Chili Piperrevenue, valuation & funding

pull up a little bit uh you say no crazy pens well yeah these well these are kind of great these are the ones like Americans look they're backwards they call they call this the distressed look and they mark it up right they see they're backwards right I take my comment back yeah there you go that's the theme of the discussion the backwards yeah we raise a lot of money and things started going backwards how are you guys I know you rushed up to say hi to Serge or how are you guys trying to figure out how to move to CI right now at it can see this integration that's right yeah what's the chat what's the biggest challenge uh we had a huge Legacy is a lot of uh uh companies do and we decided to do a completely right and that's uh a big uh bite to take this is the worst thing how many of you guys your engineer sends you that slack message saying I really recommend we just do a full rerun you're like [ __ ] off come on down the drain right right who's that who's just admit I'm Nathan and this happened to me you know who actually said no raise your hand what'd you say who said no but for the longest time I said no we're not going to be right it's come if you raise your hand it's coming trust me all right so you're gonna move to it so we did it uh our investors say what's going on you don't innovate anymore because you know you're rewriting or you're writing writing but it's coming now so yeah so uh and we do want to do all the cool stuff of continuous delivery consist integration so you guys learned from Alina yesterday who came on stage she was the one missing one half pants pink Amazing Story uh Nicholas and Elena got together this was back in 2016. yeah it was launched 2016. and you came on the podcast it was a great story last we spoke was 2021 when you guys had broken about 16 million bucks of AR where are we today yeah 30 million in AR today so that's great so the things that I'd love to touch on over the next 15 minutes there's sort of three of them um one I'm gonna take advantage of because I know you're very open and transparent but you know you were really smart in that you raised VC but you took chips off the table see I don't mind if folks raised we've seen the founders get rich while they're doing it right that's like a nice combination but it's really hard to um navigate the storyline where the founders take secondary then a year later their Market crashes you have to lay off half the team so let's start there I would say Johnny and hoppin did this terribly you're doing it in a much better way how did you manage this storyline with the team uh it was extremely challenging uh because it was very uh sudden um we uh so for background information we we raised 15 million uh you know Iran so we bootstrapped for four years then we raised 15 million in 2020 just after kovid and then tiger Global came in and say we want to give you 33 million at an absurd valuation the latter was absurd but um but they didn't and so we took it and that's when we did the secondary so we had a lot of cash in the company and and we invested and hired including Engineers to rebuild the the systems on and um we started 2022 on a good trajectory so our growth was actually higher than plan and um we started hearing people talking about layoffs and things but we were not affected and I think this is weird right so we continued uh investing including in our company culture so we at the time we had 250 people in 42 countries in 180 cities and once a year we get together and of course when we get together it's a big deal right because we it's like the one time we meet in person so his own fairness we did something a bit extravagant um what's the number how much did you spend on the retreat altogether more than a million okay extrapped again yeah and with 250 people right where was it in the desert of Morocco so we had like were there dancers and fire and no just cool music we we did uh it looked like a apple Apocalypse Now you know we had like 50 SUVs taking on our teams and driving down to the desert and this dance growing and it was just an unbelievable experience uh except that uh when we came back from the trip and we looked at our numbers and we talked to investors then reality hit us you know like all these investors we had lined up to do us here on and started saying you know your numbers don't look as good and and literally or or revenues especially uh expansion and contraction crashed in within two months so around that Morocco oh you actually saw churn you saw a real churn not So Much German contraction so how much you give pre Morocco after Morocco so primaroco we were typically 20 to 30 percent above plan in in organic expansion and the month before so around September October we're starting middle below plan I think and and now candidly we had 50 off when you say plan you say you have like 120 ndr Target and then you decide to drop to something that's exactly exactly yeah so we that's right we have a plan for it and we based on history so our customers tend to stay with us but they've cut their head count and the result they're fewer uh need for licenses and we sell per seed and so right now it's affecting us very badly uh in our renewal we get contraction and there's nothing you can do right you can't say well on that level you cannot say no no keep 100 licenses even though you only have 20 salespeople it's just so it is we're trying to keep our ndr up help us out exactly so what we do is that we do cross-selling so we switched I am bonus Italian cross-selling they no longer compensated in any or the only composite and cross-ending and that's what we try to do at the renewal so you haven't another team use TD paper but uh you use this other product that we have launched and so on so that we actively fighting the contraction with the cross-selling so we have to so but your question was different was it how did we handle the the layoffs so we come back from Morocco everybody's excited and then we really uh hear us in the face and um it was very obvious there like we've extrapolated that we we had um oversized the company with based it on on you know uh more than 100 growth with a certain assumption that new logos retention and so on and it was oversized and then we thought okay um do we gradually adapt or do we just take there's something that is going to last and we did the ladder so we cut we got a third of the company so we went from 250 to 170. you made a decision it was better to rip the Bandit off do it all at once or you're going to do it gradually the former oh that's once yeah um and it's it's super hard because you just party in Morocco you have a great time you're we're all friends we all we develop friendships and then you come back and say you know you you're my friend but you're no longer in the company so yeah that was a slack message said it's like so the way we handled it uh is uh we actually um first of all did it very fast so within the time we decided uh we decided on a weekend I called the board I said I think we need to do that the board came in and said yes you're right the boss said you should get uh like 10 to 20 percent and they said we're going to not we're not going to have a goal we're going to look at the who does what and I said eternity was more than 30 what was your net burn before the cuts per month do you know yeah I do know we were born he went to two million a month and that