How Bizzabo Raised $56M and Scaled to 120 People as an All-in-One Event Success Platform (Interview with Co-Founder and CEO Eran Ben-Shushan)

Introduction and Company Overview

Nathan Latka

00:02Hello, everyone. My guest today is Eran Ben-Shushan. He is the CEO and cofounder of biz... Bizzabo, an all in one event success platform at one of the fastest growing event tech companies in the world. He's led the company winning the people's choice award at the event tech awards for three years in a row. Before this company, he was an event marketer and served as the CEO of the Roshpina media con... Media convention. He also was

00:23a team leader and systems engineer at Elbit Systems. He graduated cum laude from the interdisciplinary center School where he studied business and participated in the prestigious Zell Entrepreneurship Program, often considered the Y Combinator of Israel. Eran, you ready to take us to the top?

Eran Ben-Shushan

00:38I am ready.

Nathan Latka

00:39Is... Hey. Is that program by Sam Zelle, the real estate mogul?

Eran Ben-Shushan

00:42Yes.

Nathan Latka

00:43Ah, very good. We'll study the heck out of him, man. That guy seems like a genius. Did you get to spend meaningful time with him?

Eran Ben-Shushan

00:48I wouldn't say meaningful, but spent enough time to leave a mark.

Nathan Latka

00:52Very good. Enough so that you can use it to make bizz... Bizzabo, you know, a $100,000,000 company. Right?

Eran Ben-Shushan

00:58Indeed.

Nathan Latka

00:59Alright. Very good. Alright. Talk to us about the company. What does the company do and how do you guys make money?

Eran Ben-Shushan

01:04Yeah. You know, Bizzabo is a company that is trying to take events to the modern era, which means we all go to those events, professional events, whether they are internal, external, big or small events. There are a lot of inefficiencies at events and it's not only about functionality, it's also about the data aspect and how can you really leverage the data and events to make them measurable, automated and personalized. This is what Bizzabo does. We do

01:32it by building an end to end platform which is extremely robust. So we take care of everything from your website registration, email marketing, agenda management, mobile app, analytics, you name it. So we kind of build 15 different startups into one startup which is a very powerful tool and is today the system of record for organizations to manage their events. We sell it under a SaaS annual subscription model, usually multi year and that's how we make money

02:05and that's what in essence Bizzabo does.

Average Contract Value

Nathan Latka

02:07Just because we don't have time to go on every customer cohort on average, what would you consider an annual contract to come in or out like $10, a $100, 1,000,000?

Eran Ben-Shushan

02:15Yeah, so we look at it by different cohorts. We have three different cohorts, but I would say across the board the average is 25.

Churn, Retention and Expansion Revenue

Nathan Latka

02:23$25,000. Okay. Very good. So call it maybe $2,000 a month or something like that. Let me let me ask you a question. Most other event applications like this I've had on the show with the exception of maybe like Reggie at Cvent and Dan at Social Tables. There... There's always major churn issues because people will have an event in January then they will cancel when they don't need your software then they will re sign up next January

02:44like when they need it again. So my question to you is how do you how do you... Which by the way, don't actually consider that churn because they're still paying every year, it's just they cancel in between. How do you measure churn and how do you keep your you know, how do you measure it low?

Eran Ben-Shushan

02:57We measure churn just like like any other company. I think what you're referring to really depends on the type of customer you're thinking of. We sell to customers so think about corporations that run dozens of events at minimum annually and in this case sometimes we even have customers that run a thousand events a year right. Those would be customers that have three business events or professional events every business day. They think about Bizzabo or their event

03:26platform is something that is recurring constant a part of their life cycle and and blood circle in their organization. So we we think about churn just like any other company that has annual subscriptions.

Nathan Latka

03:39Okay. So when you look at trailing twelve months what is before you add back expansion revenue, what is gross churn come in at about?

