How do we grow without growing apart?

Many prospects have asked us, "are you planning to sell Rundoo to one of the conglomerates in the industry?" It's a fair question, and to assuage fears, we wrote a public proclamation that we aren't going anywhere.

However, recently, a few folks have asked, "how does Rundoo not become them?" Many of our competitors started the same way we did: smaller, founder-controlled, and focused on clients. Over time, the technology has become outdated, support has suffered, and clients are generally upset with them.

How do we not end up there?

Andrew and I would be devastated if years from now we were a big company but client love faded. So today, I propose three ideas that I hope will help us scale and stay great:

1. Focus on technology to ensure our product and company keep pace with the breakneck speed of technology improvement.
2. Prioritize service in recognition that at least half our success is being a good partner.
3. Optimize for growth over profits to ensure we find incremental revenue by growing, not by extracting from existing customers.

Let's dive in.

1) Focus on technology

Many of our competitors' products feel frozen in time. The code base they initially wrote, perhaps in the 70s and 80s, is the same code base now.

But it doesn't have to be that way! Apple and Microsoft were both founded in the 1970s but have successfully navigated various waves of technology: the internet, mobile, cloud, and now AI. Sure, newer companies are also successful, whether Google, Facebook, and Amazon in the internet wave or Anthropic and OpenAI now. But Apple and Microsoft were the most prominent companies then and now, and their products have stayed cutting-edge.

How is this possible?

a) Recruit phenomenal technology talent

We need to consistently recruit phenomenal technical talent. If we are recruiting great engineers now and a decade from now, then the quality of the product will follow.

Currently, Rundoo engineers have worked at Rivian, Meta, Nvidia, Apple, and Google, as well as a number of fast-growing startups. We need to continually raise the bar of technical talent at Rundoo.

We are firm believers that excellence in engineering scales faster than compensation, so we should have a small but incredibly talented (and well paid) engineering team. We plan to keep our R&D headquarters in Silicon Valley and pay above market.

b) Rewrite code

Fergus Henderson at Google famously wrote that most software at Google gets rewritten every few years. We are already on the second version of our general ledger modeling. We initially had separate ledgers for payments and inventory, but when we launched Rundoo accounting we realized one general ledger would be more accurate and more elegant.

At this very moment, we are rewriting a lot of our infrastructure so that Rundoo AI can be more effective. As we learn how to be better, we need to be excited to refactor in response.

2) Prioritize service

A point-of-sale (POS) or enterprise resource planning (ERP) system is not a typical piece of software. Most software does one or two things, and people use it only occasionally. A POS is used every minute of the day, for the most critical workflows in the business.

So when you buy a POS, you are really buying two things: the product, of course, but also a partnership. We need to stay phenomenal partners.

a) Listen and respond

This is simple to say and hard to do. Every Rundoo employee works at a client during their first week to understand the product. We review sales and support conversations to understand where we fall short. And our roadmap is heavily influenced by the Idea Board, an in-product forum where our clients submit and vote on feature requests. I personally review the board weekly, and our team shares designs and sets up client calls directly from the board.

b) Hire great customer success folks

To date, our entire implementation and support team is US-based and has experience managing supply stores, working in technology, or both. We plan to keep it that way.

c) Hire enough customer success folks

You can have the most lovable, intelligent person in the world, and they still cannot support the whole world by themselves.

I think we messed this up in the first half of this year. We have historically held ourselves to high standards, including a two-minute median response time, 95 percent of cases closed within 24 hours, and a proactive check-in once a quarter. Those slipped over the first half of the year, as I am sure some of you noticed, our support queues grew longer and we built up a backlog of implementations.

What did we mess up? We simply did not hire enough. Demand overwhelmed supply.

This is a challenge analogous to what our clients face daily, which is how to stock the right amount of inventory for demand you cannot perfectly forecast. Our best bet is good planning and restraint, which means hiring enough support folks to handle the sales we close, and not selling beyond what we can support.

3) Optimize for growth over profits

There is a moment in many companies' lives where the math quietly changes. Growth slows, and the easiest way to make the next quarter look good is to extract a little more from the customers you already have, by raising prices, trimming support, or slowing down engineering. Many of our competitors hit that moment years ago, and you can feel it in their products today.

We never want to reach that moment. The way to avoid it is to stay in growth mode, finding new revenue by creating new value rather than by squeezing what we have already sold.

This comes down to a choice that every profitable company eventually faces, which is whether to pay profits out to shareholders or to reinvest them back into the business. The best technology companies almost always reinvest. Google is still focused on growth over profits even at its scale, and its war chest is exactly what lets it compete with Anthropic and OpenAI today. We intend to do the same for as long as we can see room to grow faster than the market.

The next dollar of profit can come from additional customers or from additional value. In practice, that means two things for us.

a) Reaching new markets and sharing learnings

As an example, hardware stores carry so many SKUs that they have long relied on mobile inventory counts. We brought this feature back to all clients, and non-hardware stores love it. Even if you only have a couple hundred SKUs, it is game-changing to not have to close the store and walk around with a clipboard.

b) Deepening the product without nickel-and-diming

When we launched gift cards, we planned to charge for them, since they add some cost for us. The trouble is that clients who had never sold gift cards were reasonably unsure whether it was worth it, and trialing was not really an option, because if you sell gift cards and then stop supporting them you end up in a pickle with some customers. So we decided to include gift cards for free, for everyone.

None of this means we ignore the financials. Not every feature will be free for everyone, since some clients use things that others never will, and we will price accordingly. But our default is generosity, because a feature in more hands makes Rundoo more valuable for everyone.

That is what growth over profits really means. As long as we are growing, we never have to choose between our margins and your trust. The day our ambitions stop expanding is the day that pressure starts, so we plan to keep expanding them.

If you got this far, thank you. Our thoughts here are still developing, so if you are a client or partner with any comments, shoot me a note at nick@rundoo.ai.