Rigor CEO, Craig Hyde, had the desire of many aspiring entrepreneurs with a cushy six figure salary at a young age: start his own company. Many bankers, brokers, and ballin’ reps who are reading this because they too, one day, “want to start a business,” should know: this is the story of the guy who did. He’s your crazy friend who leaves the comfortable, predictable career for something with much more risk, rigor, and reward. What once was a pipe dream in the back of his mind, turned into one of Inc 500’s fastest growing companies at one of the most desired places to work in Atlanta.
This is the story of Rigor.
How did a Computer Engineer from Georgia Tech, turned technical sales guy, turned MMA studio owner, eventually end up a technology entrepreneur? The simple answer is what every engineer does: solve problems. But what happens when those problems seem too arduous, or too complex, even for an engineer? Well, Craig resorts to his instinct to use another strength: brute force rigor.
We catch up with Craig in the Atlanta Tech Village for an interview that spans an entire week. Our interview contains so much content, the effort to curate the discussion is almost equal to communicating it on paper. After reading this story, anyone from student to well compensated graduate (like Craig), who knows starting a company is their destiny, will now have one more sketch for their entrepreneurial blueprint.
Let’s start with the important fact that many could forget as the rest of the story unfolds: Craig is an engineer. His Computer Engineering degree (with a Certificate in Entrepreneurship) prepared him right out of college for the lucrative, complex world of sales, with the long term vision of being a CEO of his own company.
But it wasn’t easy to initially break through in sales.
Jon Birdsong: How did you find the the culture of entrepreneurship at Georgia Tech, as a student?
Craig Hyde: I used to say it a lot more, and the culture is changing now, but I’ve always said: Georgia Tech is a factory at manufacturing Fortune 1000 employees and management consultants. So almost everyone I knew went to Accenture, Deloitte, IBM, Bain, etc. or they are working for a major company designing something in a professional engineering sense. The way I kindled my spark for entrepreneurship was through a friend who found out about the engineering/entrepreneurship track, and it taught you about company formations, marketing, accounting, finance, and the like. This was junior year, and the certificate was a good break from heavy engineering and lab work. While in the capstone class, they had a handful of entrepreneurs who would come into the class and share their stories about how they bootstrapped the company off their salary, and all sorts of amazing stories to get their companies going. This really ignited the entrepreneur spark and exposed me to the business side, where I could put myself in a position to control my own destiny. I realized sales was the closest thing to entrepreneurship, where I could control my own destiny, and make some decent money, so I focused on sales out of college.
I realized sales was the closest thing to entrepreneurship, where I could control my own destiny, and make some decent money.
JB: Wait a minute, how does an engineer automatically shift to sales?
CH: I was a mediocre engineer, at best. I realized I wanted to get into sales because when I met with grown-ups and asked them what I should do with my life, they would say, sales is where you can control your destiny. I started to realize this, and that you weren’t judged on how many hours you sat in a chair, but you were judged on results achieved. Even though I was a trained engineer, I took that mentality to finding what type of sales I wanted. For example, in my last year at Georgia Tech, I interviewed twice a day, and bet you I had over 100 interviews my senior year. And from all those interviews, I found a unique role with a company who acted as the Southeast reps for West Coast startups. All of these companies sold test tools for networks or infrastructure. So big companies and government agencies would buy these tools to manage their network. It was right up my alley because the product revolved around things I studied, but it was also a sales role and it was with a little company that allowed me to rep a whole wide range of technologies. So I was able to work with all of these startups on the West Coast, within a small company, doing the entire sales process from cold calling to installing and training.
As Craig spent the first three years out of college working these startups and selling to large enterprises, he was able to get a feel for what works well in their space, and what did not. Proudly, one project he worked on was designing the network for Georgia Tech’s Klaus Building. It was a challenging job that required advanced problem solving, while communicating and understanding customers. In addition to the skill sets being learned, he was able to see many new technologies hit the market, and go through cyclical trends like owned to rented and centralized to distributed. All the while developing an understanding in the market, and acquiring the skills he’d lean on when building what was ahead.
Even though Craig had a full time job, his desire to start a company was too great to sit around on nights and weekends. So he went and started a company.
Enter a fully decked out Mixed Martial Arts (MMA) gym.
From those entrepreneurial talks in college, Craig learned funding a company through his day job was possible. So he and a friend did just that. Through personal savings, paired with family and friend’s investments, Craig was able to pursue his entrepreneurial dreams, and invested $35,000 into a state-of-the-art MMA gym. Success was inevitable. According to Craig, “my business plan and financial projections told it would be a huge success.” While Craig sold software, his friend and business partner ran the operations.
JB: What were your first few lessons in entrepreneurship after starting an MMA gym?
