Last week, Chattanooga, Tennessee-based Skuid, a cloud-based, software-as-a-service startup that allows companies to easily design custom UX for applications like Salesforce, announced that it would open an office in the UK. Expansion is nothing new for Skuid (an acronym for scalable kit for user interface design), which is easily one of the fastest-growing companies in the city, if not the state. The company, which was founded in 2013, also has an outpost in San Francisco and boasts an enviable company culture. It’s just a matter of time, then, for Skuid to pack up and head for a greener, more expensive, less Southern startup community, right?
Not the case, according to Ken McElrath, Skuid’s CEO and founder. Not when Chattanooga, dubbed Gig City due to its 10 gigabit fiber internet, has much to offer startups. In addition to the super-fast internet, this former industrial city also can claim a low cost of living and an abundance of affordable office space. We talked to him about Skuid, why those factors are important in site selection and why the startup is staying put in the South.
Q: First off, tell us a little about Skuid. And, what’s the relation to squid?
A: With Skuid, you can assemble bespoke, made-to-order apps and portals with drag-and-drop components. The relationship between Skuid and squid is about data sources. Truly useful apps must grab bits of data from multiple data sources to create a complete picture of a customer or partner. With Skuid, your apps can interact with data from anywhere. We keep adding new “tentacles.” Creating apps with Skuid is infinitely scalable because there’s no code required, so you don’t have to spend a lot of money servicing legacy code debt. But the most scalable aspect of the drag-and-drop Skuid approach is that you can change your apps quickly and easily, as fast as your business changes, in minutes instead of months.
Q: Congratulations on the expansion to the UK. What’s going to go on there? And who are you trying to reach by expanding abroad?
A: Nearly 25 percent of Skuid’s customer base resides outside of the United States. About half of those live in Europe. Our customer success process is rooted in design thinking, which requires a deep understanding of what our customers are trying to accomplish and how best to apply Skuid to solve their pain points. Having a consultative sales presence in the UK will make it easier to provide the level of personal interaction necessary to help our customers’ achieve their lofty goals.
Q: Do you see future international expansion for the company? And if so, when and where?
A: The Aussies love Skuid. With over 50 customers there, we’re considering our options. The German and Swiss markets also look promising.
Q: You launched three years ago; where do you see the company in another three years?
A: In tech years, 36 months is an eternity. I’m not going to make public predictions. We do have some majorly disruptive stuff we’ll be unveiling later this year, which I can’t talk about yet. But laying the specifics aside, our vision is clear. We believe all enterprise apps should stop forcing humans to act like machines and instead, apps should behave more like the humans who use them. The power of interactive, connected data should be accessible to anyone. Each of us should be able to engage with each other and with data in meaningful, pleasurable ways that help us get more done in less time while actually having fun. Business apps should be serious fun.
Q: How big of a deal is the fast Internet in Chattanooga to a company like yours?
A: We’re a cloud software-as-a-service company, so Internet bandwidth and reliability are mission critical. We’ve come to expect fast, always-on Internet. When I visit the Bay Area, I’ve come to expect the opposite. It can be painful to work in the cloud with lousy Internet. Here in the Gig City, we can get all bandwidth we need for about $250 a month. That same bandwidth would cost me over $10,000 per month in San Francisco. I’d have to sign contracts with at least three separate providers to get the same level of reliability and speed we currently get from EPB.
Q: We love that you’re committed to staying put in Chattanooga, and you provided some very compelling reasons to do it—the fast Internet, low cost of living, affordable office space. But what about a qualified talent pool? How does Chattanooga fare in helping you find and keep good people?
A: The Southeast has unique advantages. Sure, the lower cost of living means dollars stretch a lot further. But the big advantage in Chattanooga is that a startup with the right company culture can grow in a relatively distraction-free environment. Great startups can invest in great employees and retain them much longer. In overheated markets like the Bay Area, employee retention is a serious problem. Here in Chattanooga, we’ve been able to find and keep amazing people—people I love to brag about and hang out with. We have had some challenges finding people with very specific skill sets, but those challenges are much the same in the Bay Area.
Most of our talent comes from right around here. We’ve found huge success in hiring from Covenant College. That school seems to have figured out the secret sauce to education, at least for the types of people we need in a fast-growing company. But we also hire people from all over the country. We have remote employees, but one of my personal joys is seeing their reaction to Chattanooga when they visit HQ. Some are planning to move here as soon as possible. Others already have, including a few from California.
Q: And what about investment opportunities? Do those look good for a startup in Chattanooga?
A: The Southeast’s venture scene is still in its infancy, but capital still flows into Chattanooga for the right companies. According to Launch TN, total capital raised by Tennessee startups in 2015 exceeded $1 billion, and Skuid raised several million of that number. Is Chattanooga on the radar of VCs? Absolutely. I remember meeting with an investor in Palo Alto who exclaimed, “What is it with Chattanooga? I’ve met with three companies this past week from Chattanooga.” Do I wish there were more tech investors in Chattanooga? Of course. But that’s going to take a long-term commitment. Right now, we still get far better terms from investors who understand the tech sector, most of whom don’t live here.
Q: Talk to us about the myth, assuming there is one, that you can’t be a high-growth tech company and not be in Silicon Valley. In your opinion, why is that not true?
A: Some myths are more true than facts. In this case, the myth has nothing to do with facts, but that hasn’t stopped people from submitting to it as truth. It’s more of a self-fulfilling prophecy. I think the momentum of the Bay Area is like a siren call to entrepreneurs, most of whom are looking for any advantage, whether perceived or real, to achieve their goals. They find out later, sometimes too late, that it is actually more difficult to build a sustainable business there. You end up giving away your business to VCs. Microsoft did not start in Silicon Valley. DELL did not start in Silicon Valley. SAP did not start there either. Nor did companies like Pardot (based in Atlanta before being bought by Salesforce). Still, it’s hard to resist that siren call of easy money and high-brow talent.
Q: What’s the startup community in Chattanooga like? Are you an active part of the ecosystem? In what ways do you participate? Do you think startups like yours (let’s call them wildly successful) have a duty to support and nurture the local ecosystem?
A: The startup community is thriving here. Eight years ago, it was easy to be “active” in the community as there was much less happening. Now it seems I’m invited to a startup or tech community meet-up every week. I’m not complaining, but it feels a bit overwhelming at times. We have a bunch of employees who participate in mentoring, volunteering or just showing up to support these activities. I would not call it a “duty,” but a privilege to support and nurture the local ecosystem. At Skuid, each employee contributes in her or his own unique way. There’s so much electricity in this city. We just plug in where we can be helpful.