Join CIC’s Emma Wright as she explores Boston’s innovation community, interviewing local entrepreneurs about their trials and triumphs starting their companies. This episode features Nevin Raj, co-founder and Chief Data Officer of Grata Data, a company bringing new data insights to the world of corporate strategy.
Below is a full transcript of the CIC Founder's Spotlight interview with Nevin Raj.
Nevin Raj: I'm the co-founder and Chief Data Officer of Grata Data. We are a platform for corporate strategy. Our platform tracks and monitors corporate strategies by reading and reporting on strategies and online documents. We use machine learning to automatically read and process millions of documents. From those, we are able to extract what a company is doing before it hits the news, before it hits the market.
Emma Wright: What kind of sources do you pull from?
NR: We pull from a lot of different sources. Anything from websites, to patents, job postings, blogs, white papers, and conference proceedings. It really varies by market, we pull regulatory filings as well. The universal thread that we analyze is text. So anywhere where there is written text, our systems process and analyze it.
EW: How did you and your co-founder develop this idea?
NR: I was a management consultant out of college, where I did a lot of this type of work. I was in New York, traveling to all these different companies that were asking very similar questions. But, there was no solution. Everyone asked these big questions, 'I'm entering a new market, what should I do? What are our competitors doing? What should I be thinking about?' People have traditionally answer those questions, but more and more they are asking for data to back it up. They say, I think it's great that you have this opinion about how you think the world's going to change, but where is the information? Where are the actual numbers that can tell me this is going to happen?
I saw that in consulting. Then I joined a private equity firm in Boston and very similarly, they are making similar investments in healthcare, technology, and beyond in other sectors as well. You bring the investment committee a thesis and you say, 'I want to invest in this company, I think it's going be the future.' Then they ask, 'where are the numbers that back it?' And all the numbers that everyone used, felt very backward looking. 'Well, this is what we saw for revenue and this is what we saw happen in the last 10 years in the market.' As we now know, with interesting events that have happened in the last few years, the past is not always a great predictor of the future. You want to know trends, you want to know what is happening. However, there are a lot of indicators that could be forward looking about a company or about a market that are overlooked. We process those forward looking indicators, to build the perspective of what the world or market is going to be in the future.
My co-founder and I both had different backgrounds and different skills and interests, but we both saw this as a problem in the business world. So, I brought that business sense, he brought the engineering talent. Although, I also studied applied math and statistics in undergrad. So we went heads down for about six months, wrote the algorithms, wrote the baseline code to do strategy data and from there we hit the market.
EW: Can tell me a little bit more about your clients? You mentioned you work with different companies, but you're also gathering a lot of data that could be interesting for a lot of different industries? Who do you serve?
NR: So right now we serve two main customer segments. One is corporate strategy groups. So think large corporations, leading companies, in spaces from industrial, to high tech, to healthcare. Then on the other side, we serve private equity and investor clients. Typically mid market, to large cap funds that are making investments in the sectors that we have corporate strategy clients.
EW: When you set out to do this, is that what you envisioned? Or has it morphed over time based on the needs of the clients?
NR: I personally know the consulting world and the investment world well. And that's why we went to those markets first, because of our personal networks, as well as just the knowledge of how those industries work. Then we actually entered corporate strategy more recently, in the last six months.
EW: How has that been so far?
NR: It’s been really good so far. There is a very clear use case, because a lot of our consulting clients use our data for corporate strategy. So we're now helping the corporate strategy teams directly as well.
And you have to change your platform at all?
NR: Yes, so our vision for the platform has always been 'software as a service'. You go in as a user, you type in a company name. You see their strategies, you see it evolving over time, you view markets, you interact with their platform. But we've had to build up to that. We started off as a services business, where we were doing it on the back end. We had no pretty graphs, everything was done in Excel and PowerPoint, and we provide the insights to clients. And then after about eight months of doing that, we then started providing data as a service. Clients and customers would buy our data directly and we wouldn't have to make sense of it for them. Now we are at this precipice where we're going to be releasing our full software as a service platform, where users clients can actually go in and interact the data themselves.
