Interview with Chris Richter, CEO of Socialware

socialware1Chris Richter and I have quite a history.  We were both founding members of Bazaarvoice and the first two members of the Bazaarvoice sales team.  Over the years, we’ve developed quite a friendship; I’ve gone to see his kids play baseball, I’ve spent the 4th of July with him and his family, and I’ve even had the dis-pleasure of spending a night or two on his couch.

He’s gone on to start his own business called Socialware.  Anyone who knows Chris personally, knows that he is extremely passionate, and wildly talented.  Socialware recently attended the Rice Alliance IT & Web 2.0 Forum in Houston, TX, where Socialware won the best 30-second pitch.  You can hear the pitch here.

I sat down with Chris and asked a few questions about Socialware and his new life as an entrepreneur.

1.  You are the Founder and CEO of Socialware.  Please tell us about your company, concept, and target market.

The mission of Socialware is simple.  We believe that large enterprises are sacrificing efficiency and productivity gain that could be realized if they would embrace public social applications.  By 2010 the number of Gen Y employees in the workforce will equal the number of baby boomers, and as these employees enter the workforce they will demand access to these tools in order to be maximally productive.  I recently heard a stat that said that 35% of 18-24 year olds would leave their current employer if not given access to Facebook–that is incredible.  2009 will definitely be a tipping point year in terms of changing attitudes among large enterprises towards these platforms and technologies which include Facebook, LinkedIn, Twitter.  Those that act now will gain considerable competitive advantage.
That said, enterprises universally want some level of control over access to such applications and more importantly control over the data.  Socialware has built the first Enterprise Social Media Integration platform that allows Fortune 500 firms to leverage these platforms while retaining ownership of the data and importantly enabling the seamless integration of social media communication and data exchange into existing enterprise legacy systems.

2.  How does an enterprise balance control with freedom for the people using social applications?

You bring up a very good point.  Our message to the enterprise is very much focused on enablement, i.e. enable a globally distributed sales team to collaborate more efficiently with micro-blogging and social networking, etc.  However, there is definitely a control element.  All of the communication exchanged across public applications while an employee is leveraging these applications from behind the company firewall is recorded and archived and all access can be restricted and monitored.  I think that the key is that enterprises engage their employees in a dialog around the policies that will be applied when using these types of tools from the work environment.  I believe that if expectations and policies are clearly set then for the most part individuals will do the right thing.  One of the capabilities that we enable is for users to toggle on/off the private messaging capability across Twitter, Facebook, and other social applications.
Given that we are focused on existing public applications, folks may want to use their existing accounts to privately communicate with their colleagues vs. setting up a new business specific Twitter account or Facebook profile.  This capability was introduced based upon requests from prospects and again suggests a level of trust that employees will keep sensitive company information private.  I think the other key point is that all of this information that you are posting to public social applications is already in the public domain.  If your employer wants to see what you are up to it is not difficult and there are a number of tools that are designed for that specific purpose.  In the Socialware context, archiving and indexing of data is designed to make knowledge sharing and expert identification within your enterprise easier and facilitate the information that you are sharing over public applications being deposited into the right legacy systems, i.e. your CRM system.  So in short, it is a privilege for employees to have access, it is incumbent on the employer to articulate clear policies of use and for the employee to do the right thing, and we are simply facilitating that.
3.  This economy makes it extremely difficult to get funding.  What makes you confident that you will get funded?

The reality is that every VC we meet with echos the same sentiment.  They all say “this is a great time to start a company”, and it is a valid statement.  While capital is scarce, talent is not, and given the economic environment, once we are able to establish great client partnerships and prove business impact with marquee Fortune 500 brands, we will have a considerable lead on any competition.  Also, our message is an ideal one for this market.
I heard a theme the other day for business in the year 2009…do more with less.  With teams thinning in the environment, efficiency through effective collaboration is more important than ever.  Furthermore, the public social platforms that we are advocating are free to use and because of the consumerization of technology there is a virtuous cycle of innovation happening.   Why would a company invest in software in this environment when they can leverage what exists and already has massive traction (Facebook is growing by 600k users a week and will have 200m subscribers by April).  In short, companies that have a strong value proposition will still be funded.  The rules have changed though.  Essentially, now in order to secure seed funding you have to have more than a defensible idea; you have to have a working prototype and ideally a couple of signed pilot customers.  Our mantra from day one has been “Build and Sell” and the rest will fall in place.
4.  You have an idea that not many people have been able to figure out.  Why do you think enterprises are taking so long to figure out how to use social media to their advantage?

