When Veeva Systems came public in October, it was a shocker for many in Silicon Valley. The cloud company was off-the-radar, at least compared to hot operators like Box. Yet it did not matter. Veeva posted a first-day gain of 86%.
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“I think it is a good sign when others think you’re an idiot,” said Peter Gassner, who is the co-founder and CEO.
Veeva shows that you do not have to copy the Silicon Valley playbook to create a breakout cloud company. For example, Peter raised a mere $4 million in venture capital from Emergence Capital Partners. The reason? It was simple. He did not want to spend too much of his time with fundraising. Instead, he thought it would be better to focus his attention on building great products and snag customers.
But even the way he did this was different from the typical cloud company. You see, Peter’s strategy was to target only one industry, life sciences (he calls this approach the “industry cloud”). And he’d go after the largest customers like Bayer, Eli Lilly, Merck and Novartis.
To make this work, Peter needed instant credibility. So he built the initial Veeva technology on the Salesforce.com’s platform. Again, it was unconventional as cloud companies prefer to build their own infrastructure. But for Peter, it would have meant slowing down the mojo.
Oh, and he has able to do something else that’s unusual: create profits! In the latest quarter, revenues spiked by 54% to $55 million and net income came to $6.5 million.
All in all, Veeva is a refreshing example that the Silicon Valley model does not have to be a straight jacket for every startup. Building a great company is actually about old-fashioned ideas of understanding the market and generating profits. The irony is that in today’s crazy world, this seems kind of out-of-place. But this is fine for Peter. He’d prefer to be considered an idiot!
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