How to succeed with a Salesforce ISV company (Trails Podcast episode #3 with Rupert Mayer)
This podcast episode is all about succeeding with a Salesforce ISV company. Rupert Mayer, Salesforce ISV Founder, details how teams can have maximum control with minimum effort when it comes to their patents and trademarks. Follow along as we go through his story, insights, and tips.
Rupert Mayer shares his experience of founding IPfolio, a Salesforce-based ISV company, and how it provided a niche solution for intellectual property management with minimal effort.
The article discusses the evolution of IPfolio on the Salesforce platform, highlighting the transition from a minimal viable product to a robust application with a development team of about 60 people.
It details the acquisition of IPfolio by Clarivate, emphasizing the advantages of being a Salesforce ISV company during the due diligence process and the subsequent success of the product.
Tell us about your journey with Salesforce as a founder of IPfolio
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I was working in the field of intellectual property management, which is a niche of enterprise software. When you think of enterprise software, you typically think of the big ones – CRM, HR, and finance management. But there are a myriad of niche solutions for all corners of what a company does.
Food for thought: Salesforce targets niche markets or specialized industries where ISV companies have already established a strong presence. This allows organizations to tap into these specific markets effectively.
There is contract management and IT inventory management. And there are dozens or hundreds, or maybe even thousands more areas. And one of those lesser-known areas is intellectual property management. How companies manage their patents, trademarks, and trade secrets, and other ways of protecting their IP – intellectual property.
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I had been in that field, and we were doing traditional enterprise software. When I came to the U.S., that was about ten years ago, in 2010 – I saw that everything was moving to the cloud – even in those more traditional niches of enterprise software. And I thought, okay, there must be a better way to do this, to build this kind of software, to deliver it, not to have to build everything from scratch.
There must be platforms of some kind that would allow it, that have already solved the basics that you need. You need document management – you need some workflow, reporting, strong user permissions, and so on. I went researching and played around, and I found Salesforce. I thought, oh, wow, this might be it. The "force.com" platform, as it was called at the time.
According to reports, Salesforce invested over $700 million in 2019 to acquire various ISV companies. This substantial investment showcases the company's commitment to enhancing its ecosystem through strategic acquisitions.
When picking and figuring out how to build the IPfolio product, and when you picked Salesforce, what were the pros and cons? Were you considering other options, and what really made you go with Salesforce?
One great thing was that I could start tinkering without having to pay anything. I got a free developer license and put aminimal viable product together. The amazing thing was I was able to do that without any programming. So, I created my custom objects, patents, trademarks, contracts, and all the stuff you need around IP management.
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I created my custom fields and some reports. I then had a pretty dashboard that showed you all the patents and trademarks you have, and all the money you're spending and making on it. It was better than any of the traditional solutions I had known because, in that market, most of the solutions were really weak on reporting, and no one had a fancy dashboard.
So, within a week or two, I had built something that, at least in that aspect, was better than anything out there. Of course, we'd have to do some real development at some point, building APIs and more robust components of the UI.
But for a basic application, record, and workflow management tool, I was able to build it all through 'point and click.' I said, okay, I'm going to try this. I didn't think at the time that IPfolio would scale all the way to big enterprises.
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I thought of it more as a lightweight tool – as an easy, simple, and low-cost solution for smaller companies who couldn't afford the traditional enterprise software offerings that were out there. But I thought that this was it. It was almost too easy.
How did the product evolve? And how did you go about building the product team? How did the product develop on Salesforce? Which roles did you hire for, and did you face any challenges building the product on Salesforce?
I think the theme for me is that it was almost too easy until the point came where it wasn't, because we really continued with the minimal viable product approach. We did relatively little engineering. I built a software company without a real software development team or process.
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And that worked great until it didn't. But it allowed me to bootstrap the company for several years. It was really just me defining the product. I'm kind of an amateur programmer. I know how the software works and can instruct the developers who write the code.
For the first few years, we just had a couple of outsourced contract developers based in India. There are companies that specialize in doing that kind of outsourced Salesforce product development. They call them product development outsourcers – PDOs. Salesforce recommended a company to us, and we were pretty happy with them.
For several years, I built the product with just the help of one programmer. We added another programmer and then a third. And we got really good traction. We have amazing customers here in Silicon Valley.
We were at the right time with the right product with a lot of up-and-coming companies, like Dropbox, Zynga, Square, Facebook, and GoPro.
