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 Over time, the technology has become outdated, support has suffered, and clients are generally upset with them.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 & 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 & 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: Google, Facebook, and Amazon in the internet wave or Anthropic and OpenAI now. But Apple & 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 payment and inventory, but when we launched Rundoo accounting, we realized one general ledger would be more accurate and elegant.

In 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 their users use them occasionally. A POS is used every minute of the day for most critical workflows.

Thus, 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 but challenging. 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 and/or in technology. We plan to keep it that way.

c) Hire enough customer success folks

You can have the most lovable, intelligent person ever, but they can't support the whole world.

I think we messed this up in the first half of this year. We have historically held ourselves to high standards: a two-minute median response time, 95% of cases closed within 24 hours, and a proactive check-in once a quarter. These drifted in the first half of this year, as I'm sure some of you noticed. Our support queues have gotten longer, and we have a backlog of implementations.

What did we mess up? We didn't hire enough. Demand overwhelmed supply.

This is a challenge analogous to what our clients face daily: how do you stock the right amount of inventory for demand you can't perfectly forecast?

Our best bet is good planning and restraint: hire enough support folks to handle the sales we close, and don't sell beyond what we can support.

3) Optimize for growth over profits

There's 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: raise prices, trim support, slow 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: find new revenue by creating new value, not by squeezing what we've already sold.

This comes down to a choice every profitable company eventually faces: pay your profits out to shareholders, or 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 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 currently do mobile inventory counts. We brought this feature back to all clients, and non-hardware stores love it. Even if you only have just a couple hundred SKUs, it's 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 because it adds some cost for us. However, for clients that had never sold gift cards, they were reasonably not sure if it was worth it. But trialing wasn't an option: if you sell gift cards and then stop supporting them, you're in a pickle with some customers. As such, we've 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; some clients use things others never will, and we'll price accordingly. But our default is generosity, because a feature in more hands makes Rundoo more valuable to everyone.

That's what "growth over profits" really means: as long as we're 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 on this are developing, so if you are a client or partner with any comments, shoot me a note at nick@rundoo.ai.