bottom line so one or two is your bank was going down one to two million a month and how much cash you drop in the bank and it was not a problem because I'd um 42 that's the number VCS will reach out to me to say we want to do your serum we want to do your C around right so you you have 20 minutes in the bank you're running one million you have 42 VC once you do CRM you say there's no problem I raise 15 minutes there was our plan we'd raise 15 million right and or 50 or more and and did you end up raising 50 million no we did not because that's usually on my data and I did not so so you you this is fascinating right you you see this trajectory um of growth in the spending we have and these pieces coming and all of a sudden things hit us so by the time we talk to the VCS then then our numbers look really bad uh because instead of um organic expansion with contraction instead of new logos with half of new logos so this is coming it's a universal very bad I said well two months ago or three months ago they looked amazing this is his job so then this is where we're not going to either not invest or not going to give you that but if you have a signed term sheet I did not have the same journey to do with the discussion and are there are the discussions popping back up now or no now they're coming back to us but but uh but now we don't want to take any money right so what we did is that we we well we had a choice we could have raised money at a very low low challenging valuation and says well in that challenge I mean this is what I was trying to get to your last round was November of 2021 and I think it was a seven million dollar secondary on a 625 million post right this side the tiger came in in like two seconds take the money it was another investor who priced it but at 625 yeah and you're at 30 in ARR today I mean it would be so hard in today's market to defend a 625 million valuation with 30 million Revenue although that looked like chump change about a year ago so that's right so how do you course correct I mean that's exactly right so so this would not do that kind of evaluation and so we and it was a secondary so it's not technically a Down Round right but but we didn't want to go at a lower valuation so we said we cut costs we go cash positive that's the way we do so that's what we've done that's the focus now let's get together we're there so you wouldn't take a deal but VC came to you right now and said we'll give you 50 million on a 250 million pre which would be about a 60 cut in your valuation you'd say no to that deal just because it's a terrible storyline on the valuation it's interesting it's not because it's still a real story because they don't give us I mean it's fun to have stories together but you know that's yeah I'm a story guy though it's hard to put that in the market right everyone will write a thing it's very unhealthy right yeah it's doubly and healthy the first one is that uh we'd raise 15 million even though we can see that the company is oversized right and so that that it's healthier to say I I need to I'm not going to throw money I'm going to adjust my uh my company uh headcount and spending that's the first thing and then a downright is always difficult or for everybody there's a dilution you know triggers and so on so you know we thought we can make it to just like to Cache positive and that's what we did I heard you yeah I heard you guys had an acquisition offer uh why did you turn it down oh okay he hasn't had any acquisition offers if somebody if somebody came to you and offered to buy the company all cash up front but it was also a haircut to the valuation could you sell for under 625 million today or could I could you I I think it's conceivable that somebody would give us 20x on already but would the board block it because they want you to be way above that no but I tell you and I we do not want to sell I know I know so so yeah so the answer is is it conceivable that we'd get an offer 600 million I think yes so you 20 run time is possible we have a very strong position strong brand and so on and our numbers are good but it's not would you it's could you uh so I know you guys don't want to but if you did could would the board block an acquisition offer look I don't think they wouldn't block an acquisition offer under the last round valuation well um that's correct they don't have the right those who came in that are very high Evolution do not have the rights to blow I see I see so we we could do it but we it's not our plan any questions for Nicholas we've got four minutes left okay Nina yeah repeat the question the question is where where did he cut head count sales engineering we decided to keep almost all around the intact because we didn't want to jeopardize our future so we made any major adjustments and we cut across the board everywhere else and the way we thought of it uh um for soccer fans why do you look at me like that no no because I took an analogy and I wonder if you it's a soccer friend if you haven't seen the PSG where they have Messi and Mappy and yet they lose you know with all these Superstars so we thought the way we're going to do it is like a young team not young in age but in in in in in seniority people were so we moved to a lot of director level instead of having sea level and and we restructure thinking of how the dynamic is going to work and so we cut across all departments but with a plan on how we were going to operate more efficiently with possibly lessen your paper on on paper but very motivated and very talented uh so that's that's how we did it and I forgot to mention so the way we handled it the the shock that we we had a six weeks during which all the company was focused in helping other the people who had been layoff find a job so we helped them on LinkedIn I wrote 70 recommendations I took calls from reference and we all said we're going to help you find a job and it worked well people did find jobs very quickly yeah so let's go over here on the end culture change after your big Morocco party to laying people off and so I'm going to be very precise we did an engagement survey before Morocco and we were at the 92 percent satisfaction with the average for uh SAS companies is 79 or similar questions you asked in that pre-morocco survey to gauge that employees done by this company called Trump who's actually your customers culture M okay they are a set of questions I didn't invent them they they have questions and they use the same questions as a result uh if they assess your company that assess my company the same way and they can mention I see the same set of questions so the average is 79 we were at 92 percent uh before Morocco we redid it in January we had 75 so we know a little bit below so obviously people are a bit traumatized as I completely understand it you know you see your friends living but we're still within the range where the the this is positive and we um as the advantage of being very focused and I think that the results come back this year and it will come back up what does Glassdoor say s yeah it's hard to manage last year no that's not true I don't know where the guys don't stay oh yeah fair enough I think I think I think the reviews are good but but yeah without very much attention to that any other questions yeah right in the middle take to get the cash how long did it take to get to cash flow positive yeah so uh so November December January February