On Friday, September 18, 2015, Applied Predictive Technologies (APT) CEO, Anthony Bruce, addressed the ACG National Capital membership at the chapter’s September Monthly Meeting. During his speech, Anthony discussed APT’s service offerings, how the company has grown and evolved to the big data and analytics powerhouse it is today, and the steps taken along the way to eventually positioned the company for its May acquisition by financial services giant, MasterCard.
APT, which was officially incorporated in December of 1999, is a provider of advanced big data and analytics software delivered as a service via the cloud. The company’s Test and Learn solution enables organizations to use their mountains of available data and information to virtually test business decisions prior to rolling them out on a large scale in the real world.
According to Anthony, APT can “help organizations across industries better leverage data for innovation. At its core, what we’re doing is helping companies with the Scientific Method. Effectively, before you do anything, you really need to try it…It’s simple to articulate, but hard for organizations to leverage this amazing amount of data that exists internally and externally to get to the best answers.”
The concept of testing new ideas and innovative business model changes prior to making potentially costly investments may seem like common sense for business leaders. However – like many things in business – it’s easier said than done. And this is why companies need APT’s Test and Learn solution.
According to Anthony, Test and Learn enables users to, “Leverage all of the analytics, all of the data, all of the process that’s available without having to know what all of the Greek letters mean in terms of statistical confidence. It allows users to ask simple, English questions about what you’re looking to accomplish, and allows an individual in an organization to leverage data, leverage analytics and get to the right answers.”
This technology is clearly in high demand. APT currently licenses its software to a veritable “who’s who” of large, globally-recognized brands. Among APT’s client roster is McDonalds, Walmart, Procter and Gamble, Kellogg’s and Hilton Worldwide. With this industry-leading technology and impressive customer list, it’s easy to see why a company like MasterCard would be interested in acquiring the company.
But things weren’t always completely perfect for APT. Mistakes and wrong turns were made along the way, and some chances that were taken ultimately had to pay off for the company to become what it is today. Anthony laid out several different shifts and changes in direction that have culminated in the success and growth of the company.
One of the first shifts the company had to make involved corporate culture, employees and hiring. When APT was first incorporated, the company was more focused on growing its staff quickly, and less focused on hiring correctly. This focus on quantity over quality came back to haunt the company. Anthony said, “When we first started the company, we wanted to just hire as quickly as possible. We had this great idea and we were going to hire quickly based on experience, what people had done, the programming languages they knew …and it almost killed us.”
Since that misstep, the company has switched direction entirely and is now laser-focused on bringing only the top talent into the organization. This includes a focus on hiring employees from the finest colleges, and giving them the ability to advance rapidly. According to Anthony, “We began to focus on talent – which we recognized would be central to our business…and we focused on developing a culture of rapid feedback, of providing reviews every six months – enabling employees to expand their impact and their role quickly- and I’m excited that Washington Post named us as the Best Place to Work in 2015.”
Another strategic change involved a shift to focus on company profitability, which runs contrary to what many emerging technology companies do. As Anthony described, “Our first round of funding happened right about the peak of the NASDAQ and we said that we probably won’t be getting another round of funding anytime soon, so we better figure out how to be a profitable enterprise…The discipline that we had helped us accelerate our growth by cutting off ideas that weren’t working quickly, and making sure we had confidence in what was working and how it was working quickly.”
Another significant shift in strategy and direction involved technology. Originally designed to be on-premise, APT struggled to integrate their solution on their customer’s disparate IT infrastructures. To avoid this problem, the company took a risk on an emerging technology that many experts weren’t sure would catch on – the cloud. “It started off that we were going to put applications on-premise, behind the firewall, in the hands of our clients. And we couldn’t get it done,” said Anthony. “We pivoted to say, we’re only going to work through the Internet. That was a critical shift for us that was critical for our success.”
Although that move ended up aligning with the general shift to Software-as-a-Service and cloud-based applications that dominate the industry today, there really was no way of knowing that it was going to be successful at the time. “I’d love to tell you that we made that shift because we saw the future and knew that the technology and its evolution was going this way, and we were ahead of the curve,” Anthony said. “That wasn’t the case. We just knew that this was a way for us to deliver on our business.”
The final strategic change that Anthony and the APT team implemented was to the business, itself. The company started off with a business model and focus split between software and custom consulting services, which needed to change as they grew and needed to scale the business.
“…When we started, we didn’t have any software and didn’t have any clients – which slowed us down a little bit, and we were doing a whole bunch of different things” Anthony said. “About six years in, 50 percent of our revenue was coming from consulting. And I’d love to tell you that we thought through that and strategically realized [software was] the future, but we just realized that we were not able to do all of these different things, and every time we did a big, customized consulting project, it was shifting resources away from building our SaaS product and platform.”
Today, APT’s business is predominately software. The vast majority of the company’s revenue is from long-term licensing relationships with users. The remainder is predominantly from short-term trials that are expected to become long-term licensing relationships. That’s a significant change from where the company started, when 50 percent of revenue was coming from consulting.
APT is an incredible National Capital region success story. Through strategic shifts and changes to the company – including changes to the company business model, culture and focus on profitability – APT has grown to be one of the world’s preeminent big data and data analytics companies. Today, one out of every five dollars spent around the world are reflected in the data on APT’s servers, and with the MasterCard acquisition, the company is poised to watch that number grow. As Anthony eloquently stated, “Ours is a story of a few realizations, a few mistakes along the way and some shifts…that were meaningful to us and our success.”