CH: The first few lessons in entrepreneurship I learned was first: the market. Sell to people who have a need and a budget. A high-end gym for people who like to beat each other up is not the largest market. The second lesson was making sure there was always cushion in the bank, and longer runway than needed, because those ‘up and to the right’ charts don’t always work the way they should.
The second lesson was making sure there was always cushion in the bank, and longer runway than needed, because those ‘up and to the right’ charts don’t always work the way they should.
JB: What was the vision of the MMA Gym?
CH: Oh man, we were going to take over the world. We were going to be the brand, when it came to MMA, to training — and this was when UFC was on the up and up, when Brazilian jiu-jitsu was on the up and up, and we had a real direct link from one of the guys who got his black belt from Carlos Gracie in Brazil. We got it up and running, had many members, even to the point where we were recognized as one of the fasted growing Gracie gyms in the country, but the economics didn’t make sense. Scaling to our vision would have required a lot more money. Most importantly, I just wasn’t passionate about it, and that’s another big lesson. Going full-time was never in my mind.
After spending two years trying to make it a real business, with Craig writing checks, and his business partner operating the day to day, it was time to move on. Today, the gym is still running, but Craig and his business partner, who are both still friends, are out. From this lesson, Craig made a conscious decision to get back to work, pay his family back, and focus on his job.
BECOMING THE MOST KNOWLEDGEABLE WORKER
The year was 2008, and the MMA gym was behind him. Craig was telling the story about his MMA gym to one of his former co-workers who had just started at a new company, and they needed a really technical person to rep the Southeast. A couple of weeks after sending his resume, he was hired. All throughout his career, Craig sought after opportunities to punch above his weight class.
His first job, during his MMA gym years, required 3-5 years experience, yet he was hired because of his technical background. The second job required 5-7 years experience, but because he had industry knowledge, a technical background, and sales experience, they hired him.
His base was immediately doubled, and now he was punching way above his weight class. He knew this immediately when he walked into the office, and was the youngest guy in the room by a decade. No one wanted to take a kid to any of their accounts. The first 6 months were tough — he had to prove he could add real value.
JB: How did you prove yourself to your new co-workers?
CH: I took all the worst accounts, including the ones who were about to fire us, as clients. I remember there was one account who was about to leave us, and I was like, let me take a swing at this. Since they were already halfway out of the door, everyone was like, “fine, see what you can do with it.” Remember, I was pre-sales and post sales, which basically means convincing customers why we’re better, and then implementing the proper solution on the back end. Sales reps could pick which pre-sales and post-sales reps they wanted, so naturally they selected the most experienced ones. Since I was the fresh face, I rarely got picked. So I had to work on the accounts no one wanted to work on, and earned my stripes that way. After turning two companies around, from leaving us into multi-million contracts, my reputation around the office changed dramatically.
JB: How did your day to day change once the organization knew you could add value?
CH: It was like a switch was flipped — from sitting in the office, by myself, reading manuals to being on the road five days a week, instantly.
I took all the worst accounts, including the ones who were about to fire us, as clients.
Life was good. Craig had a blossoming reputation in an established firm. His on-target earnings (OTE) were in the six figures — and he was tripling his targets. At 26 years old, Craig was making a very good living.
Most young people at this point would start elevating their lifestyle expenditures to match the income. Yet, in the back of Craig’s mind, he knew he’d start a company and would need a nest egg to lean on.
His vision overpowered his ego and he kept his expenses low.
During a club trip, Craig started discussing with one of the more senior guys about starting a business. The senior rep said to Craig: “I couldn’t even fathom starting a business, I’d need $100,000 just to pay my bills.”
Vision and reality touched paths, and he knew he had to stay lean, because his future ambitions required it.
JB: So why didn’t you go start a business right after that conversation?
CH: Good question. I remember thinking to myself, “so what am I going to do next?” I mean, this may sound weird, but my job was so easy. All I did was fly around the country, talk about technology, and bang on the keyboard, while making really good money. It was so fun, and up my alley. It suited my strengths. I liked the people I worked with, but always in the back of my mind, I was like “now what?” My boss had been there a decade, his boss had been there a decade and a half, her boss had been there for 30 years, and then there was the CEO. So I’m like, okay, do I run on this hamster wheel for the next 10-20 years, for a chance to get to the next level up, or 30 years where you actually have impact, or what do I do? I didn’t want to coast in my life for the next 20 years. I felt like I had learned the most from the job I was going to learn, after two years. So I started to look at going back to grad school.
JB: You achieved what many would call the dream lifestyle, but yet you weren’t satisfied?
CH: Yeah, it was a really weird feeling. The company had been the same for the past 30 years. Nothing was changing, or going to change. It was less about the dream lifestyle — it was more about answering the question: What am I doing with my life? I knew what I wasn’t doing: working on any new problems. It was rinse and repeat.