Eran Ben-Shushan

03:47Gross churn, so we went through a process in the past year and a half of really identifying what is the sweet spot for us in terms of the right customers that Bizzabo would be also the right fit for them right. It's not about what's the right customer for us it's what what kind of organization Bizzabo is the right tool and not an overkill or too much and not too little. So we had to go through a

04:17process of deciding and making some difficult decisions about some cohorts of customers that we will need to split ways if they cannot get to certain level of criteria and obviously doing it with the utmost respect and being a super customer centric company. This is something we always believe in. So in terms of gross churn that would be around I would say 80%, and in the past six months or so negative net churn, so overall pretty healthy.

Nathan Latka

04:51So just to be clear, 80% of your revenue over the past twelve months churned?

Eran Ben-Shushan

04:55No. No. No. Retention.

Nathan Latka

04:57Was about to say that that'd be not a good position. So 20% churned, 80% retained. Now the way to get to net negative is you obviously make up that 20% churn with expansion. So what's total expansion been? Something above 20% I assume.

Eran Ben-Shushan

05:10Yep.

Nathan Latka

05:11What is it like talking like 30% or just barely above 20?

Eran Ben-Shushan

05:14It's between 20 to 25.

Nathan Latka

05:17Oh, okay. Fair enough. Good. So that puts your, know, said differently net net revenue retention is above a 100%, maybe up as high as a 105%.

Eran Ben-Shushan

05:24Correct. And that's, know, and and obviously when you look at it core tied by different segments between, you know, SMB to mid market to enterprise, you would see different ratios obviously, typical to a SaaS business.

Nathan Latka

05:38Of course. Yeah. Yeah. Of course. That's the nice thing about net revenue retention is it equalizes ARPU differences. Right? It's just... It doesn't matter if someone's paying you a buck or a $100,000,000. When you do... When you... You know, if the dollar churns, it's no big deal. If the $100,000,000 churns, that's a really big deal. Talk talk to me about how you've structured your kind of use cases around expansion. Tell me the story of someone that

05:58start off paying you $20,000 a year and they expanded to 40 or $50,000. What... Why are they expanding? Is it event volume, number of seats, data play, what is it?

Eran Ben-Shushan

06:06Yeah, that's you know obviously it needs to start from having the right business model in place and thinking about that in the right time and building it into your model. And then it needs to be highly correlated to the value of the platform. I would say that we would see typically two use cases. One is we are on the same team they would start little with us and then they will give us the rest of the

06:33business on the same team of more events or within an organization we would have the classic land and expand type of approach where you would go into an enterprise organization, you would start with them with one local team and then let's say you get 100 events and you know one or two teams and then they make the referral which is there's nothing better than that to other teams in the organization and that would be another expansion

Founding Story: From Networking App to Event Platform

Eran Ben-Shushan

07:01model.

Nathan Latka

07:01Yep. Interesting. We jumped in the economics pretty quickly here. Let's put us on a timeline. When did you launch the company? What year?

Eran Ben-Shushan

07:09We launched the company...

07:12First product out to the market was summer of twenty twelve.

Nathan Latka

07:12Okay.

Eran Ben-Shushan

07:12We actually started, we had an interesting story Nathan. We started from trying to solve the problem of people going to events and not knowing who to meet. So you know we were, I was an event planner myself but we were also attending a lot of events and I'm sure a lot of the people listening to us and maybe yourself as well when going to these

07:36events sometimes it can be really frustrating. You're there, everything is left for serendipity and luck and nothing is really predictive and there's no science behind it although you would think that in 2019 and even back then 2012 you should be able to have all the tools and all the data out there whether on social networks or your mobile device or your computer to run those events in a much better way. But that frankly doesn't exist and

08:06that bothers us a lot. As entrepreneurs who said we're going to fix it but two years in our customers actually told us you know you build this great mobile networking app why aren't you doing also the other elements of events which are actually more painful and we need even more help there and are even more mission critical to the success of the event like the website, like registration, analytics, agenda, email marketing you know combined with the

08:34social aspects and networking aspects and around two years in so call it mid late twenty fourteen we realized we have even a bigger opportunity ahead of us where what's traditionally out there in the market is more of you know legacy solutions that are focused more on functionality and we said we're going build Bizzabo to be a strong holistic functional platform with an even stronger data infrastructure.

