How Docebo CEO Martino Bagini grew to $28M revenue and 1.4K customers in 2018.

hello everybody my guest today is Claudio Arabah he is the founder of a company called do Chabot SP and has been in its chief executive officer since March 2005 he serves as the director at the company and has served as a board vice president at ry sto srl from July 2013 to December 2014 we're gonna jump into the company today Claudio are you ready to take us to the top yeah all right tell us about the company so so what does de Chivo do and how do you make money well actually we are a software as a service company that sell these training delivery platform to midsize enterprise companies and Oh imagine imagine touchable as an empty box where you can upload your training content and train all your employees also if they have several offices around the world and reach them globally you were a guest lecturer did you use the tool to basically you know you know systematize teaching your guest lectures to teams that you worked with well the funny story is that the table was born as a software because my students needed something to download my PowerPoint presentation after the lesson so with fabulet is my actual partner and CTO we created this a small application that was a release that originally under you know open source license we really then we went to release it for free online and the day after we've got a big article from the biggest economics newspaper in Italy and the day after we start getting a phone call from people that say we want to buy this software but we didn't get a company and the first invoice with issue it by me not by a company so this the company started without any business planet without any be an idea to create a company behind the the need of my students that's great and and so today when customers are paying for your platform give me a general sense what's the average of what they're paying per month well we have two plans one plan is the entry level plans so it's slightly above 10,000 bucks per year yeah and the enterprise plan is 30,000 there really depends on which modules you want to add because we have more give me the average would you see the averages there which I'm like 15 grand or 25 grand what's the average to different different solution 10 and 30 okay so people can't people don't upgrade from one to the other yes they jump okay they succeed on adoption usually they jump to a more complex instructor in solution yeah so I want to avoid kind of going down holes on each customer code if you take your total customer divided by your revenue that gives you an average revenue per customer essentially right so what's the average customer paying per month it's somewhere between three it slightly below 20 if we I needed to make that but it's not it god okay but just to be clear again two separate plans they pick one and they can upgrade when they want yeah because the first one is called adoption because they need to adopt it and the second is growth yeah cause they need to throw and what you're G launched the same same again what year did you launch in with these new plans so when did you launch the company in 2005 2005 very good so you've been building this for you know over 10 years have you bootstrap turvy raise capital we raise capital but in 2012 Doge a boy have a - two different lives the first one was an Italian company that sell 93 percent of the revenues up to 1 million in 2012 then 7 year growth and then we rise in capital we changed business model and then we started doubling the revenues from 2012 to today with a huge growth and with 93% of the business outside Italy 60% in North America okay so how much total capital have you raised working capital around 10 million okay something like that and just be clear that's like total capital of the company has raised I'm including secondary with secondary we have something more yes okay God like are we talking like double triple ladders it's still around 10 million it's it's uh it's it's way below 20 ok got it very good so between 10 and 20 ray mostly working capital sounds like some of it was secondary which mean early founders maybe took some money off the table or things like that walk me through what you've scaled to in terms of customers how many customers on the platform today as of today we have 1,400 enterprise customer meet enterprise customers and in term of revenues we have doubled since 2014 okay if I take 1,400 folks paying an average price point of 20 grand per year or about 1600 per month that puts you at about 2.3 million bucks per month or well north of 24 million per year is that accurate okay great that's accurate so that's that's great growth considering that you guys have raised you know a fairly small amount of capital relative to what your ARR is the growth you said you said you've had great growth since 2012 quantify that for me so if you're doing 2.3 million per month today what were you doing a year ago I think actually we we would like to be start becoming more capital efficient that means that as of today we have doubled arriving user investing only 10 million of working capital probably will slow down a little bit the growth and improving some other key is like margin and so on and so on what we are very conscious is the cost of customer acquisition we want the customer to repay the chaebol in at least less than one year okay so less than 12 months which means you're acquiring them for less than 30 grand is that correct yeah okay and I want to talk more about that in a second but I want to go back very quickly to growth again so if you're at 2.3 million per month today in revenue if you go back in July of 2017 how much were you doing that month in revenue July 2070 let's try to put a 68 percent jobs 68 ok great so you you were doing somewhere around 1 million seven hundred per month at that point on top on top of what we have now I don't know so I'm trying to get a growth rate here Claudia so if a year ago you were doing 1.7 million per month and you grew sixty percent year-over-year that would put you at about 2.3 million per today are those accurate no I thought that your question was on the future forecasted revenues we have added something more well we have added more than 75 percent this year okay to the preview to the previous year okay so if you've if you've added if you've grown by more than 60 percent so let's say 70 or 80 percent that means a year ago you were doing maybe 1.4 million per month and now you're doing 2.3 almost yes okay god sorry just to be clear it's a little bit less than 2.3 okay but somewhere between 