure to entrepreneurs and entrepreneurship, because I knew I wanted to start something. But the curse of that is that you become like a hammer looking for a nail. 

And I had spent probably the better part of a year and a half by the time the RJMetrics idea really crystallized, just kind of kicking the can around on a million little side projects and ideas and small businesses that I was trying to do my 80 hour a week finance job and also program or manage offshore teams to program on the side.

And I was getting like pretty burnt out already and I didn’t even have a company yet. Like I was a burnt out CEO without a company. And part of the problem was just like, I was picking ideas that sounded very cool and maybe were related to things I had learned in my day job, but I didn’t have like founder market fit on it. And this RJMetrics idea, what was beautiful about it is that it was just sitting there, like punching us in the face the entire time.

It was right in front of us because we had all this positive market feedback. We had all this evidence that fast growing companies needed it, and we were uniquely good at it and had unique exposure to how to do it and how to execute on it well, and we had a universe of potential customers from day one. 

So by the time the moment came to like take yes for an answer from the market and actually start this company, simultaneously I had learned so much about what like, honestly, what a lot of my own shortcomings and gaps were and where, and how I would need to spend time in order to make something get off the ground and the fact that it would be virtually impossible to do that without a partner. So it was perfect timing and our paths were set.

Jason: Nice. So you said shortcomings and gaps. Was it pretty clear, like who would be doing what when you guys started, because you were doing this very, the same role basically next to each other at Insight? So was it clear who was going to do what, and I guess did that change over time?

Jake: So we were hired into the same role, but our roles evolved over the time there, and I think partially because of the fact of what the two of us kind of gravitate to and what our skill sets are. So like Bob said, he has an engineering background. Like I was taking some online classes so that I wouldn’t be completely helpless in trying to figure out how to program something or understand how a computer works. He was like, had been building websites for years and was much deeper on that.

So over time I was spending more of my time at Insight on the deal sourcing, the sales focus part of the job, and Bob was shifting way more into the due diligence part of the job and the analytics. So it was pretty natural that at least from the building the product and then selling the product prospective-

Bob: Yeah. I don’t know how many years it’s been since I’ve said this line, but we used to say, “I build it. He sells it.”

Jason: Nice. Really simple.

Jason: Okay. So was the transition from Insight to full-time at RJ, did it happen like overnight? Was that a slow process? Did you get any pushback from Insight? Like how did that whole transition go?

Bob: Yeah. Insight was great, because I was transparent from when I got hired about that kind of being the roadmap, I think they were super cooperative and supportive, even when I had previous ideas before RJMetrics that were less good, they were willing to sit down with me and hear the pitch and eviscerate it for me and convinced me to stay. So that whole process was super fluid and they were super friendly about.

So from my point of view, that was the experience and it was a very … because I was doing this due diligence work they even allowed me to kind of like gradually transition out over a longer period and keep some partial paychecks coming in from time to time. And it really smoothed the transition. Especially given that this was the fall of 2008 when we did this and Lehman Brothers collapsed around the same time that we quit. So like keeping those paychecks and health insurance cover were big deal. But I don’t remember what was your, you quitting, how did they take that?

Jake: They took it fine, and you could probably know this from knowing Bob and I for years, they were very focused on making sure they had some of Bob’s time for a couple more months, this move to transition.

And I was like, “Hey, don’t worry. I’ll give you like two months of notice.” And they were like, “Oh yeah, sure, cool. Leave whenever you want.” I remember my boss stopped by my desk, like a two weeks after I gave notice. And he’s like, “Just so you know, it’s like 5:02, why are you still here?” And I was like, “Oh right, sorry.” And so they were totally cool about it. I think they get a kick and this actually fairly common for people who started that firm in like entry level roles. Some of them continue in VC, but a disproportionate number have gone on to have some sort of entrepreneurial career.

The other thing that’s worth calling out is that, and we went and looked at this later, something like 80% of our revenue in the first year came from deals that were either Insight portfolio companies, Insight itself, or companies that were referred to us by Insight. So they were not only super cool about us leaving, but like they had this problem-

Jason: They hired you basically.

Jake: Yeah, they were paying us to solve this problem before and we built something that solved the problem better. So they were like, great. We’ll pay you now in a different way.

Jason: Yeah. It’s amazing.

Bob: Yeah. We were probably drawing down less in revenue than our combined salaries at that point.

Jake: Absolutely, sure. Yes.

Bob: So they were getting a bit of a deal, but yeah, it was amazing. Our exposure to Insight in year one was an existential threat to the business in some ways.

Host's Commentary


There are a few things that RJMetrics did in the early years that had a big impact on their success as a business. First, Bob and Jake didn’t rush in, they deliberately immersed themselves in an environment that would set the foundation for their future startup. Granted, Bob and Jake didn’t know exactly what that startup would look like, but they absorbed every bit of experience and knowledge they could squeeze out of their time at Insight ventures.

Day in and day out, they lived the problem they would eventually attempt to solve and build a business around. Learning firsthand how the other side of the deal table functioned led to much success in navigating the fundraising in VC culture in future years. Most founders don’t get the opportunity or perhaps don’t make the choice to invest two years of their lives in frontline research before launching their startup. Most founders attack their idea instead of waiting until the business is punching them in the face as Bob describes it.

Starting Off Strong

“We made tons and tons of mistakes over the course of RJ and definitely learned a lot of things, but one thing I think we did well, and then I’m really happy we did was that from the beginning, we were trying to sell the thing before the thing existed.”

Jason: So then, the next move was to open up a small office in Camden, right? If I remember correctly or was there something in between there?

Bob: There was a hot attic in between there. So I lived with my girlfriend at the time in Collingswood. So in conjunction with all this, the move down to Philly, so we were in New York, right? We leave Insight, our income slows way down and Lehman Brothers collapses. And the recession comes on kind of in full force, and I don’t know if you remember at the time, but there was this really popular PowerPoint deck that leaked that was sent from the partners at Sequoia, which is this prolific venture capital firm to all of their portfolio CEOs. And the cover side was a gravestone and it just said RIP, good times.

