I’m starting a new series of posts here on theNIRD called Where are they now? in which I hunt down and interrogate founders/owners of association technology companies who have sold their businesses and moved on to other pursuits.
In this first installment of the series, I interview Amith Nagarajan, the founder of Aptify, which was acquired by Community Brands in March.
Q: Given your longtime involvement with the association community, and Aptify’s Evergreen status, some industry insiders were surprised by your decision to sell Aptify to Community Brands. What’s the story?
If you had asked me 12 months ago if I were planning to sell Aptify I would have told you that it was unlikely. I didn’t feel that there was a good strategic reason to do so. I enjoyed Aptify from when I founded it in 1993 through the last day I was there. Aptify wasn’t just about making money, it was about fulfilling a deeply held belief that we could significantly impact the association profession and ultimately improve society and the world through our work. I am very proud of what we accomplished as a team and most proud of the way we served clients and upheld our values as a team. Growing a company globally is a challenge and a privilege, particularly when the work you are doing can affect so many people in different fields.
Ultimately, I decided that the opportunity to sell made sense on 3 levels. First, I felt that our customers would be best served long term if the right acquisition were to take place. Second, I felt that the growth opportunities our team members would enjoy would also be maximized in the right deal. And finally, as the founder and entrepreneur behind Aptify, of course, I had to ensure it was a good deal financially. As I mentioned, I didn’t think that this type of deal would come together a year ago but things happened very quickly over the last quarter of 2016 and first quarter of 2017 and my team and I really bought into the vision of Community Brands and how it aims to serve the market in a whole new way. Not just due to its unprecedented scale, but with an approach across segments and product lines that will allow for new forms of functionality, integration and collaboration that just wouldn’t be possible before the Community Brands strategy came to life. I felt that our customers would be well served in an aligned culture and our team would have new and even better growth opportunities.
Q: What’s your biggest concern for Aptify clients as a result of the deal?
Any type of change is difficult and this is a pretty big one. As a result it is critical that clients of Aptify as well as the rest of the companies that have become part of Community Brands continue to receive clear and frequent communication from the leadership team. As long as the communication continues to be transparent and frequent I think there is very little to be concerned with. The investment level and long term commitment that Community Brands has committed to the Aptify product, clients and team will be very exciting for everyone. I wouldn’t have done the deal if I felt there was any major risk to any of the stakeholders in the company.
Q: On a personal level, what was it like sell a business that you’ve spent most of your working years building?
One word – strange. I am very happy with the decision and am super excited about what I’m doing now. But when you start a business in your college apartment as a teenager, see it grow into a global company and have spent essentially all of your adult life doing it, it is strange to wake up one day and not be part of it. I miss working with the awesome team members and our clients. I was very fortunate to have built a successful business and could have sold or stepped away well over a decade ago. But I stayed involved personally for years because I loved what we did and how we helped our clients. I also greatly enjoyed helping team members grow and building an amazing culture. So I do miss that. But, I think that change drives new forms of growth and having the same leadership (me) for so many years can also be limiting for both the team and the leader, so I think it is a good thing. But, as I said, it sure was strange the first few months.
Q: Some people may not know that Aptify wasn’t your only business, and that you’re a serial entrepreneur. I guess you’re not just going to drink Mai Tai’s on the beach for the rest of your life. Tell us about your portfolio of companies and investments.
Hahaha… I have spent a lot of time enjoying myself outside of work over the years and continue to do so, so I’m not too worried about getting beach time. Anyone who knows me would realize I would go nuts sitting around for too long. And business is huge fun if you have a great culture, team and clients! One of the reasons I started branching out from Aptify about a decade ago and helped other entrepreneurs build companies in other markets. I’m an investor or co-founder in about 15 other businesses, some very successful and some in early stages. Some startups I have backed have failed which is part of the journey. Entrepreneurship is about taking calculated risks and then going for it, and having fun along the way.
After the first dozen years of building Aptify I figured I would give back to the entrepreneurial cycle and invest in startups at the earliest possible stage. I helped quite a few early startups with initial seed capital and in some cases some advisory or board help to get off the ground and scale. I’m very proud of the entrepreneurs I’ve helped. Some of the companies I’ve been an early investor in include www.concertgenetics.com (SaaS for genetic testing), www.zlien.com (Construction management software), www.kickboardforschools.com (Education software), and outside of software a few other things including www.bioceptive.com. More recently I’ve invested in some promising companies such as www.sixday.com and www.axosim.com I’ve also been directly involved in a co-founder capacity with a few other companies over the past several years including www.radolo.com, www.aligntoday.com and www.rasa.io.
Sure. Rasa.io was originally incubated within Aptify’s Innovation Labs. Innovation Labs was a group I started within Aptify a number of years back whose charter was to go experiment with new forms of tech and find ways to apply it in a disruptive (not an incremental) way for associations and non-profits. Innovation Labs created a bunch of great improvements for the Aptify product over the years including some patent pending technology that dramatically improved the user experience within Aptify’s software. Innovation Labs also came up with the idea of personalized content curation using private association data and public content. Before selling Aptify I spun out rasa.io because I knew I wanted to keep rasa and focus on growing it. Once I was a couple months past the Aptify sale I decided to really dig in on rasa and focus on it personally because I believe rasa.io can solve one of the major domain problems in the association market… So here is the pitch:
Associations are good at doing things that drive deep but infrequent engagement – think about conferences, education programs and publications – all mainstays of association business and value creation. Great stuff but these things only happen annually, sometimes quarterly, at most monthly.
Associations do not typically do a good job of shallow and frequent engagement. That is, the opposite of what they do well — doing things that a member has a reason to interact/engage with on a regular basis – daily/weekly.
The above is what we call “The Association Engagement Gap”. That is, associations basically don’t have a good reason to talk to members on a regular basis, daily or weekly.
This is a huge issue because today people are inundated with content on an hourly basis on mobile and web and they don’t pay attention to anything for very long.
In addition, the social science behind habit and consumer brand loyalty is very clear – FREQUENCY IS KING. That is, frequency predicts habit formation – if you are interacting frequently with someone you are much more likely to have that person form a habit with your brand than if you interact with them infrequently but in a deep way (such as a conference)
Associations have 2 of the 3 things they need to solve this problem and “bridge the gap”. They have a great brand and they have a latent but extensive data set that provides hidden insights into consumer preference in their market. Yet they don’t really do much with their brands or their data.
The 3rd leg of the stool in solving this problem is a specialized form of Artificial Intelligence – which is what we’ve built – the AI will take the associations private data and then curate public content to create a daily email for each member that is relevant and personal. The AI is able to take into account preferences, areas of interest, relationships and much more. Over time the AI learns from a user’s behavior and automatically tailors more content to their likes and dislikes and is also able to share new content ideas based on trends in the market that are likely to be a fit for each person.
The ultimate goal is to assert the brand of the association as a must-have/go-to daily resource for the key news that someone needs in a given profession or industry.
This leads to broader and deeper engagement and that drives better results in traditional association lines of business like membership and conferences, but also create opportunities for new forms of monetization.
Summary: rasa.io delivers a truly personal daily briefing to your members of the things that matter most to them. In addition, rasa sends data back to your AMS, CMS, LMS and other systems signaling what each person is really focused on so the rest of your organization can more effectively serve them.
Q: Why do you think investors are increasingly interested in the association technology market?
Each investor has a different thesis on why the market makes sense, there are 2 or 3 different approaches I see active in the space at different stages of companies.
Q: Any predictions on what the next year will bring in the way of investment and M&A activity in the association sector?
I think you’ll see more of it, beyond that I don’t want to venture any guesses.