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Monday, Jul 15, 2024

Growth, Success Bring Seismic Challenges

From five guys working out of a basement in Solana Beach to a multimillion-dollar tech company employing hundreds, Seismic Software Inc. has become one of San Diego’s fastest-growing software firms.

Late last year, the company’s growth forced it out of its startup space and into a sprawling office complex in Del Mar Heights. The company’s new headquarters seem almost cavernous, with Ping-Pong tables and bean bag chairs only taking up a fraction of the square footage.

“We needed to plan ahead this time,” said Doug Winter, the company’s co-founder and CEO. “We’ll need extra room to grow.”

Only seven years since its founding, Seismic now employs more than 250 people with offices extending to Boston, Chicago, New York, and San Francisco. The company has doubled its revenue five years in a row, growing so fast that the leadership team has been sprinting to keep up with the demands of its clients.

When the company was still in its infancy, with only 10 employees, it managed to snag large corporate customers, including General Electric and TIAA, a multibillion-dollar financial services firm.

“Those are big, sophisticated companies who, in retrospect, were probably crazy to do business with a company as small as us,” Winter said, laughing.

Left, John Stoddard and, right, Jon Freeberg.

Training Tool

Like the category-creating tech unicorn Salesforce, Seismic is serving the sales teams of massive corporations. The company makes a suite of software tools that help big teams communicate, get trained, and store pitch materials, among other features.

Since this kind of software didn’t exist before Seismic, the company created a word to help describe it: sales “enablement.”

“If there are 10 salespeople in a company, it’s no problem to get everyone together once a week to talk,” Winter said. “But when you have 18,000 salespeople with 10 new hires coming in per day, how do you get them trained and up to speed quickly?”

That’s what Seismic’s platform does best. The company now serves over 230 global customers, with about half of its clients in financial services and the rest in life sciences, health care, tech, and insurance, among other areas.

Growing Pains

But Seismic’s fast growth has not come without a lot of risk and growing pains.

The company was founded in 2010 by five experienced executives: Marc Romano, Ed Calnan, Nasser Barghouti, Fred Xie, and Winter. The founders had worked together at a previous company, EMC Corp. (acquired by Dell Inc.), and recognized a need in the marketplace for a product like Seismic’s sales enablement platform.

The five founders bootstrapped the company for the first several years, using their own cash to keep the company alive.

“I sunk pretty much my life savings back into Seismic,” Winter said. “That creates a definite focus and sense of urgency. We joke about ‘OPM,’ which stands for ‘other people’s money.’ OPM is like opium. You can get addicted to other people’s money. Having started it with our own money, you make decisions a lot differently.”

First VC Step

After about three years going at it solo, Seismic finally raised venture capital in 2013: a $4.5 million round from San Francisco-based Jackson Square Ventures. Winter approached that decision with a little trepidation.

“I knew as soon as we took outside cash that expectations were going to change, the pace was going to change,” Winter said. “I told my wife, ‘if I do this, the next five to 10 years are going to be a little crazy.’”

Seismic is not Winter’s first venture, and it’s understandable that he would approach a serious entrepreneurial commitment with caution. Winter’s first business was a company called Objectiva Software Solutions, which faced a few hurdles on its way to success. “We started on August 1 of 2001, and 41 days later the airplanes hit the (World Trade Center) buildings,” Winter said. “The whole economy stopped. It was a rough time to start a business.”

That business managed to survive the economic downturn along with three acquisitions as the company’s ownership changed hands over and over again. Today, the company is run by Winter’s business partner, Barghouti, and doing well, Winter said. The experience taught him a few things about entrepreneurship that seem to lend to his confidence at Seismic.

“Starting something new is always scary,” Winter said. “But doing it for a second time is a little less scary. You realize that failure isn’t death. The sun will come up and you can move on.”

Supporting a Trailblazer

So far, it seems like Seismic has been faced with very few failures. After that first VC round, the company ended up raising an additional $60 million in capital to help support its growth. That includes $20 million in 2015 led by San Diego VC firm JMI Equity.

“Seismic is a trailblazer in the growing sales enablement space,” said Peter Arrowsmith, general partner of JMI Equity. “Seismic’s innovative solutions deliver strong value to customers, and we are excited about the company’s performance and long-term growth prospects.”

Seismic also received nearly $40 million in 2016 led by General Atlantic.

“One reason we decided to take outside investment was so that we could move from being constantly a little behind to constantly a little ahead,” Winter said. “We’re not leaps and bounds ahead, but at least we have a big enough office to support our growth through next year. I don’t want to move every six months.”

On top of its startup capital, the company has been generating solid revenue over the past two years. In 2016, the company brought in more than $25 million in revenue. So far this year, Seismic has brought in $35 million and the company expects to hit $50 million by year’s end.

Winter said having that financial flexibility to support growth helps “minimize the freak-out” about the company’s rapid pace.

Still, Winter admits he freaks out a little bit, but he’s taking it one day at a time.

“Growth is not linear, but I try to think about it in steps,” Winter said. “I don’t think about being a billion-dollar company, but I do imagine what we should be doing to be a $70 million company. I just have to get to that next step.”


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