If you want to build a SaaS, if you’re wondering what a SaaS or if you’ve ever wondered about how to make a SaaS a huge success, and eventually sell it, then you need to listen to our episode today. I am interviewing Catherine Graham who is the CEO of commonsku, which is a workflow collaboration platform, which enables product-based businesses to seamlessly work with supplier partners and clients. It was originally built in house for RIGHTSLEEVE, a promotional products agency where Catherine spent 12 years as president before selling the business in 2019. Catherine played a variety of roles prior to RIGHTSLEEVE and commonsku.
She spent several years doing financial planning for fast track individuals and entrepreneurs at TD Bank after pursuing an MBA at the Rotman School of Management she joined the newly formed eBay Canada and launched two categories in the Canadian marketplace. Catherine joined A.T Kearney as a management consultant working with Fortune 500 companies in a wide variety of areas including merger integration, marketing strategy, and operational efficiency.
Outside of work, Catherine is a mother to three children ranging in age from 15 to 10 years old, and spends a lot of time in the hockey rink coaching the teams of all three kids. She also sits on a variety of boards and committees in the nonprofit space such as the Dell Women’s Entrepreneur Network, the Loran Scholar Foundation, Communitech, NEXT Canada and Futurepreneur. This is an episode which is going to give you the nitty gritty on getting your SaaS out in the market.
Catherine I’ve been looking forward to having this conversation for quite a while because your entrepreneurial journey is just so amazing to me. It’s been such an evolution. Tell us a little bit about you and your journey, what you’ve done.
It’s been an interesting and winding road, one of which I never really anticipated when I began my career in the banking world way back when. One interesting learning in making that transition has been to keep your eyes open to opportunity and totally different things that you never might have thought you were on the path to do. Having kept that open mind opened up different paths that has been a really, really fun, exciting journey over the past 15 years.
So your husband originally started RIGHTSLEEVE Promotions, but then you ended up joining him. Tell us about that.
That was a very pivotal time in that I had been working in management consulting, and after our first child was born, the hours and travel and everything that that entailed was making it pretty challenging to think about going back to that environment. At the time, RIGHTSLEEVE was going through some kind of interesting growth challenges and that aspect of the development of the business and as we started talking about that more and trying to figure out where to take the business.
Mark ultimately convinced me to come on board for a couple days a week just to help out. I think it became pretty clear to me pretty quickly how much fun it was doing small business, and ultimately what that meant for us as a family in terms of flexibility. Also what it meant for me in terms of my professional journey of taking over running a team and trying to figure out how to take it to the next level. How to put in place a lot of processes and the career paths of those who are joining the organization as to how it is that we could set that up for scale and give them something exciting to join and be a part of and to be able to grow within. It took a lot of what I learned during my MBA and being able to put all those pieces together in a way that I quickly became a lot more interested in going back to the work world
Was it hard to work with your husband with two little kids at home?
Yeah, I mean initially, coming in as the boss’s wife is pretty interesting. I had to check my ego a bit at the door of having been working with really big companies and working with C suite level people and solving big problems and going out for fancy dinners and all the stuff that being in the consulting world entails. To come into, at the time, a five person organization as the boss’s wife was definitely not what I thought I would be doing. I think that once the team realized that this wasn’t like a pity play as far as trying to give the boss’s wife a job to do. I think that it moved quickly in terms of adapting to what it was that I was bringing to the table from a skillset perspective. Then ultimately, as we started to build the technology in-house it was, which we’ll get into, ultimately became commonsku that things took on a totally different path as far I was, you know, what my role was in the organization. During that time period I took over running the business essentially.
I often hear people saying, Oh, I just need to be able to create, you know, this product that I could just sell. Tell us how you went from doing promotional products through RIGHTSLEEVE to this whole idea of commonsku, and it being its own entity? How did that happen?
So when we first built the software in-house to solve the pain point that we were experiencing at the time, which was how to scale a business that had tremendous logistical complexity. For those that aren’t familiar with the promotional industry, essentially it’s branded merchandise. And the actual mechanics of how it is that you create swag or promotional product is actually really complicated from a supply chain perspective. You have hundreds of factories you’re potentially working with, you have a ton of information that has to get communicated in terms of sizes and colors and skews and artwork and decoration locations and colors and specifics and the sizes and of the imprint areas and all those things that have to get communicated across a number of different factories over a very short period of time. Typically, with the end objective of coordinating anywhere from a handful to many different products from different factories that have to end up at the same destination at the same time.