And the purpose of the deck was basically to say, I know that we gave all of you money before, but that money is all you’re going to get, not just from us, but from any venture capital firm, like hunker down, if you need to cut staff, do it sooner, not later because the dry times are here. And that was the moment that we set foot out into the market to start a company. Before we raised any money and each of us put 3,500 bucks or something into a bank account, like so you look at that bank account and you can say, wow, we could survive for six weeks in New York, or maybe six months down in Philly where I grew up and where Jake went to school and was familiar.

And partially, I had personal reasons too. So my girlfriend was down here. She’s working at a law firm in the city at the time. And we got a house together in Collingswood and the attic of that house became RJMetrics headquarters. And from the winter of ’08, so end of year ’08 for the first six months of the business, we were up there, but it was not air conditioned.

Bob: So once the temperature started going up and this was ’08, so every computer had like spinning hard drives and waring fans, it was like a hotbox up there. We had to move to Camden because it was the only place that we could get an air conditioned office for less rent than we were making in income. Props to Camden, it actually ended up being a freaking great experience. I would start another business in Camden at the drop of a hat. Love that city, we had a great time there, but yeah, it was kind of like a force of all the external factors kind of crushing in on us that brought us there to begin with.

Jason: Right. So you had the recession you were dealing with, so I’m sure that that’s slowed things down, forced you guys to really strap in. How long did it take, like what was that first year so like? Were you able to acquire the first five customers quickly or was it a slow process? Tell me more about that.

Jake: It was, I think all things considered, we were really fortunate and we were able to start generating revenue really quickly. So Bob left a little bit before I did, but I think my like first day full-time working on RJMetrics was October 1, 2008. And I still have like the email starred for like the first payment we got. It was through PayPal that was in January of ’09. The thing we were selling at that time, the customer was really taking a leap of faith on us and it was a personal relationship. It was one of those things where we said, okay, the implementation is going to take a month or two, which is not unheard of in software but we were like building the product.

Bob: Oh yeah, it wasn’t an implementation, it was literally actually building this entire SAS product.

Jason: Right.

Bob: Yeah.

Jake: I think, we made tons and tons of mistakes over the course of RJ and definitely learned a lot of things, but one thing I think we did well, and then I’m really happy we did was that from the beginning, we were trying to sell the thing before the thing existed. And almost everybody said no. And we asked them why, and if they were honest, they told us. And then sometimes we said, “Okay, well, if we change that, then would you buy it?” And sometimes they said yes, and then, so we just very quickly were like having our north star, can we actually acquire these customers? Can we convince someone not to tell us that it would be useful, but to actually take money out of their pocket and put it in our pocket. And that was a really clarifying, forcing function in the early days. So we were able to get a handful of customers, I think all things considered pretty quickly.

Credit: Philly

Bob: Yeah. I think what’s interesting when you think about, I’m just trying to recall who those first customers were and not through us like going out and trying to find amazing companies. There were just some amazing companies in that batch that we just caught really, really early. Like they were getting started around the same time. So like Bonobos was one of our first customers and we were like the initial at the ground floor analytics platform that Bonobos ran. Paperless Post, they were actually … I’m trying to remember customer IDs, right?

Jake: I think Paperless Post was two or three.

Bob: Yeah. I think they were five. I think SmartRace was two. SmartRace was one, we were two, Paperless … no, we were 12. You can cut this out later.

Jake: Wait till we get to the part where we talk about what we named our servers.

Jason: Nice.

Bob: I know, I totally forgot about that. And then like, which is a company that maybe has fallen out of a lot of people’s recent memory, but was founded by this guy, Sam Lessin, ended up getting acquired by Facebook and Sam Lessin became like one of the top, top, top folks at Facebook on the product side. He basically invented Facebook timeline. Aviary, which got acquired by Adobe a couple of years after we went in there. Just like kind of a rock star cast and they were all willing to put their logos on our site and talk about how they were using us and I think that we just got little … some early adopters who they themselves were on their own incredible journeys and they created these rising tides effects for us too.

Jason: That’s awesome. So you were able to use those names pretty early on, right?

Bob: Big time. Yeah, absolutely.

Jason: So at that point, were you doing a lot of custom development like for each solution specific to each client or were you able to kind of use the same formula for each customer in those early stages?

Bob: I would make an argument that we never did any custom development because anything we ever built was built directly into the main platform and became available to basically any customer. So in that regard, there was no like custom implementation. I don’t think we ever got more than a fraction of a percent of our revenue from like services or anything that was like bespoke to a particular client. That said, we had a lot of stuff that we built for like one person and that just kind of sat out there. So we were probably lying to ourselves a little bit about that, especially in the early days where we built some pretty funky stuff to get early customers in.

Jake: And the other thing I’ll add is that while we didn’t charge for implementations, sometimes the non-engineers around the implementation team, which at first was me and then we eventually had a team of like a dozen people doing implementations at our peak. There were parts of the product where the analyst would write PHP or Java to get the job done. So it was like not custom implementations, but it was a customer implementation.

Jason: Right.

Bob: That’s true, yeah.

Jason: It may have been part of the sales expense, but it was there.

Bob: Yeah, totally. Yeah. We built portions of the backend of our product so that without making code commits, you can basically inject code, like execution code that would run on the customer’s data to do little data transformations or data cleansings or things like that. And yet we had this whole analyst team that was like writing, basically writing code that wasn’t “In our code base,” but touched the implementations of all these companies.

Jason: So you were in the attic for how long?

Bob: Six months.

Jason: Okay. And then you had an actual office in Camden for a little bit.

Bob: We did, yeah.

Jake: Yes.

Bob: At the Rutgers Camden Technology Incubator 200 Federal Street.

Jason: And before you moved to Philly, so this was like 2008, 2009, we’re still in 2009 or so at that point before you moved to the city?

Bob: In the summer of ’09 was when we moved to Camden. And then we were in Camden until January 2011 when we moved to Philly.

Jason: Okay. And you had a team of what, like 10 people or so at that point, or?

Bob: When we moved to Philly, it was four.

Jason: Four, okay.

Bob: We didn’t have much, yeah.

Jake: It was our fifth person first day.

Bob: Yeah, that’s right.

Jason: Okay.