oh you're at casual positive today Oh I thought you were still working on it ah so all the changes you made you went from one to two million netburn to now you're cash flow positive oh wow that's pretty that's that's hard that's really freaking hard yeah that's hard it is hard but that was the kind of the equation right we said we've got a lot can we make it happen yeah I mean we work with so many folks we have found about that I can't tell you how many Founders in your exact same situation where the advice has been you need to do this and it still hasn't been done and they're still burning 500 grand net worth a month and we're like you need to do it hurry up yeah uh and even our investors are look at the Venture debt uh Revenue debt and so you know what we used to bootstrap in the old days it was a nice world without that and we were just healthy and so we went very deliberately toward that path okay there we have it from starting in 2016 running a company with his spouse it's not an easy thing to do either we're going from 2 million to 4 million to 11 million to 16 million in 2021 down to 30 million but more importantly burning a bunch a couple months ago pre Morocco post Morocco now Castro positive is very difficult last round seven on 625 obviously it's hard to get an evaluation nobody doesn't need it anymore because he's taken the Rajesh path profitability long term maybe in the next proficorn we'll see guys give it up for Nicholas from chili Piper thank you that was great I appreciate it

Intro I'm not going to stay here and be boring so I'm gonna want to interact with you as much as you're all learning from me I also want to learn from you today um I'm gonna start with one question how many of you are founders everybody okay um how many of you are um have heard about chili pepper before so brand worked um and I'm also curious how many of you are actually actively working on brand right now about half the rest of you have uh probably don't have that as a as a mission I'm going to Alinas Beginnings cover a couple of things what the name came from how we reached our first million dollar in AR how we actually measure the impact of our brand and then how we actually went about it when we started the company in 2016 this uh the chili pepper we didn't think that there will be a Silicon Valley show that would be called Pied Piper we thought it was funny but we actually came up with it before we thought it's hot and in Pipeline and it comes from revenue but I'm gonna take you a little bit back to my Beginnings I was born in Romania and like most entrepreneurs I started doing entrepreneurship stuff without really understanding that I was doing that I was doing it mostly out of necessity I was working about three or four jobs in parallel with school just to pay for my books and um I didn't know then that I just was a Founder at heart I didn't realize that so when I came here in from Romania to us I thought it was Disneyland here I couldn't believe people were paid what they were paid I couldn't believe what the economy looked like what people were going through and I started working for corporate America I worked for Bloomberg I worked for Reuters I worked for Pearson large companies where I was managing development engineers and products I Grew From an intern to a senior vice president relatively fast and I realized that two things were happening one my career progression was happening because of my own brand it was what was being sent about me when I was not in the room and also I was not made to make to work for other people I was just not made of the right material and when my co-founder said let's do something together I was more than ready we're known for Most Profitable Product um a specific product that we have we have more products but this is the one where we're making most revenue from you have a form on your website we put a JavaScript there and then if the prospect is qualified we put them directly in touch with the sales rep most companies have a thank you somebody will contact you soon they have an army of sales people that are trying to reach those prospects that are already expressed interest most companies was about 60 percent of their inbound pipeline like that which makes absolutely zero sense with an instant connection to a sales person they get to about double their pipeline which is about 80 percent uh conversion on inbound which is instant Roi and that's the reason why we've managed to stay stable throughout the all the oscillation that have happened in the economy and covid and now all the things that are affecting Tech have not affected us because we're a truly uh a strong efficiency in the inbound Pipeline and we immediately uh double uh double uh the qualified sales pipeline that happens from inbound when we got started this is me and my co-founders he's actually my husband as well so if you have questions about what it's like How We Started to run a company with your husband I'm here for you we started going to events like that and any event where ICP would be there we would go and talk to them about our product by 2017 I think that everybody who did any sales in New York was sick and tired to hearing from me or from him but that's how we build our pipeline it was just me and him and that's how we got our first millionaire I was support I was product I was engineering and and also selling at events when we started building our brand and I'm gonna walk you through some of the crazy things that we do because I have an engineering background and I'm obsessed with measuring we started looking at all the ways in which we were touching our addressable Market we have a particular account that we go after there are people that are using Salesforce or HubSpot and they have to be of a certain size we can't sell to everybody because they have to have a sales team and we wanted to know how everything that we did brand related Touches for the first time this accounts because once you get the first touch then it's a lot easier to send an SDR Cadence it's a lot easier to show an opportunity in their social feed to buy but you have to make sure that first Our Results you have that first engagement and we started measuring and these are actually our results from September 2022 as you can see we have a big channel that comes from events it's still a big driver for us we also have a viral aspect to it so there's product that touches our customers as well our SDR team is amazing our account executives are also contributing to our brand and I'm gonna get more into that um and we have Channel partners and some other activities that are starting to ramp up all right so how do we go about brand Brand when if you remember I was telling you that I realized as I was going through my corporate career that what was being said about me when I was not in the room was brand I realized that our brand was our employees everybody who worked at chili Piper was an in effect an extension of our company and the only way for me to be able to extend that brand was to make sure that our employees are a reflection of our values and one important one for me and it might sound silly at the first sight is actually ownership Ownership we Empower every employee to help us make decisions in the company product strategy pricing roadmap org structure anything anyone is empowered to help us make those decisions we have a decision memo process we achieve