So when we looked at what was out there to support that complexity and to be able to accommodate more growth around that. There just weren’t any options for a small business. You could either pay hundreds of thousands of dollars to customize SAP or Oracle or something that could accomplish that, to handle that complexity. But that’s just not feasible as a small business. This was the time this was back in 2005, when the world was really changing at that time in terms of cloud and what the expectations were, as far as flexibility in terms of being able to work and all the systems that we were looking at that we might be able to either utilize or adapt were all server based, and that’s not where the future is.
We ultimately made the crazy at the time decision to build this in house and unfortunately, we were very naive in terms of what would actually take as far as time, money, focus, all the rest. It was never built with the intent of commercializing it. It was always built with the intention of solving our own pain point and where things evolved from there was that in realizing a few years in that we had done something that had utterly transformed the business, that’s when we started to think that might be something interesting that we have on our hands here.
Talk us through the process of how you went from “I have this problem. I need this to talk to this to talk to this to talk to this,” to work with someone to create a software to make that happen. Did you have a software guy?
Fortunately we had an awesome guy, someone who we had been working with for years. We were early adopters of building ecommerce on the web back in 2003; so we had done all these great front end solutions for our customers. We were working with duct tape and band aids in the back end to get orders at the door and he was fortunately one of those very multi-talented, jack of all trades type developers that was capable of doing front end and back end.
When we went to him with this idea of we’ve done all these great things for front end, let’s talk about what we could do to handle the back end of the business and he fortunately had a flexible enough skill set that he was able to start developing that. Ultimately he hired someone to help with the building of it. It was a very interesting learning process going through that being a non technical person and you know nothing development, you know nothing about the cloud, the web, any of those things. The journey of learning that, working with him on that, then realizing once we made the decision to spend the business out, what huge gaps of knowledge I still had in terms of how it is that you then look at building a technology organization.
Was there ever any hesitation to sell, to essentially your competitors, something that would make their businesses more efficient and stronger?
Yes, certainly we absolutely thought about that in the beginning, as far as what is RIGHTSLEEVE’s secret sauce, and is the technology our secret sauce. At the end of the day, the technology was a fantastic enabler, but we felt that at the core of it, our secret sauce was the strategy and design and partnership approach we brought to our clients.
The software has made it really efficient and easy to do business but ultimately, as the world was evolving in that regard, we knew that certainly other players were going to start having software solutions that they were utilizing too, that we didn’t feel that was ultimately going to be the difference between what was going to make RIGHTSLEEVE successful. So by focusing on the core of the strategy, the design, the team, the creativity that they are bringing to the table and working in partnership with clients; that if we were to turn around licenses to other companies that wasn’t going to take away from what it is that RIGHTSLEEVE was good at.
The other piece of it is that in the beginning we focused exclusively on the US. First of all, because the market opportunity was so much bigger there. But also because that question never came up in the US of like, “Oh, you own a competitor, you’re going to try and take our clients” like that question came up all the time in Canada. In the US, they viewed it as being a fantastic positive as you walk a mile in our shoes every single day, and you understand what it’s like to run this business. So they viewed that as being a very positive thing and what it is that we could bring to the table from a software perspective.
Why do you think there’s a difference between the two countries?
There’s some very interesting cultural differences I discovered over the years and selling on both sides of the border. In the US the promotional products business is very regional. So a lot of companies are focused within a specific square kilometer radius of what is around them and there’s just so much opportunity within the industry, they don’t have to go much further than that. So there are not many US businesses that are selling in Canada. And there aren’t that many Canadian businesses that are selling in the US. So there was that kind of distinction to begin with, if you’re a Canadian Promotional Products Company, I’m not going to worry about you being that competitor.
The second piece is that we found that US companies in general, were far more willing to take risk. And so for a company that was at an earlier stage, and that hadn’t been around for years they were far more willing to jump in and say, okay, this looks like an interesting solution. I’m just going to go for it. Canadian companies were far more conservative and took far longer to make decisions as well. We still see that in terms of the sales cycle of what it takes to work with a Canadian company versus what it takes to work with a US company and the approaches they take toward investing in their business. The kind of entrepreneurial spirit, I would say that the US side is just far more willing to kind of get out there and see the value in making that investment and kind of pushing the business forward.