Bob: We took him out in Camden. We interviewed him in Camden. He got food poisoning. We took him out for dinner, he got food poisoning from salsa.

Jake: He didn’t tell us later until after he got hired.

Bob: But yeah, I mean, it was a challenging time. Hiring engineers is obviously hard in any environment, but when we started needing to hire at some kind of scale, there was a point in time where we put up a job posting simultaneously that one of them said Camden with our Camden address and one of them said Philly with a fake Philly address. And we just started interviewing candidates from both pools. And it so happened that we kind of got a bit larger and more interesting audience for the Philly job posting.

Jake: It was seven and a half times larger.

Bob: Seven and a half times. I think, there’s an old blog post that’s probably still on the internet about this. So I think that was a pretty compelling piece of evidence that it was time to kind of set up shop in Philly proper.

Recurring Revenue is the Name of the Game

“It was a cascade of last-minute deals and loans. It was very messy, but we just kept going. I’d say one of the biggest, most foundational things was recurring revenue, where we saw this both at our time at Insight, and then in analyzing and understanding our customer’s business. We wanted people to want to stick around, not to be locked up into a 10 year contract… So trying to provide great service, trying to give them incremental value.”

Jason: Okay. When you guys were thinking earlier on about RJMetrics, obviously you were entrenched in the whole customer lifetime value, you were analyzing data, you were looking at what makes a good company. Tell me about some of those things that you took into that, the early stages of RJMetrics and said we have to have this as part of the business model.

Jake: I’d say one of the biggest, most foundational things was recurring revenue, where we saw this both at our time at Insight, and then in analyzing and understanding our customer’s business. Just the idea of that, you’re going to spend some amount of money, often a non-trivial amount to bring a customer on board and that’s in terms of awareness and then sales and implementation and customers in their first couple of months typically need a lot more support than they need, fast forward two years.

We’re going to be ROI negative on customers on day one. If someone pays us on day one and then never pays us again, that’s going to be a problem. So one is just the business model where we charge subscription fees for access to the platform and the ongoing service. And two, was just trying really hard to make sure that people want to stick around. Like we wanted people to want to stick around, not to be locked up into a 10 year contract. So trying to provide great service, trying to give them incremental value. We were successful and not successful at various points at that. But just understanding the importance of that and trying really hard to make it a reality. I would say that’s probably like the most foundational thing that we took away from our understanding of the data that we applied to the business.

Bob: Dovetailing into that is, so if that’s how we monetize our customers, how we acquire our customers and doing it in a way that was very heavily driven by organic channels, content marketing, thought leadership, I’d say it was like ground zero for the business. We had a blog post that got us tens of thousands of impressions and was number one on Hacker News and on Slashdot and a bunch of other sites that don’t exist anymore, months before we had a product even.

So like viral blog posts that took our ability to crunch data and made it an excuse for people to land on our website so that they would kind of be at the top of our funnel all the way through, even to the quarter that we got acquired was a fundamental part of how we raised awareness about RJ. The thing we loved about that, it’s a little bit of a hits business because you kind of like sometimes you write a blog post and it goes nowhere, you do research and it goes nowhere, but when it hits, it really hits.

And outside of our time where we were willing to work ourselves to death it really didn’t cost anything to do to swing that bat pretty frequently. So I think a lot of people that know of RJMetrics even to this day that we’ll meet at a trade show or something, they’ll remember us, it’s as likely they remember us because of a blog post we did as it is that they remember us because they were a customer of our product or something more high touch.


Jason: That’s awesome. So you guys didn’t … I don’t want to say it was easy, but you didn’t hit a lot of stumbling blocks in acquiring customers in those first couple of years. You said you started bringing in revenue in a couple months and it was a nice, slow build from there, or did it spike at any point, like what was that like?

Jake: I think we were pretty successful early on in generating customers and revenue as you said. The thing that we didn’t really get deliberate about until later and then I think we probably were slow to try to address is just, we were growing linearly where we had one customer, we were like, great, let’s get our second customer. And we had five and they were like, awesome. Let’s figure out how to get number six. And then we had 15 and we were like, all right, we got to focus on 16.

Jake: And it wasn’t really stepping back and thinking, okay, how are we going to scale this to $100 million business? Or how are we going to create a customer acquisition strategy that doesn’t rely on Bob staying up till 2:00 in the morning because he needed to fix a bug until 7:00 PM, and then he’s got to do marketing late at night. So that is something that I think partially because of the fact that we’re just by nature super scrappy, partially because the fact we hadn’t raised funding, partially just the, I think, being a little bit ignorant because it was our first time going through this rodeo. I think we didn’t get serious until later than would have been optimal around, how do we really actually scale.

Bob: Yeah, I mean if you think about that timeline, right? So basically quit our jobs in the third quarter of 2008, fast forward to us moving to Philly in January 2011. So that’s two and a quarter years worth of work and at that point we only had two employees. And the reason why we had these two employees is because that’s all we could afford to pay and by the way, at the time we were probably paying ourselves $30,000 a year, maybe 40.

Jake: Yeah. We were 18 months at zero and then we started up from I think like 5K a year and then worked our way up from there.

Jason: It’s a nice raise.

Bob: Yeah. So that journey, you throw a lot of today’s entrepreneurs into that environment and at any given moment during any of that point in time and honestly, even after we were in Philly, up until probably 2012 or so, it was possible to take a step back and be like, it’s entirely possible we’ve just wasted two and a half years of our lives. Like this business could still go to zero. We’re still basically living effectively paycheck to paycheck, right? Like customer MRR payment to MRR payment. And the business was small enough. Like we’re still talking about roughly a million bucks-ish of revenue probably in that first year in Philly, that’s a slow, slow, slow build.

And while you get these gradual wins and it’s always like this quarter is always bigger than the last quarter, it felt a little more like a neighborhood brick and mortar like a restaurant or something that you’re running that’s growing than it did a software business.

Jason: Yeah. Well B2B and monthly recurring revenue it is like that. I mean, it sometimes takes like two or three quarters to see the impact of a client you sign the previous year.

