Chili Piper Revenue, Valuation & Funding (2025)

Introduction quick context this was recorded March 28th and 29th so a couple weeks ago at my live event SAS open.com we had a thousand software CEOs there if you missed it we hope to see at the next one September 5th and 6th in New York City SAS open.com but for now let's jump into the recording once you feel that you're having a conversation that feels artificial you lose trust it's about the quarter of a million impressions which is hard to get we see conversion rates of growing from 40% to 80% [Music] Chili Piper's growth journey: Bootstrapping to profitability this is our growth to date the first years we've been bootstrapped and uh then the gods of SAS were kind to us and we've been um showered with VC money as well they both came with the good and the bad um this year we're finally profitable and we're growing which I'm very grateful for I can sleep at night well not all nights last night there was a poker game do we know who won you won shout out for Jen uh what we're Core product and demand conversion enhancement known for is demand conversion um on your website if you have contact us or uh request a demo uh we put in touch directly with your sales team so there's no leakage in that inbound funnel people don't get ghosted uh we see conversion rates of uh growing from 40% to 80% of that inbound funnel we have other things in the in our portfolio of products but that's what we are mostly known for uh and in this presentation I'm going to AI's role in Chili Piper���s operational scaling follow the pattern that I was given around um the things that we actually do with AI with our Skilling with our processes um AI in our conversations with our customers and in our ecosystem as well I want to start with our employees we actually put it as a constraint on the growth of their career within chili Piper on their promotions and on their salaries how well they're learning and how well they're upskilling in AI as well we have actually levels set up so that we can determine whether they're making progress there because I don't think that if you don't measure it then it you don't see action uh and I actually made this uh framework uh open sourced I put all my skills for for instance for my marketing team what I'm assessing them to um go grow from a director to a VP or from a senior to a manager and so forth and how we're mapping the various skills towards those levels we also make it the automation with AI a team support everybody in the company is collaborating in improving processes um so sdrs contribute account Executives contribute we all want to make the machine run smoother so we have a slack channel in which we give ourselves ideas on things to optimize with AI and we prioritize very simply if it's a low lift and it has a big impact we do it if it's a High um high level of effort and it has an high impact and we can bring a tool we bring a tool as well and I'm going to give you some examples of the tool tool that we use and some of the things that we've built Utilization of AI in creative processes and content generation ourselves um obviously we use AI also for our creative actually who who here is using AI for Creative for your creative motions 1 2 3 4 5 who here is using AI for Creative successfully so so okay we have 5% with more direct success these are the tools that we are using um with our creative team uh one of them is Surfer SEO the team is right there shout out to kazik um it's a very useful tool to creating SEO optimized content out of the gate uh we also use oppus for shorts um this script for um for our videos for our podcast I don't have here uh one other tool that our some of our sdrs use but I've just seen will we also use lavender shout out to the laender team um and we also do a lot of experimentation on our demand conversion Channel because that's where our product Experimentation and optimization in sales processes is so we've been experimenting with Distributing um high level um hand raisers to best closers as well so as opposed to just doing a round robin or doing a regional distribution we also do uh based on conversion rates and that has yielded impressive results as you can imagine it's quite controversial because you have your newcomers and you want to distribute leads to them as well and you want them to practice so we're doing a fair distribution there we're also doing a lot of uh AI experimentation on the funnel with mut I don't think the MU team is here today um on our sdrs we started building our own Bots for a lot of these things we are practically empowering sdrs with assistance and we are Distributing our Bots with ducts and tapes with ducts and tapes on doing research on creating account uh information for them to make sure that when they reach out they are very uh precise in their um in their messaging has any of you has been SDR team strategies and AI-powered support prospected here by our SDR team may my SDR Team all right they're doing their job I like that um and we're obviously doing a lot of ab tests on on their cadences but every message that we send comes from a human and I'll explain later why um for our count Executives and our am we actually um prepare them a lot as well uh so that when they reach out to someone they know um when they talk to someone they know ahead of time time and we we scrape uh this from our partners from all sorts of signals they know ahead of time if a competitor is already using our product the use cases in which a competitor is using a product what use cases a particular account is active in the market um we also know if they've been active with a previous customer or with a turn customer so that we understand the entire picture before we get on that call um and we also take the transcripts of our account Executives to uh put marketing attribution in in our CRM to actually know which some which marketing motions are working and which are not this is um an example of how the boat bots are scraping things we have as a data source snowflake so we um consolidate all our data in there from our CRM from marketing from our website from our product and then uh have intermediary places where we store the information that we have and we distribute bots on it we are now playing with some other tools to help help us do this at scale because we have a lot of accounts that we reach and our SDR team books more than 500 meetings a quarter so as you can imagine this becomes very hard to manage at scale so we're now testing some tools that can Wrangle the Bots for us um any question on the on the sales Bots part Sales bots deployment and their functionalities yes uh we're deploying uh Bots that go because in our case we sell better to companies that have a contact us form on their website and it's not hidden we check if there is a contact us form and how it works how it distributes so we have the Bots kind of do the that research work for us and take screenshots so that we can include that in the Outreach um we also very strong um Believers in doing motions in in the goto Market Market space uh using our ecosystems so we have a very robust partner program uh and we also work a lot with B2B influencers and I want to show you how we're using AI there as well um on our on the partners front we Partner program strategies and AI integration actually have both a product partnership program and a channel uh Channel partnership program um and our Playbook is actually in this book by Bob Moore and he's here and is presenting this afternoon if I'm not mistaken as well the book is really good it's the top seller and you'll find some of our playbooks here um we're now working with um some tools that are um listening to calls with to sales calls and if a partner is mentioned then we know to reach out afterwards and have a conversation about how we can go to market together um we also have Bots that are helping us in terms of signals when a new customer of a partner uh goes on board it pings our sdrs with information about what um how they might be reached out effectively at scale as well um these are some of the influencers also that were working but we haven't deployed any bots in our relationship with with them and I'll explain to you a little bit why does any of you recognize some of the faces here of this influencers two three okay all right because I believe products these days in AAS company are super easy to The crucial role of human relationships in business copy it's very easy to build product um now with AI content is very easy to write the hardest part is the human relationship part that's why we don't deploy SDR that's why we don't have ai Robo colors that's why we don't have automatic sdrs because I believe that once you feel that you're having a conversation that feels artificial you lose trust and that's the hardest to build that's why when we work with influencers we work with those that um don't sell themselves short who are genuine in their conversation and then everything that we post feels very playful and authentic to them and authentic to our brand so we let them wild we let them we don't have constraints with our legal of what they can post what they cannot post um we truly let them let uh put whatever um comes to their mind even if might not be politically correct these are some sample Impressions that Impact of influencer partnerships on brand visibility we get on our typical work with an influencer this is one sample that I pulled before I came here from qan it's about a quarter of a million impressions which is hard to get in other kind of even if you are very good at writing content these kind of impressions are hard to get in one quarter we get about four four to five million impressions from influencers and again it comes to my belief that if someone comes across as a ro robocaller somebody comes across as this genuine then that relationship with a brand is just done I made it short because we're running out of time but oh there's a QR code here if you connect with me on LinkedIn and you