Bootstrapping Using Services: George Anderson, CEO of Ninth Wave (Part 6)

Sramana Mitra: Who did you raise money from?

George Anderson: It was from a company called Soros private equity. 

Sramana Mitra: How much revenue was the software business generating when you brought this firm in?

George Anderson: I don’t want to get it wrong, so I’d rather not say that one. 

Sramana Mitra: Just give me a ballpark number. Was it tens of millions?

George Anderson: Smaller. When we spun that business out, we had just started to convert from a conventional software license agreement model to a SaaS-based recurring revenue model. That transition takes time and there is a lot of pain that you need to go through.

We had customers, but the model was software license agreement and maintenance. We did a good job in transitioning in 2017 and 2018. We continue to do that. We still have some customers that are on software maintenance, but we have transitioned a lot of them. 

Sramana Mitra: You kept the services business on the side as well?

George Anderson: The services company is run by a separate management team. I spend 100% percent of my time on Ninth Wave. That was an interesting process too. I had a software business operating under Enterprise Engineering and now I was creating a brand new entity. 

Sramana Mitra: I know how all of this operates – all of these steps to transition. It’s a bit cumbersome, but they work if you do it right and diligently. 

George Anderson: I’m really happy with our products, the customers, and the reception. I’ve seen a real transition in the business, especially over the last year. When you start something new, people don’t know what it is. In the beginning, we paid some headhunters to go and find people. That doesn’t happen anymore. People find us now. Having that pivot is a real testament to what you are doing and your value proposition. When you have people calling you and saying, “Hey, I really love what you are doing. Do you think there is an opportunity for me?”

You also have customers say, “I heard you did this for this company. We would like to talk to you about that.”

Sramana Mitra: George, I want to point you to something that I wrote recently that you may find interesting in this context. As you are thinking about your product roadmap, this may make a lot of sense for you.

If you go to our website and to our blog, you will see a post called “8 Startup Ideas for the Post COVID World”. In there, there is one piece called managing philanthropy in the post-COVID world. I was brainstorming in the context of COVID.

A lot of people were asking for startup ideas. I started putting my thoughts together regarding the COVID discontinuity and proposing ideas.

Somebody who is a member of my program had just sold his company and wanted to start another company. He is working on one of my ideas right now. This managing philanthropy is interesting to me, because we have a partner called Bankbot that is one of the leaders of Software-as-a-Service for managing philanthropy.

Thinking about it from my point of view, my bank is Morgan Stanley. They have all of these functions like donor-advised funds among many. What I would like to do is put some money and be able to click and say, “I want to fund 50 chamber music organizations in small amounts of money.”

There is no one-click way of doing any of that from a donor-advised fund form of consult. I would love to hear what you think about something like this being part of your software offering. 

George Anderson: Thank you for asking that. I know Morgan Stanley quite well and I know the space fairly well. 

Sramana Mitra: Take a look at it and reach out to me if you would like to do something with it. I think that this is the right dot to connect. I love your story. Philosophically, I’m in agreement with how you played your cards. I fully recognize the utter stupidity of how the industry operates. It was nice to meet you.

This segment is part 6 in the series : Bootstrapping Using Services: George Anderson, CEO of Ninth Wave
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