Multiple Pivots, Taking on Giants, to Over $100 Million in Revenue: Matthew Calkins, CEO of Appian (Part 4)

Sramana Mitra: What year are we talking?

Matthew Calkins: 2003. There was a long transition and it was difficult for us. BPM naturally needs an interface in which you can consume all of the information that goes with it. You might need broad awareness and a portal interface would be good for that. You may need lots of pieces of information to synthesize a decision. Furthermore, that information needs to be targeted to you. So we said, “We’re going to get into BPM, but we’ll call our offering not just BPM but a BPM suite because these other things are synergistic enough for you to buy a suite around BPM and not just the core product itself.” We had to say that because all we had was the suite. We didn’t have the BPM in the middle.

We set about writing BPM, which is essentially a flow chart that automates the progress of work through your organization through rule checks and human decisions towards an outcome. There are great things about this as an area. It is extraordinary to think that you could draw software, which effectively was what BPM was doing. That flow chart, and the configurations that surround it, is a non-code way of coding. It’s a reduction of the complexity that it would take to specify a process. I love that in principle. Even as our market has evolved, I still love that idea. I think there’s a great future in simplifying the specification set for processes and applications.

Sramana Mitra: In terms of getting into this market, what did you learn? How did you get into the market?

Matthew Calkins: We were the last credible player to join this market. It was already overstocked with competitors, all of them with too much money. We came in at the end. They had already established their reputations with the analysts and made friends with the analysts. They had already played big at the conferences and established commercial reputations, and they could spend far more than we could. It was an exceptionally dangerous move.

Sramana Mitra: Yes, you were coming into a market that had dominant players and you needed to find a gap to enter through. What was that gap?

Matthew Calkins: Here’s the trouble. We definitely thought we had advantages. We had the suite. Truly, the market saw our differences as a disadvantage because we had the analysts telling them that our product and our approach was inferior. This was a common theme. We did not get the credit we deserved from the analysts.

Year after year, we would be a challenger, at best, while companies that we thought were clearly inferior to us would be given wonderful ratings. It was very difficult for us as a bootstrapped company and having the influencer community not coming through for us. We only had one spokesperson we could  rely on and that spokesperson was our client base. Our client base was very pleased. When we were fortunate enough to break through and win a client, we did a great job for them. We’ve always been obsessed with client outcomes.

Sramana Mitra: What was the positioning point that was helping you win these clients against these heavily-funded competitors?

Matthew Calkins: I suspect it came down to personal involvement in sales and creating a personal bond of trust with the decision makers. We used to look for mavericks who would want a superior product  and not care about the reputation of the firm from which they bought it. We did not have a wedge feature that was recognized as such by the market. We had wedge features but we had the influencer community telling the market that they were bad moves.

Classic example here is, we were the first to have a thin interface. Everybody else was doing client installations. We used a browser. Nobody else had that. Seamlessly, we could move from that strategic advantage to being first on the cloud. I remember we tried to sell this to the analysts. We said, “This is going to be great. We have a breakthrough advantage against our competitors. We’re on the cloud and we have a thin interface.” The analysts said, “This is a terrible mistake for you to make. First of all your competitor, whose expertise we trust implicitly, has announced that BPM will never succeed on the cloud. Secondly, you’re too small a company to create an innovation that has a high overhead.”

With market perception, we just  couldn’t win. We knew our product was better. We knew we were thinking ahead of the rest. We didn’t have the money to market in order to gain a perceived advantage. We had to win in the trenches. We had to win when we got to the sales event. If we were fortunate enough to be invited, then we would have to work from behind and try to win a comeback victory on the basis of what we showed the client in the sales process. We would show them that we were simpler to use. We would show them that we were faster.

We had a number of advantages but it mostly came down to speed, simplicity, elegance, and availability. By the way, I didn’t even think it was close. I thought we had the clear technical edge all this time. I thought that we were just not getting the publicity we deserved during that time.

Sramana Mitra: But you were getting customers?

Matthew Calkins: We were because our product was really better. Furthermore, our people were better. When they saw who they would get to work with, they often chose us just for that.

Sramana Mitra: For this period, you remained bootstrapped?

Matthew Calkins: Yes.

Sramana Mitra: You were going after the enterprise customers?

Matthew Calkins: We were. We generally start at the top end of the business and work our way down to the middle.

This segment is part 4 in the series : Multiple Pivots, Taking on Giants, to Over $100 Million in Revenue: Matthew Calkins, CEO of Appian
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