just mentioned SAS open I'm glad to share with with you anything that you've seen here that you might be interested in and um also to have conversations about uh running a business and I don't know maybe doing some therapy together um cool any questions from the Q&A session: Insights on influencer compensation and marketing strategies room pay influencers how how much are we paying influencers influencers yeah for that 250,000 um that one that one influencer is about $3,000 a month it's completely worth it um we have others that are um lower than that we pay them um $200 proposed or $100 Propst we have different uh tiers everybody's very different everybody prefers to work very differently some of them um like to just work with us for brand exposure themselves so it might be quite a uh Net Zero cost to us but because they want to uh help their brand they work for free with us as well so the entire tier so you've I've shown earlier that we actually do transcripts of our account uh executive calls and we uh look for mentions for our campaigns and influencers names um sometimes we use uh UTM in our in our call to action as well but it's a lot hard to go from a LinkedIn uh post to a lead magnet of some kind or get them people to book a demo and ever since we started the company eight years ago I've been very very bullish on brand and I do think that Impressions help more than than one imagines actually I'm curious how how many of you knew of chili peiper before coming here that that proves my point brand work really works any other questions all right um I just approach them and I say I'd love to work with you I like your work how do you want to proceed and sometimes they throw a number out there that's completely crazy then it's harder to uh back from it but they have in B2B is a new um it's a new line of work for many of them mbtc is very very different it's much easier but in B2B it's harder to have the right conversation and the right content so many of them can afford to have crazy prices and some of them are just starting and are learning alongside with us right thank you Conclusion [Music] everyone hey folks if we haven't met yet my name is Nathan Latka I launched and sold my first software company back in 2015 and went on to write a book about it which you guys made a Wall Street Journal bestseller purchasing over 30,000 copies thank you so much for that after the book I launched this show and went went on to create founder path.com I raised a large fund to do non-dilutive deals with B2B software Founders so far we've invested in over 400 software Founders totaling $150 million here in 2024 we're doing three to four New Deals per week so if you're looking for Capital and don't want to give up Equity go sign at founder path.com for free to get your offer

Introduction to Chili Piper and Revenue Growth guys chili Piper got going in 2016 2017 helping sdrs book meetings they broke 2 million Revenue in 2018 went on to raise a lot of capital broke 15 million in Revenue in 2021 and then they had to make a drastic change when markets compressed they took their team from 225 down to 150 after a team retreat in Morocco that made them instantly profitable at least cash flow positive bought them Runway now with a multi-product approach over five products in the market with a new chat GPT or sorry AI product coming uh they continue to drive growth they have 2 customers paying on average $1,200 per month with a self- serve option getting ready to launch which we're excited about hey folks my guest today is Nicholas Vandenberg He is building a company called chili Piper now you might know them from their early product which really has to do with scheduling but they really expanded nicely to a multi-product approach he's been on the show many times he went the hard route of by the way when I say hard route I mean it's hard to raise VC he did it I mean he played the game him and Alina the co-founder they played the game they got a lot done tiger came in with a huge round they did the secondary All That Jazz you know they then had to make some Cuts reposition the business and now revenue is growing again we're going to jump into all of it today Nicholas are you ready to take us to the top let's do it all right I want to go back to the team Retreat you knew hours after the team Retreat you're gonna have to lay up a bunch of people to sort of right siiz the business what year was that again just remind my audience just last year Team Scaling and Profitability Strategies was last November 2020 June last November and before coming on here I want I wanted to reach out and said hey how's Revenue going and and you told me I don't want to say it out of our email but you told me Revenue today is about what in terms of ARR 30 million run rate and that's up from about 16 million in 2021 two years ago right uh yes that's right exactly it's almost doubled over the past two years in the middle of a big layoff I don't think you raised any additional capital is that correct no we switched to being cash posit two amazing okay so I want to dive into the story right so how did you get to Casual positive well so um we had to do a painful a painful reduction in force um the story you're telling is that we took everybody to Morocco in an unbelievable trip and we got a lot of for that because people say look at this idiot they're spending all this money uh but it's irresponsibly but it's not quite the way it happened uh we do a trip every year we actually just back from Iceland uh even though we catch positive you know we manage our cost we we flew everybody to Iceland um in Morocco we were operating under a certain growth assumption um you know and so we had more than 200 people at the time in the company um and um as the market slow down we thought okay let's talk to additional U sources of financing to see if we can continue that growth and when we came back you said a few hours after it actually took us an entire week of meetings with poti investor immediately upon coming back from Morocco where it was clear that that the market Chang too much investors that lost appetite so to your question we we laid off a third of the company so that's so 200 down to 125 uh two went from 225 to 150 okay 225 to 150 um in one shot and the idea was say we do it it's done we're not going to have other layers those who stay are in for good and and they're not they're The Impact of Multi-Product Strategy not going to worry and so we scaled it to price point where we can tell we could tell that we were going to be cash positive right and and so that's what we did we did one go we we did the with as much support as we could for those we who couldn't stay so we help them find another job or place them I wrote many LinkedIn recommendations because of course when you go from when you get one third of the company you're going to have to let go a lot of very talented people the people were were performing you know it's just the nature of it so it's not like there was anything wrong with anybody so um it seemed that fortunately most of them were able to bounce back even though the markets were difficult I'm happy to observe that the CH Piper has become a strong brand and and people are interested in hiring X chv Pipers We call we call our we call ourselves Pipers so um you know we see all of them fighing good job so so uh obvious been painful transition but but just works well oh what's going on there YouTube good to see you guys now imagine this you love watching these interviews with SAS Founders but imagine if we took all of the valuation data out from over 287 interviews I've done manually saves you a lot of time well we've done this we've built it into the beautiful interface inside of founder path check 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link this link founder path.com products SLV valuations or if you go to founder path.com and hover over products click on get your valuation here and go ahead and sign up to give it a whirl again all that valuation data live right inside the platform I hope to see you there all right let's jump back into the interview my first interview when I when I first discovered you Elena was back in 2018 you guys at that point were making on average you told me arpu was about $820 per customer I then had you on again in 2021 and that had grown to about 1,200 I I'm going to guess you haven't told me this but I'm going to guess RP today is even higher than that uh and it's or maybe flat but because of your multi-product strategy can you maybe just take us through the quick product R you launched with a scheduling tool what products do you offer now today today we uh bringing to Market of food r of product uh focus on what we call in non conversion so we uh we exactly right you said we started with a scheduling product but it was it was already more targeted than just canly our initial product was to help sdrs book with count Executives so we already had routing run robbing and you know and one click and something people understand that we give the ability for sdrs to book um themselves so can is about having the prospect booking you send a scheduling Link in the prospect books but SDR doesn't work that way you're on the phone you you you're the one who is booking So currently actually doesn't start use case and that's what Learning from Product Launch Challenges we started with so the early days and we bootstrap we did raise money in 20 19 2019 three minut small round and and then really in 2020 20 2020 um but but so so when when we we launch this conci product where when people come and submit a form and they see thank you page and companies lose their Prospect in that thank you page we build this product that qualify RS in real time now we've added a product to do automated lead distribution so for those who don't ask for a meeting but but come to webinar and all that uh we call it drro and we launching soon a chat product to have the full range of what it takes to convert interest into a pipeline basically um we also