rough consensus we Empower people to give us their opinions in all our decisions before we make them and that helps a lot because when you're working a company and you feel like you're lacking autonomy and you're lacking impact you're a lot less likely to be an advocate for your company you don't feel ownership over it so why would you care why would you represent the company well outside ownership is a big deal for me we also have a very generous option package so that all our work is working for for them as well and my goal is to help all my employees become millionaires so we look at the option price and and how we can make them all millionaires we've already had secondaries so some of them did um and that made me very happy another big piece that happens when you're an employee of an accompany is your growth potential Growth sometimes when you're working in sales and all you're dreaming about is doing marketing or if you're working in marketing and all you're dreaming about this product you cannot be an effective employee of a company and hence you cannot be a brand Advocate as a result growth for each one of our employees is equally important and we hire coaches that are tasked with helping our employees reach their dreams sometimes those dreams are not inside the company sometimes they want to be a race car driver sometimes they want to be a developer and we don't have a developer opposition open for for junior role and in those cases we actually help them go outside and find their dream job because retention as a company to me makes no sense why would I keep someone captive who doesn't want to be there my goal is for them to reach their dreams Fun fun is also in our DNA and that comes across whenever people think about chili Piper I don't know how many of you've seen our crazy parties on LinkedIn no one all right those posts haven't uh I have one there we actually do a lot of crazy things but more mainly to celebrate life is short why should we celebrate when only when we do an IPO why should we celebrate only when there's a big funding we celebrate all the time and for instance our company trips this one is in Tulum in Mexico we've had them in an ashram in India we've had them in the desert in Morocco and we also went to Ibiza party but we have even us an Anthem our company has music in their in the DNA and we have an Anthem that uh our sales team I'm not gonna play it because I don't think I have access because of these values because we let people feel empowered to make decisions and we help people achieve their growth we also help them with their advocacy their own brand and we let them be with Advocacy whomever they want to be online a lot of companies feel uncomfortable when employees post things on LinkedIn that they disagree with a lot of companies feel uncomfortable when employees might post things that might be perceived as sharing Trade Secrets or God knows what we let people just be humans and that helps a lot a big part of our culture is also around Innovation Innovation and that is also reflected outside of our brand obviously these days uh child GPT everything is just part of the the normal equation but I don't mean innovation in terms of tech necessarily because when we think of innovation we think oh we're going to build a new product or we're going to build a new feature in that way I mean innovation in every sense and sometimes it would be just cutting pants half the pants to not um look normal on a stage but Innovation comes from from from different directions and creativity can um achieve results when one doesn't expect them everything that we do we speak about it Build in Public we build in public a lot of things that we've been experimenting with that have been successful or that have been failed we put them on our blog and we help all our employees write about the things that they're doing and we're sharing our experiments uh publicly as well the last but not least I was observing that when we started the company when I would get on a call with a customer and Create a Culture of Help I would get them through the implementation and I would get them running and I would see that their pipeline was working I wasn't stopping there I was looking okay they are in that job what do they need to get promoted or they're miserable in their job maybe they might be looking for Alternatives or maybe their boss might not be observing this other thing maybe I can help them grow their career like that or maybe I should just introduce them with some other people in their Network and that's not quite normal from a SAS company because we expect that we just deploy things and just let the our customers run with it and I realized that I was very focused on help and my question was how can I start creating a culture of help around me as well so that it's not only the founder but it's everybody else and we started looking at all the things that our employees were doing in order to help they were helping another department that was not part of their job description or they were helping a mother that was having a hard time at work maybe getting some extra child care every time somebody was doing something outside of the ordinary would pay attention and we would celebrate when we started raising our first we were bootstrap at the beginning and we started raising our First Institutional around I couldn't believe my luck when tiger Global came and started throwing money at chili Piper I could not believe my luck and I said this is not fair this is not fair I can't just take this financial success for myself I want to start a foundation and I want to be focused on help one subject that was dear to me was non-violence I grew up in a communist country and as a child I had a neighbor that would come to our house he was part of the security at that time his role was to basically put in prison anyone who would talk badly about the government and the stories he would tell when he would get drunk were not the kind of things that the five-year-old should hear he would talk about murdering people killing people for speaking out and that terrified me so when I had the chance to be able to have an impact I took it we started a foundation all focused on stopping violence and right as we put the money from Tiger Global in our foundation the war started Stop Violence the war between Russia and Ukraine for seven days I wasn't able to sleep I wasn't able to even go to the restroom without feeling guilt and everything that we've had in our funds at that time the million dollars that we put aside we put it at the border to make sure that people are taken care of that was not at the time where Red Cross about their things together the U.N the government were not yet in a place because everything was accelerated it was happening too fast there were mothers at the border who couldn't feed their babies they were they were in Without Shelter and without a warm blanket so we've put helped those um who needed it most at that time I'm not saying that because I want to look righteous but I really think that as Founders we have a duty to elevate those around us in whichever way we can I still feel that the war should be stopped I still think what else can I do to stop the nonsense that has Ripple effects in the economy but I strongly believe that without leaving an impact behind as a brand the brand cannot be successful thank you thank you

