I’m trying to make people wealthy – Interview with Matthew Gravatt of Radiant Interactive

Brent: I’m Brent Weaver, and you’re watching uGurus, the most watched web series to become a more profitable and in demand web professional. Today I’m hanging out in Boulder, Colorado at Radiant Interactive with their founder Matthew Gravatt.
Welcome to the program.

Matthew: Thank you.

Brent: Tell me about Radiant.

Matthew: Radiant is a long culmination of my career and a few other people’s careers that came together about five years ago. I started in the U.S. military writing software for mission critical systems, military intelligence, and that sort of thing. Then, in the early 2000s I came across this agency called Frog Design out of New York City. I realized that computing and people had finally reached this nexus where computers were really about people as opposed to the other way around.
I fell in love with digital marketing. So, I dedicated my career to working for different digital companies, but bringing my military background to it to provide rock solid software with UI and UX driven development. I worked for a couple of different companies large and small, my favorite small one being Texturemedia which was eventually acquired by Crispin Porter.
Did a lot of different projects for large and small companies. Finally decided it was time for me to branch out on my own with a mandate to bring rock solid software digital marketing that is UI and UX driven to large and small companies alike with the same kind of service.

Brent: Who’s the typical customer for Radiant?

Matthew: We have a few. One of our larger clients is Pearson Education. We typically work with smaller divisions of large companies that are trying to get a digital initiative done, but they can’t get it done internally because of the way budgets are structured or politics a lot and that sort of thing. We work with those kind of companies to get those initiatives together.
An example is OpenClass.com. It is the premiere learning management system for Pearson. We work with small companies as well.

Brent: You built OpenClass. Or, did you guys participate and help them with OpenClass?

Matthew: We helped on the product, and we did a lot of the digital marketing for openclass.com. We did all the engineering for their website. We did all their email marketing campaigns and that sort of thing. All of their marketing side stuff we did except for the design which was done by SALT Branding out of San Francisco.
On the product side we worked on multiple facets of that. We work on both the marketing side and the enterprise side, but both of those are driven by UI and UX considerations by our design team.

Brent: Heavy in design. What else makes Radiant unique?

Matthew: Well, mostly our commitment to quality number one. You know, I worked in a few different places where quality was not the biggest concern. Because let’s face it. Marketing campaigns don’t live forever. They may live six months. They may live for a year. But, we target those that are going to live for a long time – four or five years. We need to build in quality so there are consistent results and that sort of thing.
We also target smaller companies that don’t have the resources that bigger companies have for their digital marketing campaigns or even their enterprise efforts, and we partner with them by sharing costs and sharing risk in those costs.
For example, a lot of our competitors will just charge $150, $200 an hour for dev costs. What we would rather do is work with a product company that has a solid product idea that we love, that all of us on the team care for. Instead of charging them $200 an hour we’ll charge them $80 just to keep our costs in line and keep our lights on and that sort of thing. And, we’ll either revenue share or we’ll share in their actual business. In that way we can get some shares in a product company as well to broaden our business portfolio.

Brent: That sounds complicated to me, like, getting rev shares and then partnering with companies at a strategic level.

Matthew: Sure.

Brent: How has that worked out in practice?

Matthew: You know, it’s tough. It’s really tough. Because eight out of ten of the…
Just to be clear, there are two different kinds of projects. We qualify those as either project based, where we just build a project, or venture where we risk some money and we risk some time and effort. The project based, there’s almost no risk even though we charge mostly fixed price, and we only charge after the project is done. We never charge before the project is done.

The venture projects are riskier because we are dependent upon the product management of the partner company that we’re working with. We’re dependent upon market influences that we may not totally understand because it may be in a different vertical. So, 80% or more of those venture projects maybe break even for us. We may even take a loss on those. But, we’re okay with that.

We are a risk taking company dyed in the wool, and we love taking risks. We like to work with other companies that take risks. Of those 80% that don’t work out for one reason or another, yeah, we lose money. It’s hard. But, the other two pay for everything else from a financial standpoint.
And, it gives me the opportunity to give my engineers intense projects that they really love. Because we only do things that we really love. That is worth more than money, because when I have to ask an engineer to do a minor tweak on a service project that needs to be done but it’s not interesting, I also have the other side of the business where they get to do something really interesting, something that they truly care about.

