Creating Ideas with Matt Rizai, CEO of WebFilings, Part 2

This is part 2 of the Matt Rizai interview, to see part 1, go here

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Matt Rizai: When you get into the financial side of it… I think businesses are realizing that they can really realign their resources so that it becomes hugely more productive, and at the same time be able to see an incredible amount of cost savings. Those costs that they're saving can be used for more business-related, productive, creative, avenues – as opposed to just maintaining a server farm, that type of thing.

On top of it, you end up creating these people companies, whether it's Google or otherwise, whose business is to do that. I would argue that today no other company can hire as good talent in IT in terms of security [and] in terms of server management than Google. All the very talented people want to go work there, and it's their business. No other business's business is IT other than the IT people's business.

One would argue that you want to be able to source out your not significant, not critical, kinds of things, to the groups and companies whose mission critical and business is being able to deal with these types of issues. From this point of view, by centralizing the computing capability, and literally taking the savings – 70, 75, 80% cost – is a huge, significant advantage.

You will see in about 8 to 10 years that the whole business world will transform itself and even become a lot more creative with more ideas because of cloud computing. That's why I'm even more excited about the next 10 to 15 years from a technology point of view.

WebFilings' main office is based in Ames, IA, which is not exactly a place I think of when I think of cutting-edge technology. Why there? Are there any challenges?

Matt Rizai: We had that argument, a bigger argument, in the 1990s because we started Engineering Animation in Ames, IA. We think the comment you've made, which is a very relevant comment, is true today. You can imagine 20 years ago – it was much more true at the time.

The reason we're there this time around is very similar to the Silicon Valley effect in that, from our last company, we still had quite a few talent there, and a lot of people stayed there and started their own companies. So [we wanted] to bring that talent back. Of course they were more experienced, and we could immediately start together. That gave us quite a bit of heads up in terms of realizing that if we put teams together that had worked together before – and in a very similar concept, though it's in a different industry – we can accelerate our development much faster.

Once you get the critical mass going, then after that it gets easier. That's why we're in Ames, IA, because my other founder, Marty Vanderploeg, used to be a professor at Iowa State University. Now we decided to really focus on the expansion of WebFilings in Ames because we already had that critical mass. And once you get that critical mass going after that, once the word is out there, it's a lot easier to attract additional talent.

Your company is showing impressive growth – even more impressive in the face of the current economic climate. What would you say are the keys to your company's success despite the downturn?

Matt Rizai: Well, the ironic thing is that, even when we started Engineering Animation in the late 1980s and 1990s. The ironic thing about a downturn is that it's easier to start a company in a downturn. When the market [is doing well] it's harder to find the talent.

In terms of the success we've had, it's simple from our point view, and when we've talked to investors, from their point view – as I told you before, idea is one thing. It's all about execution. Everything we do in our lives, it's what are the choices we make? On the consumer level, you always look and wonder if you should purchase something here because it has good reviews, or because it's been good in the past, you've had a good experience.

Our company is all about management teams that have been together for a long time. We're very experienced. We understand what needs to be done. When you couple that with – and I think we happened to be in the right place at the right time – was that market that we really thought was very much underserved in terms of the technology we can bring to quality of the process they're involved in, which is very unusual.

As I mentioned, typically when you're doing a startup, you really don't know what your market is. You spend a lot of time and energy trying to figure out what market you're in. It takes three, four, even five tries. When you have a market that doesn't matter if it's an upturn or downturn – it's a government-mandated action – so even if the economy's not doing well companies have to file.

So the economy there is very neutral to us; it really doesn't matter. The fact that we found that market that we can bring incredible value with our technology product and solutions was a key thing.

The mid-term elections ushered in a significant change in the political makeup of congress. How would you categorize the government's attitude toward business? Do you feel any more or less optimistic about business considering the election results?

Matt Rizai: Perhaps you have more of an understanding of where I come from, based on what I just told you. So you're talking to an entrepreneur and someone who, historically, is very curious about events and things. I compare human behavior and what happened in the last 100 years and so forth. In that context I am always optimistic. In the short term, there are always various ideas that come into the picture and collide.

If you literally go back the early 1900s and start reading some newspapers, you'll find that the discussions are very similar. People get passionate about ideas and they discuss it and it happens. If you look at the last 100 years, we've done great in terms of advancement in technology, as humans, and as a world.

