January 8, 2018 –Gigya is synonymous with customer identity and access management — rightly so, since Gigya created the category of CIAM, which allows companies to manage profiles of its customers. The Gigya story is a decade-plus tale of growth, expansion, industry leadership, and eventual acquisition by SAP in late 2017.
Today, over 700 leading companies use Gigya, founded in 2006, to connect with their customers and build upon those digital relationships. At the time of the acquisition, SAP Hybris president and co-founder Carsten Thoma said, “Consumer trust is the main currency to succeed for customer-driven organizations. This is what Gigya is known and recognized for.”
Gigya’s success story is about pivots and growth, as described by Patrick Salyer, its CEO since 2011, having joined in 2007 as one of a few employees on payroll. However, for all the changes over the years, at its essence Gigya has maintained true to its founding vision, a vision centered around the importance of digital identity.
From Widgets to SaaS
The Gigya we know today began in a very different time, and in a very different market. 2006 marked the prevalence of social networks such as Friendster and MySpace, which provided the ability for users to personalize their social profile pages with content such as widgets and layouts. Gigya initially launched a content sharing technology called Wildfire, which was monetized via an advertising network.
“Navin doesn’t wait for opportunities, but comes with a prepared mind to investments.”
In 2008, the company was contacted by Mayfield’s Navin Chaddha, at a time when they weren’t even seeking investment, says co-founder Eliezerov: “Navin doesn’t wait for opportunities, but comes with a prepared mind to investments.”
Those initial discussions, beginning with that “out of the blue” phone call, eventually led to an investment. For rest of 2008 and early parts of 2009, Gigya was focused on its widget distribution business monetized by advertising. However there were a lot of discussions at the board level to get out of that business and focus on making websites social by connecting them to social networks. This was the reverse of what Gigya had been offering.
“Together we had to make a tough decision,” says Salyer. “What would be the monetization model for our new business that helps websites become social? And how much were we going to focus on it?”
The answer turned out to be quite simple, according to Salyer: “Ultimately, we decided that we were going to focus all of our energy on our SaaS offering which would help websites become social. From that moment on, reinventing Gigya was our number one priority.”
“There were a lot of debates on how to price the new product. Some people were of the mindset it should be free and monetized through advertising. Navin and a few others were of the mindset that we should charge for it. I remember Navin saying if our product has real value customers will pay for it. Based on these discussions initially, we were thinking that we could get 10,000 customers paying us $10,000 a year, and that would be a pretty profitable business plan,” says Salyer. “In that first year, we went with this business model from zero to almost $5 million in revenue. It was a critical pivot for us.”
As Gigya began its new product focus, their customers were primarily small and mid-sized businesses. But that all changed in the wink of an eye, says Salyer: “Suddenly we were courting the Fortune 500 and doing seven-figure deals. Ultimately, not only did we completely shift our product offering, as well as our monetization, from advertising to SaaS, but we also began exclusively selling to large enterprises doing $100K+ deals. That was another big shift in how we did business”
Says Salyer: “Gigya had now become the leading player in the customer identity management space, but getting there wasn’t easy. We had to make three massive pivots in the way we do business.”
“Together we had to make a tough decision. What would be the monetization model for our new business that helps websites become social? And how much were we going to focus on it?”
An Inside Man as CEO
As Gigya grew, the founders tapped Salyer, a first-time CEO and 30-year-old digital native, to lead the company. Patrick had been with the company for four formative years and had led its go-to-market efforts.
“Even back then, I knew we would be successful,” says Salyer. Growing up, he played a lot of sports and at Harvard he was on the school’s football and basketball squads. As CEO, he embraced the sort of leadership approaches that helped teams win championships.
“You can win or lose any individual game in sports,” he says, “but you have to believe that you’re going to win the championship in the end. A huge part of my leadership style is rooted in sports. You have to bounce back when things don’t go your way and push forward when the opportunity presents itself. Being a CEO is just like being a sports coach or leader on a team: You have to rally people around a vision.”
A Tough Sales Reorganization
“I’ll admit, it was a challenge during the first few months,” says Salyer of the transition to CEO. “I had to make a lot of changes.”
Before Salyer took over, Gigya was a small business with less than $5 million in revenue. But within just a couple of years, the company had grown to $25 million in revenue. “At some point,” he says, “I realized that we’d have to change our go-to-market approach to grow to $50 million. I had to pull the trigger on some tough decisions to get the company to that point.”
“We began to realize that our market fit was within medium to large size enterprises. Further, it was as expensive to sell to small companies compared to large companies. Yet, we didn’t have the right personnel or approach to sell to large companies,” says Salyer.
Because of this, Gigya made the strategic decision in 2015 to go all the way to enterprise. “We changed our whole go-to-market strategy,” says Salyer. “We transitioned from an inside sales focus to direct sales and an account management focus, including professional services.” Letting go of talent was a tough call, but eliminating inside sales was right for the business.
A Banner Year
The shift in focus to enterprise was hugely successful for Gigya. By 2016, the enterprise segment of its business was growing extremely fast. Salyer and his team were energized by completing million-dollar deals with the largest businesses in the world.
“At the same time,” adds Salyer, “we were able to essentially create a customer identity management category — something that didn’t exist.” In late 2016 and early 2017, the three top analyst groups — Forrester, Gartner, and Kuppinger Cole — recognized Gigya as the industry leader in customer identity and access management.
When Your Mission Requires Getting Acquired
Over the course of 2017, Gigya built a strong partnership with SAP. They shared customers, product vision, and values. That September, SAP announced their acquisition of Gigya and the deal closed on November 1. Salyer credits Navin’s optimism with helping him through the negotiations: “Navin was on the phone with me four or five hours a day for a week straight.” He also mentions the assistance of other board members, including Jake Winebaum, founder of Mayfield portfolio company Brighter (which was acquired by Cigna in December 2017).
Eliezerov sums up the reason going with SAP made sense: “We have our vision, but we can’t do it alone. To be a trusted source of identity for the world’s businesses, you need trust, and SAP is arguably the most trusted brand in enterprise software .”
Almost immediately after the sale, Gigya launched its Enterprise Preference Manager, a new platform giving marketers the ability to manage consumer opt-ins while keeping tabs on the terms of service they’ve subscribed to. Both SAP and Gigya anticipate the growing need among brands to manage consumer identity more effectively — especially as the European Union’s new General Data Protection Regulation (GDPR), scheduled to go into effect in May 2018, draws near.
“The partnership with SAP made sense for a variety of reasons,” says Salyer. “We had the same product vision and we shared a deep alignment of cultural values. They wanted to modernize and move to the cloud and, of course, we could help them with that. But also, they valued our team — they understood the importance of bringing us in and keeping us together.”
Ultimately, says Salyer, the relationship between SAP and Gigya was a “bottoms up, tops down” organic union: “We shared technology integration and common customers, and that provided a convenient area of catalyzation for both of us.”
Reflecting back to the early days, Salyer readily admits that Gigya occasionally stumbled during its shaky transition period. But he never stopped pressing forward. Salyer had confidence that Gigya would persevere and emerge victorious in the long run. A lot has happened, professionally and personally; it was Salyer’s 30th birthday on the day he was offered the CEO job, and he is now the father to three children. Like a basketball coach who guides his team to the championship, Salyer marshaled his own team to victory. “I’m not afraid of adversity or challenges along the way,” he says.
“The original founding team of Rooly, Eyal, and Eran in Israel, as well as CEO Patrick in Silicon Valley, have shown persistence and flexibility along the way. It has been an honor to serve as their partner and I believe that they will continue to expand their impact as part of SAP.”