Rick tells us about balancing growth and profitability during the early stages of a business, when to seek out and spend venture capital, and how Tracx is helping organizations operate in the growing social media space.
Today’s guest, Rick Rudman, is Chairman and CEO of Tracx, the leading social business cloud for building brands, driving new business and improving customer experience in the new social economy. While a lot of companies try to solve one problem related to social media, Tracx helps businesses with the full life cycle of social.
Prior to Tracx, Rick was the Chairman and CEO of Vocus, a leading provider of marketing and PR software. Rick founded Vocus in 1992 and, under his leadership, the company achieved over twenty years of 36% average annual growth, growing revenue from under $1M to over $180M, with over 1,500 employees in the US, Europe and Asia.
Rick took the company public in 2005, and then sold Vocus to Cision for nearly half a billion dollars in 2014.
We’re going to learn about balancing growth and profitability during early stages of a business; when to seek out and spend venture capital; and how businesses are operating in the growing social media space.
In this episode, you’ll learn from Rick:
- The history of one of the earliest SaaS companies, Vocus
- Growth will typically be driven by direct sales or partnerships
- Companies should be spending as little as possible while they are still trying to figure out if the software is aligned with what the buyers want, or if the sales model is effective and scaleable.
- Inside Sales, or sales done remotely (over the phone or the internet), take fewer resources and can be instrumental in driving growth for SaaS or B2B companies
- A lot of companies mistime their venture capital, by getting it too early and spending it excessively. The best use of venture capital money is to accelerate something that is already working really well.
- Without spending some money, it can be difficult to experiment and improve your sales process, or validate your ideas
- “One of the rules I have learned, and re-learned over the years, is never run out of cash.” Part of the strategy of building a company isn’t just about the products you’re building or the customers you’re acquiring, the financial modeling piece of it is equally important. “You have to have a strategy that has worked out on paper, that says what rate of growth you’re going to target, and what it’s going to cost to support that rate of growth.”
- If you do you’re planning wrong, or decide not to plan and focus on customers and products, you may wake up one day and realize you’re running out of cash.
- Getting to cashflow positive is really empowering for a company – you’re in control of your future at that point. That’s the benefit of a balanced growth and profitability business model.
- There are 3 billion people in the world with access to the internet – 2 billion of them are on social media – and this is changing the way companies do business
- Tracx endeavors to help businesses during the full life cycle of social media. This means listening to conversations (not just mentions), aggregating analytics (they capture 500 million posts and tweets daily), engaging with users, and publishing (or re-publishing) relevant information.
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Resources mentioned in this episode:
- “Grit: Passion, Perseverance, and the Science of Success” by Angela Duckworth (affiliate link)
Answers to Quickfire Q&A:
- If you could chat with anyone, dead or alive, who would it be and why?
- Leonardo DiVinici, “I think he was the original entrepreneur.”
- Name a tool, app, or website that you can’t live without and why.
- “I’d probably go with the time-saving tactical apps that we use, like Open Table … That’s a big one of mine, saves a lot of time.”
- Tell us something unique and interesting about you that not many may know.
- “Maybe the one thing that people don’t know, is that I’ve been a drummer for a long time … I have a son that plays piano and a daughter that sings, so we jam together.”
- What is your favorite business book and why?
- “Grit: Passion, Perseverance, and the Science of Success” by Angela Duckworth – “[It is] a great book that talks about the factors that make people successful.”
- What is the top characteristic or trait that you look for in people you work with?
- “I’d be tempted to say smarts, but I think what I’d rather say is self-awareness … With self-awareness, you get, basically, the ability for a person to know what they know and know what they don’t know, and pursue learning based on what they don’t know.”
- What is something you believe, but few others agree with you?
- “I’m not sure I have a good one for you on that.”
How to contact Rick:
You can learn more about Rick and Tracx at www.tracx.com.
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