launching a new version of a our scheduling product where we've um start long and hard about how AI can help that use case you know a lot of people say I want to do the chat GPT of Kenly and and so we have something coming in the in the first quarter that we think is the chb you know but but but we'll see it's um it's um very cool product I'm excited about so we have a full range of of the tools it takes to convert again convert interest into pipeline when you have a interesting Prospect whether it's by email whether on your website where it takes to be there and in terms of go ahead I didn't mean to cut you off there Nicholas but uh in terms of order of operations so today if people go to Solutions dropped down on your website you've got from when I can see five products you're really your first product though and was instant Booker and then what what came after that handoff drro concierge live or form coner okay so it went uh uh handoff then instant Booker then con then con life not distro and soon chat that is not yet listed on the on the website will come soon one of things Understanding Chili Piper's Customer Base and Market Positioning that I think a lot of Founders um don't spend enough time thinking about everyone has a product Vision but they don't think about order of operations sequencing like what should come first and then second and then third had did you guys ever debate this in I'm sure you have a million project is how do you decide what to do next and then after that and for after uh we debated internally we have this thing called decision memo where we list the options of how we should do things and everybody contributes their the data and their evidence that they have supporting one way or the other um so that that's how we do it and we try to be very strategic about it but um we don't always get it right so little known is the fact that in 2020 we launch a product called inbox uh because we thought okay we need to help people engage with their buyer and is a lot happening in the inbox so let's do an inbox an email inbox we we talking about like a a replacement for Gmail an email client and we pulled it out after a couple of months for that very reason it's of sequencing we're not ready to bring this product to Market we we are still we still have too much work to do targeting marketers targeting UPS and it was too early for us to go after the young users and helping users even though I love the product we pull it out because you know one thing is to have good product another one is to be able to bring it to Market yeah and I I most entrepreneurs [Music] are misunderstand the uh the challenge of bringing your product to markets you know you take so much energy and so at the time we felt that we didn't have the energy to bring this product so your question now we think long and hard about which product is closest to what we have now and and most likely to succeed and and um relevant to existing customer base that we can elever that customer base to to to accelerate and that's how we sequence them I mean what convinced you though I mean because if you go back to I think it was like February of 2020 is when you launched in your drop down it was under sales execution and it's out inbox beta invite only so you were thinking about inbox then in February 2020 when you go back and look at the thesis on I mean because Exploring Growth Channels and Marketing Strategies everybody was convinced let's go launch this product when you go back into a postmortem what were some false assumptions you made back then was it just your capacity to handle a new product line you overestimate or underestimated how much work it would take or was there something else the first adoption we the first hypothesis we made was the speed of adoption uh we got people interested but then they tried it [Music] they didn't use it for some ofc reason and it takes a lot of work to get people to adopt you know you get this myth that slack went up live and all of a sudden and maybe it happened to slack but it doesn't happen to the rest of us you know to get a product to get adoption it takes a lot of energy and the false hypothesis was the level of energy we take we thought it would just take turn its on and and that was not happening so uh we just thought right now we have too to too much work still to do on other products to continue the adoption we can't afford to assign these resources to invo that's what happen well it's a tough balance because I imagine people on your team going okay let's go research front app and let's go look at shift and there was a b you know to-do it there's a bunch of these other tools that were only doing this sort of inbox idea and it looks like it's simple and doing well and it's a logical thing for you and I Founders to go okay let's go take some of that market share we have't built-in customer base but it's hard you're exactly right and and what happened that we we had a lot of good ideas about in box uh which I still think are good ideas uh but good ideas uh still need a lot of work to get adoption and so um so it was painful to say well pull it out especially those who built it but it's the way I thought of it like we say in French you know it's not farewell it's only it's only Ora it means it's not farewell forever it's just goodbye be here interesting okay so okay that's a PR strategy that's super helpful to understand update us on customers today how many paying customers pay for CH one of Chili Peppers products yeah i' say what the question how many paying customers uh 2,000 so about 2,000 okay Future Plans for Chili Piper and Upcoming Projects great and are you gen would you generally say that you're moving up Market or staying where you are midmarket SMB um currently we staying where we are we've been staying where we are mean Market in the last two years um we are launching self-service version of our products in the first quarter so we are going to carb more efficiently okay wait take me into that decision because that's a big why go that route versus going up market and only looking at 50,000 acvs yes you know that's a contrarian view I have actually uh because you hear all the go market go market and uh and uh I'm observing U how H spot is taking market share away from Sal force and they take them from the bottom and then from Market one from the other they take them from the bottom because when you start with a product that can serve the the bottom efficiently and you start going up uh the incumbent that started up has a very hard time competing right the product is more complex it's more expensive and and so I've always thought that the the way to the better way to go at Market is good down Market first um yeah so that's go right I I see oh DHA keeps repeating oh we love smbs we loveb we just wake up for smbs and in the meantime if you look at the product they keep bringing Enterprise features more and more Enterprise and they get more Enterprise business and you know and so I'm sure on purpose like pretending that he L me in the meantime he's going and crushing cforce on the Enterprise side you know it's like like like the stairs mode so that that's the that's what we're doing we're doing we doing a self- service we want to we want to make sure that we serve the the smaller guys out there well efficiently for both paries and um and we think this these are the foundation that you will take toh to scale back up do you feel like your product's in a place where um people can successfully on board without anyone from your team touching them or helping them or getting on a call with them no we reded everything we're relaunching wow okay so so so so so the answer is yes but uh only after uh years of investment in R&D and and we we've had so many mockups of the design of the product that we do we even recently we completely change again we launched something and it didn't quite work the way we wanted so it takes a lot Conclusion and Key Takeaways of work but I I do think with there we continue there yep you did a $15 million series a in December 2020 at a 60 million post and then a $33 million series B in February of 2021 before the big secondary in November 2021 at a 625 million post money valuation this isn't just you this is the whole Market everyone's valuations are down how do you talk to people about their the value of their options today and making sure people stay excited and incentivized to keep building at chili Piper yes so we riced we Ric the options so we uh I went to the board I said look uh the of stock options to be motivated uh that so we we uh we had another 49a called to tell us the kindr correct price and we repace our options I see yeah I see okay that's a good way to do it um very cool okay so to some I mean we got self-service coming up here soon uh you like staying where you're at you got a multi-product approach five current products with an AI play uh coming up here shortly which we're excited about you've repaced options the team is smaller higher Revenue per employee and you've done all this even by cutting team size you've doubled Revenue over the past two years uh before we finish up here how are you getting new customers what's your main growth channel it's still the same mix of inbound and outbound we still have an SDR team um they're great guys how many uh 20 20 sdrs okay yeah yeah yeah close to 20 um and they do a really good job and is continuing to to to perform um we've added um excuse me uh motion that I'm very happy with we call it Chili Pepper everywhere so we've uh done more partnership ecosystem Partnerships so for example we integrated with uh uh intercome kit gong you know and so if you you want the gong engage going to work with ch pepper we are integrated with G2 so if you want to list your product on G2 instead of getting leads by email you can actually have the your prospect book on the G2 site with your sales rep um see so we actually moving the scheding on the G2 site for our customers um so we we have this big motion and that's bringing up