Ray Hein of Propel: “If building a business was a straight line up and to the right, everyone would do it”

“If building a business was a straight line up and to the right, everyone would do it” — Matt Holleran (CloudApps Capital) investor in Propel. As we started the company from a thesis and white sheet of paper, Matt told me (and continues to tell me) that knowing where you are going and focusing on and correcting […]

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“If building a business was a straight line up and to the right, everyone would do it” — Matt Holleran (CloudApps Capital) investor in Propel. As we started the company from a thesis and white sheet of paper, Matt told me (and continues to tell me) that knowing where you are going and focusing on and correcting quickly can help smooth out the path and make the journey closer to a straight line up even with the inevitable bumps along the way. When things go awry, I remind myself of this and just get back on course and move forward.

As a part of our series about business leaders who are shaking things up in their industry, I had the pleasure of interviewing Ray Hein, CEO and co-founder of Propel, which helps companies achieve product success by connecting the people, systems and processes needed to deliver products from concept to customer. Based on years of experience building and leading product management teams in both SaaS software and hardware companies, Hein launched Propel in 2015 to disrupt a fragmented PLM process by harnessing all disparate elements into one flexible and easy-to-use platform that is the single source of product truth for the entire value chain.

Prior to founding Propel, Hein served as Senior Vice President of Product Management at Apttus, where he was responsible for product strategy and new product launches. He has also held senior leadership roles at Vendavo and Centric Software. Hein spent nearly a decade at Agile Software where he led product strategy and development and created the company’s product development roadmap, based upon his in depth experience and knowledge of manufacturing. Hein was also responsible for the identification and acquisition of seven companies, ultimately resulting in Agile’s own acquisition by Oracle.

Hein is known as a results driven leader, as well as a thought-leader within the analyst community. He has been awarded three patents covering product network effect and enterprise platform integration. Hein is Pragmatic Marketing certified, focusing on value propositions and prioritization to drive focused, market validated, product launches. Additionally, he is a Certified Agile scrum master.

Thank you so much for doing this with us! Before we dig in, our readers would like to get to know you a bit more. Can you tell us a bit about your “backstory”? What led you to this particular career path?

Manufacturing and product engineering is in my blood. Both my parents were in the engineering field from WW2 through the Korean war. My mother was somewhat of a pioneer as she was a mechanical “drafts-person” throughout her life, and she was usually the only woman holding that position wherever she worked. My father served as a radar engineer for most of his career. And while I always dreamed of being an architect akin to Frank Lloyd Wright, I followed my DNA and became a leader of engineering teams in the early days of “computer-aided design — CAD” (in the early 80’s). I moved up the ranks to leadership positions in the industry, including getting more involved in the business aspects of new product development and commercialization of products.

Can you tell our readers what it is about the work you’re doing that’s disruptive?

Enterprise software has been a mainstay for businesses for years, but in a very disparate way. You’ve had CRM for managing the customer; ERP for managing manufacturing and the financial records; HCM or HRM for managing the employee record. And, the PLM category — product lifecycle management — to manage the product records and teams that involved bringing a product to market.

In some ways, PLM fell behind the other software categories because it focused on a seemingly narrow segment of engineering and manufacturing in the product lifecycle. PLM is really an outgrowth of moving from paper-based drafting (hey, Mom!) to managing design data files in a controlled manner, and not much had changed about the segment in 20+ years — kind of an old-school, “if it ain’t broke” mentality permeated the industry.

The A-HA!/lightbulb moment for me was seeing the movement of the other categories moving to the cloud, while PLM was stuck in the dark ages. With the “rapid rate of innovation”, changing selling models of Software as a Service (SaaS), and Products as a Service (PaaS), the rise of multichannel selling and eCommerce, and mass customization, I saw a distinct gap that could be filled with a “new definition” of the whole lifecycle and PLM category. PLM that extends the definition from concept to customer and puts the customer at the center of the product experience by including everyone in the company in both product development and go-to-market models. And that is what we do at Propel.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

Don’t let the CEO do the demos! Very early on we were demonstrating our product to a prospective customer. Wanting to seem very official, the team and I decided that, as the CEO, I should be the one to present the demo. We practiced and practiced and had it down to a T. Until the day of the demo.

At first, everything was going well…then the demo stopped working. Just completely broke, in front of this prospect. Then it started working again — a miracle! At this point I am sweating, trying to make jokes about how the product itself is so easy to operate and works smoothly and efficiently, yadda yadda. Then it breaks again. You can imagine how flustered I was, showing off a product that just wasn’t working to a customer who now probably wasn’t going to buy. I muddled through the rest, but I definitely ate some humble pie that day.

Turns out, we were using the engineering team’s development system which was updating in real-time, and I made amends with the prospect. We eventually learned how to show off our capabilities and delightful experience without that hiccup. I learned to leave it to the professionals to demo the product and get the CEO out of the way.

We all need a little help along the journey. Who have been some of your mentors? Can you share a story about how they made an impact?

My first real mentor was Nigel Macleod. He was an engineering VP at Micropolis, and in the early 90s, he assigned me with the task of getting a new technology disk drive to market faster than our much bigger competitors — no small feat. He entrusted me with a do-or-die development team and he coached me along the way. He taught me that it wasn’t just the feats of engineering that would win, that it was managing people, motivating them, and being a selfless leader that would lead the team to success.