2 and 2.3 though oh yes I'm okay very good so that's great yeah again great growth so let's go back to your economics so you said your I didn't know I need I need my business plan in front of you did you just out of curiosity did you listen to any other episodes before you came on oh no no come on Claudio there are you at you would have you would know if you listen to one I know I know I know sorry bag I will download all the episodes start from no done don't do that because there's there's over a thousand you won't have enough time I'm a mountain bike and I leave sent audio books oh very good okay so let's let's go deeper here so churn is critical in a SAS company what is your turn actually we have 97 percent net rotation okay that's on a logo basis or revenue basis we had we had we had since a few months ago we had positive negative net churn that was around 103 but cl��udio those numbers don't make sense so I think you just gave me the number 103 percent that would mean that you are your net revenue retention is 103 not your determine out one of who doesn't make any sense having you driving your attention is 97 actually net revenue retention are gross okay and that's annual its hello okay so and then what's the 103 number say it again you just was the previous net retention that yeah oh the prior year yeah prior got it okay so why did I go down because we we faces it just to be very honest we face it I grow pains where we we acquired more custom then we were able to hire customer success yeah and this is an advice that I'm giving to other enterpreneurs hire first grow after yeah and what is the what's your team size today actual actually this kind of emergency is is a solvent because we have created that we having double at the number of customer success learning and support and implementation people well it was a group a what's the team size today in customer success no 250 people in our is everybody based in Italy I no absolutely not we have alpha B team in North America and we have 100 something people in Italy because they are nd easier then we have 10 people in Dubai and very few on in in I mean other 30 people in there in the Canada and and lasts economics questions here what do you assume lifetime value is on these customers in terms of months and dollars almost these 3 years on average after a lifetime value that we have and what do you assume the dollar figure is lifetime value just to put the number that number we discussed before times 3 almost because we are we are well that's assuming night just to be clear you're saying just multiply first year a CV so 30 grand times 3 minus minus 10% that is the coat of average professional services we have on top when we deploy the table I see if I do that I get life to marry that assumes you're not driving any expansion revenue year-over-year why aren't you expanding accounts year over year say together if you're saying that lifetime value is just taking year one contract value of 30 grand and multiplying by 3 to get 90 grand that's telling me that you're not driving any expansion revenue year over a year on that same customer why is because our we our culture have been always that to acquiring new logos more than creating expansion our customer base but this is an action that we took place that took place this year creating the theme of the what we call strategy Account Manager and Account Manager that are focusing on growing and facilitate the adoption to the actual customer I see what we did before and was a mistake was to give these upsell quota to customer success manager but customer success manager would confuse it because they don't didn't have a clear view of growing customer in adoption or upsell to customer yeah so my lesson is don't let customer success upsell or having sales quota they need to focus on making customer happy are you currently raising any capital no we are we are self we are capital efficient we are not yet on a break-even but as of today we are not actively looking ok all right you know when was the last time I raise capital what year 2012 let me early 2016 okay so look that's almost it's over a year ago that means right now you're either raising more capital or you're selling to your biggest competitor which one is it no one I mean we have I mean we I have too many ideas to implement in the product especially artificial intelligence and selling will live will you take me off a lot of the fun all right all right Claudia let's wrap up here with the famous five number one what's your favorite business book I am let's say exponential organization it's very it's easy but what you call I like it if exponential organization by Salim Ismail exponential exponential organization yeah very good number two is there a CEO you're following or studying right now um [Music] hahaha I don't know I mean I follow a lot of tweets I'm not studying any one in detail okay great so nobody number three what's your favorite online tool slack number four how many hours of sleep to get every night say it again how many hours of sleep do you get every night depends I loosen my body I I can sleep six hour or 12 hour side I don't have any routine what do you get on average sit again what you get on average I think seven seven eight I take melatonin every day and what your and what's your situation married single kids I married one daughter four years old I became that very old another advice I can give is make do become daddy when you are a young alright and then last question here how old are you I'm would be 45 on 20 oh bugger same point for 45 and it sounds like the advice you'd give your younger self has become a dad or father earlier yes very good guys there you have it from Claudia become a father earlier he started off kind of you know teaching obviously courses a guest lecturer needed a way to give PowerPoint presentations out then people started saying once he open sourced it they said we want to buy this thing so he drew up an invoice got his first money that was in 2005 today they've scaled that to over fourteen hundred paying customers paying caught sixteen hundred bucks per month doing north of 2 million bucks per month in revenue that's up from 1.4 million bucks per month a year ago so healthy growth they raised ten million dollars willing to spend up to thirty thousand dollars to acquire a new customer which gives them a 12-month payback period and he assumes a 36 month lifetime value at about 90 grand where this team of 250 based in Italy and other remote locations Claudio thank you for taking us to the top Thank You Nathan and thanks to everyone