I actually noticed that too, in working with women from the US and women from Canada. The sales conversations are very different. The sales tactics are very different. Even the sales pages that we use are really different. Because there’s different triggers for different cultures.
Absolutely. What we found selling within the US were the regional differences. What someone in Texas buys versus someone New York versus someone in LA. We certainly had to look at all those different nuances as well. Our VP sales for commonsku lives in the US, she was very deliberate both in terms of the market that we were serving and that approach to the market that was more aggressive as far as sales are concerned, was the sale goal.
So you’re here you were running two businesses, you have the commonsku, which was the software you had the RIGHTSLEEVE promotions. How did you pull commonsku out of RIGHTSLEEVE so that people could see the commonsku as its own identity?
When we made the decision to go for it, we spun it out completely as a separate legal entity, and made it clear from the beginning that they were two totally different companies. Different business registrations, very different branding, obviously very different go to market strategies. Initially the development team was embedded in the RIGHTSLEEVE office at a little car road space and leave office where they could sit. Then we had a very fortuitous circumstance happen about a year or two into the journey. The people that have been in the office space right next to ours, did a midnight run, just picked up and disappeared one night and they left their lease and left all their equipment and left everything. All of a sudden we had the space next door to us that was available and so we jumped on it and that became commonsku’s office.
Ultimately we moved the team over there. We connected them with a doorway and internal doorway so we still shared a coffee maker and whatever else in terms of some resources. That began the distinction of creating separation between two businesses. We stayed and were able to grow into that space up until last year. We had taken down a storage closet and the developers then moved into that footprint where the closet had been and crammed kind his team of four into this little area. We were absolutely bursting at the seams. Fortunately, the neighbors next door to that space, then their lease was up and we managed to take that space and so commonsku moved into that space, just in the spring of this year.
Through those pivotal moments of leaving your corporate to jumping into RIGHTSLEEVE to saying yes to building the software to taking the software, moving it into its own company, who mentored you along your journey? How did you get support through those big, big decisions?
Yeah, I would say that’s a bit of a gap for me and I wish there had been people along the way that were able to hold my hand. There were a couple things that were instrumental in helping you guide me to that process and that when we first were establishing commonsku, I went out and talked to as many people as I could within my network, and asked a bunch of really stupid questions.
As far as, “what does this even need in terms of understanding code structures and languages and architecture decisions” and all these, like really big decisions that we were having to make at the time. Because we totally blew up the platform when we spun it out. It was because it was never built with the intent of being a multi tenant application. So we re architect the whole thing. And so we’re making really big decisions at the time that could set us up for success and scaling or that could end up hampering growth down the road. And I knew nothing about any of this kind of stuff.
Fortunately, I had friends that had software businesses and that I felt safe asking some really dumb questions to. Also, as far as understanding what the roles of a software organization looked like, and therefore what I should be hiring in terms of even just job descriptions and technical terms. To all those pieces and, and it’s funny because eight years in, I look back and I just shake my head about how little I knew, compared to what I know now.
But you have to start somewhere. And being willing to be vulnerable and acknowledging that you don’t know these things and being willing to ask the stupid questions and ask people that you feel kind of safe with was pivotal. I wish that I’d had someone who could have mentored me more during downtime because they were very ad hoc coffee conversations that I was able to grab some people’s time.
The pivotal piece from a mentorship perspective was when we raised Angel funding a few years into the journey and our investor was absolutely instrumental during that next phase of growth. He had such great input in terms of things we should be thinking about. He was that great combination of being the cheerleader when you needed it, the kick in the pants when you should be kind of pushing things faster, patient long term kind of horizon and was just such a, and he continues to this day to be such a fantastic influence in the business. It’s funny because he’s an investor and technically an informal board member of the former board right now. It’s hard to call a mentor because he’s directly involved in the business. Certainly I wish that I had more people along the way that helped guide me and that’s why I mentor a lot now because I see it as a way to give back for what I feel is a real gap in that time in the journey.
Well, I feel like you were a trailblazer. I mean, you were one of the first now it’s quite common to see SaaS being unrolled daily, really, but you know, five, six years ago, it wasn’t a everyday kind of thing. What did you have to do to get commonsku ready for investment?
