In 2016, when Jeff Nichols had been a senior member of Glassdoor’s FP&A team for 2 years, he and other members of the finance team were confronting the nagging truth that the firm’s path to going public wasn’t getting any shorter.
The online job recruitment firm’s efforts to grow its profit margins had met only mild success, while its cash burn rate was inching upward.
According to Nichols, Glassdoor’s IPO path was further complicated due to the unique characteristics of its business model. Points of comparison between Glassdoor and top recruitment rivals such as LinkedIn and Indeed offered few insights due to the firm’s unique approach, making Glassdoor’s story more challenging for management to tell.
Read MoreTo help remove the firm’s storytelling obstacles and address its meager margin growth, Nichols says, the firm’s finance team began asking, “How do we get the business to perform over the long term in a way that would actually make for a compelling story?”
To help answer this question, Nichols reports, Glassdoor first had to widen its lens and search for points of comparison with SaaS companies, ad tech firms, and other companies beyond the traditional recruitment realm in order to identify competitive attributes that aligned with those offered by Glassdoor.
At the same time, this broader comparison helped to magnify certain weaknesses in Glassdoor’s model.
“What we were lacking was retention. Most SaaS companies are focused on net dollar expansion or gross dollar expansion, and we just didn’t have it,” explains Nichols, who says that another challenge that quickly came into view involved small and medium-size businesses. “The way in which we went about SMB sales was just not efficient—it was very labor- and cost-intensive,” comments Nichols, who—having played a central role in helping to broaden the company’s strategic view—was soon helping to put a restructuring in motion.
Says Nichols: “We reprioritized. We made some new investments that we had not made before, but at the same time we curtailed some costs and refocused what we were actually doing.”
Ultimately, Glassdoor’s path led not to an IPO but to a sale, when in 2018 Recruit Holdings, a large Japanese human resources company, paid $1.2 billion for the company. Having been valued by investors only 2 years previously at around $860 million, Glassdoor had a story that had no doubt become more compelling.
Looking back, Nichols cites his part in helping the company to widen its lens:
“All of this was a directional change for the company. I feel that I brought something to the organization that it really needed, which was an honest, objective look at ‘here’s what’s going on in the business, and here’s how it appears to its peers.’” –Jack Sweeney
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CFOTL: Tell us about UJET and how as a finance leader you’re achieving visibility into the pipeline …
Nichols: I think that the crux of UJET is the fact that we can probably all agree that at one point or another we’ve been frustrated by poor customer service. UJET is probably the most exciting player in this space that’s entered the market in recent years. The market around contact center and call support and customer service platforms is pretty antiquated. A lot of it is still on-prem for most of the largest organizations, and it’s really only been in recent times that we’ve seen this move toward the cloud and a more mobile orientation.
Read MoreSo, in simple terms, UJET is really the first and only cloud contact center platform that was designed specifically with the smartphone in mind. We live in a smartphone-dominated world, so it’s incredibly important for companies to have the ability to manage how they support these customers with that at the core of the tool. Unlike other service providers, we’re able to unify the brand experience and the interaction between the two parties.
Some of the stuff that I’ve been focused on looking at really has been getting in and understanding our margins. Gross margin is incredibly important to most enterprise SaaS companies, but it’s especially important to a company like UJET in a space where our profile is a bit different from those of your traditional B2B enterprise SaaS companies. So I’m really trying to understand our margins—to understand the levers in there and how things will scale.
Likewise, we’re a hypergrowth company that is trying to evolve and hone a go-to-market machine that is still in its infancy. I’m spending a lot of time looking at and understanding our deals, our pipeline, our sales process—what works, what doesn’t, why our customers buy, why they don’t, things like that. I’m trying to take in as much of this information as possible so that I can be thinking ahead about how to really support our growth.
Befriending sales ops is important. Sales operations and strategy, these folks are right at the forefront of being able to crank out the data that you need to give you visibility into the stuff that’s really important on the sales side. I’m fortunate to already have a solid basis of reporting and data on the finance side, so in terms of looking into margins and looking into our cost structure—and how this works and how it will scale—we’re still sort of in the refinement phase, but the data’s all there. It’s a little bit of a mix of just getting my hands dirty while also meeting with the folks who kind of drive these costs and meeting with my finance team to really understand the mechanics as best I can.
Value Quote: “We live in a smartphone-dominated world, so it’s incredibly important for companies to have the ability to manage how they support these customers … . Unlike other service providers, we’re able to unify the brand experience and the interaction between the two parties.” jb
UJET | www.ujet.co | San Francisco, CA