First of all, how are you and your Family doing in these COVID-19 times?
Courtney McColgan: We are adjusting to the #newnormal. We welcomed our third child into the world on June 18, so there has been a silver lining for us. We are based in Latin America, so quarantine has been pretty strict here.
We are now going on 130+ days without leaving the house. Luckily, both my husband and I are busy trying to navigate what the COVID storm throws our way, so we are far from bored.
Tell us about you, your Career, how you Founded or Joined Runa
Courtney McColgan: I grew up in California. My undergraduate was completed at Berkeley and my MBA at Stanford. In between those two, I started two startups and worked in venture capital at Draper Fisher Jurvetson and Morgenthaler Ventures. My story turned toward Latin America when I met my now husband at Stanford. In 2014, I moved to Peru, where he is from.
After learning Spanish, I joined Cabify (Uber of Latin America) as Chief Marketing Officer (CMO) when it had about 30 people and had just closed their Series A. I helped grow the company to 2000 employees across 130 cities and 12 countries and a 1.5Bn valuation after their Series D.
During my time at Cabify, I had constant complaints from our sales and marketing teams across all those cities and countries about being paid wrong amounts or not on time. When I evaluated the HR systems Runa was using to handle payroll, I discovered it had some issues. That’s when I knew I had to step in and help revolutionize the systems we use in HR in Latin America.
How does Runa Innovate?
Courtney McColgan: Runa is automating payroll for Latin America. With Runa, companies can calculate and pay their employees in 15 minutes with only 4 clicks. Previously, the 17.5MM companies in Latin America primarily used excel or 20-30 year old software to run payroll, which resulted in long timelines and many errors. By automating the process, Runa eliminates manual work offering incredible time efficiency and no errors.
How the Coronavirus Pandemic affects your Business and how are you Coping?
Courtney McColgan: COVID did not have a huge impact on our existing customers. We experienced more monthly churn than normal when COVID hit, but nothing significant. I guess payroll software is one of those items that is a need-to-have, not a nice-to-have for companies. Where we have seen the impact on our business is in the acquisition of new customers. Customer acquisition has slowed by 50-70% due to COVID. As one can expect, payroll software is not top of the list for HR executives these days.
Therefore, it will take us longer to get to the numbers we were shooting for our next round of capital. To ensure we get there, we have dramatically reduced our monthly burn, which resulted in layoffs and expense cutting. With our reduced burn, we now have the runway to get to our next round metrics.
Did you have to make Difficult Choices, and what are the Lessons Learned?
Courtney McColgan: There are a couple of key learning for me, thus far, from COVID:
(1) Make hard decisions sooner than later. As soon as COVID hit in March, we listened to our investors and the market and, in doing so, anticipated the resulting market downturn. We assumed that the market would go soft and that it would be harder for us to grow at the same rate as previously. As such, we made the hard decisions to let go of employees and dramatically cut costs sooner than later.
(2) Be transparent. While Runa has not been able to escape the layoffs motivated by COVID, we have been able to largely escape the negative employee sentiment around those layoffs. We were extremely open and transparent with our team about what was happening and why. This fostered a sense of trust and confidence between our employees and our leadership team that has helped us manage the COVID storm as well as possible.
(3) Come up with a plan B, C and D. No one knows exactly where COVID is taking us, or how long and how severe an impact it will have on our businesses. Therefore, it is important to have several plans depending on how things advance. For example, Runa is currently operating on plan B; however, we do have a plan C and D depending on how the market advances with COVID.
How do you deal with Stress and Anxiety? How do you Project yourself and Runa in the Future?
Courtney McColgan: I am not one to stress as I find it a bit counterproductive to thinking clearly. What I do feel is pressure to find stability in this new normal for both my team and my investors. What helps me deal with this pressure is problem-solving. I am constantly looking at lots of data (internal and external), speaking with companies in similar verticals in other geographies and pushing our team to find internal efficiencies and optimizations that will help us win faster once the market returns. By doing all the above, we are ensuring Runa is putting its best foot forward in this new normal, all anyone can ask for.
Who are your Competitors? And how do you plan to Stay in the Game?
Courtney McColgan: Runa doesn’t really have new age competitors. We entered into an industry dominated by local age-old software solutions that have built pretty clunky and outdated payroll software. The modern cloud-based platforms from Silicon-Valley do not compete in Latin America as their software is not localized for the Latin American market. We are already leading the innovation game, so we really just have to survive COVID to keep winning.
Your Final Thoughts
Courtney McColgan: We like to see the silver lining here at Runa. There are many great things that COVID has brought us. It has allowed us time to invest in improving our product (more time to do things we wouldn’t otherwise have had time to do), in building out our team (we have access to many more high-quality candidates than we would have had previously) and in optimizing our operations (we have been able to really streamline our people and our processes). We think that all of those make us even stronger than we would have been before and better positioned for closing our next round of capital.
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