Business Leader Interview Kirk Krappe, CEO Apttus

Kirk Krapper Co-Founder, CEO and Chairman of Apttus (Image credit Apttus/YouTube)Kirk Krappe is CEO of Apttus, a company he co-founded in 2006. Apttus describes itself as the category-defining Quote-to-Cash software company that drives the vital business process between the buyer’s interest in a purchase and the realization of revenue.

Prior to Apttus, Krappe worked at BEA Systems, Nextance and Corio. He has an MBA from INSEAD.

ET:          Who is your inspiration and why?

Kirk Krappe:       Richard Branson. Philosophically, the way he’s approached life is very similar to mine. He was somebody who wouldn’t accept what was current and believed it could be different. He has taken on extraordinary things over the years, from airlines to all the different businesses he got into, done it more innovatively, been successful, and prevailed. He didn’t accept “no” from anybody, just pushed past it.

On top of that, he’s ridiculously charismatic which is the other great thing about him. His innate ability to, and I’m going to call it, “bad boy” or “maverick,” where he would not accept the status quo; he would believe he could do it better. He would take on the icons and defeat them. Meanwhile the guy’s humble, at least from my optics.

ET:          How would you describe your leadership style?

Kirk Krappe:       I’m a lead-from-the-front guy, for better or worse. When you’re very small you have to do everything. Therefore I’ve done almost every function and I love doing that. I would say our company is very “warrior-like”; I use that term quite a lot inside Apttus. We move very fast as an organisation. We pioneer lots of new things.

ET:          What are your personal challenges for the next 12 months?

Kirk Krappe:       Working out a balance in my life. The reason I’m saying that is, the next 12 months on the Apttus journey is very, very significant. We’re a company at scale not a small company anymore. Our revenue’s getting really quite large; we’re signing very, very large customers. All of this is requiring more and more of my time. Working out how to balance that is going to be the most difficult thing for me. I like to get in front of customers and I like to get in front of people, and I can’t anymore. There’s just going to be a moment when we have to be selective.

ET:          What was your darkest business day, and how did you overcome it?

Kirk Krappe:       Apttus amazingly, doesn’t have the darkest ones for me. We’ve certainly, like all small companies growing, had our ups and downs, but we’ve done amazingly well at Apttus, thank God. We have an amazing marketplace; we have amazing product.

Pre-Apttus in a different life, I had a senior exec role in another company.  (The darkest day) was me understanding how that company was controlled and managed.

There was a moment where I realised, no matter what you did you’re not in control. It was the genesis for me to start this company. It also resulted, in us not raising outside capital. We ran this company profitably for the first eight years, and the reason we did that was because we wanted to be in control. We realised in previous lives we had no control. When you have no control it comes down to points of view, and points of view are subjective. So we said, let’s not make it subjective; let’s create our own thing, and run our point of view.

ET: Was that the only reason you started Apttus

Enterprise software is difficult, that’s full stop. No matter what anybody will tell you, everybody has their ups and downs. I was at this one company that truly had a difficult time with its products. I was running the go-to-market engine. There was a moment where I would spend 50% of my time apologising to customers, and 50% of my time selling. I didn’t want to sell anymore because the apologies were too often so I coined myself as the “chief apologetic officer.”

So the reasons we started Apttus, were 1) we wanted to be in control; 2) we emphatically wanted to have customer success be a very important part of it, because one of the worst things you can do in life is sell something to somebody that doesn’t work, or doesn’t transpire. I can’t live with that. For me it’s what we call PZero,  It’s a mission critical thing.

ET:          What was your proudest moment?

Kirk Krappe:       I’m going to answer it slightly differently, because I don’t think there is a specific “moment”.  I just think, honestly, what we’ve pulled off in Apttus is ridiculous. We started this company with no capital, with no customers and with no real estate, meaning we didn’t have an office. We just built product, got on the phone, sold it. We didn’t raise any money for eight years. I mean, it was amazing. The founders and employees of this company own the majority of the company to this day.

To me, the proudest moment is literally where I’m sitting here right now and I look at what we’ve achieved in Apttus. I am as excited, if not more excited, than I’ve ever been, right now. The stuff we’re doing with artificial intelligence, which is real, everybody else has little tool kits; we’re doing real stuff. It’s amazing for our customers; it’s differentiating. We have 1200 employees. The proud moment is now, but it’s the accumulation of that journey.