Getting it to the point where we had proved product market fit. Initially you built this for yourself and you think well, is this replicable to others who run their businesses maybe differently or have a different go to market. And obviously we were focused very specifically in the promotional industry selling specifically to promotional products companies. So we felt that there would be a good product market fit, but ultimately being able to prove we’re willing to pay for this. That was not just people that were paying us at a pity, they’re really nice we’ll support them by jumping in and trying this out, but then ultimately, when it became clear that there was an opportunity here and that we needed funds to take it to this next stage. The challenge with SaaS is that you pour money in for years before you start to see a return because frankly, licensing amounts are very small and takes a long time to get out of that cash flow trough because you are in the building stages until you start to have substantial enough number of customers on board that it starts to pay for itself. And so that trough is deep and dangerous in terms of how far it can go on for before you even start to pour sales and marketing fuel on the fire.
You’ve got to put so much in the front end. How did you find your investor? How did you guys connect?
It’s a very funny kind of small world story. So I had been just trying to educate myself on the space again. I knew nothing about venture capital and knew nothing about angel investors. I just was not familiar with that world because RIGHTSLEEVE had been bootstrapped. It was a services based business and so not typically the kind of business that you raise money for. So I just started to have conversations, again, reaching out to anyone I knew in the network that could help educate me on what the landscape looked like. Who were companies that got involved in earlier stage investments, how far along did you need to be in order to be able to be considered. That got me connected to John, our investor. I’ve connected to him through a friend of mine from NBA, oh, he was actually living it in Newfoundland at the time. And his wife is from Newfoundland, and they had moved out there and he was involved in the tech community out there. And John has a summer place out in Newfoundland. As a result of being out there in the summers, he’d gotten involved in the tech community, and so they met each other.
My friend was kind of talking to him about this fact finding kind of journey that I was on in terms of understanding the landscape, he said, talk to this guy, John, he’s an angel investor, he might be able to give you a sense of what it’s all about. When he connected us and John specifically said, ‘I’m not taking on any other investments right now my portfolio is full’. I said, ‘that’s perfect, because I have no idea whether that’s even what we’re looking for’, and so it was a very low risk conversation initially. We started to spend more time together consistently over a period of months. I think it was literally over a year later, after having gotten together every one to two months and talking through what was going on and getting his opinion on things and all that I said, ‘You know, I think that I’ve made the decision that we need to do this race,’ because I was wrestling with it myself in terms of what does this mean, as far as giving up equity? What kind of path does this put us on? Are we on a treadmill now in terms of results, and someone else is going to now have say and potential control and all those things that fundraising means and so that’s part of what I had been talking to him about. When I said, ‘You know, I think I think we need to go down this path of raising money’ and he said, ‘Well, I want to invest’. I was like, ‘What? Okay’.
Yes, it was just one of those things. When I tell people that story now I feel like a bit of a jerk. I know how hard fundraising is, and that this happened to just kind of fall in my lap for all intensive purposes. The learning end of it is that relationship development. The key importance of that is that you can’t just waltz in and pitch an idea and expect someone to invest in your business, right? The importance of fostering those relationships and drawing someone in. And in this case, it was totally naive and unintentional on my part that I was kind of drawing him in and didn’t even know that he was evaluating me at the time. I didn’t know that. Again, the naivete kind of helped me in that regard. I think just knowing that you have to get people interested and excited before you can then think about pitching them for money. If they see that your business is on a good path and they see an opportunity there and they have dry powder that they want to deploy, then that will just naturally happen.
I think I feel like your network has been this beautiful support system through the whole journey, you know, back to the beginning days, and then you know, am I going to build this new business? And it’s just been such a resource for you. How did you cultivate that network? In the beginning?
What was a very serendipitous thing is RIGHTSLEEVE was the sponsor of something called The Mesh Conference, which was years and years and years ago, but it was one of the first tech conferences that happened in Toronto. And it went on for many years and being involved in that we met some very interesting people and just in the community in general, and that kind of started our involvement in the tech community, and then it went on from there.
What’s interesting, one of the people who was first involved in that was Mike McDermott, who’s the CEO of freshbooks. And he was one of the people that we called when we were first setting up and freshbooks was much earlier stage at the time when we asked him about setting up a modernization and what the rules were, and so it’s just like that was as a result of having known him through through Mesh.
I try to attend conferences or events in Toronto, I got involved in an organization called the Dell Women’s Entrepreneur network, which was a global group that’s been amazing in terms of support from that perspective. I think just actively looking at how you can get tapped into communities that are going to be helpful to you in building your business, but also at the same time, being protective of your time, because you could spend all your time networking and attending conferences, and all those things and not focus on actually building the business.
