How Assembla CEO Paul Lynch grew Assembla to $10.8M revenue and 3.5K customers in 2018.

hello everyone my guest today is paul lynch he's the ceo of a company called assembla he's responsible for driving the strategic direction of the company before assembly he held multiple executive roles within cloud businesses where he drove revenue growth and international expansion paul's a marketing degree from from dublin city university and is fluent in spanish paul are you ready to take us to the top yeah that's great all right so dublin is is like a cool hip space and now you're in san antonio tell us how that happened so i came into assembler in uh in late 2015. uh you're right it's uh i i traded the uh i traded the green fields of ireland and dublin for the oppressive texas summers it's not that bad though right i know i love i love it here nathan it's great it's like i always say you know the the party's not over for guys like me but it's a different kind of party yeah the idea staying until three in the morning at a nightclub is a horror show so san antonio has exactly what i need for me and my kids you have no options to stay out until 4am except maybe the emma on a good night right that's that that's it and uh hey i mean saying at the end of till 4 is probably a good thing that's probably good yeah all right let's tell me more about the company what's assembler do and how do you make money yeah great it's a assembler is in a source code management so you know in in terms of you're building a website you're building an app you need to put that source code into a place that's secure and safe i mean in the current environment and climate around source code breaches and around data breaches and your echo faxes there's a huge there's a huge sort of onus now in terms of securing source code so we take your source code we keep it and we give you the scaffold to build your app or your website or whatever it is you're looking to design and develop and is this more about version security kind of in the cloud and version controlling the cloud along with kind of cyber security or is it more like rainforest qa qa symphony like a testing kind of ci kind of tool um look i don't think you can talk about source code not talk about security in the current climate uh so it's a marriage between the two okay um the business started off purely around source code hosting source code uh managing source code and and managing the the your get your subversion and your perforce kind of repository types for you to build your software but like in today's day and age uh source code is is the key valuable ip content in most businesses you can't talk about source code you can't talk about hosting without talking about security so look it's a it's a marriage between all those three things okay so there is some element of a sauce labs a bug see like there is testing automated testing built in yeah we we at a low level i mean at a low level this automated testing i mean i i would say you know at a at a higher level we would do static code analysis in terms of people committing code back into the repository so you know we would we would would scan code in terms of looking for known vulnerabilities prior to that going back into the core production um workflow now we would look for stuff like you know credentials or amazon passwords um et cetera et cetera within the code that we're hosting so we're looking to secure it and make it safe as it's developed peer play sas model or you have other revenue streams professional services built in 100 sas uh it's a beautiful place huh yeah absolutely i mean like professional service is another and every week to focus that's right and give me a general sense of kind of customer size here what's the average customer pay per month for this kind of tool so i mean i i think we've gone sort of up market if you like over the last two years we bought the business that would have had an arpa um sort of a low you know two-figure kind of art but now we're up to say you know between five five hundred and fifteen hundred per month would be our sweet spot yep 500 per month and these are typically i mean why will someone pay 500 1500 are you upselling based off number of seats or a feature set or some combination yeah it's some combination i mean it's based on a on a seat like user basis um there's different tools and there's different features that customers will buy from us if they require additional security or additional slas additional customer support etc etc uh also like with the likes to say per force um that's a that's a that's a paid licensing tool property to perform so there's licensing costs around that and and lastly if you look at the the key specific customer requirement around performance if they're pushing larger file sizes if they've got compliance issues or compliance requirements or security requirements we can get into sort of dedicated solutions for those guys around private cloud around single instance and then geo specific stuff so if if you've got a gaming studio say in australia their their performance is not going to be great if they're if they're hosting on our infrastructure in aws and san fran so we'll fire them up local instances in sydney or local instances and wherever they are you know and now this uh when was that well first off tell me when the company the original company was launched and then i want to talk about kind of how this is is not your original baby and how you got involved yeah uh business was launched in 2005. so i mean assemble is a very mature company um we acquired it from its uh it's its founder in 2016 um early in in in the year and who and whose we give some people some perspective on what you're building there yeah so effectively ascend was owned by a venture equity fund by the name of scale works um they're san antonio-based i mean their their tenant is that venture equity venture capital rather works very well for for for businesses that are looking to give away a small amount of their equity um and drive growth private equity works very well for larger businesses that are looking for an exit um private equity will come in they'll take they'll take dividends and distributions out of those businesses but there exists nothing in the middle so you've got a business that's doing say you know three to ten million private equity aren't interested in them in that they're too small venture venture capital aren't interested in them in that you know if they're 10 years old if they haven't hockey sticks yet they're not gonna um so where do they go um so we buy businesses that are product focused and uh we then we we turn on our sales and marketing engines and we drive growth and the only just to be clear so venture equity i mean they're not you know you buy the company for x amount of money you're not trying to pull cash out of the bottom line to get a return there you're just building it and then if you sell it that's how everyone will get a return that's exactly it yeah interesting very cool okay same time i mean when we'll never take money out of businesses but um you know solid business practices are our key to our business model yeah we talk about profit and reinvestment as opposed to you know fire hosing money at sales and marketing and and creating a giant big black hole of debt strategically i mean i think about a vista equity right i mean they are so well known for their playbook which they guard like crazy i've seen some of the agreements they make everybody sign about not sharing that you basically get killed if you share anything on the playbook i mean is that what you're building and that's what they're building kind of at scale works you've got kind of you know a playbook you run on the company right when you buy it and three or four tactics will work out and grow it um look i think a playbook is probably oversimplifying it i mean every business is different every founder is different i mean there are certain um characteristics in the businesses that are required typically you're looking at a ceo found or led business um you're looking at the ceos when you've been running this company for like six or seven years and they're getting tired um it hasn't happened for they were whatever a lot of them are bootstrapped however i mean there are businesses we required that would have raised a large amount of assembly was though bootstrapped right assembly was very much yeah i mean this business you know i think we bought the business there was 32 stuff and it was doing a couple of million bucks um it was making money um the the the issue of course was that he was 12 years old i mean the the founder wanted to do something different he needed an exit he took it to market and uh he didn't like the numbers that were they were given to him initially in that you know businesses like vista are looking for growth yep that's right and it's very hard to raise vc if you don't have doubling year over year right 12 years is too long absolutely so what are the first three things you did on the company when you took over so our tenants are pretty much the same i mean you assembler the ceo andy singleton of assembling famous great guy but very product focused so we need you know you need to shift these businesses around you need to move away from you know specific product focus into focus on sales marketing um if you're if your business isn't marketing right it's not going to be selling right uh the sort of business needs to pivot its mentality away from building pretty things into building functional things that customers want to buy um we we...