Nathan Latka

08:34Sure.

Eran Ben-Shushan

08:34And that's how it's built. So that was the timeline,

09:08launched 2012, expanded the book, the model and became a SaaS company towards 2015.

Customer Count and Team Size

Nathan Latka

09:16And Eran, how many how many customers have you scaled to now today?

Eran Ben-Shushan

09:20Yeah, I can't say exact numbers, but in the high hundreds.

Nathan Latka

09:25Yeah, no, no, by the way a range is fine. So fair to say between 700 and a thousand something like that?

Eran Ben-Shushan

09:30Around that, yeah.

Nathan Latka

09:32Very good. Alright and then walk me through what the team looks like today, so how many folks?

Eran Ben-Shushan

09:37We have a 120 people, originally we're from Israel, I guess the name and the accent, know, but you probably picked on that, but we started the company in Israel, I myself moved here to New York and joined one of the co founders, we're three co founders who started the business. I joined alone my co founder who came here first around four years ago. We have around 50 people in the Israeli team. Everything around product engineering and

10:07design is based in Tel Aviv. Incredible team, incredible talent and and we're very happy of having this structure in place and here in New York we have all the go to market teams. So marketing, sales, customer success, client services and operations.

Total Funding and Series D

Nathan Latka

10:22And how much capital have you raised to build the company or have you managed to stay bootstrapped?

Eran Ben-Shushan

10:27We, no, we raised to date $56,000,000.

Nathan Latka

10:31Oh, brutal man. Was liking you so much and then I'm going, oh, he's raised a bunch of money.

Eran Ben-Shushan

10:38We just closed our series d round earlier in April a month ago, 27,000,000 round, yeah.

Why Now Was the Right Time to Raise

Nathan Latka

10:46Why was that the right time to raise more capital?

Eran Ben-Shushan

10:49Listen, the event space is one that you know, a) it wasn't always obvious that or not it was initially an uphill battle I would say to raise capital right. Not always maybe the sexiest industry but over the years and I think also later on with some of the transactions like Cvent and others people realize there is a huge market opportunity and one that is very tight and correlated with marketing automation and CRM and events being a

11:21black box. Huge addressable market, not a lot of sophisticated tools in the market to solve the problem, and pretty complex problem to solve. Event planners and in general events are complex. There's a high level of anxiety and the set of tools that they need. So you know Bizzabo is heavy technology. It has a lot of functionality built into it that we were able to execute well over the years and that requires capital. And as for the

11:50timing, why now is the right timing because Bizzabo is you know definitely I'm very proud to say after hard work and a lot of passion in the past seven years is a market leader among modern software for events and I guess that we and also the investor that participated identified that we're probably the company that has the highest potential to become the next category defining platform and be able to really revolutionize the space and doing that

12:18with additional capital and going after bigger customers and more enterprise accounts and having the means and the capital to build the level of innovation that we have in mind is something that resonated with us as the right timing to raise more.

Revenue Growth and ARR Targets

Nathan Latka

12:32And how much time do you think you need to break like the 15 or $20,000,000 ARR mark?

12:40Like within reach?

Eran Ben-Shushan

12:41Yeah. It's gonna happen soon.

Nathan Latka

12:43Yeah. But I mean, you... I mean, is it is it uncomfortable enough where you don't think it can happen this year or it's a fair stretch goal for this year?

Eran Ben-Shushan

12:50Probably it's gonna happen next year Yeah. But very early next year. Yeah.

Nathan Latka

12:55Yeah. No. No. That's great. And do you think most of that, like, when you have your internal kind of strategy discussions, do you think that will come from expansion revenue or new customer logos altogether?

Eran Ben-Shushan

13:04Both.

Nathan Latka

13:04Now I know, obviously both, but what do you think is gonna be a bigger driver, expansion or

Eran Ben-Shushan

13:10I think this year more is gonna come from new and probably next year in 2021 we're going to start seeing actually that shifting because the cohorts of more enterprise customers coming on board is going to be more prominent towards or throughout this year and expanding them in 2020 and 2021. So that's... That might change the books and the balance a little bit in the future.

