How Conquer CEO Joshua Tillman grew Conquer to $12M revenue and 20K customers in 2018.

hello everyone my guest today is Josh Tillman he began building his company dial source in 2005 while studying at the University of California Davis to seal the gap between business and consumers through analytics and automation the engineering firm has since changed the way modern enterprises communicate earning product of the Year honors in 2016 and 2017 he received the Sacramento Business Journal's 40 under 40 award in 2016 Josh are you ready to take it to the top I am alright tell us about dial source what are you doing how do you make money sure well first I say we are a group of professional nerds we enjoy tackling many of the largest most complicated problems and enjoy the luxury of designing our own hardware and our own software from the ground up allowing us to take our custom-built technology and wrap it around some of the largest problems for the biggest enterprise in the world using either salesforce.com or Microsoft Dynamics as their CRM and what does the tech actually do I mean is this like a call rail or these kinds of call tracking companies no it's different in the space the best way to think about it is that we are more like a native IVR PBX inside CRM so we have what my audience won't know hey Josh my audience won't know all those acronyms can you say that stalled-out sure in a simple explanation we facilitate enterprise communications inside the CRM so we help organizations make and receive phone calls based on the data inside their CRM and allow intelligent and dynamic routing of that inbound phone call or that outbound phone call based upon data contained within the CRM are they an existing contact do they have a revenue opportunity associated to it is there a technical case and based on these data points we create analytics with inside the CRM and use those data points to then automate the labor-intensive processes and procedures that sales or service reps are supposed to do at the end of the conversation often take a lot of time to do and if not done the most common scenario then the data does not exist within the CRM management to make actionable and intelligent decisions do you do the call recording and say things like sales person one who always beats quota brought up the word price right at the beginning a car versus everyone else does it at the end yes we do and we can do all kinds of things like maintaining compliance on state federal and national levels so we can automatically identify is the leader contact in a one-party consent state versus a two-party consent state and automatically not only record the conversation but only the right part of the conversation to maintain compliance pump in analytics sentiment and other types of things into the reporting capabilities and the real-time call monitoring all with inside the CRM via dial source okay and business model wise this is a kind of a pure place ass model or pay-as-you-go or what it's a it's a typical enterprise software model there is a seat based license and there's a telephony component and of course the size of the contract dictates is it a 50 user one-year deal or is it a two and a half thousand user three-year deal on general what do you charge per seat per month the record starts at a hundred and fifteen dollars per month per seat and then drives down based on like mentioned the amount of seats in the term of contract how significantly will drive down if I'm signing up five thousand seats I mean we go as low as you know fifty bucks or a hundred bucks or what we would probably be around that fifty dollar mark for that size I won't get into too many details but we do have accounts that are sub fortune 250 of the fortune 500 that do have seats that are in to the many thousands yeah that do have price points is in that range and without getting into specific customers cuz obviously you can't do that what are you doing right now in terms of just total seats using dial source we're well into the tens of thousands of seats on dial source or into the high hundreds ish in terms of accounts but as you can imagine an account could be five seats an account could be several thousand seats got it so I mean it's fair to say you've got north of call she said low ten thousands 20,000 seats those are those are folks that are the companies that are paying you for when their employees to be using your platform via Microsoft where via Salesforce that's correct okay give me more the backstory here when did you launch the company so I started this out of an undergrad at the University of California I was writing a research paper with a handful of friends on telecommunication technology database and outsource labor that college paper then turned into a publication and the American computer Machinery journal I was then contacted by some early players at salesforce.com in the early mid-2000s and as a handful of early 20-somethings fresh out of the University of California we started building some prototypes and selling a cloud-based CRM with built in telephony into real estate into insurance and under other industry segments and it was at that point we were contacted by Salesforce to build our unique hardware in the programming language of Salesforce becoming the first native communication system for Salesforce and 12 years later we still are the only fully flat Versailles and ranked as the number one sales application on the Salesforce app exchange the number two support application on the Salesforce app exchange and the sixth ranked application of thousands worldwide as a result of that technology as Salesforce approached you to buy the company I'm not a liberty to discuss that why haven't you sold the Salesforce I don't believe that our business is in the right position to warrant the dollar amount that I would accept for an exit I believe that we have another couple hard years of work in front of us perhaps another round of to of funding in front of us to build the team to get to where we want to go part of that strategy was diversifying our technology from not just being the leader for Salesforce but over to Microsoft Dynamics and so we've launched many players within the NFL we recently just finished launching all of Madison Square Garden Holdings on our Microsoft product of dial source and so these type of strategies allow our organization to grow in size and in redundancy which of course translate to the value of the organization I would except for an exit event so I have some follow-up questions there number one how much have you raised today total today we've done about seven million in fun okay and obviously I imagine that was not all just comfortable debt you've done a price to equity round at this point correct okay got it and when when was day one start date I know it was in your dorm room but what what year was that that would have been 2005 - okay Wow you've been at this a while 10 10 11 years it's great well more than that yeah it's 15 years oh okay 2005 good - your point though we were a bunch of college students looking to solve problems and then that morphed in' we started generating hundreds of thousands of dollars and into millions of dollars but we really were a technology engineering firm first and foremost it wasn't until just a handful of years ago that I would say we really pivoted from being top engineers to also building a sales and marketing team and a business around the technology which is atypical for how technology companies build by saying let me go raise funds put a model together and then scale we were already doing millions of dollars in revenue before a single dollar was ever raised what year did you raise that first dollar you know probably would have been around the early 15 timeframe and what was trailing 12 months revenue when you do that I'm curious how big you got bootstrapped uh we were we were doing seven figures at that point we're doing a low seven figures okay call it to three million something like that yes okay but I warn the north on the high side of that okay and what are you growing at now year-over-year what do you like to aim for we closed last year at a hundred and twenty one percent growth Oh ACV of the year prior as you can imagine we're a lot bigger now than we were at that previous state I would like to see this quarter at about equal to last year's revenue so we're growing quite a lot but we are also stacking many of the largest enterprise organizations into multi-year contracts into dial sources well develop front uh generally so it's generally we're getting like twelve months up front and then as you can imagine nobody's paying thirty six month contract upfront hole you be happy a genie if you figured that out right right I'd like to think we would but I'm we're happy to do 24 and 36 month contracts and in the larger deals to know we might take biannual payments but it is a contract paid upfront and then there's a lot of land and expand when organizations realize moving from using outbound calling and automation analytics for sales processes and then also using the similar type of intelligent inbound dynamic routing or service calls and tying service to sales as we see rapid growth in our accounts very very regularly more often than not you this number I think is gonna be aggressive but I'm gonna do it anyway 20,000 seats you said your price point typically starts about 115 a seat obviously it goes lower with bulk deals but on the high end that puts you at around 2.3 million per month if everyone is paying 115 per seat or about 1 million a month of people everyone was paying 50 bucks per seat is it fair to say you're somewhere in that range between 1 and 2 million in mr yep got it and we're we're and and I guess you already told me a hundred twenty one percent you over your growth so you were doing what like eight 750 a month 12 months ago yeah...