Brent: So, very different business model it sounds like than the average web shop. How do you guys find customers that are excited about this type of venture? Because I mean it seems like most companies might think I’ll just pay you X and get Y.

Matthew: Sure.

Brent: But, you guys are saying pay us .4X and we get another potential multiplier on the output.

Matthew: Sure.

Brent: How do you guys find these types of customers?

Matthew: Again, it’s difficult and it depends on the client. With the bigger clients, the Pearsons or the Microsofts of the world, you can’t approach them the same way. Believe it or not, that relationship almost has to be more personal with the business manager.
Because the way that relationship works is that we bid out a project. Then, we have a one on one agreement between me or one of the other officers of the company that whatever it takes it’s going to get it done, and we’re not going to nickel and dime you on charges. It’s a personal agreement a lot of times outside of the written agreement.
The first time that we don’t honor that agreement we get bit. We’ve never gotten bit. In that scenario it’s a personal agreement between two people that on the big business side chances are they’re just trying to get stuff done and they’re having a tough time getting it done.
On the small side of the business the contract is a little toothier, just because usually they’re venture backed or they’re personal venture backed. Somebody has some money and they have an idea.
But, again, it’s a relationship that makes those work. I can tell you that a lot of times we’ve had to gracefully terminate a relationship because we knew that it wasn’t going to work out. Having the reputation of winning gracefully, losing gracefully, making money gracefully, and doing it in a socially responsible way, the word gets out.
So, in short terms to this point it’s all been my and my business partners’ personal network. It’s trust.

Brent: Very interesting. Have you had any specific major challenges? I call them the nightmare story. You’ve had a business for five years. I’m sure there’s been something over that period of time that’s been a very difficult challenge to overcome. Maybe tell me a story or two.

Matthew: Sure. You know, cash flow is tough in this business. Because we’re taking risks with our clients, because we’re charging after the fact, because of all these things, you really have to trust your staff and you have to trust your contractors.

Brent: Kind of key in on that, charging after the fact.

Matthew: Yeah.

Brent: Because that seems different.

Matthew: Yeah.

Brent: It seems different than what I typically hear from companies. What’s the impetus for that?

Matthew: Relationship and trust. I’ve got three kids. I want to go home and know that I did the best that I could for my clients. If I’m charging them knowing that I or one of my staff didn’t do the very best they could, I can’t do that. So, I know that I’m not going to get paid until I do the very best in the world. That is the way it has to be, and that is the way my team works.
With my clients understanding that that’s how we operate, they trust us. So, when something goes wrong, and it always does – there’s a deployment issue, whatever – they know that we are on the hook as much as they are. We’re easily a part of the same pain that they are. We’re part of the same success as they are.
All of our clients, literally, when it comes to a launch success or whatever, they invite us as part of them. That’s the number one reason.
The number two reason is that if we charge a fixed price instead of hourly and we get the job done faster, then we make more money. So, if we’re more efficient, smarter, faster, better at what we do, our employees and our team members, they get a bigger bonus. It’s up to us to do things faster and better and base our pricing based on value instead of on exchanging hours for dollars.
It’s better for everybody. It’s better for the client because they get the product faster. It’s better for the client because the risk is lower. Because they can just say I’m not paying.

Brent: You mentioned cash flow being one major difficulty that you overcame. What else have you had to overcome as a business?

Matthew: Like I said, I come from a military background. I’m an entrepreneur. There’s a lot of things about me that I kind of expect – sense of urgency, sense of intensity about what you do, a sense of loving what you do.
I’ve come across, and this is both when I was part of a giant company and as an entrepreneur, a lot of people that are just okay with mediocre. I fight against it. There’s room for people that don’t want to put in 80 hours a week, and there’s room for people that are just starting out but they’ve got stuff going on in their life and they don’t want to devote their life to their work.
I would say probably the second biggest challenge for my company is my tolerance of that human condition. As a leader, that’s a problem for your company. It’s something that I’m constantly railing against trying to get people to work harder and get this done.
I’m trying to make people wealthy. I don’t want to give them a job. I want to give them a future – for people that work with me.
Yeah, it’s that. We always have to work faster. We always have to work harder.
There are offshore companies that are coming in. Theoretically cheaper, but the quality is less. So, how do you mix all that in?
Managing that throughput, that ties into cash flow, too. Because as you meet milestones you get paid. We’re after the fact. But, if we’re not meeting milestones fast enough we’re not getting paid.