At this point, Craig made the decision to be proactive in his search to start a company. He was 27 years old at the time, and it had been in the back of his mind for years. It was time to take action, and the decision was made.
JB: Knowing what you learned from your MMA gym, how did you decide what market to start a company?
CH: Funny you ask. My roommate came home from work one day, complaining that he was trying to buy a gift card for a customer success person that helped him out on an account. He was like, “I can’t find a place online to buy gift cards.” And I was like “if you are looking for gift cards, one of the companies I’m working with has all the gift cards you could need, from a wholesale perspective.” So our idea was born: create an online storefront for gift cards. My roommate at the time, Jordan Rackie, was an Account Executive at Pardot. He said: “my CEO is a big entrepreneur, why don’t we talk to him about that.” And then I said: “Alright, let’s do it.” So Jordan brought me in to meet David Cummings in the Pardot office in 2010. The energy of what they were building at Pardot was incredible.
JB: How was your first “pitch” to then Pardot CEO, David Cummings?
It was more of a conversation. Jordan and I told him about our gift cards idea, and he was like “I like software companies, I don’t really do e-commerce, it’s just not what I know.” And in the conversation, we ended up talking about my experiences and business software I enjoyed. We talked even more about one of an acquisition my company recently had with a SaaS company. Long story short, we left the meeting with no next steps. David didn’t do e-commerce, I went back to my regular job, and Jordan went back to selling Pardot.
I followed up with him a few days later with an article about a company in the space. We ended up going back and forth a fair amount about the market. In one of those emails back and forth, he just asked: “how interested are you in starting a startup?” And I remember replying back “it’s the only option in the long run, I just don’t want to sell my house and move in with my mom while getting it off the ground, so I want to wait until I have customers.” Then David said something like: “from my experience, going all-in is the best option.” And it morphed into: “if you want to start this company, I’ll back it. How much do you need to get started?”
Three years into his latest job and five years out of school, Craig Hyde is making a great salary with strong benefits, and on a steady career path that made him set. Yet, he pushed it all aside to start what is now Rigor. Paired with his soon to be CTO, Hubert Liu (another Georgia Tech graduate), Rigor was off to the races and in the corner of Pardot’s office was the new Rigor headquarters.
JB: What did you guys decide to build?
CH: I wasn’t sure yet, all I knew was we needed to build a waterfall chart. And then I realized, it wasn’t so easy to get that waterfall chart and you had to do all this stuff to make sure the waterfall chart worked. But overall, we were building and still continue to build website performance monitoring software. That is what Rigor does very well.
Anyways, the waterfall chart gives you a visual breakdown of everything that happens to build a page when a visitor comes to your webpage. I remember it took a year to get that dang thing, but we got it and it worked well. And actually the only reason we got it through the finish line was because we sold it to Georgia Tech, and they needed it for a very specific reason. So we actually pre-sold them the waterfall chart.
It took us six months to build anything meaningful — and this was with both of us coding, or in my case, attempting to.
JB: How long did it take for you to get your first customer?
CH: 7 months. It was a friendly. It was KontrolFreek (written about here in the SingleOps journey).
I remember having two sides of emotions. KontrolFreek paid us $50/month and we were elated. Then I remember thinking, wait a minute, two people have been working day and night on this thing for the better part of a year and have only have $50 in total revenue and asking myself, what the heck am I doing?
I was wondering why am I giving anyone high-fives for $50. I guess just a small example of the ups and downs of starting up.
JB: At that moment, 7 months in, did you have any regrets?
CH: No way. I do remember my former colleagues calling me up and saying, “when are you gonna be done with that stupid startup, we’ve got big deals to close, yadda yadda yadda?” Cause I’m friends with them and we stayed in touch. And I remember saying, “no I’m good right here, staying up all night, coding, pushing software to no one.” (He laughs)
JB: Ha! How long did it take you to get to $1 million annual recurring revenue (ARR)?
CH: It took us a long time. It took us 4 years. January 2011 was our first sale. We exited 2011 with close to $100,000 in ARR and hit $1 million ARR in 2014. Got to give it up to our team. They made it happen.
JB: When did you hire your first sales rep?
CH: Late 2011 is when our first sales rep came on board. I remember delivering the quota and comp plan, then realizing it was completely unrealistic. He was a trooper and absolutely crushed it.
It was about this time that Kyle Porter started building SalesLoft out of the Pardot office, so that was fun.
JB: You and Kyle were in the same fraternity at Georgia Tech?
CH: Yeah, we were actually pledge brothers. Crazy small world. Now we’re sitting next to each other as if it was freshman year. He left a great job, too, and so we’re just looking at each other, building software, wondering what we got ourselves into… but now just as entrepreneurs, instead of students.