It is a combination of factors.  We are encountering a sort of cultural inertia head on.  It is the old “no one got fired for buying IBM” model in action.  There is always a certain reluctance in terms of risk taking in the enterprise–it is the “factory model” that Seth Godin describes in Tribes.  But that is changing quickly and the idea of blocking access to these applications over the long term is not a sustainable policy.  In my opinion the last couple of years have been experimentation primarily around how do we use Facebook, Myspace, Twitter as a form of customer outreach to engender loyalty.  Some of these experiments have been successful and some of them have failed miserably where enterprises weren’t willing to adopt the new rules of the game.
Again, because of the rapidly changing dynamics of the work force, I believe that this is the year where those same thought leaders (tribe leaders) will take a leadership role in mapping out a more comprehensive strategy for how enterprise wide an organization can leverage these applications for productivity purposes across departments.
We want to be the underlying technology enabling that disruptive change.  Fortunately, while we are uniquely focused on building the technology to solve this problem, there are a number of consulting firms focused on being expert advisers teaching enterprises how to incorporate web 2.0 and social technologies into existing business processes.  We are out actively partnering with those firms as well as directly taking our message to the market.
5.  2009 is said to be even worse than 2008.  How does an entrepreneur stick it through the tough times like these?

In reality I don’t think that there is any better place to be in this market than being an entrepreneur.  We have large enterprises applaud us every day saying that the innovators like us are the lifeblood of the economy and thank God for us.  They also send resumes of their downsized employees our way.  We are fully prepared to bootstrap through this year or live on a moderate amount of seed funding and simply deliver a great product to a handful of brand named partners and blow away their expectations.  If we focus on doing that, we will survive and in fact thrive.  At the end of the day though, now more than ever, you can not be in this with a profit motive; you have to be in this with a real passion for your vision and true belief in how you are going to make an impact in the world.  As always if that is your mission and you stick to it, the rest will fall in place.
I actually believe the 2009 will be a fantastic year for Socialware.  We are keeping our customer acquisition goals moderate given the economic environment, but if we achieve our goals, we will be in a perfect place to put the pedal to the medal on the plan when the expansion begins again in 2010.
6.  You have spoken with VC’s and Angel investors.  What have you learned through these experiences?  What can an aspiring entrepreneur learn about the process?

It is very simple.  You must have gone further than simply having the next great idea.  You need to have a prototype of the product in hand and a pipeline of pilot prospects willing to validate the business impact that you will create.  If you have that, then you will get funded.  If not, you won’t.
One of the upsides that I find in this environment is that there seems to be a greater sense when you talk to VCs that they are going to do more than just provide capital; they are going to be true business partners working with you to weather the current environment and build a sound foundation for the business so that when that market recovers, we are prepared for hyper-growth mode.
7.  Your wife is an entrepreneur herself.  How is an entrepreneurial family different than the average family?

Well–It can be challenging, but also very rewarding.  The key in my mind (and frankly something that we do not do extremely well) is forced planning and structure, i.e. being very communicative about what is going on with each of our businesses. We have 3 children, aged 8, 10, and 12, so it is absolutely essential that we plan and communicate so that their lives are not disrupted.  The beauty of a 2-entrepreneur household is two-fold.  First, we were playing a game with our kids the other day where we have them tell us one thing that they loved and admired about each member of the family.  When it came to me, our son said, “I like it that you start companies, Daddy”.  I think it is massively beneficial for them to see and hear us have a vision of a way that we can change the world or improve it, and to go for it, execute, and make it real.
Secondly, it is a bit surreal, but it has made my relationship with my wife even stronger as we collaborate and share ideas with one another about how to make each of our businesses great.  It’s a bit strange, but now we both read management books and talk about the concepts–it’s pretty cool.

8.  Final thoughts on Socialware, entrepreneurship, or business?

This is certainly not a life for everyone but for those that have a true passion for their ideas and really believe that it can make a meaningful difference in the world they should act now.  There is truly no better time to start a business that at the bottom of the market–where I am afraid that we are today.  If your idea can survive and be embraced in this environment, it can weather anything.

I am very excited about the unique position that Socialware is in in this market.   I am glad to have found a great partner on the technology side, and we are both very bullish on our prospects.  Most of all, we are having fun and doing truly rewarding work that we believe in.


3 thoughts on “Interview with Chris Richter, CEO of Socialware

  1. Adam, thanks for a great interview with Chris. Having seen them present in Houston at the Rice Alliance, there is no doubt that SocialWare is a company to watch in the coming years. It’s great that they are based here in Austin, helping bridge enterprise and Web2.0. Keep up the revamped blogging!


  2. Adam,

    Cool interview Adam. I stumbled upon this doing a little research on Socialware on the web. I’m interested in an inside sales manager position they had posted. Your interview helped me understand a little more about what their software does. So thanks and take care.


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