Software Executive Magazine

February/March 2018

Software Executive magazine helps software executives grow their businesses by showcasing the business best practices of our readers, executives from established and innovative software companies.

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of these public software companies are turning profits now. But Norman's foresight in building a sustainable rev- enue model before diving headfirst into sales acceleration wasn't just noble. It also helped pave the way for an easier fundraising round, and it allowed Arryved to develop a process-focused mentality that would help the company onboard customers more efficiently in the long run. For example, when Georgia's governor signed a state law in May 2017 allowing breweries and distilleries to sell di- rectly to consumers, Arryved saw a flurry of new custom- ers all wanting to launch around the same time that the law would go into effect in September. Instead of raising a toast to the new flow of customers, Trigg took a moment to slow down. Arryved had never rolled out so many new customers at once. She explains, "We literally stopped and said, 'If we launch all of these sites at once, support could be an issue.' If after we go live every single one of them is calling us for support, that would be overwhelming to us. So how do we frontload some of that activity?'" Arryved could have wasted cash on adding extra hands to its support staff. Instead, the scrappy team doubled down on training cus- tomers before the go-live dates and built internal checklists and processes to make sure no stone was left unturned. It's scalable and repeatable, and it became a staple in the on- boarding process moving forward. "Over the last year it's been really important to pause and reset," says Trigg. "They don't have to be long moments, they don't have to be 'stop development for a month and focus on something else' moments. But it's worth the ef- fort to take that day or two days and sit back and say, 'How can we better manage this process? How can we better fa- cilitate getting features out to our customers?' So it's not just the engineering of scale that we pay attention to, it's the human side where we're constantly addressing opera- tional points of pain." From an operational standpoint, Arryved is mature be- yond its startup status. It's still doubling every month, and in the process, is winning business from much bigger, VC- backed competitors – albeit competitors who aren't cater- ing specifically to Arryved's craft beer niche. The company has its sights set on vertical expansion down the road; but for now its leadership team isn't trying to build a unicorn. They're just trying to master the craft of engineering, and occasionally, they enjoy a nice, slow pour. Trigg says, "Our growth strategy is solving one problem at a time. For now, that is a point of sale solution for breweries. There are sec- ondary markets, of course, which are obvious in terms of market growth, but there are also plenty of problems to solve within the industry we're in." S SOFTWARE SHOULDN'T RUN SLOW, BUT SOMETIMES YOUR BUSINESS SHOULD Slow growth is a perceived death sentence for most born- in-the-cloud software companies. Many would have taken Arryved's early realization to pivot from a consumer-fac- ing app to a robust B2B solution as an opportunity to floor the gas pedal. Instead, Norman insisted on starting small and getting it right with just a small handful of pilot lo- cations. The company wasn't going to risk sending the wrong impression with an MVP, which is why it spent almost two years developing fully functional and scalable software before accelerating sales efforts in early 2017. Trigg explains, "The brewery industry is a close-knit cul- ture, which is a really, really good thing for your business if you can earn trust and build a reputation. But if you blow it by coming to market too quickly with an incomplete product, you can lose your shot, too." And Arryved's customer base does traditionally move very quickly. Brew masters are known for experiment- ing and constantly changing their beers without the fear of failure. Norman doesn't think that should be the case with software. "We had to be pretty judicious about how we wanted to approach this and if we could find a place to succeed where others would not," Norman says. "There are a lot of cautionary tales of companies in Silicon Valley that have opened and folded. We wanted to be sure that we were hyper-focused and knew the market we are going into. We figured out a revenue model before really pushing forward." This revenue model was built with the philoso- phy that, unlike many SaaS companies, Arryved didn't want to shackle customers into long-term contracts. After reviewing different pricing options and seeing how those played out with early customer conversations, the compa- ny focused on creating a frictionless contract. This meant Arryved was staking its own revenue model on how much it could help customers succeed, and by committing to mutual success, it also meant the company was willing to share the risk with customers. This "slow down, figure out your revenue model, and then grow" philosophy isn't glamorized in the tech world. Look no further than some of the high-profile software IPOs from the past six years: Marketo was still showing nearly $35 million in losses when it filed for its IPO in 2013. Then there was Box with its $45 million in losses when it filed in 2014. Both Coupa Software and Workday were posting losses in the ballpark of $46 million when they filed in 2016 and 2012, respectively. Maybe these examples are being too picky — after all there are plenty of highly profitable, private, bootstrapped companies that aren't being covered regularly by the likes of Forbes, plus some 28 By A. Sorensen ENGINEERING A NICHE STARTUP SOFTWAREEXECUTIVEMAG.COM FEBRUARY/MARCH 2018 EXCLUSIVE FEATURE STARTUP SUCCESS

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