How Chorus CEO JB Rousselot grew Chorus to $55M revenue and 200 customers in 2020.

hello everyone my guest today is roy renani he's the ceo of chorus.ai and an engineer with a passion for business and sales he spent his career working with startups and advising technology companies on strategy and operations he started his career at bain and company and holds a an engineering engineering science degree from the university of toronto and an mba from stanford he was the first hire at eric schmidt's innovation endeavors roy are you ready to take us to the top can't wait thanks for having me very good so you know we're joking before the call you're in a hot space call tracking specifically in the sales and marketing kind of tech stack space so what's your angle on this what's chorus.ai and what's your business model how do you make money yeah it's a great question um i would say that over the last couple of years there's become more and more of an interest in calling and so there was the an original kind of group of companies that were making it easy to record calls do more dials they were more focused on the activity side of things and in sales that started with the outbound prospecting so the guys that had to do a hundred dials a day more efficiently and the opportunity that we found and we were i would say one of the one of the first doing that started that started doing this about three years ago was that there was an opportunity for the actual quota carrying sales people right so not just the 22 year olds that are the heart of building pipeline in sales organizations but the folks that are actually closing deals and renewing deals and so those people are doing less calling but they're doing meetings they're doing discoveries they're doing demos they're building consensus they're negotiating they're upselling they're renewing and sales teams will do thousands of those meetings a quarter and those meetings just happen and they essentially disappear right there's no record of what was discussed there are so many of these things happening that managers have no idea what's happening and so you essentially have this black box around what is the most important thing that any sales person does right and what we found was that in every other part of business you look at the fundamental drivers of performance you measure them and you improve them and when it comes to closing revenue and renewing revenue that most fundamental activity is a conversation and there was no data on it so what we wanted to do with chorus was help businesses realize that a conversation is the most valuable thing that anybody on their team does make it easy to record and capture those conversations and then understand them at scale using technology and by doing that help people close more business help reps make more money help businesses better understand their customers and their markets that they can build better products now do do you dive into actual kind of voice things i.e can you tell a sales manager or a cro that their number one sales rep who always beats quota says the word price three minutes in versus everyone else waits until minute 18 they should change what they're doing yeah absolutely um we focused a lot on making those types of uh insights really actionable to folks so it turns out that um you know you picked up one around pricing but it turns out that discounting is something that happens on you know we've analyzed over a million calls at this point and it'll tend to come up on maybe 25 to 30 percent of conversations and what you find is that the way that discounting is brought up is very very different depending on if you're a very experienced rep or a less experienced rep so everybody offers the discount but very few people get something in return for it right and some people offer the discount very very early on in the sale cycle some people wait until they know that there's a real deal in place and they understand the timeline and they're using the discount to get something concrete so what we try to do is build algorithms that are going to surface very actionable very hard roi types of moments for sales teams so that as soon as you start using chorus within a week we're gonna hopefully find moments that cover the cost of the platform for your entire company for the entire year which is what what's the average customer paying you per month i know you have cohorts but if i forced you into an average what would it be yeah so the first thing that i would say is we can't we don't want to talk about pricing until we've looked at value but what i would say is we are competitive with any other core piece of the sales stack right so competitive with something like a salesforce.com so let me give you a hypothetical because i'm going to align the hypothetical with my audience members because they're obviously i want them to obviously evaluate course if someone has a team of 10 right they're doing i'm going to make this up a million in arr and they're going yeah we're bringing on two we have like two sales people we're bringing on a third and a fourth maybe they're doing a seed round of funding what should they expect to pay for the platform are we talking 100 per month 10 grand per month a grand per month yeah it would be more around the 100 per month range okay got it and is that an is that a uh an accurate description of the majority of your customers are they typically bigger or smaller than that i would say there's there's a range the people people will buy course for very different reasons depending on the size of the business so if you're a smaller team like the one that you described the number one reason that people will buy is because they'll all have that one account executive that's been around for two or three years that knows the product inside out they know how to position it versus competition they know how to create urgency they know how to do all of those things and you're buying an insurance policy because if that person decides to leave for whatever reason there's a family emergency who knows they decide to to go to that shiny startup around the block you've now lost all of those um all of that gold around what they're doing that's so effective and so you know typically if you're that startup it's incredibly important for you to hit your numbers to continue to show growth and so it's very difficult to ramp up a new rep if you don't have those call recordings and then in addition to that making it very easy to find the 10 out of maybe hundreds that are really important to listen to because they deal with a certain competitive situation or a certain part of the sales cycle or a certain objection this is basically you're auto creating a training manual for scaling a sales team just by recording these calls in a worst case scenario yeah i think i think that that's the simplest thing right the simplest thing is this is this is a data set that you want um more and more what we're finding is managers and vps of sales are starting to use corus as a way to manage their day-to-day business right and so we have some customers that tell us that they spend more time in course than they do in salesforce.com simply because salesforce is a lagging it's a lagging system right it requires sales reps to go in and update certain fields and it's based on the reps interpretation of what happened in that meeting and so for a lot of managers if there's a deal that they care about they can pull it up in chorus with one click and immediately they'll be able to see everything that was talked about what was or wasn't discussed whether or not this deal is actually going to come in you know end of month as the rep is forecasting and so what we're trying to do is find out more and more how to take it away from just training and coaching which is a very high value use case into something that is a part of your day-to-day that sounds like a sales pitch to salesforce are you in acquisition talks right now um if if we if we had to sell we'd be really disappointed take us that's a you've practiced that roy that was very smooth that was a very good answer to that question and take take me back to uh take me back to the start what year did you launch the company in uh we launched it in 2015. and did you decide have you decided to kind of bootstrap or if you raised capital no so you know pretty early on um we we realized that if we wanted to tackle this market and you know the way that i talked about it with my team is that there's a billion dollar enterprise value company five to seven years from now that's ours to lose and it's simply because they're you know this data set of customer conversations and meetings is so valuable and so core to a business that there's no way that uh every company in the world isn't starting to to to record and track and learn from and act on the insights in these meetings and so um when we started out we had a decision to make about whether we outsourced the technology or whether we built it all ourselves and we decided to build it all ourselves to do a couple of things that you can only do when you when you build uh build this technology yourself so very early on um we you know we spoke to investors and we were fortunate enough uh to close a seed round uh a pretty substantial six million dollar seed round uh that was led by emergence capital um with board was that priced or was that a no um it was actually it was priced yeah it was priced so we did we actually did a friends and family round um that was based on a safe and did you go through yc uh we did not but we decided to use the safe just to keep things...