Who: Tidemark Fellow Nick Mehta
What: CEO of Gainsight, a pioneer and creator of the “Customer Success” category
Where: Palo Alto, California
How: Eschewing a zero-sum approach and treating all humans (clients, partners, community, investors, teammates, and their families and friends) as people, “human first,” Nick Mehta has known the full spectrum of entrepreneurship. He took customer calls from a college dorm room, set up shop in his cofounder’s parent’s backyard garage, and secured a Series A round from an alluring venture firm that led to a blaze of glory. He has built a growth equity business, sold it to a big company, and established himself in the world of SaaS technology.
In his latest endeavor, Gainsight, a software company that helps businesses reduce customer churn, increase net revenue retention, and ultimately drive company growth, Nick has his sights on a bigger swing -- he is building a better way businesses operate, by winning in business while being human first.
As Nick sees it, the mission of new world companies is not just to build amazing products; it is to deliver exceptional outcomes and value. In today’s SaaS economy, customers have the power of choice. If a company is not helping their customers to become successful, they will move on. This makes it imperative for customer success to be at the foundation level of every business.
Clearly, he is onto something. Customer success is now one of the world’s largest communities. While it is easy to get lost in the data, analytics, and KPIs, Nick’s passion for customer success and human first is a clear reflection of his belief in providing exceptional service to all his customers, employees, shareholders, and community. After all, human-first captures the spirit of what customer success is all about. It’s about viewing your client not as a transaction or a deal but as a human being. Gainsight’s purpose statement is, “Living proof you can win in business while being human-first.” To Nick, business isn’t there for the profit — businesses exist to serve human beings.
That philosophy has worked. Gainsight’s recent Pulse Everywhere conference was a three-day extravaganza with 20,000 customer success professionals, complete with Hollywood A-lister Mindy Kaling as a headliner. There is also an online university, job boards, and books -- everything necessary to advance this new profession of customer success. After years of application and evangelizing, Gainsight’s purpose -- and Nick’s calling -- is greeted with respect. Vista Equity Partners recently acquired the company for $1.1 billion.
Not that this has slowed Nick down. He continues to lead the company, is a member of the Board of Directors at F5, and has joined the advisory board of the CSM Practice, the world’s first consulting firm dedicated to customer success management strategy.
Nick’s leadership style is truly unique. He is very passionate about family, football, philosophy, physics, fashion, feminism, and SaaS customer success — the byproduct of growing up with a mom as into science as he was— and he’s a prolific writer and leading thinker on leadership and customer success, which he writes about in his blog, MehtaPhysical.
We recently spoke with Nick about the virtues of the human-first approach.
When did you hear the call of Silicon Valley?
I started my first business in college. Three of our cofounders went to college together, and the fourth was a brother of one of the others. One of the guys, named Amar, was a close friend of mine and on the Harvard golf team. He said, “Hey! Let’s start a business doing golf e-commerce.” He originally had the idea In 1995 and I came into the business as a cofounder in 1996. It was just a dorm room business. I would help him by taking orders online and building the website. And then it started taking off. In 1998, when we graduated, at the beginning of the first dot com boom, we all had to decide whether to work in a normal post-college job. I was going to be an investment banker, so it saved me from that path! We all turned down our jobs to pursue the start-up: Chipshot.com.
We moved to Saratoga, where my friend was from, lived in his parents’ house, and worked out of their garage to run the start-up. That time, the summer of ‘98, was a really hot period for start-ups, and we wound up getting Series A funding from a firm that we had never heard of, a firm called Sequoia Capital. So Sequoia did the Series A, and we almost went public in 2000 - we were just a few months away and in the mid-IPO window. But unfortunately, in the end, we sold it for not much, and no one made any money, but it was still an awesome experience. Now all that exists are the memories and this commercial.
How did young entrepreneurship inform your future?
Doing your own start-up for your first job makes you completely unemployable. Like, you are deemed a bad employee from then on, so I went and worked for a large company called Veritas for five years. Veritas was eventually bought by Symantec and over the years I went from product manager to a GM running a large chunk of the company. I had a great time, but after five years, I had to recognize that I had come to Silicon Valley to do my own thing. Doing your own start-up as your first job also makes it harder for you to ever work for anyone else. I didn’t know what I wanted to do, but I knew it was time to leave. And since leaving Symantec, I really haven’t worked for anyone else except my investors and my board.
You’re prolific on your blog. Why do you write so much?
I really like writing — it helps me get thoughts out. It helps me scale because a lot of my ideas are in my head. If I write about them, my teammates and customers can learn about them. And the approach works. In our business, part of our value proposition for our clients is our knowledge and expertise, so the writing helps to get that out there. And really, I do like to write.
How do you decide what to write about?
I basically write about two things. I most frequently write about our domain of customer success. I’ll have a conversation or attend an event, and someone will ask me a question. That will be the trigger. I’ll decide to turn the answer into a blog post for everyone’s convenience and accessibility. And then there is the other stuff about running a company or about mistakes that we have made. Those blogs are less frequent, and I’ll keep those topics in a list for consideration. For example, I just wrote a piece on a subject that I have been thinking about for months: What are the awesome things and the challenges that come with raising money valuations that are actually way ahead of your company’s real traction? What do I wish I had done differently? None of it was catastrophic. We did well, but we could have been even further along if we had done some things differently. And so I shared that.