Many of them were cloud companies. No one wanted to put up with the clunky old ways. Most of the other offerings for IP management were still client-server solutions. These cloud companies saw this cloud-based Salesforce solution and loved it, although it was pretty simple.
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And they said, “Okay, we're going to buy it.” So, I think we scaled to probably almost a hundred customers or so in those first few years without having a real development team.
Only when we got into the enterprise segment, once you start selling to really big, established, more traditional companies, they have way more traditional requirements.
Also, the vast amounts of data we had in each customer database were getting bigger, and we were hitting certain limits in Salesforce. We were just hitting that breaking point where you need a real development process.
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I was fortunate enough to find someone who could build that and bring things in-house. To really set us up with proper development methodology and all the tools around it, like continuous integration. That's how we ended up becoming Hutte’s first customer.
Once we figured out how to do things well, we wanted to do them really well. Within a few years, we built a state-of-the-art Salesforce development lifecycle and organization.
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Today, the development team is a product and development team of 60 people or so. It has evolved a lot from those early days.
How did being a Salesforce ISV influence your traction? Were the companies you were selling to interested in the platform behind the product? Was it easier to sell because you were running on Salesforce?
I would say it was an indirect benefit because when we got into the Salesforce ecosystem in 2010, Salesforce was a billion-dollar revenue company. They were starting to really promote the AppExchange and this idea that companies could run their entire enterprise software stack on Salesforce.
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They would have CRM at the heart, but they would also have HR management. I think Salesforce had just acquired an HR company at the time. That didn't really end up becoming a big part of their offering, though. But then you have the Service Cloud and FinancialForce, which was already big. And you would have contract management.
You would even have an IP management solution plugged into that. That was a great vision for us to become part of an ecosystem where companies would just start plugging us in. Once you have a Salesforce stack and architecture, you will always default to finding Salesforce-based solutions for all sorts of problems – even niche problems.
Did you know that Salesforce ISV companies often emphasize a focus on enhancing customer success solutions and experience? This alignment helps acquiring companies provide more comprehensive solutions to their customers.
Although Salesforce and the AppExchange grew, I think our little niche was just a bit too exotic and far away from CRM. Once you have CRM, you may add document automation, for example. You add a DocuSign plugin. Conga is one of those companies that grew big because everyone needs more sophisticated document generation. Or you add marketing automation, where Salesforce started doing a lot of acquisitions.
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So, all these things are natural add-ons to CRM, but patent and trademark management are so far removed. The salespeople who run CRM – or the sales ops people – don't even know what a patent is. The patent people in the legal department don't even know what CRM is.
I don't think we ever closed a deal resulting from an AppExchange lead. The AppExchange was zero in terms of leads for us. I was always a little bit envious of these other solutions that you could just tag onto Salesforce.
But coming back to the indirect benefit. It turned out to be an ever-growing benefit that Salesforce was gaining so much momentum and becoming the go-to cloud company, especially in security.
Have peace of mind that Salesforce has maintained a strong focus on data security and compliance, ensuring that customer data is protected and meeting industry and regulatory standards.
When you're a small software vendor, and you're asking your customers to put something into the cloud that they consider very valuable, such as their patents and inventions, you get a lot of security questions and concerns.
And for us, it was always about building on Salesforce by looking at their Data Center Reports, "trust.salesforce.com," and looking at all the news articles about how secure Salesforce is.
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Think about how critical Salesforce CRM data is in terms of security. If someone steals your invention from today that might result in a product in five years, it will still be hard for them to copy your product. But if someone steals your latest proposal for a customer, and they put out the same proposal and just undercut you by 5%, they can put you out of business.
So, we started finding the right line of argumentation to alleviate the security concerns. Lawyers tend to be rather risk-averse. They're always concerned about security. But when we tell them to think about a patent versus a sales proposal, what's actually the bigger security risk of getting into your competitors' hands? And they understood where we were coming from.
The next one is dealing with IT departments. If you sell a traditional niche solution, you tell them: “Oh, you have to set up your SQL server.” Or if you build on Oracle, they have to buy Oracle licenses and run it in-house. That became a no-go in the last fifteen years, which is why everyone wants to move to the cloud.
Think about APIs, for example. Customers want to integrate this solution with other stuff they have in-house. If you build your SaaS solution from scratch, typically, you don't have strong APIs because that's not top of the wishlist. With Salesforce, we had all of that.
Yes, we have all the security. Yes, we have enterprise-grade backup and mirroring. Yes, we have super robust APIs. Yes, there are standard integrations even to standard products – like Workday – or other enterprise packages, where they can stream data in and out.
