WRG Leadership Series: Jon Roskill - The Road to Acumatica
By: Anthony Bontrager, Managing Director, WestRiver Group
Welcome to our first installment of WestRiver Group’s Leadership Series. Here we plan to talk with leaders from across the global innovation economy who’ve agreed to share their thoughts on a number of timely and relevant topics.
First up is Jon Roskill, former CEO of Acumatica and WestRiver Group advisory board member.
For a bit of context, Jon is a prolific angel investor but from 2014 to 2022 he was the CEO of ERP juggernaut Acumatica which he scaled from $10M in ARR to $100M+ before exiting the company to EQT back in 2019. Prior to Acumatica, he was at Microsoft for 21 years in a variety of roles on product teams, GTM teams and lastly as corporate vice president of Marketing and Channels.
The Road to Acumatica
Anthony: Jon, it would be great to just hear about your road to Acumatica. How did your formative years at Microsoft, which was a different company back then, shape you into the CEO who led Acumatica to such growth?
Jon: I started at Microsoft as a product manager for developer tools. Developer tools was viewed as an important group inside Microsoft, not in revenue contributed directly from our products, but by the revenue that we influenced through helping developers easily write applications for the Windows platform. So we were “strategic”, but that didn’t mean we had huge budgets. My annual marketing budget for Visual Basic 3 in 1994 was $265k, so we had to be scrappy, figuring out how to get a big impact out of what we had. Besides the “scrappy” lesson out of that early Microsoft experience, which of course paid off hugely when working with start-ups, I learned a lot about thinking big…scale and impact. These experiences of course were useful as Acumatica really started to take off.
Hyper-scaling
Anthony: What was Acumatica like when you first took over? How did you think about the culture, the directions, the strategy, and how you were going to impact that over time?
How did you look at tools like M&A to support organic growth?
What advice would you give founders or people running successful businesses in terms of how to think about their directionality
Jon: Wow, a lot of questions there Anthony! We could spend an hour on those!
Quickly, everyone says it, but culture is key. When I arrived at Acumatica I found a company of great people but there was a lot of internal bickering. I have zero patience for wasting valuable energy and as I dug in I found that most of the divisiveness was being instigated by one person. Normally this would be an easy call to just fire that person and move one, but besides this divisive behavior they were very smart and driving some awesome work product. Of course, you are going to have to replace the person if you fire them, and will you find someone that good?
In the end I gave the person 2 warnings and told them the 3rd time that would be it, trying to be reasonable and very clear on what the issue was and ideally correct and move on. That didn’t happen, 3rd instance happened within a week, so I told them it was time for them to move on.
Because I had set expectations well, the individual wasn’t surprised and actually agreed with the decision. But the best part was the rest of the company (only 45 people at the time so everyone knows exactly what is happening) knew this bad behavior was going on, and wondering “would Jon take action”? So when I did, and they all saw that this behavior would not be tolerated, even by someone really strong, and it made it clear that a collaborative culture was really going to be prioritized at Acumatica.
More broadly on strategy and direction, one of the things I found when I started at Acumatica is the company had been changing direction every 6 months, so I wasn’t surprised that traction wasn’t really occurring. I see this behavior at start-ups all the time. You need to be thoughtful in putting your strategy and plans together and of course you want to tune as new data comes in, but you also can’t be radically switching direction that frequently.
To your question on M&A, there is a lot of this activity to drive “inorganic” revenue in many biz apps companies, and it can be a successful strategy to rapidly build a revenue base by slamming companies together. The issue though is you end up with what I call “Frankenstein Software”, where the user experience varies significantly as you move across components or modules. I believed that, particularly for midmarket businesses, having a good, consistent experience across the whole product would drive customer satisfaction, and customer satisfaction would drive strong reviews, and that in turn would drive revenue, which it did.
Overall, I am in favor of “tuck-in” acquisitions if they make sense strategically but even there you have to be very thoughtful around the impact on the user experience.