founders what's going on you guys know i love in-person events and they are back the recording you're about to hear is from our most recent event where we had hundreds of founders come together share intimate details templates kpis okrs about their business and it was something special something special we'd love to meet you in person if you want to see the next live events we have coming up via our schedule the link will be down below in the description if you're listening on itunes check this out on youtube you'll see the links in the description or you can just google founder path or latka next event we'd love to see you in person in the meantime though enjoy this recording it's a good one please tell me welcome to the stage nicholas from chili piper [Applause] not with a presentation uh volunteer to be interviewed by nathan that's called that is the best interviewer i've ever come across you know whenever you ask digs deeper and find the information so i figured that would be the best way to do it let's not bury the weed we're gonna do your life story but first you just did a secondary how much secondary did you do and then we'll go back to life story okay all right we did a secondary with tiger global we sold 33 million so we raised 33 million and we also sold 33 million that's why i have new pants uh because i was able to afford that those were expensive pants yeah trust me so this big theory the total round was 40 million and seven one second so the total was 66 33 in 33 out i see got it okay yeah actually and then we did another secondary uh in november and i told you it was six it ended up being 25. uh do you want to get right into that now everyone's curious go back to your life i've got to get back to the pre chili piper the pre-chili piper all right so as you guys hear can hear i'm french i came to the us a while back mid-90s to go to stanford my plan was to move to asia because for some reason i wanted to be in hong kong and i met steve jobs my classmates steve jefferson invited steve jobs to talk to the business school students and sat on steve jobs sat on the floor at the time he was at the lowest he complained about the press and said it doesn't matter i'm going to go back and change the world and i think i want to do that you know i want to be a tech entrepreneur so i did my first company ironically with john scully the very guy who fired uh steve jobs his funnies because goddard was talking about john scully as an investor he indeed he was not as texturey as he could have been but that first company i did was successful it was a photoshop for dummies um that was a software photo it was a software yeah it was at the time it's hard to imagine for most of you but at the time software was on cds and you would chip it you couldn't download it it was too uh so anyway i did that and we did 6 million our first year 11 million second year and then we got an offer for 50 million and john scalia one five or five oh five oh five oh yeah fifty five zero uh i was a minority shareholder and john said ah we can do much better and i'm thinking i'm out of here so i sold my shares i did my first million i was in my early thirties and i doubled down on a second company uh doing online uh universal shopping cart and garder was was asking who has done sas and i think i wonder if that would be called sas today it was an online i guess it was says 11 months into it i have an offer for 60 million dollars one six or six years no six zero i'm sorry i like get corrections for the french accent six zero and i have 72 percent of the company so i'm i'm about to clear 42 million and uh and the deal collapse and the dot bomb happened and and to shut down the company actually i did a deal with microsoft but i i laid off 65 people and and you sold all your pants someday i'll get some fans so that that's the story and then there's a whole bunch of other things and when when we uh what year was it this 2000 yeah okay then i did a biometrics company that that i sold successfully uh then i have a little secret donating like secrets so i sold my biometrics company in 2005 for a few minutes so it was comfortable but not full retirement money at least the kind of retirement i'm considering uh so thanks for being honest about that that's great that's right so so i i played around and actually in 2007 i started a company to do exactly what g2 does and i failed i felt and i was uh my interest was picked when god said you know at the beginning we had no reviews nobody come because exactly what happened to me except that i pushed two years into it and after two years 2009 2009 crisis happened actually i had also my daughter got hit by a car she was three-year-old so i had to give up and i never made it work and i'm thinking that's i don't get it because it's such a good idea and so now i see g2 working on billions is amazing anyway so it's an interesting story that sometimes you know you try and timing doesn't work or the angle doesn't work i had this purist id that i shouldn't pay for reviews you heard him say he gives five dollar cards to people to write reviews i thought that's not right people should just i don't know a bit of a idea at least raise your hand if you've ever paid for a review be honest yeah yeah yeah part of the game anyway so then i did some whole bunch of other things and and uh my i got remarried my wife alina is romanian and uh ironically she's a tech person she went to polytechnica romania and he was doing really well as a product development person she did the first ipad app that steve jobs demoed when he launched the ipad she was working for reuters at the time then she was hired at bloomberg then she was vp product at pearson and i kept telling her when you have this kind of talent you don't work for people you you make money to yourself and and i kept trying to convince her and and finally in 2015 she agreed and we started a company and that's chili piper and how much equity did you what was the split sensitive question it's a good question interviewer you're still married so she has 51 so though she has slightly less than me i thought it was fair that uh so i'm going to tell the full story of the company because it didn't quite happen that way um since we have time i tried to convince her in 2013 to do a company and she didn't want to so i did it on my own and i started a company um to go after a problem that i had i was helping a friend running a sales team and my reps refused to update salesforce and i said look we're not going to get your commission if you don't update salesforce and say look we have other things to do how many people have said that i'm sure you're not getting your commission if you don't update the damn sales field yeah right exactly exactly uh so i thought you know i'm going to do a smart system that goes into the sales reps email contact calendar find the information put it in salesforce and everybody's happy right they don't have to do anything and my system does it so i start that company i start building the system then i find that there's a company in israel called implicit that's doing the same thing i'm thinking well that happens right good ideas up at the same time and we're doing well we have a freemium product we start growing and then i found that a company in san francisco started before me and thought that it's such a good idea to do this smart capture of data that they're going to go and disrupt salesforce and that was a