I remember calling Kyle after my conversation with David and saying I was thinking about starting a company with David Cummings. Kyle knew who he was because David gave a talk at Georgia Tech shortly after Kyle and I graduated. Anyways, I called Kyle up and told him I was thinking about starting a company with David and Kyle was like: “Do it. Yep, definitely do it.” before I could even finish my statement. I remember Kyle then said: “I mean it’s a lot better than what you’re doing right now?” And I was like, “Hey, what I’m doing is pretty good right now”. Kyle responded, “but you’re going to go start a company eventually, so now’s a good time to do it.” He knew what I was thinking long term.
JB: Let’s talk about the evolution of your pricing model. How has Rigor’s pricing changed as the product has become more robust?
CH: It started out at $50/month, $100/month, $250/month, and from there it’s gone up dramatically since. Our average customer pays us a little over $22,000 a year. So it has evolved as the product has matured.
JB: Let’s fast forward to $1 million ARR. What were some of the biggest learnings?
CH: I definitely don’t have the magic wand. For us, it was just chipping away for 4 years. You know, so much of a startup’s success depends on the market. Sometimes, the market pulls you along, and other times you just have to use brute force, and in our case, it’s just been more brute forcey, chipping away over time.
We’ve been chipping away in the direction for years, and now we have 7 years of IP, solving some very tough problems that are only getting much bigger.
Looking back on the early years, we didn’t have the luxury of being wrong. For example, if we were a well-financed startup, with millions of dollars in the bank, we would have built it right from the beginning — but what if we built it right, and it was wrong? We didn’t have that luxury of losing, which is why it took us 4 years to get $1 million — with steady, incremental growth. So we just had to duct tape everything together and keep going. Chipping away, each day.
Since day one, we’ve been focused on website performance monitoring. We’ve never pivoted.
JB: What’s the difference between getting to $1 million ARR versus to $4million+ ARR (which is where they are today)?
CH: We got to $1 million the same way we got to $3 million, which was through brute force, sheer will, and grit. Things in the business change at that scale. We had some key team members move on, which is always tough. Our transition from $3 million to $4 million was more difficult for us than other companies, mainly from an organizational perspective. I heard one time that a growing startup is like musical chairs. Everyone starts in one position and grows to the next chair and then the next. At some point, the company reaches a scale and a bit more structure and process is required to grow the business — you can’t play musical chairs over 20 employees (Rigor has 40 employees today).
We’ve spent the last 9 months hiring and putting new team members in place to set us up for what’s ahead.
I’m incredibly confident in the growing team we have in place. For example, our VP of Sales has run a massive sales team before, and our VP of Engineering who has started something from scratch and scaled it to IPO before.
We also brought on the Zoompf team which was a game changer. I can’t say enough good things about joining forces. It was a perfect fit, in every sense.
JB: What does your new VP of Sales, Pete Mansel, think about Yoursday’s? (Yoursday’s is every Thursday where people at Rigor work from home, with no scheduled meetings, and get key personal items done as well).
CH: Ha! It’s funny you ask. When Pete got here, he looked around and was like “what the heck, people actually care about each other here?” He’s done a great job adapting to the culture, because he’s so focused on mentoring and building people, and that strength aligns with our culture.
JB: What’s Rigor’s future hold?
CH: When we started the company, the first goals were to be on the Inc. 500 list, and be the best place to work in Atlanta. Now that we’ve achieved both milestones, the next goal is to hit $20 million ARR. It interesting to see the life cycles of businesses. There is no question that we can be the leader in our space. It’s taken 7 years of blood, sweat, tears, and brute force to say that with confidence. We know exactly where we fit in this market, and we know exactly why we are special. We’ve carved out a very specific niche for ourselves. That niche is full lifecycle management of performance, from development to release. We’re doing this by turning performance into something QA and development think about again. Our focus on that over the last few years has given us a big head start on where the market is going.
JB: With this approach, will you continue your brute force style?
CH: Right now, we only have one investor. We may go get some more firepower to work with. But yes, there is a huge market out there, and we’re in a perfect position to own it. Brute force will always be in Rigor’s DNA.
In software, many folks think success comes easy. The stories that don’t get told include the ones with substantial opportunity cost, and years of grinding for that “overnight success.” This is the story of Craig Hyde, a Georgia Tech educated, Atlanta native. While he probably wouldn’t consider himself successful yet, he, and his growing team of 40+, have created an indispensable product that is solving complex problems for businesses throughout the world. Every entrepreneur’s journey has its ups and downs, but one thing is certain in this company’s future: growth, with brute force rigor.
Story by Jon Birdsong