More recently, I have had two mentors who have been intrinsically valuable in guiding me through the first several years of Propel: first, Matt Holleran, whom I’ve known for 20+ years. He very much saw the vision of “playing bigger” and driving this seismic shift within the category. His belief in the market idea and ability to fund us from a “white-sheet-of-paper” is the reason we are here. While he is not as widely known as other venture capitalists, Matt’s pragmatic approach to working with entrepreneurs in the early stages of an enterprise software company is just what I needed.

Second is Bob Spinner, who is a VC, CEO, and just an overall really good human being. He has helped me make some tough business decisions. His insight and advice have allowed me to grow into the CEO I knew I could be, while also encouraging me to stay true to myself and my beliefs. We are similar in age and share many common outside interests that allow us to have a balanced approach to building the business while understanding the challenges it places on a CEO’s perspective and family life.

In today’s parlance, being disruptive is usually a positive adjective. But is disrupting always good? When do we say the converse, that a system or structure has ‘withstood the test of time’? Can you articulate to our readers when disrupting an industry is positive, and when disrupting an industry is ‘not so positive’? Can you share some examples of what you mean?

Very obvious answers to that are what AirBnB and Uber/Lyft have done to disrupt the hospitality and transportation industries. Obviously there are still challenges, but I don’t think there are consumer companies that have so drastically and positively changed our behaviour in such a short period of time.

Another positive disruption is the ability to leverage the cloud vs. on premise offerings to democratize, modernize, and increase the pace of innovation for the Customer Relationship Management (CRM) and Human Capital Management (HCM) categories. Salesforce and Workday are pioneers and have eclipsed legacy players because of their ability to be nimble, flexible and on-demand. In the same vein, I’d like to think that what we are doing is a positive disruption. By expanding the definition of PLM to include all teams to ensure product success, we are making the PLM category relevant again and delivering value that makes our solution a “top-line” revenue enhancer versus just the efficiency and cost savings solution it was in the past.

As for negative disruption, I always think of what the consequences of disruption are — is it building and adding jobs or is it decimating them? I love on-demand streaming services, but when you think of it, 80,000 Blockbuster employees — not to mention countless mom-and-pop shops — lost their livelihood with the shift to streaming. Similarly, I feel the current “K-shaped” economy includes a significant amount of negative disruption. Due to COVID-19, companies like Zoom, Slack and Livongo Health are clearly winning because of social distancing and remote work regulations. However, the hospitality and restaurant industries have taken such a hit that they may never recover. I don’t believe people in those industries are concerned with a soaring stock market when they can’t pay their bills.

In both cases, it’s important to understand disruption has negative effects and we need to help those who are negatively impacted to ensure disruption remains a net positive to society.

Can you share 3 of the best words of advice you’ve gotten along your journey? Please give a story or example for each.

“You’ll always miss 100% of the shots you don’t take.” — Wayne Gretzky. The short story is that at 55 years old, I knew I needed to take my shot. I had been on teams that were successful and passed the puck and played roles to help us win. But, this time I knew I needed to take the shot and start Propel or I’d regret it.

“If building a business was a straight line up and to the right, everyone would do it” — Matt Holleran (CloudApps Capital) investor in Propel. As we started the company from a thesis and white sheet of paper, Matt told me (and continues to tell me) that knowing where you are going and focusing on and correcting quickly can help smooth out the path and make the journey closer to a straight line up even with the inevitable bumps along the way. When things go awry, I remind myself of this and just get back on course and move forward.

We are sure you aren’t done. How are you going to shake things up next?

I can’t give away all our secrets for Product Success domination! Suffice it to say that the disruption that we discussed above is empowering everyone in the company to have a Product 360 and Customer 360 mindset on how products are designed, launched, managed in the market with feedback and insights they’ve never had before. With compressed innovation cycles, increased competition, business resiliency management, and customer insights and loyalty impacting a products success, the category we’ve been in needs a complete overhaul. And, we are doing it.

Do you have a book, podcast, or talk that’s had a deep impact on your thinking? Can you share a story with us? Can you explain why it was so resonant with you?

I have two books that have impacted me: 1. “Dear Founder” — by Maynard Webb. This is a collection of short stories from other founders and VCs that are organized in a manner that you can read over and over. As a founder and entrepreneur, this book is like “Chicken Soup for the Entrepreneur.”

The other book that has been pivotal in my growth is “Mavericks at Work.” Originally published in 2006, this book includes case studies on a variety of companies with different cultures and wildly different approaches that have found success. The Mavericks ’10 Question Challenge’ is something that I refer to often — even today — as it’s a timeless set of questions to make sure you are building a great company with a lasting impact and culture that will span beyond you and your legacy.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

Why is it that a cartoon has resonated with me the most? I love this quote from Ziggy: “We should enjoy today while it’s here… because someday today will be a long time ago.

We tend to solely focus on our life’s work, without really celebrating the little joys that are around us every day. Net-net, instead of focusing on the destination, sit back and enjoy the journey.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂

We are passionate about the Pledge One Percent and giving back to non-profits in our community, and encouraging other early stage companies to do the same. We’ve been involved in this organization since Day One, and we cannot be more proud of the work they are doing and the small part we play to help further their goals. https://pledge1percent.org/

As a legacy, I’d like to see that we drive an innovation mindset across generations, genders, and diverse backgrounds. There are far too many gaps in engineering and product companies that continue to deplete the growth needed to match what the world looks like today. If the work we do can help make innovation fun and rewarding, I’d feel like we can propel a better world moving forward.

How can our readers follow you online?

This was very inspiring. Thank you so much for joining us!

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