Impact of AI on SaaS
Anthony: Everyone today is AI focused, which makes sense. And there’s even talk about how AI will disrupt traditional SaaS businesses and their models.
You've lived through some pretty big technology waves, so how big of a deal is AI and more specifically agentic systems in terms of the evolving enterprise SaaS landscape. What do vendors and their customers need to be mindful of as this evolution continues to take hold? Is safety one of those issues in your mind?
Jon: There is always a “flavor of the month” and right now that is clearly AI. But as you mentioned, I am kind of old school having lived through the Dot-Com crash, 2008 recession and the COVID pandemic. My personal belief at the end of the day is there has to be a business model I can understand on how a company can create a sustainable and ultimately profitable business (yes, profitable!).
That said, looking at the early signs I have no doubt that AI is going to be the force behind the next tech wave. I don’t think of it as a SaaS replacement but more of an augmentation. We are still in the very early days where you see a new technology get applied to the typical early revenue wins – finance and porn. But the most interesting thing to me about AI is as we head into the 2nd derivative wave and start to see AI turn up in places like union organizing optimization or Rembrandt authentication, that is where the biggest impact will occur.
And “Yes” on safety….as usual Europe leads here.
Areas of Opportunity for new Startups
Anthony: We’ve talked a lot about your background at Microsoft and Acumatica, but you’re also a prolific angel investor as well, with investments in Azuqua, Vendorhawk, Trusted Health, Sensoria and our mutual portfolio company Groopit among others.
Where do you see the “puck” moving to over the next few years across the global innovation economy? What excites you and would get you to write a check?
Jon: Take this the right way Anthony, but there has always been a huge amount of lemming behavior in the investment community. Remember when everyone needed to be investing in an electric scooter company? I would suggest being a bit old school here and look at, as you said, where the puck is going, but also what are your own personal strengths. I have a background in business applications so I am looking at AI opportunities in what some people would consider the “boring” places like inventory management or manufacturing. It turns out often this is where the real money’s to be made are.
Lessons on Leadership
Anthony: In a 2017 podcast you said: “Vendors should respect their customers” which won a lot of praise as Acumatica had come out as an open solution, able to work with 3rd party CRM’s like Salesforce. This was a great example of staking out an important leadership position in the ERP space.
Can you talk more about this? Both from an external / competitive facing perspective, but also internally. How did you motivate your internal teams to undertake something that could have depreciated your own CRM solution which many likely had a lot of vested interest in?
Jon: Business applications is an area famous for vendors who treat their customers horribly, so my strategy was to go the other way and give customers what they actually want and see what happens. Trying to lock out APIs to drive customers to your crappy CRM product is not a customer-winning strategy. Giving people choice - if you love SFDC, great, we will help you work with it, and if you are interested, we have something that can likely meet your requirements and at half the price - turns out to be a good way to do that.
Your Superpower
Anthony: What would you describe as your leadership superpower?
Jon: My superpower, if I have one, is getting teams to work together to scale and do unbelievable things no one thought they could do. I attack this through a servient leadership approach. A couple rules: (1) I don’t ask people to do things I wouldn’t do myself (and if you are ever in a room where assignments are being handed out, raise your hand for one of the unsexy ones and see the respect that brings). And (2) if you really want to know what is going on, go right to the source – the first level person who is actually working on that problem. It turns out that if you hired the right people, this works every time.
You will find this occasionally pisses off midlevel managers, but if they can’t deal with that, then time for them to go somewhere else. Midlevel management has to be where you start to learn about growing talent (not suppressing it!).
On Legacy
Anthony: What do you want your legacy to be?
Jon: Legacy Smegacy! I want to colonize Mars, right! At the end of the day anyone is replaceable, and your legacy is the people/teams you built and leave behind. I have really seen this over the years as I watched people I worked with from Microsoft, Acumatica etc. do amazing things…. that is your legacy. That, and maybe you do something interesting with the money you make that makes this world a better place.