Jake: The cost of that time is, it’s not like an explicit cost. Like we did some huge marketing campaign and it failed, but it’s an opportunity cost where I think about what we could have accomplished with how early we were into that market. With, the early employees we had were complete rockstars with those amazing customers we had. And so like, it’s a great experience I wouldn’t trade it for anything in the world but we could have done more.

Host's Commentary


Let’s keep in mind that Bob and Jake are purposely holding off on raising capital until they have a proven, scalable business and have the level of responsibility and discipline to manage the capital in the right way. I always applauded them for sticking to this approach for so long and showing the maturity and patience that is often undervalued in startups circles. RJMetrics built their DNA around a few key tenets, organic growth strategies, overselling and promoting the product before they had built it, which was a forcing function for product development. These key tenets helped to limit exposure, unnecessary work and spending.

Bob and Jake accepted that good things take time. But while other startups around them were taking off like rockets, it was certainly difficult to prevent doubt from creeping in. There would come a point where Bob, Jake and the rest of the RJMetrics team was ready for a shot in the arm and waiting any longer could only lead to missed opportunity and regret.

Time to Go Hard or Go Home

“Back in those days, I think if we’d raised money, we would have wasted it and gone out of business.”

Jason: You kind of made a stance around, we’re not going to raise money just to raise money. And I remembered that, and you said we want to hit a million in revenue or higher before we even think about it. And am I remembering this correctly first?

Bob: You surely are, yeah.

Jason: Okay.

Bob: 100%. There in, I think 2012-ish there was an article in the New York Times that profiled us and our biggest competitor at the time a company called GoodData. And it was kind of this side by side, GoodData at the time, I think had raised north of $50 million of capital. Today they’ve raised hundreds and hundreds of millions of dollars. And at the time we’d raised nothing, we were still bootstrapped and we would go head to head with them on deals all the time. And it was kind of this like side by side, here’s our argument for not raising money, here’s their argument for raising it.

If I go back and read it, today I kind of gravitate a little more toward the founder of GoodData’s view of the world, but I think the reason is because I’ve 10 plus years more experience and the execution risk associated with just being a rookie at this is a lot more suppressed. But back in those days, I think if we’d raised money, we would have wasted it and gone out of business.

Jake: That’s very fair, very fair.

Bob: It’s really true. And it’s like, we didn’t articulate it like that then, right? Like we just needed to get our reps in. We needed like more scar tissue built up before we could say, we know that we’re going to spend another dollar and make another $2 come out of it down the road. And I think that we were just like so green and so early that it was dangerous to put that much money in our hands.

Jason: So eventually though, you guys did get to the point where Trinity Ventures came in and then August followed that. So that’s, I mean, substantial amount of money there, five million and then what? 16.

Bob: 16 and a half. Yeah, about 23 million in total went into the business between … we’d also done a seed round very shortly before we did that there was another million in change.

Jason: Okay. So what changed, like what happened in that period of time where you go from like bootstrap, let’s hold, hold, hold, now let’s raise a bunch of money?

Bob: Internal and external factors. The external factor was that the market woke up and that not only did the market wake up, but a lot of the focus of the renewed enriched venture capital market was placed on eCommerce companies, which was our core target market. So you get this series of things that happens starting kind of in the early 2010s, where like Groupon becomes all of a sudden this overnight success out of nowhere, that IPOs and makes a ton of people a ton of money and kind of ushers in this new era of what they would call next generation eCommerce, which is eCommerce with a business model where you either have group buying or you have subscription commerce, or you have a direct to consumer model, like the Warby Parkers of the world or the Bonobos of the world who are manufacturing and selling their own products directly through an online, only channel.

And a wave of these businesses that was extremely significant in size and extremely well capitalized and well-funded suddenly landed on the market seemingly overnight. And RJMetrics was the de facto go to solution for analytics for those companies. And as quickly as that tide rose, we rose with it and we got to the point where the leads were coming in so fast that they were literally and figuratively falling off of Jake’s desk. And we had to get to a point where we said, “Look, if we don’t hire salespeople, if we don’t hire customer success and onboarding people that can allow us to scale this business beyond ourselves, we are going to miss this incredible market pool that’s happening to us right now.”

“And a wave of these businesses that was extremely significant in size and extremely well capitalized and well-funded suddenly landed on the market seemingly overnight. And RJMetrics was the de facto go to solution for analytics for those companies.”

And because of what Jake described earlier, where every single customer still the day you require them they’re negative ROI, right? We still had to onboard them. We still had to sell them. We still had to pay commission to the sales reps, all that other stuff. So just do the math. If your business is growing 100% year over year, every year, and it takes you a year or more to make back your initial investment in the customer – by definition, you will be cash flow negative. You can be building tremendous equity value, an insanely valuable company that you can stop growing and make super profitable almost overnight, but you don’t want to stop growing because the growth is actually the biggest input to that equity multiplier. So we found ourselves in that situation. And I think when we raised our series A round, there’s a thing called a CAC ratio, which is basically like how quickly do you make back your money on a new customer that comes in the door and a healthy one is like one-ish so it takes about a year.

Our CAC ratio was 8.1, which means we may back our money eight times in the first year of having any customer and that was actually bad. That’s a bad thing because it means that there is a wild opportunity for us to be spending more money and accessing way more untouched market to flatten out that ratio, that would give us way more magnitude and still allow the business to be healthy because we were basically just paying ourselves 30 grand a year and chugging through this stuff as quickly as we could. We grew slow. We grew lucratively, but we capped our growth in the face of all this market pull that we could’ve gotten pulled into and that’s why we had to raise capital.

Jason: So when all those leads were coming in, did you have to slow things down for a bit while you went into fundraising mode or were you just doing everything all at once and it just kept on coming?

Jake: To some extent you kind of have to do everything all at once. And in that division of labor we talked about before Bob definitely did the lion’s share of the fundraising and I can continue to focus on the business aspects of it or just focus on the business. I’d be like, obviously there’s some amount of going to partner pitch meetings that the two co-founders have to do. But to the extent we could, Bob tried to shield me from that stuff, which was great. I think fundraising is horrible.

Bob: I love it.

Jason: That works, where did you go?