But, if you ride your staff – you know, look, let’s get this done, come on guys – if you ride them too hard you’re working against your team not for your team. So, the leadership piece of it is really difficult. You have to always remember that you work for your team, your team doesn’t work for you, and keeping in mind that goal with the understanding that we don’t get paid until we get it done. That’s the biggest difficulty for me.

Brent: Very cool. You mentioned military background. I’m curious if you have any monthly, weekly, daily practices that you maintain in order to get to where you are today.

Matthew: That I maintain, no. Starting a company, this is my fourth startup, all the routine for me is just gone out the door.
Now, if I have my druthers and if I was doing it exactly right, I would say that routine in the morning is the most important thing. Physical fitness. Make your first hour of every day the same very day. Make sure that you’ve got a foundation to build on. Make sure you get a little time with your family in the morning. Make sure you’ve got a little bit of the stuff that’s important to you in your personal life accomplished so that you get that foundation for the rest of the day to go get it done.
If you’ve got to stay until 9:00 at night, if you’ve got to stay until 4:00 in the morning, you’ve got that little bit. Your girlfriend, your wife, your kids, your run in the morning, your swim, whatever it is, get that little piece. Take care of yourself first, and then go out and take care of your future, which is partially your job.

Brent: Definitely heed that advice. I’m just thinking about my schedule. My wife’s pregnant. She’s about to have our first kid in July…

Matthew: Oh wow.

Brent: …so I’m thinking about daily practice right now. I’m like…

Matthew: Congratulations.

Brent: …this is all going out the window.

Matthew: By the way, I’m speaking like some crazy sage. I need to follow that advice myself. I will give props to my wife who does. She follows it and she does great. I need to do better at it. I think those things are really important to your business. People don’t realize that’s part of your business.

Brent: One of the things you told me before the interview is you’re the CTO, but you’re really the founder of the business. So, I gather you’re kind of a technologist at heart. You love the tech stuff.

Matthew: Yeah.

Brent: What trends are you following in our industry right now? What do you think is where the puck is moving?

Matthew: I don’t think there’s a puck. I think we are in a situation where…
A lot of your viewers are going to be kind of science geeks like I am with the Schrodinger’s cat scenario. There are a lot of pucks.
In the dev side you’re seeing native dev, iPhone, Android, and to some extent Microsoft, although I think that’s going to change, opensource.net, node, dynamic languages versus compiled languages. Personally, I think they’re all going to exist in the future.
There’s going to be some consolidation very similar to different languages that compile into the JVM. You can write in Django and it’ll compile into JVM. Or, you can write in Java and it’ll compile into the .net interpreter. All of these things.
What matters is that you have a development culture that supports the platform, then let the sys admins deal with the deployment of whatever the output of that is, so that the language, and how the class structures, and how the full on architecture fits together, that’s in the realm of the devs and, to some extent, the sys admins. If you can get that piece of it down, the rest of it is a sys admin problem. Those guys are great at it. Let them do it.
This is why Rackspace is fantastic. They deal with all of that stuff. They’ve made our business. Our IT budget for hosting our apps was millions of dollars back in the day. Now it’s thousands.
As far as trends go, I think there are a lot of trends. I think node is a big one. Obviously, Ruby is a big one from a language standpoint.
I personally am a Java guy. I like the Java On Rails platform called Grails because it lets you work way up high in the stack and float up here if you want to. If you need to get in the guts of how Java works you can dive deep and you can do it all in the same stack. .Net’s not going away. I think they’ve got a great platform. We don’t do a lot of it.
You kind of have to pick where your culture is. I think the younger crowd is going towards the nodes of the world and that sort of thing, the Javascript based languages for native cross compilation for apps. You can write Javascript that will cross compile into iOS and Android.
But, there are big drawbacks to all of that. What I tell my team – because they ask me the same question a lot of times, where are we going – my answer is there’s no getting out of the work. So, writing a cross compiled Android versus iOS app right now, if you spend X units of energy writing the core app that’s going to be cross compiled, you’re going to spend another 50 units of energy making it compatible between the two. Then, you’re going to lose all the stuff that makes that app on that platform special.
For now, we’ll write a native app in Android, and we’re going to write a native app in iOS, Instead of getting 80% of what we want we’re going to get 100% of what we want. And, we only have to spend 200% of the effort. That’s just the way it is right now.