a sizable amount of business now just be clear Nicholas if I go to chili piper.com Integrations you've got over 64 I mean this is a serious investment you've got over 64 Partners here ranging from cand do to clearbit to eloqua to gong Etc these all require unique obviously building experiences but on the back end you're saying there's Partnerships with each of these two and they're driving you business you're driving them business and this is a big growth channel for you that's just right yes can you go deeper on that so like clickfunnels is listed here what are you doing in terms of back channeling with clickfunnels and you say hey we'll build this integration if you send us customers on here some we say like what does that sound like the most common integration is is the ability to to um um book a meeting when you uh when you in the product so with is product that you on the phone or you in email and then you can click on T paper to book the meeting or send link to so that's the B of integration always always about scheduling in other people's products we also have integration for is sendoso for example where if you send a gift then you receive the gift and then you can book a meeting with the person who sent you that that's the general approach we have you know in many many situ ation meeting needs to happen and we there to enable the theing you know off the top of your head how many unique hits chili Pipers it clicks chili Pipers is getting from Google organic per month is it like hundreds of thousands or tens of thousands you know yeah I don't nobody seen the hundreds of thousand yeah so you have a strong SEO play inbound SEO organic SEO we we get a lot of uh kicks from the viral aspect of it right so people uh tried tons of it people go to a website they book with G Peppers well that was a great experience and they come to your site that way so it's more the viral aspect than the SEO that's working for us SEO to be cand I think we can do better and we and we get back to it next year so just to be clear when people book a meeting and it says this meeting was booked with chili Piper and then you can click the logo and go through you're getting hundreds of thousands of clicks per month from that logo placement not from the logo placement from the fact that the experience was good and and and people either click on that logo basement or Ser chili paper or type in chili paper yeah amazing yeah well this is a hell of a story you're always very transparent and a ton of fun to interview let's wrap up here with the famous five Nicholas number one favorite Business book oh oh um I still have to say never spit the difference because it's uh you're consistent number two I would ask what Co your following are studying but it sounds like you're following dmes and HubSpot closely huh yes I'm following D closely yes number three what's your favorite online tool for building chili Piper online to you comparing with with what I said last time uh online toour paper is is because we we do so much uh on on documentation um all the decisions all our logs it's on sweet so Google Docs seems very very simple but it's very powerful number four how many hours of sleep do you get every night I had Alina give me a book that says look if you want to live longer you have to sleep eight hours so uh I'm aiming for eight hours I'm 728 that's that's awesome that's awesome so married and you had two kids in 2021 still two kids or is another one still two kids still two kids okay and I think you've had a bir what are you 56 now 5 yeah that's what 57 57 all right last question Nicholas something you wish you knew when you were 20 something I wish I knew so when I was 20 I didn't I didn't imagine that entrepreneurship existed um and uh for sure I wish I I knew that uh you can take that route that you can you don't need to wait and you can just start something um it seemed impossible to me and I wish had known that it was actually difficult but something was doing guys chili Piper got going in 2016 2017 helping sdrs book meetings they broke 2 million Revenue in 2018 went on to raise a lot of capital broke 15 million in Revenue in 2021 and then they had to make a drastic change when markets compressed they took their team from 225 down to 150 after team retreat in Morocco that made them instantly profitable at least cash flow positive bought them Runway now with a multiproduct approach over five products in the market with a new chat GPT or sorry AI product coming uh they continue to drive growth they have 2,000 customers paying on average $200 per month with a self- serve option getting ready to launch which we're excited about Nicholas we appreciate you thanks for taking us to the top thank you Nathan one more thing before you go we have a brand new show every Thursday at 1M Central it's called Shark Tank for SAS we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares backend dashboards their expenses their revenue arpu CAC LTV you name it they share it and the buyers try and make a deal live it is fun to watch every Thursday 1 p.m. central additionally remember these recorded founder interviews go live we release them here on YouTube every day at 2 p.m Central to make sure you don't miss any of that make sure you click the Subscribe button below here on YouTube the big red button and then click the little bell notification to make sure you get notifications when we do go live I would want you to miss breaking news in the SAS World whether it's an acquisition a big fund raise a big sale a big profitability statement or something else I don't want you to miss it additionally if you want to take this conversation deeper and further we have by far the largest private slack Community for B2B SAS Founders you want to get in there we've probably talked about your tool if you're running a company or your firm if you're investing you can go in there and quickly search and see what people are saying sign up for that at Nathan la.com slack and the metime I'm hanging out with you here on YouTube I'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode and if you enjoyed it click the thumbs up we get a lot of haters that are mad at how aggressive I am on these shows but I do it so that we can all learn we have to counter those people we got to push them away click the thumbs up below to counter them and know that I appreciate your guys' support all right I'll be in the comments see you

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...

Introduction hey folks my guest today is nicholas vandenberg he's building a tool called chilipiper.com automate helps you automate lead qualification routing and scheduling nicholas you're ready to take it to the top let's do it now last time i saw you was pre-covered in new york i think it was 2018 2019 we had our little ceo mastermind and you were talking about breaking a million dollar run rate and how excited you were and now you're like you exploded what the hell happened yes a lot of things happened yeah it's been a different world uh well when kobe happened uh we um [Music] um it's all sorts of advice for my investors to lay off people and cut cars on that and elena and i felt strongly that we had built a beautiful team and and we shouldn't do that so we actually applied for that payroll uh protection program from the u.s government thinking at least you know we'll survive and we don't lay off anybody and um the opportunity for expects it happened our company actually grew faster a lot of people came to us they needed to do more things online we you know we doubled in non-conversion rates so who wouldn't want that uh you know for inbound so next thing uh we went from uh uh fearing for for our life to uh getting tons of interest from vcs literally three months later so in june Raised we did our a-run we had bootstrapped all the way because we were cash positive and we never found an offer that was attractive enough but this time the vcs were serious about investing and base then gave us a very strong offer so next thing we took a 15 million day round what was the pre-money on that it was the post was close to 75 so it was a 15 on uh north 55. and then uh and then we um 63 75 post yeah and then uh and then um we kept growing uh even as you can imagine when you bootstrap for a long time you know suddenly you have money you can invest beyond what you were doing and then things go better so unsolicited in march we got an interest from tiger global um [Music] i got on a call with john crutches and literally he made the offer on the fly uh the later the evening with a term sheet two weeks later with the money for 33 million b round so now we are we're definitely growing faster than we used to as you can imagine we say money to invest we passed 150 employees Monthly recurring revenue uh we we actually passed the 10 million mark earlier this year so we know no aiming for the 20 minute mark that's where we we we're aiming for mrr last month nicholas uh i always think on run rater annual so so we uh we know between 10 and 15. got it okay and you think you'll hit 20 by the end of the year well that's the plan yeah yeah interesting um real quick when you boot triple company to the scale that you and elena and by the way guys this is a great story because nicholas i'm saying this or elaine is your wife right yeah she's my wife and co-founder that's right white vancouver and then you guys split at 50 50 back in 2016 when you launched yes that's right we did yeah that's impressive and you're still married and things are still good today so these are wonderful yeah yeah yeah actually it's gonna show up to say hi hey elena how are you it's good to see you i love that um yeah i know this is this is just because i remember when when we were in new york you were really only doing from what i remember scheduling like i would see people send me a schedule against a powered by chili piper now you're expanding the product that's a very interesting observation you make uh it's actually not the case but the scheduling piece