I think one or two years of discussions of this way or that way should not deter people from looking at the future as optimistically as possible because the last 2,000 or 3,000 years have only indicated that we always make progress. Within that context I am very optimistic as we move forward.

I'm gonna give you the loudspeaker now, so you can sound off on anything that's going on in the world that you think needs your attention or is not being sufficiently reported, or that you want to give your opinion on.

Matt Rizai: As a person who is running a fast-growing company, I'd say there are two things on my mind all the time. (1) My company and (2) the other is my family. I feel very lucky to have the opportunity to be in the position that I'm in. [The average human] doesn't get the kinds of opportunities that I've gotten before. Only 0.0001% of the population in the world may experience those things once, in their life, if they feel that's a lucky thing for them, which I happen to think from my point of view.

But to be able to be in the same situation twice – I am just incredibly excited. I know there is a lot of hard work ahead of us. I know the situations we're going to go through again. And the fact that we're seeing an incredible reaction from the market place, and seeing an increase in our customers and the way we're advancing – that's all very exciting. At the same time I want to make sure I have a balance so that my relationships and my children, my family, are also in check.

And the third thing is, as we're doing these things, there's some additional help in terms of the way I raise my kids and the way I look at the world in terms of what's happening. Because I also realize that there's a significant part of the world cannot get fresh water. It's a humbling experience to even think about from that point of view. You have to [balance] all these things. On one hand there's a lot of excitement happening, but on the other hand we have a lot of work to be done to make sure that humans have their simple needs.

Is there anything you do in particular to keep up with these issues? Do you have an opinion on the role of the leaders in the business and financial world in these world affairs that are going on?

Matt Rizai: I'm sure I have personal opinions, but I also have enough experience [to realize that] I don't have the full details of a lot of the things that happen. Am I privy to it? Sure. I'd like to be able to discuss things at the table before dinner. But we live in a much more complex world, and I see that through my children's eyes, and with cell phones, Internet, today there's an incredible amount of information. The world is very complex and comprehensive.

I think the next 20 to 30 years are going to be quite interesting to go through the transition. Historically, the human transitions have been 50 to 80 years, maybe a century at the time, from railroads to automotive, etc. But that's shrinking quite a bit. Humans are trying to adopt. And with this new technology, and communication being worldwide, there's a new chapter in history.

Suddenly everything is available to everyone all the time. That is going to be very interesting to watch – how we evolve as a society the next 80 to 100 years. I'm also a believer that everyone wants to do the right thing, good things, based on their beliefs, whatever that is. Everyone is working as hard as possible.

I don't really have an opinion on this leader or that leader because I'm not privy to their information all the time. They all have a lot of hard work to do. It doesn't matter which side they're on. We just have to keep on working and I'm doing my part, I think, by creating and developing a culture, looking at markets.

We are going to incredibly increase the productivity in the financial world in terms of how the information is being put together. I think that's going to help more than just business-wise in terms of being able to disseminate information, financial information, business information, to the world.

What was your first and what was your worst job?

Matt Rizai: My first job, I was a busboy at a German restaurant in Dearborn, MI. The worst job was not one particular job, but what I realized is that if I'm sitting at my desk, or wherever, and I'm looking at the clock to see if it's five-o-clock to so I can go home – I think that no one can pay me enough to be in a job like that. Categorically, I would say that, in general, that's the worst job for me.

What is your favorite way to spend your leisure time?

Matt Rizai: I like to spend it with my family. I have teenager kids. [Spending time with them] and my girlfriend and my extended family is the best way to spend the day.

Finally, what is the best and what is the worst investment that you've made?

Matt Rizai: What is the best investment? Having my children.

The worst investment… You have to define what ‘worst' is. ‘Worst' in the context of how much money I may have lost? Or ‘worst' because I may have trusted someone that they were going to do a job and they didn't.

How about worst investment in terms of, when you look back, you wish you had made a different decision.

Matt Rizai: As I look back, I wish that I had put all my money in the bank two years ago, in cash. That would have been much better. [Laughs] Monday morning quarterback is always very easy.

I've had situations where I've trusted people and their advice and/or hired them and it didn't turn out. So I would say that I made a lot of mistakes and [one of them is probably] the worst investment. But [no single investment] clearly comes up because today I'm still healthy, I'm still moving, I'm still productive, and I'm optimistic. So it must be a [part] of a certain decision that I made that was a mistake that I overcame.