stupid idea that's what my thinking is that's not what kleiner perkins thought because they gave them 10 million and shortly after axel gave them 40 million that company is called relate iq that most of you have heard of then some vp at salesforce decided to buy implicit my competitor and i'm thinking they bought my competitor what am i going to do and as i'm kind of recovering from that information i hear that mark benioff bought related iq for 400 million dollars uh and incorporate videotape q in the company so at the time i had raised angel money 1.7 million to do that company and all my angels call me and say you it in french you know they've put 430 million to acquire capabilities you think you're going to win and so that's when i called elena to the rescue that's what really happened i said nina come help me i'm all right so now we're going to talk about uh um i mean is that first round on this is earlier this is pretty this is your funding graph this was before 2018 right was this chili piper no so this is this this company it was a shitty name it was called floating apps because we're floating in the cloud um that's also another reason why my wife should have joined me because she had better ideas so she came in and said we're going to be called chili piper and everybody say white chili piper and mostly because it's cool the way we came up with it we were looking something around pipeline and and we thought there was a super cool ad for the champagne piper let's say he who pays the piper called the tune which is a saying in british like if you paid the piper called the tune so say let's call the company piper and that was of course not available so we found a play on the word chili pepper chili piper i'm sure you get it and we launch it we don't get it [Laughter] to these days people call us chili peppers or red hot chili peppers so so we started and when i when we started with say we say okay what do we do what product do we do and and it was very hard to go back to raise money when i had just been rolled over by a bus right and so i told elena we're just going to pick a small problem and make money that's what we're going to do and so we were talking to some of these people who had used our smart product and it would as i mentioned with going to emails contacts and calendar and one of these customers who using it for calendars i have this problem that when my sdrs book a meeting for an ae it takes them seven minutes because they have to go and look in the spreadsheet who's next in the round robin then find the calendar create invites and the invite by the time they send the invite the prospect is gone and they cheat they don't do the right guy now can you automate that process and true story my wife alina said i didn't quit my job to do this shitty little product right and and i said you did because we need to make money and we have a product that people want to buy so so are you guys already you're already married at this point aoa marijuana a little more leverage well yeah we waited so so uh so i went back to the company the company called five star that woman who asked us to say would you prepay for it and she said yes i would prepay i was i'm sure she would have paid much more but we were so desperate uh we we did the deal for 20k so they gave us 20k to automate the little and there were like three years worth of software anyway of 20k we get started uh and actually clear the way you cause a lot of people are trying to do that if they're moving into it was it a poc did you call her them a design partner to help you build the product together because there was no software they could test yes exactly right so it's a good question because you have to structure it you have to be smart right you can't do a service uh the the fee has to be a prepayment against software because otherwise they're on the ip right if you do a service business you do develop for them and they own the ip so the is very important if you ever do something like that where you ask up front somebody who needs something and build it for them that you don't structure it as a service business because your structuralities are the fee sometimes later we did acceleration fees so product roadmap acceleration fee so people give you money it's your money and they own nothing i've never heard of a product revenue acceleration fee that's a road map product i am not a trash guy i am a waste management consultant what the are you doing revenue acceleration fee forester forester as a customer they wanted us to do something and they say we'll pay you right and say where would you we can't do something custom because then belongs to them so i say okay you pay me a product road map acceleration fee everyone's gonna we're gonna see some pricing pages over the world tomorrow this is that's gene round up that's a round of applause for this smart thank you just to be clear though what i'm more interested in is you're selling software that doesn't exist yet so as a sales guy how did you convince them to do that how did you sell them that you could actually build it was it a powerpoint was it a one-pager did you bluff it in a figma design to make it look like it's already live how did you do it or the above yeah so so no but that you have to think uh uh she came to me with this problem she said i have this problem and i have not found a solution can you solve that problem so i don't pitch you know she she so the question is okay i solve it how do you pay me and how much right so we did what you said we did at the time sigma was not as big as it is envisioned yeah something like that envision or powerpoint whatever but we did some specs we said look this is what you do it's going to look like and and pay us 20k i think it was two payments 10 and 10 and then and then go live and then we had a product and then we went to uh to um pitch it this time to other companies and our first actually paying customer was a greenhouse here in new york so we were very excited the company was five of us so alina myself a tester in romania and actually two engineers in ukraine that's how we got started and from the beginning we said you know there are smart people everywhere we can talk about the ukraine navy and uh so we're very attached to ukraine because these two guys made us successful we thought there are smart people everywhere alina is romanian i'm french alina and i love traveling we want to be so we're going to hire people anywhere and let them work from anywhere so today we are 220 people we are 185 cities and 40 countries so we have people in countries uh i'm sure most of you could not place on the map like uh north macedonia or and what tool do you use for payroll uh yeah we used to do all our self-contract we do contracts contracts and now we're on oyster oyster okay yeah so that i was cheap we were bootstrapped i was cheap i didn't want to pay the fee to oyster so i said i'll just send them money it's okay i go to chase that stand money is no problem but then when we did our b run uh the the attorney for tiger global said that doesn't look very uh safe like a from a liability standpoint right and um so we said okay we'll move to oysters no we know we move oyster we use oyster so that little product that we did um got us bootstrapped the truth is that we had a dry summer the first summer so we put this on the map so everyone sees this timeline up here this is pre-2017 on the left