Catherine, you made reference to giving back and mentoring others – what organizations are you involved in now?
So formally, I’m involved in Futurpreneur. I mentored for the NEXT Canada informally through other people that I meet along the way. I sit on the board of Communitech. So have gotten to meet some others through that connection as well. I obviously have a total bias towards mentoring female entrepreneurs, especially those that are in tech, because I just think that there’s a real fear on the part of women around the perception of getting involved in tech and what that means and what the perception is of what they need to have from the skill sets or knowledge perspective.
I know that I have lived that journey as being a non technical founder, and ultimately can help people from the freeness considering this, what that journey, looked like and ultimately the path to get there. So that’s definitely the area that I’ve been involved in the most of my mentoring perspective.
Do you think it’s been more difficult for you as a woman in tech as it would be for a man in tech? From a fundraising perspective?
So we tried to go down the VC path a couple of years ago, and that was a just stick a fork in my process. There’s no question in my mind, there is still heavy bias in that space. I think that they’re working at it, for sure. But we’ve got a long way to go before I can get there. I think that one of the things that has been the most eye opening in that journey is that women, and this is the time Sheryl Sandberg spoke about when they put want to put themselves forward for a promotion that they feel they need to have 90% of the qualifications of skills for the job before they feel that they’re qualified for it. And it’s the same thing when it comes to pitching is that women want to present a plan and a vision that they can deliver upon. And men have no problem going in and saying that they’re going to be a 100 million dollar company in three years, and then kind of throwing stuff out there in terms of projections and the hockey stick and you know, all those kind of things and I think that me personally, I can’t do that. So I think that that’s something that has hampered women from a fundraising perspective.
I think that there is a tremendous opportunity for VCs, to be able to, to realize that and to be able to get engaged with the community in a way that ultimately the stats prove it, as far as the returns are higher on female owned businesses, where they are and women are known for paying back loans faster. There’s so much data that shows that women are an excellent investment.
One of the things I’m working on this year or for 2020 is trying to figure out how to shift the perspective. What is it that we’re missing, or what are we presenting that is really making that disparity or people saying, Oh, I’m not really sure I want to invest in her versus, I’ll invest in him. What are we presenting, how can we make that platform even out a little bit?
There’s no question, there’s a confidence factor there. I think that men are better at going in and firmly taking their seat at the table in a pitch environment and projecting with confidence that they can knock this out of the park. Whereas I think that women’s more inherently conservative nature’s have them go in differently, right in a pitch environment. And there’s no data in terms of the horror studies that were done on this and that women are asked different kinds of questions more like risk oriented risk aversion kind of questions versus the kind of questions that men are asked. So I think that, being aware of that, and being able to turn those questions around in a way that frames it around opportunity focused versus risk mitigation is absolutely something that I think women need to think about in a pitching environment.
That’s great feedback. So just to close us out, what is one piece of advice that you would tell yourself back at the startup phase of commonsku?
That it’s gonna be alright. Don’t worry, you’re gonna be fine.
Mark and I joke about a conversation that took place around our dining room table about 18 months into commonsku. And, of course, as soon as we started doing commonsku, we took our eyes off the ball a little bit of what was going on at RIGHTSLEEVE so that business started to struggle a little bit from how it had been growing previously. I remember sitting around the dining room table saying, Well, what happens if we bankrupt both businesses like what are we going to do? and I said, Well, you know, I would just go out and get a job and Mark’s like, “I’m not employable.”
It was the funniest part of it. Knowing that you’re onto a good idea, and I will qualify all of this by saying that it has to be an idea that has legs in terms of within the marketplace. And certainly, I have a lot of conversations with people where they pitch a concept and it’s like, oh, you’re never going to get that to any kind of scale and it doesn’t have to be a huge business, but just in terms of you know, that you can build a business around and have a consistent revenue.
I think that if you’ve got a good idea, if you keep the optimism and the perseverance around it, that you can get over any hurdles. That’s the beauty of the eternal optimism that entrepreneurs have to have is every day is a new day. The stuff that seems absolutely catastrophic at the time, you get through it, like we’ve had no key people quit on us and keep critical development, time periods where, oh my god, what are we going to do? Everyday you just get up and take a fresh crack at it.
That’s awesome. This has been an absolutely delightful conversation. And thank you so much for sharing your journey. We so appreciate it.
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