Bob: Yeah, another gray area where our division split or our responsibilities and interests align. But like, during those early times when like some of the leaves were falling off my plate, I had a panic attack. Like I was like … my attitude at first was, I can always just work one more hour because why not? And that’s a good idea until it’s a really bad idea. And so like over time, we just had to like, I wasn’t well equipped to say now I’m not going to follow up on that, or no, I’m not going to answer that customer support request tonight. But eventually that model breaks and it breaks in an unfortunate way.

And so super, super grateful for the people that joined the team who eventually became much better than me at that stuff. But I think it’s like a very canonical case of someone thinking they need to do everything and not realizing they’re actually shooting themselves in the foot by doing that.

Credit: Philadelphia Business Journal

Entering The Fundraising Stage

“I see one of the benefits of having bootstrapped the business to a million bucks of revenue is that by the time you want to bring in your first outside venture capital dollar, you’ve got a much more compelling story than a lot of the people that are running around with pitch decks and a dream.”

Jason: So the fundraising process, you said you love it. Did it come naturally like, did it flow? Did you have any challenges there?

Bob: Yeah. I see one of the benefits of having bootstrapped the business to a million bucks of revenue is that by the time you want to bring in your first outside venture capital dollar, you’ve got a much more compelling story than a lot of the people that are running around with pitch decks and a dream. So not to say that it wasn’t work. I think that especially in raising the seed round and the series A round, really the rounds that came together were much more about the venture firms coming to us than the other way around.

So our seed round was what they sometimes referred to as a party round where we didn’t actually have a real lead investor. We just assembled kind of like the avengers of people that we wanted to have in our corner and brought in checks that range from $5,000 to $500,000 until we had one and a quarter million bucks. And some of the people involved in that round, folks like Dave Eisenberg and Andy Dunn from Bonobos, folks like Ben Lear from Lear Ventures, but also from Thrillist, who’s was another one of our customers. Folks like Jason Goldberg from, which was probably at the time the hottest, fastest growing eCommerce company on the planet. A few of the institutional investors that had invested in our customers who were seeing our product showing up in their board meetings and saying, what is this thing?

Jason: Interesting.

Bob: So that round kind of came together as a convertible note on terms that we kind of negotiated with ourselves. And then for the series A, this guy named Karan Mehandru from Trinity Ventures became aware of us because one of his friends had made an angel investment in that round and he, to his credit got on a plane and flew to Philly and convinced us that because our CAC ratio was 8.1 we were effing up and like there was a reason and a place to put those dollars, so that was easy. The series B, we can talk about it separately if you want, but that was a hell-scape.

Jason: Yeah, let’s talk about it.

Bob: Shortly after raising the A, pretty shortly, the business continued growing and we were growing at a good clip. We’re small, still low single digit millions in revenue, but we were growing at 100% per year, super exciting, but we started getting kind of pressure from our board relatively rapidly, less than a year after raising the A that, hey, we should go, there’s a lot of hype about RJ, the growth numbers look good, even though our revenue is still like pretty small-

Jake: We’re still like two or three million at that point, yeah.

Bob: Yeah, we’re kind of in that range, right? So normally when you go to raise a series B, especially in that era, we’re talking 2014 now, usually like five to 10 million in AR is kind of like the sweet spot and we’re talking more here. We’re kind of in like the three-ish range but growing pretty quickly. And we decided, okay, let’s go see if we can like raise an early B and we’ll go out to market and try to put some real extra wood behind the arrow.

And we ran a very comprehensive exhaustive campaign to kind of go out and pitch and probably pitched if you include initial phone screen phone calls, dozens of firms. Made it to like the partner meeting stage with three or four of those firms. By the way, these partner meetings are all in San Francisco, Jake and I would get on a flight, the last flight out of Philly on Sunday, land at midnight California time Sunday night, stay in a shitty motel in East Palo Alto overnight, get up, go to an 8:00 AM meeting at the Venture Firm on Sand hill Road, get on the 1:00 PM flight back to Philly and be in the office on Tuesday morning without our team ever …

We weren’t like widely saying we were raising because we knew there was a chance of failing and we would do that. It’s not like, oh, we did that one time. It’s like we did that as a lifestyle for a time period there.

Jake: I would really like to write a travel guide book of all the shitty Bay Area hotels and which ones have free cookies when you check in.

Bob: Shout out to the Zen Hotel on El Camino area.

Jake: That’s right, shout them out.

Bob: Zen hotel is where it’s at. Anyway, the net result of that was everybody passed, we failed. It was a total strikeout. And then not only did we have to like go back to the business without more capital or the ability to grow more and just like execute more and kind of grow with the playbook we had, we’d burned several months of my, and Jake’s focus and time and energy on this venture capital process and we had already talked to every firm on the block.

“Everybody passed, we failed. It was a total strikeout. And then not only did we have to like go back to the business without more capital or the ability to grow more and just like execute more and kind of grow with the playbook we had, we’d burned several months of my, and Jake’s focus and time and energy on this venture capital process.”

Bob: So like we knew eventually we were going to need to raise more capital and there weren’t new like irons to put in the fire to warm people up to try and close them a few months later, we knew that when we wanted to go back, we were going to have to go back to the same exact firms and say, “We knew that we were here a couple of months ago with great conviction that we were going to raise a competitive round and we showed you all these numbers about how the business was going to kick ass. Here we are back again. Yeah, we almost got to where we said we were going to get. And by the way, everybody said, no last time. How about now?” Like, that’s the position we were coming from.

And we had kind of like a groveling tour that happened, six months later, four to six months later, unfortunately the business continued to perform. And I think that was like, that was the saving grace is that we still had a fundamentally appealing business on our hands and a lot of customers that would say great things about it. Unfortunately, August Capital was one of the firms that passed on us the first time around. But when we came back, we had kind of done what we said we were going to do. And to the credit of Eric Carlborg, and other folks there, they stepped up to the plate and they said, we’re going to back you guys here.

Jake: I think Bob and I are pretty cynical in general about, like people in business who are making us promises or investors specifically that say, they’re going to do something. In that initial partner meeting at August when Eric passed, he was like, “Hey, I really like you guys. I really like the market. I feel like I just need to see like six months more of actually executing on this plan and I think we’d be really interested.” And we walked out of that meeting and be like, yeah fucking right.