side of the currency oh yeah that's what you have this is great 2017. yes so you can look up at that side too yeah you have something at zero there right uh so it's easy here all right so two we started in 16 uh that's right it's 16 here so we got 20k another 20k and then we had dry summer uh and then we in business with a whole bunch of big companies like square wants to buy but it took us a while so in september we're out of money and i should mention that it's been a complicated story but uh with that attempt that i did to do a g2 like uh then i had a divorce and my daughter an accident so i was left i think nobody's going to cry but i was left with my belongings being a house in the hamptons and in the bmw so we liquidated that in 2016. we sold the house we sold the bmw we put all the money in the company and then we still ran out of money uh in in october so we told our two ukrainians uh do you guys want to take stock uh for your pay in september and they both one guy said uh you know you guys are so crazy and may even succeed so he took the he took the he took the stock uh well you're talking like one two percent sort of deal it's a couple you got a 100 000 shares and we just did the secondary at sixteen dollars a share so they got a hundred thousand shares and and so at the penny level or what was that a dollar exercise spread what was the price no shares were given shares there was a yeah and and uh as i said the secondary usd is 16 dollars a share so each of them that pair for the month was 1.6 million each yeah i'm sure they didn't sell all of it though they didn't sell everything everything they saw the chunk of it yeah so we we they made millionaires in one payroll yeah we were very happy about that uh uh at the time it didn't look that way but uh but it did happen so so that that's 2016. and then we start getting some good business and and then um we start looking at now how do we build a real company because now we you know we we cash positive we can hire more people but but we we don't have a real business when you talk to vcs is that little ridiculous product they think the same as the leaner ridiculous product that you do is a hobby so we're looking for other opportunities to do something and we found these people called inbound sdrs so say what is your job as an imminent sdr so you've seen on the website when people come to request a demo they submit your form they get a thank you page they say thank you somebody's going to call you well it's my job and i'm in manager i call them to book the meeting and i said it's great how is that going for you and say it's going great i'm converting at 40 percent and i thought you meant to say that 100 people asked for a demo and 60 of them didn't get it and the reason why they thought it was great is because the outbound guys convert at one percent right they they go for people but of course people never ask for anymore yeah it was nuts but i have the the cro of zoom info tell me i'm not touching it i'm converting at 40 percent so that seems crazy so now we thought we're going to fix that problem so we built a solution a javascript that you put in your page when people submit a form it automatically qualifies them we do a real-time data augmentation data from the form data from crm we qualify we route we retrieve the reps and we we book the meeting real time and um so just to fast that's the core product that's a good product because the key thing i want to get into is how you went from single product great mousetrap to multi-production exactly so revenue was kind i mean not flat but right you were sort of stuck between a million and three million up to 2019. something happened in 2019 is that when you started thinking no but so that's a fascinating thing that that if you look at this curve that's fascinating so 2017 we come up with this id and we build this product summer 17 segment the company segment does an a b test to see if it works they double the inbound conversion rate so they go they didn't disclose the number but they doubled it and they bought it immediately and then facebook comes to us and say we want to do that for our smb teams they buy our software we do a contract with facebook by the way we have a no discount policy so i do about five rounds of negotiation with not negotiation with the procurement facebook i said but you know with facebook i say where we chili piper and uh five rounds and the same way we don't do that and the other thing not only do you know discount but we say you pay up front so facebook say we pay 60 days and i said uh so you have all the money in the world we have no money why would you would have found you right you don't do 60 days if you think you pay your 60 days anyway in the end they said okay and and they and we did a quarter million dollars with facebook so over over time so so now we're thinking we're golden we have this strong product it doubles inbound conversion rates and and um facebook is a customer segment has proved it and and nothing happened amazing our previous product uh what we call handoff thing continues growing but that new product nothing happens and you know i take the blame for maybe doing a poor job marketing but for the longest time sales people were resistant they had the sdr team they would stay with it they would not want to uh to make the change so what you see on our curve there in 17 we we had this product already but it was not happening so all the money was being made for our legacy product and and was uh pushing our sales guys say guys you have to push the new products it's much more powerful it's much bigger on that and then finally eventually the market reaches a critical mass that people know and discuss and and as you can see in the curve then we 2019 we started doubling and we went to uh seven million uh what was valuation that year 2020 so the valuation in uh 2020. so we did our a run in 2020. if you go back 18 million around 2020 80 million valuation no no no 15 million round right that's that what you did in 2020 yeah that's right youtube isn't wrong yeah yeah yeah you made me think my data might be wrong i almost should no let's go back to the data yeah it's going to be small for you bigger over there too but the revenues go back to the revenue revenue okay yeah the curve was easier so in 2020 uh so what happened uh it's a funny story in 2019 no 18 social capital came to us and said we they understood that they were lucky and they gave us a term sheet to put 2 million on 20 million pre and then as luck would have it social capital imploded you guys remember social capital expects we meet everybody we have the charm sheet we at the lawyer fee and then the guy decided to dissolve the venture firm it's like as you can tell my life has been a bit of an adventure um so now we have no capital uh social or not zero so we continue um and then cover it happens and then when copied happens then i freaked out because i had seen the movie before where you know you have to think of this company in 2000 where we're 65 people we're doing great and then everything collapsed i'm thinking the same thing is going to happen again everything is going to shut down i'm going to lose my company so i took a payroll protection program loan 350 1000 hours and we held tight and as many of you have experienced some things went down like we you lost a few customers but others came to us and said we need to book more meetings and online anything so we continue growing and then all of a sudden vcs came to us so every bc firm stopped investing in march thinking i wonder what's going to happen then they saw that the world wasn't collapsing and they think we've lost three months of investing we need to find these good companies so all of us in out of the blue i am getting tons of calls from vcs um vacationing in france the people come and say your dinner is paid for and you're out of money no another money we yeah we bootstrap we're making money so i could pay myself dinner in france um and and the guy comes and say it's paid for and a free bottle of wine i'm thinking i think it's selena right so i think it's not my birthday and but she always forgets my birthday anyway so she would have known as one of the vc firm say we sent you a term sheet we think you're exci your thing is amazing and they sent me sent flowers to you know all the courting all that so eventually yes i said okay let's do a deal so that deal was june 2020 it was base 10 and they offered uh 15 on 55 pre and there's a 20. 