Brent: You’ve been in the technology space for a while. You mentioned 1998 earlier.

Matthew: Yeah.

Brent: What have you learned over that period of time that you would tell… Maybe if you were able to do the jump in the telephone booth and go back to 1998 Matt, what would you tell 1998 Matt that you didn’t know then?

Matthew: A lot.

Brent: Maybe just one thing, right. You have one thing.

Matthew: I have one thing? I would say you’re smart enough. If you find the piece of what you really love, where you want to contribute, you are smart enough. You can take that piece of what you do and you can turn it into something amazing. Maybe it’s small, but it’s amazing. I would focus on that. If you do that you’ll have a career.

Brent: You mentioned focus on that one thing. Do you feel like maybe over the last 10 or 15 years you’ve focused on things that in retrospect you wish you hadn’t? How would you be able to filter that stuff moving forward?

Matthew: I don’t have any regrets. I mean I did IT. I pulled Internet cable under the Colorado building over there. I wrote code. I’ve been a sales guy. I don’t have any regrets.

Brent: Not necessarily regrets, but understanding focus. Because I feel like focus is such… I don’t want to even say. It’s kind of cliche. Like, I’ll just focus on one thing. But, then as an entrepreneur you’re constantly being bombarded with new ideas, new products, and there’s kind of this curse of you start focusing on something and then as you zoom into it you almost find more opportunities there. Then, you’re like wait, do I just keep focusing.

Matthew: Sure.

Brent: How do you filter out what is a good opportunity and what’s maybe a distraction to your core business?

Matthew: An opportunity from a business standpoint?

Brent: Sure.

Matthew: Like when someone comes with a…

Brent: Client, product idea, I mean…

Matthew: Yeah, okay. I have a rating system that I built. We basically rate everything from a plus one, a zero, or a minus one. We rate on a spectrum of things that are important to us. Everybody on the team gets to contribute to what that spectrum is. Everything is evenly weighted so one thing is not more important than the others.
You’ve got to be really careful how you build your piece. If you rate anything on the spectrum, a one, it’s taking the business and it’s taking you personally forward. If it’s a zero you’re kind of treading water. If it’s a minus one it’s taking the business backward or it’s taking you personally backward.
Add them up, average them, and if it’s a zero you’re kind of treading water. Is it worth spending your time on? Well, if you need the revenue, sure.
If it’s a minus one you probably shouldn’t do it, or in that spectrum of below zero.
Above zero, same thing. The closer to one that it gets, ideally the more objectively hopefully you can look at it as something that maybe you should consider as a business focus.
I developed this exactly for that reason. Because you’ve got all these different verticals that you’re dealing with. You’re dealing in different horizontals in the business space. You’re dealing with different characters in the business space, a lot of which you may not know. You’re dealing with a lot of people that you do know, which can add a lot of positive influence into your business making decision, and it may not always be good. It’s positive on the rating side, but not necessarily good for your business.
So, it’s important to stay close to your core. I’ve heard core be described in a lot of different ways. Core, like you’ve got to stay close to the intersection between your horizontal and your vertical business.
I don’t look at it that way. Core for me is do I wake up in the morning energized to go and blast out 12 hours of code to get this thing done. Or, am I energized to go and talk to a client and say look, your business idea is a little bit skewed, what if you take it this way? Do I have the energy to help them kind of understand that? If I don’t care, it’s further away from my core.
What we try to do is this sort of mental exercise on a group scale, this is our core group, to really make sure that all of the core guys on the team are really aligned with the business and with the prospective business, both from a financial standpoint – I mean we’ve got to stay in business, and we’ve got to make money – but also from an emotional intelligence situation. Because the minute things get tough all the sudden arrows start coming out and people start getting upset and that kind of stuff.
It’s important that everybody is aligned with the vision of what we’re doing. That’s what I mean by focus on things that are important to you. The software is around those things that are important to you, not the other way around. The software is not in the middle and the stuff you think is important is around that.
I think that’s the big mistake that a lot of people make. It’s almost like in some families. Families, the mom and dad kind of surround the kids. But, it shouldn’t be that way. The kids surround the mom and dad. If the mom and dad are tight the kids will be strong. It’s exactly the same way with business.