So, those became the more compelling arguments, mostly on the IT and security side, but even for some users. Even in the legal world, which is far from the CRM world, some people have experience with Salesforce-based solutions.
For some users, it was: “Oh, yes, this looks familiar. Oh, yes, I like this UI. Oh, yes, I love how you can easily filter lists. Oh, I love the reporting in dashboards.”
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I think, overall, I just call it ‘standing on the shoulders of the giant.’ With the foundation that Salesforce gives you, you can start out as a small software company and check many of the boxes that buyers are looking for from bigger companies.
You exited IPfolio to Clarivate. How did the acquisition happen? How did the idea arise on both ends? Did being a Salesforce ISV speed up or help influence the due diligence process somehow?
When you sell to a traditional software company, having built on Salesforce might not immediately be an advantage. A lot of traditional software companies have traditional software thinking – their own programming language. They would say: “You have to pay Salesforce royalties. We don't want any of that. How would we integrate this Salesforce piece into what we already have?”
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So, I think it can become a hurdle. But it ended up becoming an advantage because we didn't sell to a software company. We sold initially to a services company, because in the world of patents and trademarks, software and services are complimentary. When you file patents and trademarks, you have to get them translated, renewed, and filed in all sorts of countries.
The whole service provider ecosystem is kind of an enabler. If you have access to 10K patents in your software, it's easy to build integrations with a click of a button.
Software companies in the IP space have typically been acquired by these larger service providers. The service provider that bought us knew Salesforce because they used it in-house as a CRM platform. They found it quite intriguing how we ran all our operations, provisioned a new customer instance, and did various things operationally on Salesforce.
It was intriguing how Salesforce was the operating system for our company – not only the hosting platform for our product.
Also, just seeing our market success compared to all the old solutions, they must have seen there's something there. And then the same things that helped us sell to enterprise IT departments also helped sell the business, because they didn't have concerns about security, hosting, redundancy, or “well, what if your server goes down?”
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No, the server has never gone down in seven years because it's on Salesforce, and these guys really know how to run their servers. So, I think it all became an advantage for us.
Some technical concerns came up during due diligence, nonetheless. For example, we were far from having every customer on the same product version. We had this chart in Salesforce that showed all the colors, the different customers who were on the different versions – it was all over the place. And that raised some concerns.
But we were able to demonstrate that we are on the path to consolidate, become better with our version and release management, and eventually have every customer on the same version. We achieved this maybe half a year later. I think, overall, Salesforce was more of an advantage than any disadvantage in that process as well.
Following our acquisition, that service provider was swallowed up by a ten times larger service provider, which was then sold to Clarivate. My last three years with IPfolio consisted of a new acquisition every year.
It was a great experience to go from being a small bootstrapped company to being part of a small growth-oriented private equity owned company, to being part of a larger retention and margin-oriented private equity owned company, and finally being part of a global public company with over 10K people. But the greatest thing was to see IPfolio thrive all along that journey.
Important to note: Salesforce has a global presence and serves customers in over 150 countries.
Many of our competitors got acquired and suddenly, in a way, became internal competitors about which system would prevail within the larger company. IPfolio came out on top by being the Salesforce-based solution. I think the best business decision I ever made was building on Salesforce.
Clarivate stock hasn't been doing great in the last year because, along with all the other tech stocks, it got hammered – and it's just slowly recovering. But if you look up the stock and you see the news below the stock symbol, the first one is IPfolio being adopted by Mitsubishi Electric – one of the world's largest patent holders. They’re in the top five, I think.
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So, my product has really thrived, even being just a small mosaic piece of a much bigger company – and that has been fantastic to see even from a distance.
What are you working on these days?
After deciding to retire from Clarivate, after I felt like everything was set up, and the product and the team had settled in, I decided it was time to look at other things. I started to do a little bit of angel investing, and then I started being drawn to Cleantech, which had its kind of revival as climate tech in the last few years.
I ended up first advising and then joining a California-based solar battery startup – called YouSolar – full-time. We'll help make the planet cleaner and greener, and that's a great challenge for the second half of my career.
Did you know that Salesforce is committed to environmental sustainability? The company has set ambitious goals to achieve net-zero greenhouse gas emissions and has made significant strides in renewable energy usage.
Samantha is Hutte's Content Manager and Chief Editor. She has over six years of experience as both a content writer and a copywriter. Bringing the written word to life is the name of her game.
