(Photo by Alexandria Legget)
It was something like, “This ship is sinking, find a lifeboat,” he said. Moore remembers it so clearly because he was reading it on his wedding day.
“Standing in the back of the chapel,” said Moore, brainy and balding, with the confidence of someone who has a hidden improv hobby. And it simply isn’t the kind of review you’d expect for one of Philadelphia’s most serious present-day software companies.
Moore and his charismatic cofounder, Jake Stein, had grown their business analytics company to 120 full-time staff in impressive Center City offices. Moore is among the figureheads of what this city’s business community might look like in the future: drawing talent and capital from across the country to sell software based in the sky. But in RJMetrics’ push to ramp up outbound sales, an approach they tried didn’t work.
Some people were cut, a company sales executive left. A crucial metric for software-as-a-service businesses like theirs plummeted.
- In their early days, they had once earned $13 for every $1 they spent attracting new customers — as expressed in the devilishly wonky annualized run rate over customer acquisition cost ratio. (You know, the ol’ ARR over CAC ratio.)
- By their Series B round of financing, that had fallen to below $5.
- Around the time of that particularly worrisome review from a former employe, they were earning closer to $0.20 for every dollar they spent.
Something wasn’t working.
So in February RJMetrics laid off 25 people, about 20 percent of the company’s existing staff. RJMetrics was consolidating its efforts behind the company’s Pipeline product, which required far less customer on-boarding and, therefore, far better unit economics.
“It was the most challenging day of my professional life,” Moore said last month, speaking at Technical.ly’s #Failfest during Philly Tech Week 2016 presented by Comcast. Moore was one of eight founders to share tales of big screw-ups. “But it was a way worse day for 25 people,” he said. “People I had made a lot of promises to.”
But focusing on the part of the business that was thriving — despite the painful cuts — was exactly what RJMetrics needed to do to deliver on its promise to build a successful and growing company, Moore said.
That kind of decision is “a difficult challenge” but is the right one, wrote Bob Moul, another locally-based tech CEO who has faced similar difficulties. “It takes courage and leadership to do so.” RJMetrics employees like Steve Mayernick and Ben Garvey defended the decision publicly, as did others privately when Techincal.ly was reporting the story.
Moore’s point was that founders have to be willing to be honest about what is working, and what isn’t.
“It’s a fresh wound, still an open wound,” said Moore. “I still don’t know entirely what I have learned.”
But Moore says he hosts regular office hours if you want to find out more. Without lessons, failures help no one.
Listen to Moore’s #Failfest talk on SoundCloud or below.
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