Sunny Gupta on how adaptability factors into creating a $1B+ company

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“Go big or go home.”

It would sound almost reckless if it wasn’t coming from Sunny Gupta, CEO of Apptio and scintillating guest speaker at Foster’s February Leaders-to-Legends breakfast. The thing is, there’s a fine line between seizing the day and reaching too far, and Mr. Gupta has made it a point of study.

Apptio is the leading provider of cloud-based technology business management (TBM) software—a platform and set of tools that help CIOs manage the business of IT. In order to become the leading player in this space, the team that launched the company had to create the category as well. As it turns out, the genesis for the business idea began with Gupta listening to a customer need.

Sitting with the CIO of Goldman Sachs, a customer of a previous start-up Gupta had just sold to HP, he inquired about the struggles CIOs face. That conversation became the launching pad for creating a new business category and a company worth $1B+.

The problem that needed solving? It turns out CIOs needed tools to manage the data and decisions across the enterprise. CIOs needed a way to harness data and analyze it for decision making. At the risk of acronym overload: CFOs have ERP, VPs of sales have CRM, marketers have dashboards, but what did CIOs have?

To build the solution, Gupta drew on everything he’d learned from his beginnings as a software engineer to his experience starting companies. “For a tech company,” Gupta said, “product market fit is everything.” 41 CIO interviews followed suit, all of which deeply validated the market need. The next step involved assembling a team who could tackle this challenge, and not just from a capabilities point-of-view. “Culture trumps strategy when you’re putting an idea in motion,” said Gupta. “A great team can make a bad idea successful, and the wrong team can take a great idea and fail.”

Sunny GuptaThe next decision was scale: go after directors of IT at smaller organizations or hit up CIOs at larger organizations? The founding team opted for the latter, and that meant going after capital, positing that creating a bigger pie of available market that Apptio was poised to quickly own would more than offset the downside of dilution.

So you’ve got a PowerPoint deck, a talented team with a shared philosophy and you’re going after CIOs of larger firms with a disruptive technology in a market category you’re pioneering. And then? Perhaps the scariest decision of all to make back in 2007—you have to decide whether you’re going to build your product to be housed onsite with customers or in the cloud.

“I really worried that we’d get two years in and have to rewrite the code, which would have been a very painful set-back,” said Gupta. “I had customers say they would not buy a product in the cloud and trust their financial data being off the premises.” But the cloud seemed like the direction a lot of big data would eventually migrate, so the Apptio team studied Amazon and and then flew IT security folks in to figure out requirements for a viable product in the cloud.

It worked. And coming up on a decade milestone, Apptio is poised to keep growing, with plans that expand their market even further by leveraging broader uses of the data analytics platform built-in to their solution.

Gupta’s narrative inspires. And in addition to the passion and intelligence so clearly at work, there’s another key to success he is quick to point out: adaptability. “You have to listen to customers,” said Gupta. “But you have to listen and morph.” Everything evolves. The problem you set out to solve, customer requirements, the team, the market. If you nail the concept stage and execute successfully to make it to what Gupta calls Act I ($100M company), then making it to Acts II and III has a lot to do with adaptability.

Sunny Gupta was one of Dean Jim Jiambalvo’s guest speakers at the monthly Leaders to Legends Breakfast Lecture Series, which features notable leaders in an array of industries from greater Seattle and around the country.

Post by Eric Nobis, managing director of Marketing and Communications and executive director of the Center for Sales and Marketing Strategy at the Foster School

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