Rearden Commerce: Patrick Grady Unplugged (Part 2)

In the first post in this two-part interview series with Rearden's Patrick Grady, we explored a bit of the history of the Rearden business model as well as some of the challenges involved with driving the technology into the mainstream, especially in the company's earlier years. In Part 2 of the interview, we continue to discuss a number of recent opportunities and challenges that Rearden has faced. Throughout the commentary, I found Patrick's comments direct and refreshing. I hope you do as well.

Along similar lines, I think there are a lot of people struggling to rationalize the rah-rah Tech Crunch growth noise with the reality of a 15-20% RIF. What is your perspective here?

Again, let me respectfully but very clearly push back on the assertion that there are "a lot of people out there" trying to rationalize this. This feels a bit like a "Senator, do you still beat your wife" question.

First of all, for the record, there is no relationship between TechCrunch and Rearden Commerce. We are not now, nor have we ever been a sponsor of theirs. We are not personal friends with their leadership and there are no contemplated relationships between and among our respective organizations. We have spent two hundred dollars ($200) on a single job posting on TechCrunch's job board.

Michael Arrington and Erick Schonfeld are two of the most insightful but brutally skeptical writers I've met in my career and anyone that suggests otherwise clearly doesn't know them first hand. All they have done in their handful of pieces on Rearden Commerce through the past few years is to opine upon the merits of the application and the appeal of the business model and to relay company-published facts. This stands in vivid contrast to the body of outrageous slander, innuendo and rumor-trafficking that emanates from cowardly anonymous posters.

I'm at a complete loss, and am utterly incredulous, as to how the perceived veracity of disgruntled ex employees and/or cowardly anonymous posters has more credibility than TechCrunch or our world-class investors or thousands of customers. To ascribe moral or credibility equivalence to these groups is inexplicable to me or any rational party.

Lastly, we didn't "RIF" 15% - 20% of the employees as I pointed out earlier.

Will the current economic environment help or hurt Rearden's chances of achieving the type of growth that you and the Board are after?

Given that the value proposition in the B2B space is centered on hard dollar savings, lower TCO and better business process and supplier management agility, we have yet to see a deceleration in sales cycles. In fact, within the larger market, we've seen a bit of an acceleration.

As T&E slows down in general in 2009, how must Rearden redefine its role as a key tool on the cost side of the business when other initiatives might lead to quicker returns?

Again, we're broader than T&E in our value proposition and the speed-to-savings and corresponding ROI are such that we're feeling very good about our positioning. As anyone that tracks Rearden Commerce knows, we have a flexible and extensible platform and intend to add more applications and areas of spend as we deem appropriate.

You've been through a lot of senior executives over the years in technology, marketing, etc. What defines the Rearden culture and how do you attract and maintain the best and brightest in this market?

Rearden Commerce is doing something that no company outside of Microsoft has ever done.

With one common platform, we are addressing the enterprise, mid-market, small business and consumer segments. Additionally, we have very significant and complex platform, application and mobile initiatives and an increasingly vibrant 3rd party application network. This complexity leads to a higher execution bar for everyone at Rearden Commerce, particularly the executive team. Just because you were successful at another company, does not mean that you have the operational chops to be successful here. Skills and experience don't always transfer. While someone has experience in marketing at a business application or consumer e-commerce company doesn't mean that they'll scale here.

As far as the culture, it's a demanding one where the best and brightest, that have the skill and will to do something as challenging as this, are rewarded and are having fun. We are very ambitious but it's tempered with pragmatism.

Every day, I am humbled by how our employees step up and meet the challenge with enthusiasm and professionalism and I'm blown away by their results. It's difficult not to be. Again, let me remind you that all other comparable attempts at this vision have failed to yield any commercial success. We are very proud of what we've accomplished with $200 million of invested capital. We have thousands of companies and over 2 million subscribers today and are entering the consumer space in 2009 and we're just getting started.

I'm very proud of the Rearden Nation and all that they have accomplished.

What's next? Execute on the core or further tuck-in expansions (e.g., like T&E)?

You'll see announcements across all product lines and market segments throughout 2009.

Spend Matters would like to thank Rearden's Patrick Grady for engaging in a candid and open dialogue.

- Jason Busch

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