The platform is the Excel part, it is the way you interact with data from the spreadsheet. That's what we're putting into the platform. So for example, geographic strategies can be placed on a map of the U.S. or a map of the world. Technology strategies or product strategies fit better in a heat map. We've thought a lot about the right visualization for the right strategy type and we've put a lot of thought into those dashboards.
EW: Do you have any other vision for where this may go?
NR: I mean, ultimately we want to be the platform for strategic thinkers. Strategic thinkers, right now in a very narrow sense, encompasses corporate strategy and investors, but really it's executives. It is any type business leader who thinks about problems beyond the day, to day. Anyone who's thinking about their market, who’s thinking about their competitors should be using our data. Our vision is to be the search engine for business. Because, right now when you try to search for information, let's say you want to know how many companies offer support services, you can't just search that on google and find it.
You're going to get anyone and everyone marketing at you but, you don't know which ones are tech companies. You don't know if it's really support services, because it's kind of random question. You get a lot of noise. Our platform isolates the companies, the markets, and the strategies that you are looking for that really gives you analytics around it. We actually see our platform becoming a search, find, and report mechanism for business.
EW: What has been your biggest challenge so far, be that designing the company, or personally?
NR: It's a big question. Every day there's a new challenge and there's a new opportunity. In the beginning, is was really just understanding exactly what we were doing and the product market fit.
We knew that we were solving problems, but we were solving them in very different ways. It felt random in a way, where something would strike, people would love it, and then other people wouldn't like it. Then we go to the next client and they would like something else. You almost feel like you're getting pulled in a thousand different directions. In the beginning it was really about finding focus. On the flip side, being able to test and experiment and try different things is another way to know what's going to work, what’s not going to work in the market.
First it was really finding focus, but now where at another stage. Just to give you some background, we are a bootstrap company, we don't have institutional funding. So with everything we do, we have to manage cash flows. We have to manage the finances of the business very tightly, because we don't have a large pool of funding to sit on.
This means that every time we do something, we have a decision we have to make, either for the short term or for the long term. And when you're getting pulled in different directions, the short term may not align with the long term. So the big challenge we've had is, do we do something for a client or for a customer that may not be applicable to others, because it's going to help us in the short term or with one relationship in the long term, but may not necessarily build to the end vision of our platform. And that's been a real challenge for us, we're just figuring it out right now. We've reached a certain amount of scale, with the number of employees we have and in the way that we've developed a lot of good relationships, were we are able to have a smooth running business. We are gaining enough efficiency and time to really build towards that pie in the sky future and our long term vision.
I think that's come through a year and a half of really hard work, building a good client base, understanding product market fit, and knowing what we can and can't do. We are running these two parallel streams of work for the short run, ensuring growth and the financial stability. At the same time, we are building up the platform for the long run. I think a lot of organizations see this same issue, where everyone wants to do the research and development, but you also need to run the day to day business. In bigger companies that are public and well funded it's easier to have a cost center for research.
EW: Why did you decide to bootstrap your company vs. looking for investment?
NR: We did talk to investors early on, before we even had a product. We thought about that route, but the business we're building is not so much of a venture backed business, in the sense that you can generate revenue on day one out of the gate. If you're creating data and you're creating insights people will buy those, they're valuable. Whereas other venture backed businesses require a lot of upfront time. Maybe it’s network that requires scale, so you can’t get any revenue until you have a network, a market place, or maybe you need buyers and sellers. Maybe there's a cost of acquisition for buyers and sellers on the network. For us there's no network, so the cost of acquisitions is low. We were able to come out of the gate after six months of development and be cash flow positive.
So it was more of a business model decision fueled that route. You can make an argument that if we had a built software SAS platform for a year and a half, we could have used the funding to fuel R&D. But, we were able to build the company without it, which has given Andrew and I a lot of control over how we shape the company. I think it has built a lot of good values around how we think about spending. We're very careful with every dollar that is spent and every employee that we hire. We think twice, three times, four times about every decision. I think that has built a really good culture among us, where everyone feels like we're in it to win it. No one wants to be wasteful of resources and time.
EW: What has been the best piece of advice you have received throughout this process?
