An Outsider's View To Starting A Software Company

A conversation with Justin Rae, Cinch

Justin Rae is founder of Cinch, a marketing automation specifically designed for service businesses to support and reward existing, loyal customers, win back old ones, and reach new ones. Justin spoke with Software Business Growth about starting a software company with no software development background, how to stand out from competitors, and what advice he has for software companies selling solutions to the retail/hospitality industries.

Q: Prior to founding Cinch you ran a footwear company, led marketing and operations for an architectural firm, and owned an ad agency. What did those jobs teach you about business that you are applying to Cinch?

Rae: My experiences taught me any number of things, but I think the biggest things are it’s possible to fail and get back up, and it’s much easier to succeed and make it through tough times with a good team. With each venture new things are learned about how industries work or “departments” in a company. I honestly believe you need to fail a few times before you can succeed because of the lessons failure teaches you.

Q: Since you don’t come from a software development background how did you get the idea for Cinch off the ground?

Rae: Prior to Cinch I worked with a friend to create a simple software solution that analyzed data from Jiffy Lube to determine who was due for an oil change and send them an email or mail piece. This gave me an intro to how developing software worked but, like most things, it taught me the hard way how to be a product manager for software. This is ultimately where the idea for Cinch came from. There’s all this data out there and it’s only accessible to developers — what would happen if you let marketing teams have access to it and the ability to make it actionable.

When starting Cinch, we had the terrible experience of hiring the wrong type of development team to write those first lines of code. This became a bad experience that could have sunk Cinch almost before it even got started. Eventually I had another local dev shop fix the problems and we limped along on what was meant to be an ancillary product for too long before finally finding our CTO, Chris London.

Chris is extremely skilled and a great people person as well. Chris added new life to Cinch and it wasn’t long before he was bringing new and skilled talent to our team and really making it possible for Cinch to become what we’d all wanted it too. I’d say I must have met with at least 50 people to determine if they’d be the right fit for Cinch.

Q: How did you select your initial beta customers?

Rae: Our initial beta customers came from existing relationships, businesses/people that trusted us and were willing and able to see the potential in our product. They also saw it as an opportunity to shape the product in a way that would give them a better advantage over their competition. You have to really have a close relationship with some of those users and make sure they know they can tell you the things they don’t like or that aren’t working the way they would expect.

Our MVP beta version didn’t have the most user-friendly experience, but it functioned. This wasn’t the fault of our front-end team, but my decision to get the product out quickly and start getting feedback from users. One of the most important things you can get from those users is their perceived value to help with pricing, and we haven’t really nailed this part yet. You might give a “deep discount” to your beta users but you don’t want to sell yourself short with future customers thinking your product is too cheap to be good.

Q: Did you transition beta customers to paid customers?

Rae: Because we have a B2B product we charged our beta customers a fee, as mentioned previously it was discounted with the expectation that they’d give us feedback and put up with somethings not working perfectly.

Q: How do you ensure Cinch stands out from the crowd with your solution and what makes Cinch different from competitors?

Rae: Our loyalty product is an ancillary product to our core software for marketing automation. The loyalty allows us to collect the consumer information and associate it with their transactions. Having the complete view of the data is what then give us our advantage and lets us stand out. The other things that let us stand out we feel like we’re still too young and small to publicly discuss.

Q: What is your vision for Cinch over the next year?

Rae: A year from now I’d see Cinch having grown around 170 percent with integrations into many of the major POS and CRM systems. Cinch has not taken any VC or angel funding, we’re 100 percent funded by our team. So, our growth and position might not be that of a typical VC-backed company but we’re growing and are enjoying the ride while we’re going for it.

We were just admitted to a new program at the University of Utah called the Masters of Business Creation (MBC). As opposed to an MBA, the MBC program requires you be in the process of a startup that needs some accelerating. As I see it, it’s an accelerator that doesn’t take equity and you come out of it with something more than an MBA.

Q: What other advice do you have for software companies selling solutions to the retail/hospitality industries?

Rae: Relationships. Build good relationships with your team and your customers. Don’t burn a bridge always do everything you can to keep relationships alive and doors open.