Frontier Journal (FJ): I heard of RightNow for the first time when I purchased Rob Ryan's book titled Entrepreneur America. In his startup bible, Rob used RightNow among other startups being invited to his ranch in Montana for brainstorming as case studies to demonstrate how a startup could achieve IPO success from day one, and RightNow did it - that was in the summer of 2001 at the Computer Literacy off Lawrence Express Way near 101. Times runs fast, so what happened to RightNow since then?

Greg Gianforte (GG): A lot has happened in the last five years. RightNow is now publicly traded on NASDAQ. We have about 1800 customers worldwide - including global corporations like Nikon and Motorola, major federal agencies like the Social Security Administration and the Department of Homeland Security, and many entrepreneurial companies in virtually all vertical markets. And the software-as-a-service model we started pioneering in the 90's has become a dominant force in the industry.

FJ: It took 7 years for RightNow to go public since its inception in 1997, would it take less efforts to achieve the similar success in a much shorter time if RightNow accepted VC funding? As a serial entrepreneur, how do you differentiate between your startup experience at RightNow and that of at Brightwork, which was sold to McAfee in 1994?

GG: It depends how you define success. If you define success as getting people to loan you lots of money - independent of any value you might actually be providing anyone as a result of having that money loaned to you - then there's a possibility that VC funding makes sense. But if your ambition is to actually run a viable business that generates profits by delivering value to customers, then VC funding is not the optimal path to success - because that funding simply allows you to spend more time running a business that's not actually profitable. So I'm very pleased with the path we've taken.

FJ: RightNow offers on-demand CRM services to customers worldwide, I am curious on what ERP and CRM systems are adopted inside RightNow for business process automation and customer satisfaction automation, and I assume RightNow uses its own system in-house, so what is RightNow's own user experience on using its own system?

GG: We definitely use our own technology in-house. But just as important as the technology are the best practices we implement using that technology. For example, our technology can tell you the moment a customer expresses dissatisfaction with something your company has done. But it's up to you to translate that into action as a matter of policy. In our case, an expression of dissatisfaction generates a notification that goes right to a manager's desktop - so that manager can immediately pick up the phone and demonstrate real concern for the customer's issue. So it's our culture and processes that make the RightNow customer experience so exceptional - not just the fact that we use our own technology.

FJ: As you know, customers can be further classified into Prospects (pre-sales), Customers (after-sales) and Clients (long-tem and even life-time), so how does RightNow offer specially tailored solutions to address different demands from your customers when they are dealing with their prospects, customers and clients?

GG: Our solution unifies all customer-facing processes across marketing, sales and service. So we empower front-line staff across the company to deal with each group appropriately. Actually, we allow our customers to do even more granular segmentation than that. For example, they typically want to distinguish between prospects who are merely leads and those who have already been transformed into qualified opportunities. And they may want to treat a new customer who has proven spending power differently from one who doesn't. Segmentation is really just a matter of managing your customer data well and applying appropriate business rules to your customer interactions based on that data

FJ: How does RightNow address products, solutions and services customization issues when it has to deal with so many business processes in so many different organizations spanning so many industry verticals?

GG: There are certain things all organizations have in common. They all have customers. They all have institutional knowledge that they need to share internally and externally. They all have performance goals that they need to achieve. So our technology foundation supports these common requirements. Where there is a legitimate business case, we've developed vertically focused best practices based on our successes with multiple organizations in those verticals. B2C companies, for example, typically do things a bit differently from B2B companies. And public-sector organizations approach constituents differently than private-sector companies approach their customers. So there's a fairly straightforward approach we can take to make sure our customers can appropriately apply our underlying technology to their various business challenges.

FJ: Does 100% customer experience satisfaction mean 100% customer retention? If not, how does RightNow do in customer retention and customer portfolio expansion?

GG: Satisfaction and retention are closely related, but they're not the same thing. Some customers mismanage their business - so they can't afford you anymore even though they love what you've been doing for them. Or they can get acquired by a company that has a pre-existing commitment to a competitor. But overall, if you deliver a great customer experience, you'll achieve very high retention numbers. In our case, that number is over 90 percent. Just as important, our customers love us so much that they've become our most effective advocates in the marketplace. - so a lot of our new business comes via referrals.

FJ: On-demand computing technology associated with software-as-a-service business model has gained momentum over client-server computing associated with software licensed based business model during past decade, what will be the next paradigm shift after on-demand computing, both business-wise and technically?

GG: Before we worry about the next paradigm shift, we need to see this one to fruition. The on-demand model is still evolving. For example, one aspect of the on-demand model that hasn't been fully exploited is the tremendous visibility on-demand vendors have into their customers' businesses - something conventional vendors have totally lacked. RightNow is always coming up with new ways to leverage this insight so we can deliver greater value to our customers. For example, we can sometimes spot sudden changes in the behavior of our customers' customers before our customer do. The industry as a whole has yet to fully come to grips with these new opportunities generated by the software-as-a-service model. But RightNow is teaching them.

FJ: Back to old days, how much credit would you to extend to open source when RightNow was still a startup?

GG: Open source drove tremendous value for us then and continues to do so today. We run multiple large-scale hosting facilities on open source operating systems, databases and web servers. Because we don't have to spend money on proprietary technology, we can allocate more of our budget where it can do the most good: scaling up capacity, maximizing reliability and performance, hiring highly skilled staff. It might not be inaccurate to say that we're doing a better job of leveraging open source technology to generate market value than the software companies that are selling the open source technologies themselves.

FJ: What is your perspective on outsourcing in IT sector under global localization and local globalization context?

GG: It's important to differentiate the multiple phenomena that are all lumped together under the word "outsourcing." When our customers opt for software-as-a-service, they could technically be said to be "outsourcing" management of their CRM applications. But that's a very different thing from hiring contractors in another country to develop some strategic customer application for your business. Many of our customers want to "outsource" the management of the servers that run our application because they need to "insource" more strategic tasks. So when a Dutch company engages with RightNow, they're basically "outsourcing" a bunch of jobs to Montana. But they don't think about it that way. They're just allocating their budget in the way that makes the most sense for them at a tactical and strategic level.

FJ: Could you offer us your personal bootstrapping advice on how to launch and operate a sustainable startup with huge growth potential in today's highly dynamic and competitive markets?

GG: There isn't much mystery about what makes a successful business. You fulfill a customer's need in a way that allows you to make a reasonable profit. Bootstrapping simply forces you to figure out how to do that from Day One, instead of allowing you to pretend you have a viable business simply because you were able to convince some investors to lend you money. Sell something people want to buy and keep your costs under control. You'll do just fine.

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