What does it mean to be a human-first CEO?
Human-first CEOs don’t merely consider their teammates’ livelihoods; they think deeply about their mental and emotional well-being as well. Human-first CEOs are also reconsidering the makeup of their workforce and assessing if their representation is in line with the overall demographic mix of the population. While companies have made strides in gender representation in the last few years, much more is left to be done. And technology companies have shockingly little to report in terms of progress around Black and Latinx employees. Human-first CEOs realize that this situation must change.
As we settle into our “new normal”, human-first CEOs are reimagining their long-term approach to making jobs work for all employees—from increasing work-from-home options and running summer camps for employees’ kids to providing extra support for mental health and physical wellbeing.
What is the human-first approach to customers?
In crises of the past, companies often adopted a “zero-sum game” mentality. If they “gave in” to customers, they would lose. So they held a firm line. Each company for themselves, right? But this time around, with the pandemic, as we saw restaurants, hotels, airlines and dozens of other industries collapse globally in a matter of days, we heard CEOs, for the first time, shift from “what’s in it for me?” to “how can I help?” Public cloud company Box, run by one of the most authentic and “human” CEOs around, Aaron Levie, immediately made a number of its products and services free to customers. Salesforce allowed its customers to delay payments for 90 days. Thousands of companies realized that their businesses would only survive if their customers did. The downturn doubled down on the notion that business success requires customer success.
What does community mean to Gainsight?
We created a community intentionally, out of necessity. Gainsight is unusual because people usually build tech to offer a better way to solve an existing problem, or to improve something. Your target customers will be the same people who used the prior technology. People talk about us creating a category because we were building software for a job that didn’t exist much yet, but we thought it would exist over time - customer success management. When we started in 2013, there were probably 500 CSMs in the whole world. So out of necessity, we knew we had to make this career accessible — companies had to ensure their customers were really getting value, that they were using what they purchased and were happy. We thought that job would become a big job, but we couldn’t just hope for it. We had to make it happen. And so we said early on at Gainsight that our job was to make the customer success career a big career, a successful career.
How did you go about creating a customer success community?
We spent tons of time developing a community around customer success, creating job boards around customer success, training around customer success, finding pathways for underrepresented minorities to create customer success, writing books to help people learn, etc. It was all about helping make this profession successful. And what you find for any new job is that people really value talking to others who are going through what they are going through. And even if they don’t come away with some amazing nugget that they would never have thought of, at a minimum, they’ll feel seen and heard. It’s not just me, and I’m not alone. So we ended up creating this community of practitioners of customer success called Pulse, and it has been awesome because it makes everyone feel much more at home. It helps them to be better at their jobs and to thrive in their careers.
In the early days, when you were fundraising, how did you explain your TAM to people?
Oh, it was so hard! Luckily, investors have gotten savvier about TAM in general. When investing in a new market, you have to believe in tailwinds. The famous version of that is Uber’s Series A investor deck, where the TAM was a few billion dollars because they were using taxis as a proxy, which of course, was a very, very small subset of what UBER planned to do. For us, we said that every business will be moving to a digital business model over time. In all those models, the customer will get a lot more power, a lot more choice, and the company will receive customer data that they can use to more proactively personalize the customer experience to make it better. We explained that over time, companies will need to create customer success people, and they’ll need technology. One argument was a tailwinds, market forces argument, and the other was the analogy of companies using Salesforce for salespeople, Marketo for marketing people, and Gainsight for customer success people. It was a hard bet. I do think the question of how long it will take for a TAM to emerge is legit, but I think the superficial, “So what’s the TAM?” question for a new category is uninteresting because the answer is, “Well, nothing.” There needs to be a new way to analyze the question.
Is there a good to be found in business?
You know, my mom wanted me to be a scientist, and I love science. I think there is a disappointment in just doing business stuff. The thing that does have a tiny tiny impact, however, is the way in which your business treats people. Human relationships are not trivial. Our company’s purpose was framed around the idea that people say the way to win in business is to be brutal and tough — we say that’s A way to win, but there are other ways. Our purpose statement is, “Living proof you can win in business while being human-first.” I don’t think companies exist for the bottom line. I think they are entities created by human beings for the greater good of other humans. I am passionate about human-first business, and I like that Tidemark has woven that philosophy into the fabric of its investment firm.
From Dave’s Desk:
“You need to know this about Nick-- Nick relaxes at night by reading mathematics, scientific theory, and Anna Karenina. He has scary clock speed and scope! But bigger than his brain is Nick’s heart. I’ve been friends with Nick for over twenty years, and when asked for help, he always tries to say yes.”
“With Tidemark, I barely got to my second sentence before Nick said, “I’m in!” Most guys in the tech business are aggressive, but Nick is aggressively kind. Starting a firm is all about momentum. I’m so grateful to Nick that he jumped in during the early days of Tidemark!”