And like we heard things like that a lot. And then like seven months later, he got in touch with Karan on our board. It was like, “Hey, what happened to those RJ guys? I’m actually really interested in that. Did they actually … how’s it going?” And then we did it. And he was like, “Yeah. I said, I’d be interested and I am.”

Bob: And he did it.

Jake: And then we did the deal and we’re like, wow, that is awesome, that he was telling the truth. That’s great. And then we did the deal. So it was a … Yeah, I definitely respect that guy a lot.

Jason: And then you guys went on a serious recruiting growth. I mean, I remember you guys were, there were like job postings everywhere, I feel like.

Jake: When you raise that much money from professional venture capital firms the expectation is that you are going to spend that money and you are going to spend it to grow. And that means hiring. That means advertising. That means all sorts of things. We were trying to go fast and some of the stuff we did worked and some of it failed pretty spectacularly. It was an interesting time.

Host's Commentary


Bob and Jake knew that their entrepreneurial approach had to change as they grew. With more funding, they now had the need for more growth, which required more aggressive cash burn. Between their series A and series B a lot happened for the RJMetrics team. I can personally attest to the fact that their business visibly changed during the 2014 to 2016 period as a result, or maybe as a requirement of growth. Their lean sales and customer acquisition strategies that mark their early success seemed to change completely shifting to ADRs and outbound sales tactics instead of content inbound or creative marketing tactics.

Scaling is certainly hard and raising large sums of money is a double edged sword. At some point, Bob and Jake started to go against the grain of their core identity, perhaps it was necessary, but I’m sure it didn’t feel good. Bob and Jake would find themselves in a sticky position leading into 2016 and some difficult decisions were looming.

We Secured the Bag, Now it’s Time to Scale

“We invested a lot of energy in trying to maintain and cultivate the good parts of that culture that came along with [the growth].”

Jason: Seeing you walking around and there was just so, I mean, your team was like pretty large and it was just only getting bigger at that point. And I thought, man, it’s a completely different company. And I just wondered how stressful that was. I wondered, like what kind of stuff were you guys actually dealing with at that point? What was it like, I’d like to hear more about that?

Jake: There were a lot of great things. I mean, it was just a growing group of people that we recruited or people that we recruited, recruited. So it was just like really good humans that were interesting and challenging and smart and hard workers. So it was just like a wonderful place to spend time, so that part of it was fantastic. There were some challenges from scale that are like the thing, the challenges that everybody has from scale, like how do you just make sure you stay in compliance and make sure everyone’s paycheck gets paid on time and that you move the cash around in the right time.

But also the challenge of like, we were five people, obviously everybody knew each other’s names. We were 20 people, everybody knew each other’s names, you get to 80 people or 100 people, or more like all of a sudden the new person in engineering and the new person in sales like they’re maybe never going to talk to each other. So how do you do that? And then is that something that you’re okay with and you get to 10,000 people, you have to be okay with it. But at 100 or 120 they really ought to be a way around that.

So we invested a lot of energy in trying to maintain and cultivate the good parts of that culture that came along with it. So like we had buddy time where you would get randomly assigned a co-worker every, I think it was two weeks and supposed to spend a half an hour with them and you can go out to lunch and you can go bowling. You can just sit, you can do whatever. And there’s now like I’m so delighted, like Swirl is a local startup that is like building a Slack bot that does exactly, which I think is so great. We probably came up with it along with a million other startups that came up with doing it on our own.

But things like that, or at one point there was a hackathon project. I think it was Bob, you and Steph, who if you went on our about page on our website and you pressed up, up, down, down left, right, like Konami code, the about page would go away and then you’d be presented with a quiz of like, here’s your coworkers face type in their name. And it would keep scores and have a leaderboard. And like the day after the hackathon, I remember I woke up really early and tried to get the first perfect score and I did. And then one of our engineers de-compiled or did something, I don’t know, looked at the JavaScript code that Bob had written and then wrote a bot that would win that game one second faster than whoever had just done. That totally jacked up the leaderboard.

So there was like lots of fun, interesting stuff like that, but there were also like some of the things that were really rough, like when we, and we can get into this now, or later, like we ended up over hiring some of the things about sales that we assumed would work, wouldn’t work. And then eventually, like we had to do a layoff.

Jason: Right. I remember that. Yeah.

Everything That Goes Up Must Come Down?

“It’s probably the singular greatest regret out of the entire era of running the business. When you get to a point where not just you take away people’s livelihood and their paychecks, but you’ve sold them on a dream and that dream turns out to not be real. And you were wrong about the bigness of your vision. It makes you question everything… it just completely compromises the trust that your entire employee base has put on you and there’s no recovering from that without a tremendous amount of work.”

Jake: Yeah, and that was terrible. I mean, it was shitty for us, but it was obviously worse for the people that were impacted. And that was like in the history of the company, if there’s one thing I could have undone, it was getting into the position where that was necessary.

Jason: Yeah. The communication around that is I’m sure challenging. If I remember like the articles, it was like more about the business strategy and less about, but you just said over-hired so, like there was some … you’re admitting like you guys didn’t do it perfectly.

Bob: Yeah, I think the thing about the business strategy is we were wrong about the business strategy.

Jason: All right.

Bob: So like we had to shift our business strategy because we didn’t get it right the first time. So ultimately, it was like we moved our acquisition model away from cold outbound sales. It’s what it all boils down to. We had hired an army of SDRs, sales development reps that were … actually we call them ADRs, account development reps that did outbound effectively cold calling to generate leads and deals for us and the economics just didn’t work.

We were hemorrhaging money on that team and the deals weren’t coming in from it, and we had to make a pretty drastic shift in how we decided to invest in growing the business off of that and it resulted in that team, just not needed to be there anymore. What Jake said a moment ago, it’s probably the singular greatest regret out of the entire era of running the business. There’s things you screw up and it’s like, ah, crap. Our valuation is going to be a few million dollars lower and our upside’s going to be challenged, but like that hits the founders and the investors.