is the visible part of what we do so that's how people associate us with scheduling they our product is really about a very simple problem um when you go to a website you want to talk to somebody you want to see a demo you submit the form and typically you get a thank you page say thank you somebody's going to call you and there are people whose job they call inbound sdr to call you and schedule that call it turns out that company are happy to convert at 40 which means that the lease they lose 60 out of 100 of these requests and they think it's good because they compare that to the outbound where you're trying to get meetings and you get three percent or two percent so 40 seems like so good that you send emails and you get so many meetings but the reality is these people already said they wanted meeting so that's the problem we solved and the hard problem with that is that the form is typically tied to the marketing system is a very critical part of the marketing system because it's where you you know you can tie back the visit to all these actions they've done to a particular person and the follow-up is done in salesforce or in the crm so you yet the um gap between these two systems so it was very hard problem to solve to automate that process so that's what we did we integrate with forms from marketing automation systems to in real time get the data possibly data arguments qualify route and retrieve the calendar but all that and then book a meeting and what happened is that all our customers double the inbound conversion rates so they go from 40 to 80 or from 20 some went from 23 to 75 percent right there is some in the sme business they lose a lot of their requests uh but the hard part is not to show a calendar the hard part is to do the real-time uh qualification and routing right with all the logic that needs to come with it and also you you don't want to interfere with the marketing automation form so we think of ourselves as as an inbound automation but people when they see chili pepper they see the calendar and like you did right so you think oh yeah yeah you're a scheduling company and seriously no we a company that does all the hard thing to get to scheduling and then and then end the scheduling piece and now we uh we see that um [Music] there are other pieces that need to happen around inbound so we we're expanding our solution around inbound that's what we're going to be doing for the second half of the year uh other things around inbound conversion where uh we see a lot of opportunities to do the job better than with the legacy system they're doing i want to talk about your other products including chili events which is an interesting space very frothy evaluations from hop in visible v fares in that space right now we'll get to that in a second though round out the funniest right you did raise three million back in 2019 in a seed right yeah that's right that's right it was a very small uh seed yeah was that did you do that on equity or was it a capped note no no it was uh iniquity what was the valuation there it was in the 20s 20. okay got it so you had nice valuation increase then from your c to your series a yeah no kidding yeah yeah and then when you raise a series b from 33 million what was that evaluation well that one i won't disclose it but uh but it was a uh a very favorable uh uh valuation revolution the tiger global is a wonderful company they move very fast every entrepreneur friendly and they uh they come in when they they think you've passed that side where you're going to be successful right so so they pay much higher than than the a and and c run bc's were still you know focusing on the risk and things they think okay this is going to be a winner and you know they invest in 50 winners maybe some of them may not make it but overall with a portfolio it will work so we we we uh we getting closer to on on a way to unicorn now with this kind of evaluation we got that's most um when tiger does deals to your point that they don't have an equity target they want to hit like most series b firms don't want to buy 10 to 20 business tiger will come in and buy five percent if they feel like you've got product market fit and you're gonna be one of the winners so is it fair to say you sort of sold between five and fifteen percent of the business can we put that range on it you're going around to give your valuation uh you're correct on the evaluation and uh and as i said we're on our way to being a unicorn so that's uh yeah because i'm going to guess here i don't have you haven't told me this but i'm going to guess the only reason you would do a round unsolicited from tiger in like four or five months after you raised a 15 million dollar series a at a 60 million pre is if there was a significant amount of secondary recreated liquidity so so how much of that 33 million actually went into onto the balance sheet of the business i know um so you're exactly right there was some secondary um uh but i don't include it in that amount uh oh okay yeah i know other companies do that and they say it's an 80 million run but i only the 33 million went into the company the same amount went to the secondary got it because you know what matters what how much money we have to deploy but yeah the same amount in two secondary so my only investors are some of them exit we actually have a little video coming of them being thankful uh you know and they can because uh they uh some of them you know it came in very early and they did a 50 or 100 decks what i hear you say is this 30 million on the balance sheet and the same amount went into secondary so another 30 lane was secondary so the total check size from tiger is more like 60 million that's correct yeah i see okay that makes a lot of sense so when you say you're on your way to being a unicorn i mean uh what revenue at the valuations you're currently seeing in the marketplace what revenue do you think you have to hit to reach a billion dollar valuation i would say that if we meet our plan by the end of the year getting the 20 million we will be there uh it used to be unique ones where uh somewhere to be like in 30 to 50. but now you see that the market has changed and what has changed is that uh it's not like well there's no question there's a lot of money and liquidity and so on but i think we're all observing that the winners uh grow faster than you'd expected so if you look at the gong which is a one of our customers and strong partner if you lose a data dog in the public market um these companies grow super fast much faster than you expected so the valuation reflects this expectation right and not just reflects not just reflects it it's it's it's not even close like if you look at a company like gong and the revenue that they're doing right so i just had to meet on somewhere between 120 and 160 million bucks in terms of run rate but it's 250 million raised at a 7.8 million a billion dollar valuation there are other companies that have 120 million bucks in revenue but they're nowhere near a 7.5 billion valuation because their growth rate is nowhere near gone so growth and net dollar retention are like the premium things that we're seeing dry evaluation right now would you agree exactly that's great right i know that networking retention has always been very strong uh we uh we have customers like uh ringcentral is a strong partner into it and they keep expanding expanding you know deploying our solution involving are you above 150 net dollar retention uh we were before covered we dropped a bit and we getting back there okay interesting and if you peel that onion what does gross churn and then obviously we add expansion back what's gross churn look like the the more interesting uh um breakdown is uh what is uh our net expansion the enterprise versus market versus a small business because a small business uh we barely had a hundred uh we have a 300 very high people come they're not sure they they disappear you know uh and we do we unlike other companies we don't refuse to serve them so we don't say are you too small for us uh i see that drift is doing that because of that the strong problem so they're trying to make their numbers look better so they even refuse to take companies we nice people you know if you want to work with us you know it may not work out but but but we'll work with you so our churn is super high in this smb and on entrepreneur retention is 100 but our network in your retention in the enterprise space is north of 150 like the number you mentioned and in the main market it's in between so um [Music] obviously what we're doing to do is work on our front so make it more compelling for small businesses to to get value faster out of the box uh and of course continue selling to enterprise because our our value is so clear and exciting how many Currently serving 1000 customers how many total customers today you were at about a thousand back in uh december i think uh yeah so we passed a thousand uh we are on that level yeah okay got it and the reason i ask is i assume you're driving significant expansion again an enterprise cohort don't name the customer but what's the largest acv you have right now on the platform uh it's three-quarter of a million and an account name the customer and what and i cannot name the customer yeah don't don't name them obviously but that's 750 000 a year in revenue what maybe 750 yeah what what enables you to sell so much is it number of seats is it utility-based pricing number of seats got it okay why go into the event space uh it was a request from our customers they they [Music] found that just like on the inbound thing you want to uh get to the meetings booked as fast as possible that's where all the value is right because in sales in the b2b sales meetings is where the value started happening right your people booking meetings so we had all these events managers uh spending a lot of money to attend an event and sponsor an event and then what they would do is scan badges right so scan badges is nice but that doesn't get