Klaus Schauser is the Chief Strategist and Founder at AppFolio, Inc. He also founded ExpertCity (now Citrix Online) and created GoToMeeting and GoToMyPC. Klaus is the recipient of the 2012 Entrepreneur of the Year award from the South Coast Business & Technology Awards and recipient of the UC Berkeley Computer Science Division’s 2012 Distinguished Alumni Award.
Your first founded company, ExpertCity (acquired by Citrix Online), produced GoToMeeting and GoToMyPC which presently generates over $400MM/year. What drove you to get back into founding a new business?
New companies are a lot of fun - creating awesome products that customers love is really exciting and I love building the team too. At AppFolio we are developing web-based business process management software for different vertical markets. There is a huge revolution that is happening now to deliver the next generation of software (Software as a Service, SaaS) and that’s why I’m doing it. I am having so much fun.
AppFolio’s first product, AppFolio Property Manager, has been very successful. What was the inspiration for you to add on another vertical and create the AppFolio SecureDocs virtual data room?
From the beginning, my co-founder Jon Walker and I said we wanted to create business process management software for different vertical markets under AppFolio. We used the process of market validation to figure out which opportunities were the best to pursue. We determined that property management was a great opportunity and really needed web-based software. AppFolio Property Manager is now a significant business that is growing very quickly on its own. When it started doing well on its own we began looking for a new vertical to go after and did a lot of market validation. We figured out that legal firms in addition to venture funded companies were looking for better tools to get a paperless office going. Specifically in the Chief Financial Officer’s office there was a need for a secure version of an online filing cabinet where business documents can be stored so that when things like financing rounds or due diligence for M&A come up they are well organized and ready to handle the event. CFO’s also need secure online storage on an ongoing basis with their important business documents. Once we heard through our market validation that a lot of people were seeing this as a real issue we decided this was a great vertical opportunity for us.
Once you made the decision to create a virtual data room (VDR) product, what did you find were the most important aspects of the product development and basic functionality?
We like to develop products with the phrase, “simpler is better” in mind. So to start we designed a product that was easy to use but also extremely secure and extremely fast because that is what people really care about. When you take a look at the documents that are stored in a physical locked filing cabinet there is a reason that these sensitive documents are locked in the CFO’s office. If you think about it, the documents are really secured behind three locks: The company’s outside door lock, the CFO’s door lock, and the filing cabinet lock. There is a lot of sensitive information to protect; employee and vendor agreements, social security numbers, salaries, the cap table. A CFO wants to keep that very close to his or her chest with all the financial metrics and personal information. This is why security is #1 on our list, we have to make a service that is very secure for our customers.
Stay tuned for Part 2 of this interview, Klaus will share his advice for entrepreneurs ...