But when you get to a point where not just you take away people’s livelihood and their paychecks, but you’ve sold them on a dream and that dream turns out to not be real. And you were wrong about the bigness of your vision. It makes you question everything. Like if you’re being really intellectually honest about what it is that is working and not working, it just completely compromises the trust that your entire employee bases has put on you and there’s no recovering from that without a tremendous amount of work. And especially relative to the time that we did that layoff, we didn’t have that kind of time. We sold the business four months later.

Where Do We Go From Here?

“There was this one version of the flow chart that we probably pegged at like 1% chance that we could make it happen, which was what if we get to have our cake and eat it too. What if we get to pull the Triple Lindy…”

Jason: So there was a lot going on in 2016. You were thinking about spinning out Stitch at that point. The acquisition was at least starting to happen. I don’t know where you were there. How did the layoffs impact that process? Did it come before? Tell me about what was going on right there?

Bob: As we discussed before the business is burning cash by design. So the deal with the devil that you make there in raising the venture dollars is you’re going to be burning at a certain rate, but the growth rate needs to be proportionate to that burn, to justify the fact that you have all this cash that’s burning. And that gets you into a kind of a really sticky situation because it means you will run out of money sooner or later. So we had this inevitable thing that was happening in the future, which was kind of our out of cash date. And in order for us to continue operating as a business and growing at the rate we wanted to grow at, it meant that we would need to go and raise our next round of capital, which would be a series C round, which a healthy business doing a series C that just raised $16.5 million B would probably raise a 30, 40, $50 million seat, right?

So this big, big, big deal was looming. Raising 50 million bucks meant raising … it meant needing to give back 50 million more bucks to investors before we created any kind of positive outcome for ourselves, our team, our stock option holders, our original investors, all that stuff. So like this big looming thing was there. Simultaneously, we started getting interest from potential acquirers and that’s the thing that you take really seriously when that happens and try to feel out. And simultaneously there was stuff in the business that just was not working.

Those layoffs, they would have happened regardless, but the timing of them ended up just being this really interesting through line to all these other conversations around, on the venture side, it’s grow, grow, grow. How do we grow as fast as possible, burn rates be damned. On the acquisition side, it’s like, well, if we acquire you, we want to make sure we’re not taking on monstrous burn rate. It’s like, we want a really interesting business that’s positioned well and can kind of fit into a larger corporate structure. Those two things are battling against each other, and we’re equalizing the business and kind of re-strategizing around growth, such that we’re bringing burn rates down.

We’re going to bring growth rates down temporarily as a result in the interest of long term like having a healthier business. Every one of those conversations was influenced by the other and it was all going on simultaneously. So at the same time, we hatched this plan that was kind of like plan A, plan B, which was, we’re going to go explore these acquisition conversations and see where they go, A. B, we’re going to invest really heavily in RJMetrics pipeline, which would eventually become Stitch, which we knew was like this huge source of growth in the business, but was still really tiny. So we poured a lot of resources into that.

C, we’re going to cut the sales team on the core RJMetrics product because it’s not working in the way that we wanted it to. And it’s causing us to lose money faster than we want. D, we’re going to go out and start trying to raise that series C round and see what kind of feedback we get from the market. And it was like this giant flow chart of like a decision tree of depending on what happens here, things are going to fall out in different ways. And there was this one version of the flow chart that we probably pegged at like 1% chance that we could make it happen, which was what if we get to have our cake and eat it too. What if we get to pull the Triple Lindy, which is…

Jason: The Triple Lindy, I was going to ask you about that.

Bob: A term pulled from the Rodney Dangerfield movie, Back to School.

Jason: That’s a classic. Absolute classic.

Bob: And Eric Carlborg I think gets credit for associating it with the deal we ended up doing which was, what if the acquisition talks go the way we want and we see that there’s an opportunity for us to have an outcome on RJMetrics that given all the other things going on, like we can be proud of and feel good about it and feel like it takes care of our investors in our team in the best way possible, given the circumstances A. But B not be done with the story, because we still actually retain the big source of growth, which would be Stitch and the core team members that were required to grow Stitch without needing to lay off a ton of people, to just like pivot the business.

Basically, it allows us to pivot the business into Stitch, without firing anyone and while getting an outcome that’s something we can be proud of all simultaneously. And we pushed on that and in months of conversations with various acquirers kind of weaved our way into a scenario where that was actually possible and thank God for Magento. They really, really were interested in the core business. They were not particularly interested in Stitch. We were willing to cut a deal that was interesting for them given the caveat that we got to keep Stitch and hundreds if not thousands of pages of legal paperwork later, that deal got done, and that was the deal in June of 2016. It was a one, two punch.

Jason: That was the perfect scenario, right?

Jake: Given the situation we were in, yes.

Bob: Yes, and the perfect scenario was we IPO RJMetrics for a $10 billion market cap. But given all the data points and like the moment in time and all the kind of pieces and components and learnings, I am so glad we did not raise a series C for that business. I think we’d still be running it and I think that we would be grinding for other people’s upside to this day.

“It allowed us to pivot the business into Stitch, without firing anyone and while getting an outcome that’s something we can be proud of all simultaneously.”

Splitting Up

“Early on in the conversations with Magento, we had a discussion like there’s a chance that maybe we can sell RJ and spin out Stitch. If that happens, Magento is going to want someone to run RJ. We’re going to want someone to run Stitch, so the two of us will have to probably split up.”

Jason: Did you ever have any situations where you kind of had to debate over who was going to do what moving forward and was there any confusion or challenges with that conversation or was it all pretty like obvious to you?

Jake: I would say a little bit of both. We had to have a number of those conversations over the course of the years of the business where first are we going to do this together? Are we going to raise money? Are we going to raise future rounds of funding? Are we going to start down this whatever strategy path it’s going to be really hard to undo? There are a number of those conversations. And in my mind, the hardest one was the decision that we were, we did think we should try to sell. And like Bob was saying, there were a bunch of different ways it could go. We might have raised around and double down or whatever, but at some point we were like I think that this is probably the right-

Bob: We’re down here.

Jake: Yeah, we decided yeah, we think we want to sell and it was a hard thing to come to in our own conversation. And it was probably even harder to say it to our investors because that felt like failure or giving up to me. And I think they’re super rational about it. They’ve got a portfolio of like 30 companies and they’re like, okay, this one is doing whatever and the other one is doing the other thing. And so they’re supportive and interested and want to make sure we make the right decision. But I think telling them that was much more consequential for me and for Bob than it was for them.