you pipelined yeah then you have to follow up email them they'll go through the same thing so all of them realize that what matters is try to get meetings ahead of time animatics on the floor instead of go straight to meetings not this is intermediary steps of scanning badges emailing campaign and so on so that's what happened they came to us say you are the meeting booking company can we uh can we help and what we found is that it's a bit more complex with events because you're not sure yet who's going to attend in terms of the reps which you can send you have meeting rooms that have capacity you have a other constraint around time so we thought look we're good at solving complex problems is a real value creation is very aligned with what we do let's be the events now obviously the question was would there be events so online events at a lot of them uh it's it's a a smaller piece of what we do because often people just sign up directly on the zoom webinar and do or hop in um real world events are where we can really uh expose all the power of our platform because there's a lot of complexity so who's meeting rude within rescheduling with check-in calendar and we put we had actually built a product uh in 2019 and we literally uh mothballed it you know we move with some the chef say oh you put on the side we will pull you out of the github when the time is better so we did we cut back the code we reworked it and we're relaunching because we see um in-person events um softly but surely restarting and we want to be there when that happens yep yep no we're doing one on september 9th in austin i think it's going to be an important model for us um talk to me about the engineering required to get this done how many total engineers on the team today this is it gets me off guard there we [Music] must have between 20 and 30 engineers yeah probably yeah yeah what about sales motion how many sales reps do you guys have with a quota uh do you include sdr's with quota you only include in the revenue code it's up to you do you give that sdr's a revenue quote or just a meeting we're about 20 20 15. so 20 is here 20 years 15 a.m got into the am's carry uh yeah quota i'll get you got it so 40 between account executives account managers those 40 all carry a quota are they different quotas yeah differently well uh the is it's a bit different on the enterprise but in the mean market is a focus on new logo acquisition as soon as the meeting is booked we assign an account manager and the account manager is is at the job of expanding the account all the way to renewals and expansion of the renewals so the the structure is very different of a compensation to to to to provide the right incentive for the goals that are different yeah what for your account executives when they are closing these deals what annual quota do you have them on do you follow the million and then a 200 000 on target earnings of pay uh it depends between enterprise market and this also depends uh on um the seniority of the person we're bringing on board we have a a bit unusual than other companies we we uh adjust the code as the code as based on the pipeline so we said look if we provide you with this pipeline you should convert we're very focused on conversion right so we we bring in people and say your job is to convert these deals so if you bring your own pipeline you get compensated more because that's an extra so that the awesomeness can do that but we're going to give you x amount of pipeline and we expect y uh in revenues and so as we bring on on on new reps we give them less pipeline right cause they'll get two children and and therefore uh a smaller quota so we have a gamut of cola yeah it's it's a bit i know a lot of companies say yes you could swim or sink uh but that's not our approach our approach is to uh we're very focused on professional growth and so we give a lot of autonomy but we also give love to help so if somebody has zero pipelines starting with then they can't be expected to meet you know a certain quota so the answer to the question is their nuance because we have a quota that varies from one way to the other yeah nicholas before we wrap up i hear you might be buying a company soon what's going on look at that curveball guys this is any businesses in the next in the next six months so is that a strategy you're going to use with a 30 million of cash you just got or no uh [Applause] [Music] so it's perfect because uh is it's definitely something we're considering and uh and i was just wondering how you could have heard it uh but um uh the answer is yes um opportunistically so we're not we're not on a roll up right now the way zoom info is doing uh we we um have a bit of a different approach because our number one core value is helper number two is innovate so we trust ourselves to innovate and come up with products and runners that we focus on so you you would only um acquisition bring us if we found somebody particularly innovative in a particular space adjacent to ours so that what we'll be looking at but it's not um again we're not done on a roll-up we're very much looking at opportunity opportunity if that's something that could uh be a good compliment all right let and you're not in that question talks with anybody else we're not gonna see you sell to henry and zoom info or the gong crew in the next 12 months are we that is nearly in our future no alina and i built this company we we're having a blast we have 15 50 pipers we promised them all that we're going to get our share price to 100 a piece so that they're all millionaires um every single one of them and so we are focused on delivering that that to our employees and our shareholders i love that all right let's wrap up nicholas with the famous five number one favorite book uh or autograph or my favorite business book is never split the difference that's what we uh we think my free favorite uh literature is actually uh uh war and peace i've loved that you know the whole story of napoleon and the battle with the russians is that's fascinating number two nicholas is there ceo you're following or studying business number three what's your favorite online tool for building chili piper besides your own well i have another tool called cosmotime that you may have looked at to keep a smart calendar to keep them productive so that's my favorite tool what's it called cost more time it's something that i started yeah cost more time all right number four how many hours of sleep do you get every night that's a great question because i used to uh sleep around six hours and then alina came up with that book showing in that it was a bad idea it was detrimental to all sorts of things so now i'm closer to seven plus you have to elena's still there you have to get her to wave real quick so everyone watching the podcast can see her she is she's shy uh no she's outside you're coming elena come wave she can't hear me but there there she husband wife team another one we love it all right nicholas obviously we know you're married you guys have any kids running around or no we do uh six months old and a two and a half year old holy man so you're traveling the world during copenhagen with two kids running a business that's you know breaking a hundred million dollar evaluation breaking wet radiation 100 million dollars wow we're way above that well i know i just wanted to so now see now i know it's above 60 million now i know it's above 100 million much higher than that that's good all right so two kids and how are you i'm 55. 55. last question something you wish you when you were 20 i wish i had started immediately being an entrepreneur so instead of doing consulting and all these other things because it's such a blast and i i wish had more uh faith in uh experimenting and and and being persistent so it has happened a couple times you know i i would think i'd start working at give up and what i'm finding is that with persistence you uh keep it on it you uh you will be successful so uh which i had both uh the guts to start earlier and the the the confidence to stay at it guys chili piper launched in 2016 with husband wife team nicholas and elena they're doing 650 000 a month in revenue back just about a year ago less than a year ago now doing almost double that as they approach a 15 million 20 million right here at the end of 2021 they've got over a thousand customers they're supporting they raised their 15 million dollar series a back last year in november at around called 60 million dollar money free money evaluation raised another 33 million bucks for their uh for their balance sheet in a series b earlier this year took another 30 million in secondary just to reward all the early pipers as they call them there are over uh how many over 150 strong now 25 engineers as they look to continue to scale about to get to the events space both virtual and in person nicholas thanks for taking us to the top thank you one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back end dashboards their expenses their revenue arpu cac ltv you name it they share it and the buyers try and make a deal live it is fun to watch every thursday 1 p.m central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m central to make sure you don't miss any of that make sure you click the subscribe button below here on youtube the big red button and then click the little bell notification to make sure you get notifications when we do go live i wouldn't want you to miss breaking news in the sas world whether it's an acquisition a big fundraise a big sale a big profitability statement or something else i don't want you to miss it additionally if you want to take this conversation deeper and further we have by far the largest private slack community for b2b sas founders you want to get in there we've probably talked about your tool if you're running a company or your firm if you're investing you can go in there and quickly search and see what people are saying sign up for that at nathan lacka dot com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode if you enjoyed it click the thumbs up we get a lot of haters that are mad at how aggressive i am on these shows but i do it so that we can all learn we have to counter those people we got to push them away click the thumbs up below to counter them and know that i appreciate your guys's support all right i'll be in the comments see ya