Nathan Latka

13:35Yep. And then when you look at the past twelve months, are you still able to double year over year or are you getting too big to be able to still do that?

Eran Ben-Shushan

13:41That and above. Yeah. We are able and and even more. Yeah.

Nathan Latka

13:47Okay. So past twelve months you are more than a 100% year over year growth?

Eran Ben-Shushan

13:50Yep.

Nathan Latka

13:50That's great. Last question here before I capture kind of more your story and where you see the space going. You know 700 customers right at a kind of $2,000 per month price point

Eran Ben-Shushan

14:00I didn't say the exact number, but let's call it roughly yeah.

Nathan Latka

14:04Well sorry you said high hundreds and I said fair to say between 700 and a thousand you said sure.

Eran Ben-Shushan

14:08I said around that number. Yeah.

Nathan Latka

14:10Okay. Good. Fair. Okay. Good. Well, maybe that answers my question because if it was 700 at at the ACV you told me before that which was about $24,000 a year or $2,000 a month that puts you at $1,400,000 a month which is $16,000,000 a year. It sounds like you're still kind of working towards the 15 mark or something like that. So you have less than 700 customers at this point.

Eran Ben-Shushan

14:28And also remember that the ACV is the current ACV and historically you know that also that's also a metric that doubled almost a year over year over time.

Nathan Latka

14:37Yeah. Yeah. Yeah. Well, and I didn't ask, I wasn't asking ACV, was asking kind of ARPU, average revenue per user per month. So maybe that's a bit, I assume, look, by the way, I don't wanna like pin you down here. Right? But I wanna get the general ranges, right? So we're in the right ranges, mean, know, fluctuate plus or minus 10%.

Eran Ben-Shushan

14:53You are.

Runway and Burn Rate

Nathan Latka

14:54Yeah. Okay, fair enough. Let's move past that. So you just raised additional capital. When you go out and raise, how aggressive are you being in terms of how many months of burn you wanna raise for? Are you a 12 kind of guy, twenty four month kind of guy? What do you plan for?

Eran Ben-Shushan

15:09Twenty four and also thinking about how we can you know build a sustainable business. I think that's also important at the level of you know company that we are at. I think that we're at a stage and maturity of the business and from an operational standpoint that we are able to double or have high growth rate and also think about building a healthy business with healthy unit economics that that can you know can put you in

15:36a position to take the business to profitability should you choose to do that.

Nathan Latka

15:41Mhmm. And then I mean when you when you go out and raise the kind of money that you just raised in your head, you guys kind of have where you plan to spend most of that in terms of whether it's more SDRs or more tech people team, build up product features, things like that. How aggressive are you comfortable driving burn ups? I mean, you go to the point, would you be comfortable burning a million bucks a

16:00month for a couple months to, you know, get the growth you need?

Eran Ben-Shushan

16:04I would and that the you know the reason is because when you have a well-oiled machine that is working and you get strong sentiment from the market and you strongly believe in the long term and the market opportunity, so I strongly believe that's what you need to do, but you need to do it responsibly by you know measuring yourself whether leading or lagging indicators and making sure that you're not going for too long without having

16:33a sustainable model behind it.

CAC Payback and LTV Confidence

Nathan Latka

16:36Yeah, yeah. So the number you're really talking about here is kind of CAC and CAC relative to payback period kind of getting that money back. You have healthy expansion so you can afford to pay more upfront if you know they're gonna stick with you for a while. Will you pay more than a year of ACV to bring them on or maybe go up a size two years?

Eran Ben-Shushan

16:52In terms of CAC payback, you mean?

Nathan Latka

16:54Yeah. Yeah. So if you're doing $24,000 ACVs, are you comfortable spending $50,000 or you get a new $25,000 a year account?

Eran Ben-Shushan

17:02Yes.

Nathan Latka

17:02Yeah. Yeah. Because and why are you so confident when you say that?

Eran Ben-Shushan

17:05Because we know that those who are buying our product really need it, and we feel confident about the LTV.