20 so we're doing around four plus million so it's it was around 12x there was a number run rate uh so we took it we took this secondary our balance sheet so uh the reason why people say it's 18 because there were three million secondary okay yeah but at that price alina and i had no interest in sending any of the shares because so it's just the very beginning and and the end role that by the way i didn't shut down the company when when the thing happened with the sales force and the thing i took the same company i renamed it and i carried my android with me so i didn't know this is the right thing to do for early backers yeah at least it feels good when making money yeah so that's what i did so even though we bootstrapped some mandrels from a previous life of sin so we do this round three million of a secondary and then we keep growing and then as part of the run with base 10 google came so gradient radio adventures they put three million so the guy coming on stop real quick we're out of time so we either do group photo and lunch or are you guys just happily allowed to go five more minutes with nicholas should we keep going there we go okay i'm sorry uh i'm from the south of france i took too much do you want to talk secondaries okay no i'll tell you no if they didn't clap you're off stage would go to lunch people love you so keep going okay all right so now another fun stuff uh the google guy says there are crazy people out there called tiger global they go and drop sp uh term that are nuts get on the call with them and i say but we're not raising money i have we still have the money let's get on call with them i cannot call with john curtis he says okay we love your business oh good literally he asked me ten minutes of question he said okay what price would uh which is revenue at this time so now we're at seven seven million yeah 20 20 seven so you see that seven right we no it's it was a march 2021 so we just passed seven okay yeah so we passed seven and uh he said what valuation would you do a deal and we just did that deal at uh 55 pre so i'm thinking you know if he if he gives me 150 it could be cool but i say nothing he said how about 30 million on 320 pre yeah exactly i think we all we should happen to us you know there you go you're right these guys are crazy i said let's shake hands and we shook hands on zoom you know like so and two weeks later uh immediately after the term sheet and and three weeks later the money in the bank they were the easiest people to work with they didn't ask for a board seat and so it was amazing and so then we did the secondary and then we i sold a little bit uh and and my angel also seems such a high valuation so we sold 33 million worth of stock altogether employees but then it doesn't stop there then the company with the money grows faster as you can tell and we go from seven to six 16. so we now more than doubling so then more people are interested and and another firm comes and say i want to do a secondary on a 500 million valuation so now we are october so last october to which i said the world africa baby so i called the company says when offered 500 do you want to beat up so we got to 625 yeah so that's exactly i feel the same way i see this pair of pants i'm gonna buy myself and the club and the car is very nice so as it's ridiculous about a porsche about a boat about a house in the hamptons you name it within two months i bought the whole thing right before summer and yeah so we did 625 it was the height of the market uh we that was uh in the end well at 500 million with 10 million worth of sale at 625 with 27 million so 27 million uh secondary and uh and that's what happened 49.50 x yeah yeah so very high multiple in the question then everything collapsed but we cool because we have money in the bank we're growing we have everything so then back to the topic of the of the discussion going from these little products we did when we did this concierge product we realized that um so we doubled in non-conversion we realized that the other friction point in the inbound process so we will extend now we call it our inbound conversion platform we've added a chat that we're about to launch that will help the bot chat book meetings much faster than anything that's out there we're helping uh lead distribution to go faster for those who are not ready to book so we're expanding on on this value proposition of inbound conversion and and we're building a platform when i started the company i was very aware that it was not sustainable there's a smart vc in boston uh yes that's right davis we said you have to be aware of the gravity well it's a super interesting concept the gravity well is that you build the software and then there's somebody next to you that can include your features in their offering and so boom the features fall into that product the gravity well and uh and you don't want to be in that position where somebody comes and just swallows you it happened to a company called serious insight this is integration with salesforce and salesforce said we're going to do it ourselves and boom the disappearance so at any time we're looking for something that would say we the gravity will and right now we see in one conversion platform we uh we there's no salesforce could do it but they would have to offer something competing with us for people to choose the salesforce solution just like when cerseforce bought pardot it didn't kill marketo and hubspot because it's a different gravity well so now i think we're in a good position to be on gravity well so shits and giggles aside um we love taking advantage of a vc that is just like hype market want to get into good deals makes complete sense um if we quantify so to date you and elena totally sort of all secondaries added up together range how much have you guys sort of taken out of the company 20. okay together yeah okay so 20 out so i don't know a better way to ask this um when you raise that valuation your optionality is like very i mean you have to grow so much to get a rational buyer to pay where there's actually a successful exit do you really care you've already taken 20 million bucks out of the business you've already won uh yeah we care because uh as uh mikita was saying when we started the company we wanted to make money but not only to make money uh we we wanted to first it's a...