Nathan's introduction to today's show hello everyone my guest today is nicholas vandenberg he started selling newspapers in the streets of paris in high school then studied maths at ecole in uh and then business at stanford gsb started and sold three tech companies with up to 65 employees and 11 million bucks in revenues ran sales for a 2 billion telecom company negotiating billion dollar deals with companies like google and now is the co-founder of chili piper on a mission to create a new software category around buyer enablement helping businesses help their buyers nicholas are you ready to take us to the top sure all right so tell us about the company what's the company do and what's your revenue model is it a pure place Why they help businesses close more sales ass company yeah we are pure place test companies so very straightforward we sell subscriptions we charge per user on an annual basis um and as you say we in the buyer enablement so our solution solves a very simple problem it's one of the things that you wonder why it wasn't done before when people come to a website they fill a form and they click submit they get a message that says somebody's going to call you soon and you're just wondering well who's going to call me and when right so that we solve that problem we have a smart agent that you put on the web page and it find who's available and it will automatically connect the prospect to the right rep or enable the prospect to book a meeting or engage in whatever way the prospect wants to do that's our model we sell to a lot of the leading tech companies like linkedin facebook and many of these uh um other sas companies and so said in kind of two where it's basically almost like sales person routing kind of we call it concierge and i know from the the concept is that you have a little agent that's on your website and when somebody feels a form that that little agent takes care of that person so it will make sure find the right rep enable a call in real time if the prospects want to joke now and they want to schedule time later the prospects want to talk later so really make life easy for both the sales team and the prospect and i'm sure you have many many different types of customers in terms of size and use but in general what's the average cost or How the average customer pays them around $10k annually pay per month for this kind of service you're exactly right we do have a role diversity the smallest license i think is one person put concierge for himself on this website uh right now because customer is probably facebook uh they have hundreds of reps on our app uh but to answer your question we're around 10k in acv okay and and paint that picture more so people listening they'll know if they're a good fit for the software or not are these typically teams of like 10 sales people a thousand sales people one uh typically as soon as you the the thing that makes it most compelling to get a software is when you have some sufficient inbound volume so you have not enough leads that you think you should take care of them we actually have a few exceptions where some companies have few inbound leads but they want to take care of them really really well so if you have a high price point you don't want to lose it lose any lead and you we're very affordable our price point is uh is fifty dollars per per month to include the phone so for that price you make sure that you leave the taken care of it's worth it but the typical uh company that buys our config solution is a company that has invested in marketing automation that has built some way to bring inbound traffic and then and then see that as an actual next step to get uh to convert that traffic so not only get leads but get booked opportunities book meetings engagement uh with uh with all this inbounds are people typically using this with their i mean the thing you just described usually sdrs are doing you know one sdr for three account executives or some ratio and that's how people scale their inside sales teams after a series a series b or whatever are people replacing their sdrs with Why customers are pairing this technology with SDR's this or they're working together that's a great question nathan uh when we first uh launched it we only had booking and it's sdr's job to book right so um we had a bit of a pushback because you're replacing my job i'm not so happy about it exactly i even had a manager tell me uh how am i gonna how am i going to get my commission um right because uh and it was not our intention our intention is to do something that's more efficient for everything then we added the phone capabilities so the prospect can can say i'd like to talk now and that connect the phone and phone is the realm of sdr's right so now we have a solution that is sdi friendly and then it's up to each company to decide what to best uh how to best route got it that makes it very interesting because then it becomes more sophisticated so then it's okay what i'm going to do is do that highly qualified i'm going to write directly to the account executive and those were less qualified i'm going to have the sdr call first so you can really play and optimize your your your process what year did you launch the How they launched the company in January of 2016 company in say it again what year did you launch the company in what year did we launch the company yes we started january 2016. 2016. okay and then and then so i think we you give a great explanation of kind of what the company does talk about your ideal Why more than 200 customers are using their software today customer what have you scaled to today in terms of total customers using you we've have more than 200 companies using our software we about 7000 reps receiving meetings and using up and we're growing uh so we'll double this year from last year but now our growth has accelerated because uh it's of the thing i just mentioned we had a bit of friction when we launched our solution with only scheduling because there was this pushback from sdrs now that we have calling uh it's it's good for everybody so we see a strong acceleration we just launched it early august so but already with our best monthly september and uh in august and uh september is going strong so yeah and and look i mean 200 200 customers at that ac view just gave me would put you somewhere around 2 million How they are at $2M in ARR right now run rate today or about 160 grand a month is that generally accurate yeah that's right that's great and so year over year growth about a year ago you were you said you're doing about only maybe 80 grand a month so you've doubled you every year yeah that's right that's really great most of that growth has it come from expanding the base you already had or adding brand new customers um we've expanded a lot so uh Why they have hit net negative revenue churn annually i just did the numbers running yesterday uh we we've churned sixty thousand dollars and expanded three hundred and sixty thousand dollars so we've been next year and over the last 12 months of three hundred thousand dollars say that sorry say that one more time you turn how much jump 60 expanded 360. so we have an extreme of 300 thousand dollars we have a typical organization try it out with a couple of reps and then the extent we also have a a solution um that reps can use on their own so they can use it to suggest times and to book their own meetings that's that solution so somewhere that's how we got started actually and it's somewhat comparable to canon lee but obviously much more sophisticated in the set of features so we often extend to customer success and customer support yeah big deal that expand to other teams just to be clear though so when you say expansion of 300 000 that's also including new customers you added over the past 12 months correct no no what i mean was that just expansion from the same cohort that's exactly right yeah okay i mean customers by x and then yeah why i understand yeah the reason i asked that is because if a year ago you're at a million dollar run rate and you've added a million you're saying 30 of that was from expansion of customers and then you had new bookings of call it you know maybe 700 grand in arr yeah that's fine oh wow okay i mean that's actually concerning how much revenue you typically don't see expansion revenue making up 30 of a company's growth until years maybe three or four when they're in the five or 10 million dollar ar rate how have you been able to drive expansion so early How a majority of their growth has come from driving expansion revenue uh it's actually so the product people love it everybody loves it and they recommend it to the team that's how we expand uh two teams so we have companies like avalara where we start with the sdr then we get the ies and we get customer success and we get the analyst and we get pretty much everybody um that's how we've expanded uh uh so nicely the the thing i'm not i think we can do better is the new new Why they have decided to bootstrap up to this point uh accounts right we bootstrapped so we did not take vc money our team is all uh we we hire based on the cash we bring in you're still bootstrapped yeah we're still bootstrapped that's great so so obviously we could grow much faster on the on the new business um the reason why um we would strap it uh we just launched that new product concierge with phone uh as i said early august and that one is a is it has a huge potential so it's clear that now we we're a solid company we have top customers we have a product with great potential and so the time is coming for us to think okay we're going to put uh oil on the fire and get outside funding nicholas