A Late Bloomer on Building a Legitimate Unicorn: Veeva Systems CEO Peter Gassner (Part 6)

Peter Gassner: The thing that most people thought why it wouldn’t be good was that they’d say, “Hey, there are no big companies doing pharmaceutical CRM. Therefore, it’s not possible to build a big company doing it. What do you mean you will build your product on somebody else’s platform? Nobody had done that before. By the way, don’t you know that nobody would be able to buy you other than the company you’re building the platform on. There’s no exit. This is an absolute dead end.”

I didn’t take that as discouragement. I took that as encouragement. By the way, the guys who started Peoplesoft made this big bet. They were going to develop this client server on OS2. People thought, “You’re crazy. You make money on mainframe software. You don’t make money peddling around on this other thing.” They had to pivot, but they made it. I thought, “It’s just like those Peoplesoft guys. It might be good.”

It turns out execution is important because there was another company that started doing this exact same thing probably about a year before we did – pharmaceutical CRM on Salesforce. Usually, the idea is not the main thing. It’s execution that matters. We assembled a great team. We worked hard every hour, every day, every week. We just executed well.

Sramana Mitra: What were some of the highlights of things you did in that execution process that stand out in your mind as things that were important to achieve the success that you had?

Peter Gassner: The hiring is always the key thing. It sounds cliché but you can only get so far if you don’t have good players that don’t know how to work together. I looked for people who had range and could be very hands-on but can somewhat scale up to then manage a team over time. That’s a specialized skill. I looked for that. I found some people who did that type of stuff. For sure, the most impactful things were the hiring decisions. I think everything else really pales. Beyond the team, some key decisions were how to leverage the Salesforce platform.

Sramana Mitra: You had deep knowledge of that platform.

Peter Gassner: Yes, because I had a big hand in building that platform. With any supplier that you deal with, they have a certain set of things and you have to figure out which of those things you can leverage. I had inside knowledge on that. A lot of the ex-Peoplesoft team who I brought to Salesforce were there. That was one. It was a business model thing where we’re making an application on Salesforce.

How would the economic model work? Would we sell the application layer and Salesforce would sell the platform layer? Would you have two sales people in there and they will be collaborating together or we would OEM that platform and sell directly? We chose to OEM that platform. We decided we wanted to sell directly. That was a good choice, but I think more important than being a good choice, it was a clear choice. I would say to entrepreneurs to make a clear decision. You’re not going to know whether it’s the correct decision. That all will happen in hindsight. There’s no way to know ahead of time, but you can know if you’re making a clear decision.

We just said, “We’re OEM-ing this thing and we’re not selling on top.” Pricing discipline was important too. You have to know that if you’re making a specialized product, you have to get a decent price for it. Otherwise, the economic model doesn’t work out. If you sell it for too cheap, you’ll disservice your customers because you won’t be able to make a good product.

This segment is part 6 in the series : A Late Bloomer on Building a Legitimate Unicorn: Veeva Systems CEO Peter Gassner
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