Famous Five: Favorite Business Book

Nathan Latka

17:13Yeah. Yeah. Nope. That makes fair sense. That's the answer I would have given. Very good. Let's wrap up here with the famous five. Number one, what's your favorite business book?

Eran Ben-Shushan

17:21I'll have to say The Hard Thing About Hard Things. Maybe you get a little off, but I'm... I I just think it's a phenomenal book.

Why Not Exit, Competing with Cvent and More of the Famous Five

Nathan Latka

17:26Number two. Oh, actually I meant to ask you this. I can't... You know, Vista's very aggressive. They just raised $14,000,000,000. They're behind Cvent. They're trying to deploy capital. I know there was a term sheet. There had to have been a term sheet going, Eran, don't raise $27,000,000 at whatever valuation. You know, sell to us for a premium, you know, whatever. Two, three, four, you know, points higher than that. Why did you decide that when you

17:47did that raise, it was not the right time to exit?

Eran Ben-Shushan

17:52I think I think we're going after a big play and I'm a strong believer in what we're doing and we wanna do it the right way and and really change the way events operate.

Nathan Latka

18:03Rajee came on and said they just passed $500,000,000 in ARR aiming at a billion. Are you eroding a bit a bit of his revenue or do you do you have customers leaving Cvent and joining you guys?

Eran Ben-Shushan

18:13There are, yeah.

Nathan Latka

18:14Yeah, you can say that with confidence, that's a fun thing to say.

Eran Ben-Shushan

18:17Yeah. Alright. We prefer staying focused on us and less about you know, talking about the competition and caring about you know our customers, our employees and doing the right thing.

Nathan Latka

18:29Oh come on everyone, if you could if you had two customers that you could add tomorrow and one was a Cvent customer and one was not a Cvent customer, you would take the Cvent customer every day, every day. Let's just call a spade a spade there. Okay. Number number two, is there a CEO you're following or studying?

Eran Ben-Shushan

18:48Yeah. I I like a lot what you know Satyana Dell did for Microsoft. I think that that order of magnitude of change for a culture and and really picking up a company in such a way is phenomenal.

Nathan Latka

19:01Number three, what's your favorite online tool for building your company?

Eran Ben-Shushan

19:05I like, you know, the Google collaborative tools, spreadsheets, docs and phenomenal.

Nathan Latka

19:13Number four. Number four. How many hours of sleep are you getting every night?

Eran Ben-Shushan

19:17Around six.

Nathan Latka

19:18And what's your situation? Married, single, kiddos?

Eran Ben-Shushan

19:21Two kids married.

Nathan Latka

19:22Oh, okay. How old are you?

Eran Ben-Shushan

19:25I am 40 soon, I'm 39 turning 40 at the end of the year.

Advice to Younger Self and Wrap-Up

Nathan Latka

19:29Hold on to it baby, 39 years old. Last question, what do you wish your 20 year old self knew?

Eran Ben-Shushan

19:39Entrepreneurship is a long journey and I think two if I may. One is when you go after a specific market just strategize what is the right market for you. It can save you a lot of time and be relentless going after it and not just being tempted to all the interest that you sometimes get and can be confusing. And the second one, you know, when making hires, think about them at least four to six years ahead,

20:08having the right people in the company. So when you imagine that you have is that the right person at least four years ahead.

Nathan Latka

20:15Guys, there you have it. Bizzabo, a band playing in the event management space aiming to that $15,000,000 run rate here Hopefully, in early next year in 2019... 2020. Hopefully, they can do that. Just raised 27,000,000 extra bucks. Eran is happy to drive burn up to even a million bucks per month if he has to be as he understands his economics are sound and they are 20% revenue churn annually, 25% expansion. So a 105% net revenue retention.

20:40He's happy to pay up to two years of ACV to get that customer onboard. Currently a 120 people, again, putting the company between Tel Aviv and The States. Eran, thank you for taking us to the top.

Eran Ben-Shushan

20:49Thank you very much, Nathan. And we call it event success, not event management. We believe that's the future. Thank you

Nathan Latka

20:55very much.