ET:          Can you share a tip for new CEOs?

Kirk Krappe:       I’m going to give two. That’s the entrepreneur in me! One, listen to your customers, full stop; they will determine your success. Customers will tell you what you need. So many companies don’t. Part two is, don’t take any outside money, if at all possible.

ET:          What was the latest business book you read, or your favourite book or podcast?

Kirk Krappe:       I don’t read business books. Not because I don’t believe in them and like them but because I love history. I read history books prolifically. I just came back from Europe last week, and I read a book called The Great War, (by Peter Hart), it’s about the First World War. We all think we know what actually really happened. When you see the actual things that transpired and unfolded and what led to a series of things, I just love that.

Every time I do big presentations, like a user group, et cetera, I lead with a historical story. The audience doesn’t know where the hell I’m going and then I connect it, because I actually believe we can learn more from history. Everything’s been done before, in a different context, but it’s been done before.

ET:          What’s the worst and best decision you’ve made as a CEO?

Kirk Krappe:       The best decision was, as a CEO, starting Apttus and executing the business strategy that we did, because I was the one that did that. The business strategy meaning, born in the cloud. The term “cloud” didn’t exist in those days when we started the company, but we were born as a SaaS out of the blocks. Didn’t raise outside capital. Did focus on customer success.

ET:          And the second half of that question?

Kirk Krappe:       The worst decision, I’m going to say, really strangely, was doing the first round of investment in the company. We didn’t need it. We raised $37 million. We kept (approx.) $5 million in the company. And I dividended out (Approx) $30 million so that all my employees had been with me in the trenches, for the first eight years in this company, made something. We didn’t even need the capital to run the business. The first funding we did was a reward for employees. How can it be the worst decision? The worst decision was taking money, because that did affect stuff. But actually what we did with it was fantastic.

ET:          What is Kirk Krappe’s “why”?

Kirk Krappe:       I spent 16 years in Africa. I was born in Africa. I lived four years in South Africa, two years in Kenya, two years in Ethiopia, 10 years in Rhodesia, which became Zimbabwe. That was my childhood. For a whole variety of reasons, it resulted in me being very driven, very competitive, and in a sense having a, “failure is not an option” type mentality. I never understood this till much later in my life.

You saw stuff that most people don’t but as a kid you thought that was normal until I moved to England! So I think I’m extremely driven. I’m not going to compare myself to Branson because he’s incredible, but I have a thing I teach my employees in the company. If somebody tells you, you shouldn’t do something four times, like build a new application in your thing, it means it’s a yes. Especially if they’re really smart or clever people. Because if four smart people are saying you shouldn’t do something, it means maybe you should.

ET:          What are your key business challenges for the next 12 months?

Kirk Krappe:       We’re a high growth company like a lot of Silicon Valley companies. Scaling the business is the most challenging thing.

I thought it was the first million, first $10 million, first $100 million. I thought it would be the first employee, 10th employee, 100th … The thing that’s been most challenging, by the way for the last couple of years and still now, is scale. Finding people, onboarding them, not diluting your culture, them having the domain expertise and not having to teach them. Then of course you don’t always hire the correct people, so now you have to deal with that. There’s not just losing somebody, but there’s the hole that they created so now you’re behind. We’ve just signed up 50 more customers in the quarter, and you need to hire more people …

That scaling thing has been very painful. I spend more time on that than probably anything, and as somebody who is out there with his sword on the battlefield, I like being in front of customers; I like doing that. This begins to take time away from me to do that. That’s that time allocation thing I was talking about earlier too.

ET:          What keeps you up at night?

Kirk Krappe:       Two bottles of wine.

ET:          How do you see the company changing in the next two years and how do you see yourself creating that change?

Kirk Krappe:       The change for the company will be going from small to big. We are an at-scale company now, and getting from three guys in a garage, which we were 11 years ago, to 1200 people which is where we are today, to thousands in the next few years, will require fundamentally different things. Across the board, from leadership to processes to all the stuff, hiring, talent management, career pathing. You can’t hire rock stars in every role once you’re a 3,000-person company. And I hate to say that actually because I’m a believer in that.

It’s like going from, if you have 10 gladiators on a field, you can pit those gladiators against any opposing institution and each, individually, is so talented they could do it. But once you have 1,000 people, it’s an army. In an army, you have average; average means you need a standard procedure. If you’re being attacked like this, you hold together like that, this is your defence position (etc.)

