Why I Started Valegate.
A small, partial defence of the unsexiest market in software, told largely through the story of a man called Mr Pemberton and his filing cabinet.
Mr Pemberton — and the name, I should say at the outset, has been changed to spare a man who did not, in fairness, ask to appear in an essay — runs a small healthcare-staffing firm out of an office above a dental surgery in the south end of San Francisco. The office has two windows, a fern of indeterminate species, and a filing cabinet which is, I am almost certain, structurally responsible for the load-bearing wall behind it. The cabinet is full of paper. The paper is, very largely, compliance documents.
I met Mr Pemberton last summer, at a barbecue I had, on balance, no business being at. He was the friend of a friend's father, and he had been steered in my direction with the sentence — uttered, I am told, with no small relish — he does software. Mr Pemberton, on hearing this, took me by the elbow with the firm, valedictory grip of a man who has not, in some weeks, been listened to, and asked whether I knew anything about a particular three-letter agency whose acronym I am, even now, slightly afraid to type.
I did not.
He spent the next forty minutes telling me. The fern, in the imagined office of his account, became a character. The cabinet became, by some shift of register, almost a person. By the end of his monologue I had, mostly involuntarily, begun to believe that the entire small, sweating little world of compliance was, in fact, the most interesting thing anybody had said to me all summer.
Why nobody builds for him.
It is a curious fact about software that the markets which appear, on first glance, to be the most boring are very often the ones in which the people are the most desperate. The people in dating apps, on the whole, will live without a better dating app. The people in compliance, by contrast, are operating under the threat — not theoretical, not eventual, but actual and on a particular Wednesday — of being sued, fined, or politely struck off by a body whose acronym they have learned to fear in a way nobody fears Tinder.
And yet the software they have, when they have any at all, has the visual character of a 1998 hospital intranet.
The reason, I have come to think, is largely sociological. The people who tend to start software companies do not, on the whole, know any Mr Pembertons. They know other people who start software companies. They know designers. They know, in the slightly amorphous way of San Francisco, people. They do not, particularly, know the friend's father with the fern, and they have not, on a Saturday afternoon in July, allowed themselves to be elbow-led through a forty-minute account of the precise, idiotic, expensive ways in which the federal government wants the cabinet rearranged this quarter.
If they had, somebody would have built Valegate ten years ago, and I would be, on the whole, doing something else.
The thing the spreadsheet does not show.
People who write about compliance — analysts, mostly, of the sort who produce reports with covers that look as if they have been designed by a midweek committee — like to put numbers on the market. The numbers are large. The numbers are, on the whole, quite easy to look up. I will not bore you with them.
The thing the spreadsheet does not show, and the thing I keep coming back to, is the small, particular dignity of a man like Mr Pemberton on the morning his filing cabinet has, against all odds, just survived an audit. He had, when I sat in his office last August, the air of somebody who had narrowly escaped a small earthquake. He made me a coffee. He showed me, with the tender pride of a grandfather producing a school photograph, a binder. He said, several times, the phrase thank God for Margaret — Margaret being, I gathered, the part-time bookkeeper without whom the whole edifice would, that morning, have fallen.
It is not in the spreadsheet, the moment of thank God for Margaret. It is, however, the precise moment Valegate is for. Valegate, when it works, is a system that takes the slow, terrified, error-prone, deeply human work of being Margaret on a Wednesday and turns it into something which can be done, instead, on a Tuesday afternoon, with the windows open, while a fern is being watered.
What I am actually building.
The product, in the boring way one is forced to describe products, is an AI-powered compliance platform for small and medium American businesses in regulated sectors. That sentence is, I will admit, almost designed to die on a slide. The reality is rather more specific. We sit between Mr Pemberton's e-mail inbox and his filing cabinet. We read the regulations. We watch, with an attention nobody but us has the temperament for, the small monthly amendments which everybody — including, sometimes, the regulators themselves — has forgotten to read. We tell Mr Pemberton, on a Monday morning, in eleven sentences and in plain English, what has changed. We tell him what to do about it. We do, for him, the part of the doing-about-it that does not require a human face.
That is the entire product. It is not glamorous. It will not, I suspect, be written up by a man in a Patagonia vest. It will, however, save Mr Pemberton — and, I hope, several thousand Mr Pembertons — the particular grade of three-in-the-morning panic that I have come to believe is, on the whole, the largest unmeasured cost in American small business.
A confession.
I want to admit, at the close, that I did not start Valegate because I love compliance. I do not love compliance. Compliance has, on more than one occasion, made me cry quietly in the shower. I started Valegate because I came to love, with a slightly inexplicable warmth, the people on the other side of it: the Mr Pembertons, the Margarets, the woman in Sacramento — Linda, whose surname I will not, on this occasion, change — who once, on a phone call I have replayed in my head perhaps thirty times, said: If you build this, sweetheart, I will pay you in cash on Monday.
She did. She did pay me, on a Monday, although not in cash. The cheque is, as it happens, framed above my desk. It is for two hundred dollars. It is, on a per-hour basis, the worst money I have ever earned. It is also, by an enormous margin, the most useful piece of paper in the room.
— B.