putting oil on the fire you want to make sure obviously that the the unit economics hold out kind of per customer so talk me through some of those what are you paying right now to acquire customers cac i we pay very little uh fully weighted How they recieve payback fully weighted it's a it's it's it's it's a i've hired my first director of demand then last june we started advertising on linkedin in early july so we've grown all that business pretty much organically world of math it's it's all been inbound uh so that if i give you the cac i mean right now i say with cash positive we uh the cost of acquisition is very low for us has been very low i don't um expect that to continue that way i think as we want to expand it's going to be more costly to acquire these customers go find where they are spend more time explaining the benefits of the product so so so far um we we um nicholas real quick sorry i don't mean Why the Chili Piper team has grown to 14 full-time employees to cut you off what's your team size today though i want to understand what percentage of those folks are focused on content sales marketing onboarding uh we thought it's 14 of us but until until uh last june we had only two sales reps okay so now we have four sales reps okay uh so two sales reps does that include the the higher of demand gen the guy that's on demand generation yeah okay but when you so when you take the team that is related to demand gen or managing spam the direct spend the sales people and you divide that by new customers added so you get a full a true fully weighted cac is that two months of the customer spend or six months of the customer spend where are you at yeah well if you think of it when we were at one million How they are receiving payback within one month with two reps for half the year so they probably cost us uh 100k it was a 10 right last year this year we have a bit more where 2 million is probably still in the 15 range um so that's where we are in terms of cac but that's what has been so far i don't expect that to be sustainable you know most sas companies have much higher cost of acquisition and expect we go back to a more normal rate right now we have a very very low cost election so are you when you say very low i mean are you getting paid back in less than a month so if it's if it's ten thousand dollar acv they're paying about 800 bucks a month is your cap less than 800 dollars maybe yeah that's right you're getting paid back in every month yeah about a month okay and what do you if you raise or if you put oil on the fire what do you expect that what would you be comfortable pushing that cack to look i don't want to be uh burning money for no reason but anything between three six months seems uh healthy yeah i mean that's even are you are you are you making the assumption you stay bootstrapped or you're saying even if you raise three to six months is what you'll push it to yeah which one i'm sorry you broke up once again are you saying if you raise you're happy to be more aggressive and spend up to six months to acquire or you're saying even if you stay bootstrapped the furthest you'll push it is six months no no no it would strap we stay at what we are right now we have no reason to we have a very strong uh we you have to control your cash and and uh and we focus uh we focus on making our product compelling uh more than we focus on bringing uh sales reps right the democrat that's how we got such a strong expansion and how we are such a strong word of mouth um and that's why we waited to raise money because we want to make sure that product sales on its own and we're getting there we we we have a solution one thing remarkable about td piper is that we have a new discount policy so nobody we just don't know discounts and even these companies that i mentioned there are very large companies with procurement departments bigger than our company pay the same price so just to be clear you say it's 50 per user per seat if facebook comes and says we want 10 000 seats you're gonna make them pay the full fifty dollars per seat point you don't give a group discount i i like that question i i'll tell you what they haven't yet come up with ten thousand right now we're still in the hundreds and and so far so good we've been holding our ground and saying it with so much you pay but uh ten thousand then the question will be is it reasonable to charge the same price or ten thousand uh or should we have at least uh some steps um we'll cross the bridge when we get there but for now everybody pays the same so even if someone signs up 200 seats you're still going to make them pay 50 bucks a seat which is what a one-person license would be that's right exactly we have two two license levels those who don't need ford only on only pay 25 dollars receipts so the phone is 15 and and and the scheduling only is 25. so yes they will pay the same price and the reason why we've been able to do that uh nathan is that we've taken positionings where we're unique so they have the choice not to use chili piper but not the choice to use something else right the concealed solution we have right now nobody else does it we have some other solution with a raring of meetings for the handoff between hdr and accounts executives that nobody else does so it's a matter of do i want to invest in a tour or not not uh can we can we leverage a competitive competition too we price very reasonably got it so yeah got it uh running out of time here last question before we wrap up with the famous five if you do raise capital Why he would look to raise $5M at a pre-money valuation of $40M obviously we're being very much hypothetical here but how much would you would you like to raise to fuel growth 5 to 10 million because we we we have a lot of opportunity ahead of us in in market our product and we also have a lot of other programs product ids that we like to bring to market yep let's let's say you stay on the lower outside of that let's say you raised five million ideally i mean you've been around the block you've seen this before inside and outside of other companies what valuation would you like to raise that what would make you really happy if you raised five well uh look i see that uh fast growing sas companies uh raised at 20 times the current run rate do you think 40 million free money is fair for you yeah i think that's fair for us now will the market will tell me yeah have you had any of those conversations yet or no no but we've had the inbound vc's coming to us and uh we'll have this conversation in a couple of months yeah very good all right let's wrap up with the famous five number one nicholas The Famous Five what's your favorite business book uh right now i'm reading the way of the wolf which was written by the guy uh from the movie the wolf of wall street about how to make inbound calls and i'm having a blast with it number two is there a ceo you're following or studying right now jeff bezos oh yes he's he's my hero he's incredibly well he's smart he's taking a lot of steps that we we've actually copied some of his uh practices name one quickly well that that meeting uh organized with a long-form memo right where every decision is based on the memo we do that the same thing yeah we it's working really well another one is the pizza team i don't know if you heard of that but splitting your engineering in in the pizza size team so two pizzas have to keep the team you don't want bigger teams of what things slow down so we are architecting our software to be able to scale in that direction very good number three what's your favorite online tool for building the business besides your own uh can i semi cheat and and and and say your own because i'm co-founder of another company that's doing an intelligent to-do list for teams we in alpha and i love it it's called gypsy bot gypsy bar yeah it it um it it's amazing it schedules my day so it picks my task it lose my dates and you have to work on that now you have a meeting with nathan next next you can do that task and it tracks what other people do i love that yeah number four how many hours of sleep to get every night uh that's a great question because i used to sleep uh six hours or less but i've read the book recommended by ubc thomas tungus about sleeping and um i've increased my number of hours it seems to be healthier so i'm between seven and eight okay very good and what's your situation married single kids uh married and uh with my wonderful wife and business partner expecting oh oh very congratulations and how old are you i'm 52. 52. last question what do you wish your 20 year old self knew my 20 year old uh i i probably so i came to stanford when i was in my late 20s if i had to do it again.com in my early 20s that's because it was it was such the place to be and the place to learn to come to the bay area so that's what i would do um that's what i wish i'd known at 20 years come earlier yep good guys there you have it founded chili pepper back a couple years ago call it let's see call it 2016 today again really helping sales people and and really channel when someone hits the website they fill out a form what territory do you go to what leader is the account owner belong to what's the opportunity matching look like they help you channel all of that to then connect the prospect real time uh to set up a time to chat with the appropriate person scaling nicely currently serving about 200 customers 10 000 acv 2 million dollars in ar today net revenue retention really healthy over the past 12 months they turned 60 grand they expanded 300 grand from the same million dollar ar cohort from a year ago so healthy growth hundred percent year over year overall uh cac less than one month in terms of what the customers are paying per month so that's healthy uh 14 people based um where are you guys based up in new york i'm in new york i'm in brooklyn but the team is distributed we cover half the globe guys there you have it new york city and remote nicholas thank you for taking us to the top thank you so much