Personalized Alerts In The Enterprise: xMatters CEO Troy McAlpin (Part 4)

SM: People who have made career moves like yours, which are risky, can do wonders for their careers. Nobody at that time was going to hire you to be CEO of Microsoft. Instead, you can take a bad project and turn it around. In the end it becomes a great move.

TM: There are a lot of things I would do differently. I learned that if you are going to work with VCs then you need to be realistic regarding what their business is. They must deliver a return to their investors. Be real about it and don’t get your feelings hurt if they treat you like an investment and not like a friend. I also learned that you do not need to operate companies with a massive amount of capital. When I started my current company there were two competitors. One had raised $35 million in capital and the other raised $52 million. Both are gone now. We raised only $700,000.

I remember competing against both of those companies when we went after NexTel. I thought we would get crushed. We did a big presentation in front of forty-five people at NexTel and had our entire system operating in front of them. At the end they told us we had a great presentation but that they knew they would be our first customer. They told us to be realistic with us as long as we were open and upfront. They were a fabulous first customer. It was reconfirmation that there are too many companies rushing to get the big offices on the river that they lost sight of their goals.

SM: In the late 1990s we ran into companies like that in droves. I did a lot of consulting with companies who were in deep trouble because they had gone through more than $40 million in funding. Tell us more about the circumstances of starting your company.

TM: I made some money when we sold the previous company and I felt I was ready to start my own company. In late 2000, I had zeroed in on mobile technologies. A lot of my time at Andersen was focused on process efficiency. I wanted to explore how to use mobile devices in business processes in an effective way. I wanted to take an existing business process and put consumer devices into the business process in an efficient way.

I raised $700,000 with people I had worked with in the past. They just trusted me and did not really need to understand what I was doing. For the next eighteen months I went around and talked with as many companies as I could to figure out where the major pain points were. The conclusion I came to was that an event management infrastructure to do a good job of delivering stuff to people who were remote. Your tolerance for bad events hitting you on a mobile device were low. Spam on e-mail is manageable, but it won’t be tolerated on a mobile device.

We focused on IT operations. The macro economic situation was not developed to the point that I felt a B2C application was appropriate. The IT side of the house experienced a lot of pain. Infrastructure was growing very rapidly and they were literally throwing people at the problem.

SM: You found your focus area by talking to as many different enterprises as possible. How did you get in front of them?

TM: I picked up the phone and called them. I committed to consulting and exchanging my thoughts with their thoughts in regards to solving the problem. IT folks were telling us that if the a website goes down, they would be fired. It quickly became obvious what their sensitive areas were. People were walking around with four pagers, one for each system.

This segment is part 4 in the series : Personalized Alerts In The Enterprise: xMatters CEO Troy McAlpin
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