You have to have your SOPs, your processes, and that’s what we will be going through. We have that now, but not I think to the extent that it’ll be two or three years from now.

ET:          How do you approach the challenge of rapid growth while maintaining culture?

Kirk Krappe:       That’s a very good question, and I’ve really thought about that one a lot over the years. There was one year where we went from 500 employees to 1,000. That’s a 50% dilution. The way I’m trying to do this, is we do a one-week new hire training, where everybody in the world comes here for a week. It’s pretty international; it’s fantastic. I spend four hours on Monday at the kickoff, talking about the company, going through a presentation more about the culture and what we did, and I give hundreds and hundreds of anecdotal stories; they love that.

Then on Thursday night, they all come to my house for dinner. Every new employee in the company. I have a very nice, big outside backyard. We have it catered and all the employees come to my house. I sort of get to meet them. Now there’s too many, but I’m there, and I have some words with them and all of that.

So that’s my biggest push. We have a monthly fireside chat that I do in my office on the phone, globally with everybody. And then we have a quarterly all hands, what happened that quarter. We need to do more, but that’s what I’m doing now.

ET:          How do you keep believing in your vision when the odds are stacked against you?

Kirk Krappe:       That’s a bloody good question and the answer is, I don’t know. But I will say, I emphatically believe in my vision.

We’ve got this concept called “Five Wows.” This is one of the other things I teach my employees. If you’re in front of a customer, you’ve got to get them to say “wow” five times, right? If they do, they’re going to buy your product. That’s just the way the world works.

Now a wow, if you present it to a general counsel who’s mute faced, et cetera, it may just be a glance, because that’s like, “Shit that’s awesome.” You have to curate your wows. But it is a concept we use. And I love that because our stuff, our products, are very impactful.

That’s sustaining in the vision, because I see the reaction of the customers. I f you see the wows it means you’ve got something and hopefully they’re going to buy something and you prevail. Other than that, I don’t know. I think it’s more because I’m driven and I just believe it; I created it.

ET:          How do you prioritise your day? On what and how much time do you spend in different areas?

Kirk Krappe:       I would love to give you a fictitious answer that is well thought through. I can tell you, I don’t. At least in a protracted way, like sitting down and planning. What I do is, I get stuff that comes to me, and maybe (use) more an intuition or understanding of what’s important and what’s not, because I’m dealing with a lot of things.

I do use a strange tool to prioritise my stuff, and it’s called email. This is how I do my prioritizations; I read an email, I go, “Damn, that’s an action, I’ve got to do something,” and I unread it. At the end of the day I go to my unread emails and that’s my to-do list. If I need to do something I send an email to myself.

ET:          What are the key challenges faced currently by your industry?

Kirk Krappe:       The technology industry? The answer’s rooted because I live here in Silicon Valley: Talent, finding talent and talent availability is a big issue. I think that’s more a Silicon Valley-centricity thing. If you go anywhere else that doesn’t have as much of a technology hub, you’ve got people too far away. So if you’re building really front-end things, leading, you probably need to be here at least. Actually, London has a very exciting fintech thing going on right now that I’m tapped into; it’s fantastic.

There are pockets of other things, but talent for us is a difficult thing. Especially here in the U.S. when you look at what’s happening with the whole visa, immigration and all that, it’s affecting Silicon Valley.

We’re in a privileged situation because we are a very hot company right now. We’re at a great stage of our development so we’re attractive. But there will be a point once we’re bigger where we’re not going to have the same levers that a smaller, exciting company will have. That is the biggest issue for us, for our industry.

ET:          What’s the one question you’d like to ask another CEO to answer? And then can you answer it yourself?

Kirk Krappe:       How can I make my scaling easier on the people front? It’s not product; it’s not market. It’s not dollars. It’s people. At INSEAD they have OB, which is HR, organisation behaviour, and I speak to them quite a lot about these things. If somebody has a magic thing out there, and I’m sure it’s not one thing, but doing it better, I would love that input.

Answering it myself, I’m doing the best I can in that area. And I think maybe where I missed it, meaning in order to make it easier or better, is having a senior leadership team who’s been there and done that. I’m a very big promoter of people within. If you looked historically at my leadership team, a lot of the people in those teams have never done that because they were just very, very capable so I put them in those roles. And I think there were blind spots.

ET:          Thank you very much Kirk.

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