How Coremedia CEO Soeren Stamer grew Coremedia to $25M revenue with a 151 person team in 2023.

hello everyone my guest today is Zoran stammer he's the CEO and co-founder of core media and the recipient of the German fairness prize of 2009 he's also co-editor of Enterprise 2.0 the art of letting go he's married and a father of four Zoran are you ready to take us to the top absolutely are you that you have your hands in everything family life book deals software tell us about core media what are you doing how do you make money so camellia does actually help brands to create online flagship stores so they take the existing online stores and we turn them into flagship stores that integrate the brand experience and the shopping experience a flagship store yeah the way the idea is nowadays when you go to any bigger city the stores you see in the main road are the iconic stores like there's an apple calm there's an apple store it is not basically just the best buy Apple basically figured out that it's much better to have a direct relationship to the customer and the same happens online so when you look at Apple comm it is an iconic store and it's not basically just the brand side and you have a store of Apple to come back in 2013 so what brands these days need is they need an integrated brand side plus online store and we call that an online flagship store got it so you're helping folks create that online flagship store it's you're making a more robust from a technology perspective and it presents better to consumers to really create a brand feeling yeah you need to be iconic but you can't look like the same as any other brand and especially our customers in the luxury and fashion industry they want to create these iconic experiences because they want to sell you something on your mobile phone that costs 20,000 euros so 20,000 dollar deal on the phone to create that need that you want to buy it it has to be a flawless experience and it can't look like any other store so it has to be you know the brand itself that you feel and that's what we do so we work with brands like Salvatore Ferragamo or brands like uc's netiquette a that run I think they are the global market leader for a luxury brands online so they're 140 different brand stores for a money Valentino diesel and many others and they also run net apart a nukes and and some other of these big online retail in distressed nations where you can buy more than a million luxury products and we learned a lot from those guys the truth is we believe that that is relevant for all the other BtoB brands and retailers as well and join will give me more the backstory here first off business model how do you make money is it a pure sass play or what yeah we have a sass play but we also see that their high-end they want to have more control over the technology so we also enable them to run it in their own private cloud so you do like an on-prem installation we can provide that yeah so they they get the docker images and they can run them in their own environment okay what percentage of your total revenue would you say is a pure place ass model on the cloud right now maybe 10% moving there so the big ones they are we're hesitant that's changing actually the last 12 months so we see more momentum to move to the cloud so explain that more to me than 90% that's not sass how are they paying currently they're on annual like site like maintenance contract kind of things with SLA s they are on contracts yet usually turn-based contracts is like the standard model now they pay fee for usually a yearly defeat tiers usually are signed up for three years because they they really invest in this platform so they don't want you know the price to go up quickly and we want them to be committed as well so a yearly fee lets based on the performance of their site don't how many brands how many countries so quite a few of the brands have something like the 140 different countries at they address like 20 to 80 different languages and on average to swing in a sense of size I mean are we talkin brands paying you on average a hundred grand a month or a hundred grand a year or ten million a year generally where are you falling in terms average price point yeah the the lowest point is hundred thousand a year but we have customers with more than a million okay so would you say if their average is something like 500 or 600 yes the more like 450 to 500 a yep okay now give me more the back story this is the fun part when did you company and why so that's the funny part that we launched the company in 1996 96 that was the year I was born Zoran when they were not you it basically was still in college I'm just kidding I was 89 but still that's a long time ago right we render basically we're the first ones here to to you know say hey we can do content management was the old days Netscape was there but we were very German we were very small we bootstrapped the company we didn't put much magic are you still bootstrapped know we had the first financing in 2000 in april 2000 right after the big bubble was like me you know there there's an impressive time to raise considering everything yes perhaps that was great it was it was that 30 times revenue of the next fiscal year that we projected was the valuation and we didn't have any strings attached so there was no contract you just basically got the money and here are the shares that's it so did you get it before everything crashed yeah we actually 2000 2000 wanted until we were our best years the growth rate hundred twenty hundred two hundred fifty percent so like what were you guys more yet scale wise in 2000 like are you talking like 10 million a year or where we got so we were at that point like that two million a year and we grew at equity to six million over the next two years and then 2003 was that for us because with our customers at that point I'm with the big telco companies like bora phone in europe and Softbank japan team t-mobile and they had to cut down cost because of the red cost cast because of the UMTS licenses so the 3G license were so expensive that they started into cut cost so 2003 he was our top here maybe funny basically we show still wrong with 30% okay at some point time we were too late for the US you know because we didn't have the venture capital to base in the end of the US early and the years at the biggest market we saw the people coming from the u.s. to Europe but we're not equipped with the money to do the code there so we looked for a new attitude new way to approach the US market and what we figured out was there was the last three years that commerce ecommerce sites is the way to go so we have a very powerful kind of management platform but the e-commerce platforms from IBM Salesforce and SAV they are pretty bad at experienced Asheville's so they basically give you the transactional capabilities to sell stuff and pay for it but they really don't look good oh and so horrible they look they look like you know some guy that's been sleeping for eight days and wakes up to shovel and tries really Oscar she doesn't fit in exactly yeah and the brands were the first ones to say they the luxury brands no we can't do this so there's not a single bit that would from your platform will show to the other end of that is luxury guys create these really complicated flash sites which don't actually work anywhere and they never so you're kind of a nice blend of both of them yes this happens now that basically the rants I started hey well the marketing people have this nice side and the commerce people have this transaction side fungals you not only have an integrated one it's kind of like one of our clients they have a hundred million visitors on their brand sites but only 20 million make to the store so why do you leave 80 million just walking by your store window and I've never come into the store yeah and we help them to get all the hundred million into the store and make it very seamless to buy something that's very cool so the continued the revenue story there what were you able to scale to with this additional e-commerce place a in 2010 so the know that ecommerce picked him later right in between we had a DRM play actually we were them global market leader for mobile DRM yeah that was 2016 10 the DRM the commerce play was the last three years okay so what do you what do you at generally today then we are now above 20 million in dollars we are ARR is above 10 and we've grown with like run about 20 25 percent they are grown here that's that's great so so sorry you said AR was about 10 million of the 20 million in total revenue right and then left and yeah okay and you said you're scaling about 25 percent year-over-year so AR you know twelve months ago with somewhere around what seven seven and a half yeah in the hub and a half interesting is that your fastest growing revenue stream it is yeah interesting and is most of that coming from converting kind of old you know folks to cloud or are you going and getting new customers it's both actually we were surprised that basically existing customers we had a professional license in the past that we got them to do recurring revenue and they paid more for the same technology before because we brought them to the cloud so the specs ability is something that people value interesting how our churn rate is basically net negative for revenue so it's kind of how negative we basically with the the former customers with like...