Brent: Very nice. What’s next for Radiant?

Matthew: We’re in the process of rebooting a big piece of our company, going back to that core piece. We kind of got away from our core. In the great recession we kind of took whatever we could.
I started the company in the middle of the worst recession since the big depression. We took a lot of business that we didn’t necessarily care about. That was my fault. It was that fight or flight mode.
We kind of made it through that phase and that process which was really important for us. Now it’s time for us to re-coalesce our core only with clients that really, really make sense for us, that we can do really good work with.
Next for us is to vet new clients, be honest as to whether or not we’re a truly good fit for that client. We’d love to talk to anybody that wants to work with us. We may not be able to work with everybody, because we have to be true to what we’re doing if we’re going to grow and grow sustainably and be able to communicate with those clients that maybe we’re not the right fit. I know pretty much everybody in town will find somebody that is a good fit.
Then, we’re taking the money that we make in services and we’re turning those into our own internal products. So, we’re constantly reinvesting the money that we make into products that we care about, and we’re getting reasonably close to launching a couple of those products.
The next five years… Right now we’re about 80/20 products versus services. The next five years I’d like us to be 60/40 or 70/30 heavy weighted on the product side.

Brent: So, right now you’re 80% service, 20% product.

Matthew: Yeah.

Brent: Got you.

Matthew: Yeah.

Brent: You guys desire to eventually migrate really far over on that product side.

Matthew: Yeah. Then, the services that we do do in that, once we kind of reach that goal those services are really intended to drive more product opportunities into our portfolio.

Brent: One of the things that I see or I hear about commonly is that product and service are kind of like oil and water…

Matthew: Yeah.

Brent: …to quote another person we interviewed, Jim Franklin from SendGrid.

Matthew: Yeah.

Brent: He’s very adamant that those are two different businesses. You’re kind of saying they’re almost going to be part of your business. How are you tackling just the different mindset with product and service?

Matthew: Yeah, that’s an interesting question. Because we don’t have product designers. We don’t have product managers that know how to take a product, the life cycle and everything. That’s why we partner with companies that have that expertise.

Brent: The partnership element.

Matthew: That’s right.

Brent: Got you. That’s the unique piece that you’re not looking to be customer service, et cetera…

Matthew: Right.

Brent: …for individual products. You’re looking to help build them, market them…

Matthew: Yeah.

Brent: …but then they live within the company that you’re partnering with.

Matthew: Yeah. And, we have internal products that we’re building. But, before we build any of those we have a potential buyer, before they even start to be developed, so that particular buyer can give us some help with some product design ideas.
Because we design stuff all the time. Wouldn’t it be great if my idea’s the world’s best shopping app? Like, going to the grocery, there’s no good app out there for going to the grocery and managing your shopping list. It sounds dumb, but there’s not a really good one out there.
We’re not going to build that one, because it’s a dumb idea. A product person told us that. They did all the research.
By building our own products we’re only going to take it to a certain level, and then we’d like to give it to live with somebody that makes a lot more sense for it to live with them.

Brent: Very cool. Well, Matthew, we appreciate you taking the time to hang out with us today. Learned a lot about Radiant…

Matthew: Thanks.

Brent: …and wish you guys all the best.

Matthew: Thanks, I appreciate it.

Brent: Yeah, absolutely.

Matthew: Cheers.

Brent: Well, stay tuned for more great content from uGurus.com.