NR: I had an interesting conversation with someone who sold a company to Twitter for about 300 million dollars. He said, 'know the problem solving you are solving'. I had the conversation with him over the phone, and he said, 'what are you guys do?' Every time I said something, he would pauses and say, 'What problem are solving?' At first I was pretty irritated by that advice. I said, come on, did the iPhone really solve a problem? You can think of countless other examples of this. What I really learned from that conversation, is that the way you define problem can be different. A problem can be something that you do every day, that is causing a clear pain point in your life. Or it could also be a lack of something. The way you define the problem is really important for setting your vision.
So the way we define our problem is that 'business leaders can't find the right information about company strategies to know what's happening in a market'. While it may not be a problem to everyone, impeding someone's daily life or day to day job, the fact is, when you solve a problem that is the lack of something existing in the world, you're actually creating a more expansive market.
One thing I learned about was how to define a problem and how to work towards that vision. The other thing I thought about, and this is actually not even so much business related, but is the definition of wealth. What is wealth? What does that mean?
A lot of people say that you have to enjoy the ride, more than what you're building towards. You can get really swept up in the day to day work. Your going to work late nights. You're going to work weekends, but if you don't enjoy everything that comes along the way - and wealth as in a wealth of friends, a wealth of happiness, being healthy, working out, there are all these things. Just having the way you define wealth as having a lot of things that you like. And at the end of day, it's not necessarily a large company that you're building towards.
But if you lose sight of that short term and of all these other things that are important, you actually end up at a place you don't want to be. You may look back in 15 years and you say, wow I lost my 20s, or I lost my 30s. Andrew, the company, and I really try to make sure that beyond working hard - we have a good lifestyle, we have fun, we enjoy the ride.
EW: Is there anything specific you do to bring that to your company culture?
NR: Yes, we do. We have a few things we require, because we have two offices in Boston and New York. I'm based in Boston, but my co-founder is based in New York. We like to bring the company together. This past summer we did a summer outing, we took the whole company to Vermont. We had a series of events and challenges and it turned into this big competition. We had a games of Mario Kart, laser tag, and mini golf and strung it all together.
EW: What brings that wealth to you as a person?
NR: I enjoy staying healthy, staying fit, and I try to spend a lot of time with friends. I like the idea of 'never eat alone.' It's actually a tough balance, because when you're eating with friends you tend to eat out, which is less healthy. So I'll try to cook meals for friends, but actually vice versa, once I cook for them, they’ll cook for me. And that's a great having a healthy meal and not eating alone. Those are the two main things that I do. I have other random hobbies. I like to volunteer and do other things to the community. Right now, between work, friends, and physical activity it's a lot on my plate.
Your team is based out of New York and Boston, why did you choose to be here in Boston, and within Boston why did you choose CIC?
I really like the CIC, I'm a big fan for a few reasons. One, I really like the location. We have people coming from all over the area, from Central Square, and from Back Bay and others from Brookline. The CIC tends to be a really central point, where you take the Green Line, Red Line, Orange Line, Blue Line, from wherever. You can access it really easily. I think it is really important for getting good talent, because now people, and maybe millennials more so, are a little bit lazier. Everyone wants things faster and wants to minimize their commute. That's really important for us. Two, I like the community, I think it's a really great place to be. I have made a lot of good friends from the CIC.
I have a network and friend group here, and I went to Harvard undergrad, so I had a lot of my classmates stay around Boston. Beyond that, I didn’t know anyone else. Thank’s to the CIC, I’ve met a lot more people who didn't come from my previous networks that are now really good friends of mine. I really like the events and that there is always something going on. On the back of the bathroom stalls, there is a schedule of everything going on. I've wanted to get more involved actually. I'm looking for things after business hours, so I can get more involved with them.
I look at all of this and the great selection of food keeps me running in the late afternoon. I don't drink coffee, so I love having sweets, and chips, and juices or went over to snack on. The quarterly specials are my favorite.
EW: Is there anything else you’d like to share?
NR: We're going to be hiring a bunch in the next few months in both New York and Boston and we'll be looking for good talent. We are looking for people who are smart, ambitious, and really believe in our vision, and who have felt the pain that we've felt at some point. Whether that has been as a consultant, in the investing world, or in corporate strategy. We're always on the lookout for good people. I would definitely ask anyone interested to reach out.