I think the ultimate decision on who would go where given that we execute the Triple Lindy, that I felt was actually a much easier conversation, at least for me and I’m interested if that’s the same for you, because early on in the conversations with Magento, we had a discussion like there’s a chance that maybe we can sell RJ and spin out Stitch. If that happens, Magento is going to want someone to run RJ. We’re going to want someone to run Stitch, so the two of us will have to probably split up.

Realistically, Bob is going to be the one that is the point person on these acquisition conversations because he’s the CEO and the same way the CEO has to be the point person on fundraising, the CEO has to be the point person on an acquisition conversation. Our strategy for getting Magento comfortable with the idea that I maybe wouldn’t come along with the deal and then I would stick around with Stitch is that I stop showing up. Whenever there was a meeting, Bob showed up to that meeting and whenever there was a call, Bob was on that call and I just kind of drifted into the background and I think we were pretty aligned on it from day one, and I think it really did line up with what we were interested in spending the next couple of years of each of our life doing. But yeah, it was more of just a drift into the background. And then when the time comes to actually pick kickball teams and who goes which way, it kind of seemed like a fait accompli rather than a surprise.

Bob: I don’t remember like a giant, like last supper kind of dinner discussion. Like where we played rock paper scissors or anything. Like it was a self-fulfilling prophecy that Jake would run Stitch because there was no one even remotely close to as qualified as he was to do it who guarded the respect from the team that he had to be able to compel them as a leader to do this crazy thing, which is go from a stable laid stage startup to this crazy spinoff data infrastructure thing and have literally no one jumped ship. By the way in this entire deal everybody landed somewhere and everybody went there and stayed there.

Like we didn’t cut big pieces of the team, we didn’t have a bunch of atrophy or people quitting, like the team was game. And I think that was just a testament to us, our ability to kind of convey like lock-in due to these two separate kind of heads of state on the two sides that were clearly in each other’s corner and kind of rooting for the other at the same time. We still did joint Friday lunches for six or nine months after the two companies split. Every Friday, we all went down to, or up to the Stitch kitchen and everybody from both companies had lunch together.

Jake: I think that was important because we still had this big unified culture, especially after some of the harder times in the layoffs, like the people that were left over, it was kind of like, are you in, or are you out kind of a thing. And we had an amazing team and the vast, vast majority like dug in and were really committed.

The Best is Yet to Come (Frank Sinatra Voice)

“I am extremely proud and super just tickled by the fact that a bunch of people on our team have gone off to start their own companies or become really critical part of other really exciting companies.”

Jason: We’re going to have time to go off and talk about Stitch, talk about Crossbeam. I want to give them both their time. I want to understand what you’re thinking about long term. When I think of you guys, and maybe it’s a little early to say this and I’m stepping out and saying this, but when I think about like, okay, the PayPal mafia, or I think about the crew, like these groups that started with one company and started to just spread out.

And I think not just you two guys having now started three companies, but I think some of your core employees have started ventures. Do you feel like 15, 20 years from now like that is what people are going to think and look at you guys as?

Jake: I don’t know that what people are going to look at us as, or I think of us of, but I am extremely proud and super just tickled by the fact that a bunch of people on our team have gone off to start their own companies or become really critical part of other really exciting companies. And there’s companies here in Philly, there’s companies in New York, around the West coast. And so yeah, I think that is completely awesome and it’s like, it’s startups, but it’s also some people are married that met as at coworkers at RJMetrics. There will be kids, I assume of people that met when they’re on RJMetrics.

So like that is just, that is freaking awesome to the extent that that happens more. And if I could choose something to have people think of me as, I would love to be thought of as someone who played a small role in the story of that couple getting together or that company getting started or this awesome human going from entry level employee to really successful executive or middle manager or to founder or whatever the path that those people hold it. So yeah, that is one of the things I am most proud of in the world.

Bob: If you take it back far enough, it’s easy to get caught in this like narrative that feels super warm and fuzzy and it’s cool, but he can take it to its logical extreme. It’s just like, it’s mafias all the way down, right? Like there’s the RJMetrics mafia, these companies, but Jake and I, we were part of the Insight venture partners mafia. And you can always point to like, all these experiences that kind of constitute enough people had it. So it’s like, it’s a mafia. In reality, I think like the test is, was the experience that people had working with you or going through the institution that you created an inflection point in their journeys or not? Was it something that fundamentally changed the way they think about their future and what it can be and what it can become?

And honestly, is that true of everybody that worked at RJ? Absolutely not. We laid off 25 people. Like it was probably the opposite of that for a big amount of that crew, but there are some people that went through that experience, came out the other side changed, Jake and I are two of them, but there’s others. They have started companies, have gone on to great roles and like that’s something to be super proud of and that I kind of look for in anything that I try to invest my time and energy in building is can you do that for people rather than just being a meat grinder that kind of chews them up and spits them out?

Jason: You made a mark with that acquisition with Magento. I think your impact in the Philly startup community has been huge, and I’m really excited to talk more about Crossbeam and Stitch.

Jake: Cool.

Bob: Awesome. Thanks for the walk down memory lane.

Jake: Thanks. I really appreciate it.

Host's Commentary


Thanks for listening to GrowthCurve episode 24 with RJMetrics co-founders Bob Moore, Jake Stein. Stay tuned for the next episodes in this series where we focus on Bob and Jake’s current startups Crossbeam and Stitch, which spun out of the RJMetrics acquisition by Magento. If you like this episode and want to hear more, subscribe on iTunes or your preferred podcast app. We’d love if you left a review after listening. Thanks to Philly artist, Kuf Knotz and The Hustle for our theme music. I’m your host, Jason Brewer, I’ll catch you next time on GrowthCurve.


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Jason Brewer

GrowthCurve is hosted by Jason Brewer. As CEO of Brolik, Jason has spent 15 years of his career working directly with business owners, helping them navigate through growth phases and difficult challenges. Jason is an experienced business advisor and passionate storyteller, and brings these talents together in each episode of GrowthCurve.