Startup Grind DC was very lucky to host Reggie Aggarwal of Cvent for its most recent event. The event had a good mix of returning and new attendees who listened how the event management SaaS giant came to be. Since Reggie is busy running his company and only does public appearances once in a blue moon, this rare glimpse into the background of an elusive executive made for an incredible event. Reggie spoke on how he went from living in his parents' basement at 33 to leading one of the most successful event management software, to almost losing it all.
If it weren't for his risk taking nature and constant drive, Cvent would not have existed today.
Reggie started the event not in typical Startup Grind fashion. He began with a brief presentation about how he believes one should look at business, and how Cvent came about due to his adoption of particular business fundamentals. He based his argument on creating a venture by asking the crowd if they would rather "create an aspirin or a vitamin," his analogy for business value. He advises for many startups and said the number one reason why they fail is because they create a "vitamin" - it's a nice-to-have, not a must-to-have. "What's the first to get cut when you go into a recession? The nice to haves." he says. Startups need to find a pain point, solve it, and build must-to-have products. So an aspirin would be the better approach for creating a product that people truly need.
Reggie couldn't stress enough the value of the person. While being an entrepreneur really demands that you "really want to be an entrepreneur" to do it, he mentioned that there's more to the "secret sauce" of creating a successful business. "Building a great product, serving your customers, and having a great team" are the most crucial parts to every business, according to Reggie. He also said that not everybody should an entrepreneur "because the kind of risk and belief you have for your company is extreme". For example, Reggie spoke on how he brilliantly self-funded $520,000 on 15 credit cards in a 30 minute span but quickly spent that within a couple of weeks. Then he raised $17 million on his seed round from 152 angel investors and accounted how easy it was to raise funds during the heydays of the dotcom era, however by 2001 everything changed, 95% of those startups went bankrupt and the ensuing debacle was worst than the 2008 financial crisis. Reggie was unfortunately greeted with an unlikely scenario of becoming almost bankrupt. They went from 125 employees down to 26 in less than 6 months. "We were the walking dead" he recounted. Faced the question of whether he could afford the lease, the landlord agreed to reduce the rent if Reggie personally guaranteed the lease. He simply had to go "all-in" and followed his gut instinct. Cvent was lucky enough to evade bankruptcy by one month.
He went on to say that "investing in your [company's] DNA [is] what makes it [successful]," and that a good team is a huge driver to success. It was unexpected to hear that Reggie personally interviewed roughly 90% of the first 800-900 employees to Cvent, and that he thinks companies that don't interview their first 50 employees are simply crazy. He even admitted that in the beginning it took him sometimes 25 hours to evaluate one candidate for hire because he wanted that A player! He said it was absolutely 1000x ROI on his time because that employee is still with the company after a decade, as well as the 11 of the 12 original executives. Even with his current busy schedule, he still manages to pop into various interviews for executives and managers to ensure the same quality of hire is upheld.
He talked about "going back to the basics" and avoid chasing the latest sexy trends. "Focus on your core, once you become number one in your space, then you can expand to other pistons [products]." He explain that it took 8 years to become number one at providing event registration tools and how he avoided becoming the "jack of all trade, but master of none". He stressed, "Focus and diversify at the right time once you have the infrastructure to support it". Cvent has 6 core products now and are number one in each of their categories because too many other companies try to do too many things.
He stressed the importance of knowing your roots as a company. Even though he raised $136 million, the second largest single raise in software history, and the company is about to book $7 billion dollars in ticket and fees for 2013, "we still act like a startup" he says. He had learned his lesson a decade ago when he burned through $16.5 million within 2 years, but he is dismayed at the current state of affairs with startups and their lavish spending habits on frivolous things. "They don't even get it, they could have invested that money to get another good engineer". Cvent has been smart with its copious stockpile of cash for 14 years and is expected to grow another 300 employees at the year's end. He stills doubles up in hotel rooms with a senior associate when he's on travel.
Reggie wrapped up the night that admitting that a "startup is a grind [...] it's like rubbing two stones together, sometimes for 6 months, and then finally you get sand." This echoes his original point that one must really be "persistent and consistent" to their goal in order to complete it, for being an entrepreneur definitely has its lows and its highs.
Reggie concluded by saying that DC has massive potential to grow, seeing that "it's young, it's bright, and it's a destination city." So find quality people, tell them what you want, and get out of the way. Truly it is, and it has trailblazers like Cvent to thank for it."