DocSales Revenue (2024)

[00:00] I want to introduce Mauricio Quigela from docsales who will be talking about how rev ops doubled his MRR in three months. [00:09] >> Thank you, guys. Good morning. So thanks for being here. So I had a problem this morning because the title of my presentation was wrong and the previous speaker was not here and the room was empty and I thought, my god. What the hell is going on with my speech? So I'm from Brazil and I'm very happy to be here. You're too? Yeah. Great. [00:36] >> And I'm very happy to be here. So it's a big challenge for me to talk to this such qualified audience, especially in English. That's my first time, that I speak in English, give a speech in English. So I'm kind of terrified, but that's okay. [00:53] >> I'm gonna do my best to, and I hope you enjoy. So where'd my control? [01:02] >> Okay. So let me give you, first a context about docsales. So we are a contract and proposal automation platform. So what we do, we help sales reps to prepare sales documents and close deals with assigning, processing the payment and so on. So we add a kind of automation layer on the top of the CRM. So the sales reps just need to drag the opportunity card from one phase to another phase and the magic happens in the [01:31] >> background. So we started this business in Brazil two years ago. The idea was to be international first, but then we were caught by the COVID pandemic. Actually we and everybody else, right? And we had to change our plans and then we focused for the first two years in the Brazilian market. So [01:53] >> we had to adapt product and everything because we had to focus on Brazil. And since May, we are focusing on The US market. So over the next twenty minutes, I'm going to discuss a problem that we faced on docsales about a year ago. So basically what happened was I thought my business was not scalable. We were growing. Actually we were selling, but we are not growing. Our growth rate was flat during like six months in a [02:27] >> row. And I thought, oh my God, what's going on? If we are selling well, if everything looks well, what happened, what's going on with the company? So at the time we were at the 26 or $30,000 in MRR. This is all MRR. Now you can see that from June on, we started growing faster. So we were able to solve the problem. [02:54] >> Look at this. [02:56] >> In a year we doubled our ARPU. We tripled the number of paying customers. Our churn rate was at a very reasonable rate. So for the stage of DocSales was really good. And in October 2021, we prepared this report to our investors and we showed the problem. So if you take a look on this graph, you're going to see that the growth rate was flat for several months. And at the time, we listed a lot of [03:33] >> actions that we would take to solve the problem in terms of lead scoring, customer support, [03:42] >> lead qualifying or lead generation and so on. So we thought we knew the problem. We thought we knew how to fix it, but in fact we had no idea about what was going on for several months. I am on my fourth company, two exits and when I faced this problem I thought, oh my god, what can I do? What am doing wrong? So what's going on with the company because we are facing this kind of problem? [04:14] >> So the first conclusion was even small companies have a very high complexity. And I made some mistakes on the beginning of the company and that caused like a higher complexity than I could have. First of all, we should start selling to one person on one ICP. And I wasn't at this to sell. So I was selling to whoever wanted to buy docsales. And that caused a big problem because when I had to analyze our customers, behavior [04:49] >> of our customers, I was analyzing in average and for the average was really good. When we took a deeper look at the cohorts of the customers, we found very serious problems. Second thing, we should generate KPIs since the first day. I know that it seems very early to generate KPIs when we are starting the company, when we haven't reached the product market fit yet, but that information will be very valuable in the future. Not at the [05:22] >> moment that we are selling, but after that we could analyze, we would be able to analyze it in a different way. The third thing is, of course, don't use spreadsheets to generate KPIs. So actually don't use spreadsheets to generate, to make controls over departments because they don't generate KPIs automatically and that will make your life harder after that. And you should take care about what people think about the company. So people care usually about their goals, [05:56] >> about their objectives, if they are making money or not, but they don't want as soon as you have like a very aligned culture in the company, people would care just about themselves and not about the others or other departments. So when we take a deeper look on all departments, we were in 12 guys only. 12 guys is like a small family, you know. So we figured out that there was a chasm between departments. So everybody was [06:26] >> taking care of their own department and they were not worried about what was happening to the company in general. So we started a deep analysis and we came out with the idea of the revenue operations. So just to have an alignment, do you know what revenue operations is? [06:48] >> So nobody implemented and it didn't help. Revenue operations, in fact, revenue operations is a kind of mindset. I know that we need to do a lot of things to implement it, but revenue operations is when you take a dynamic look of all your company and you have all departments aligned. And that's not easy to do. So you can imagine, when I talk about processes, we use talk about our internal processes, how we [07:28] >> do things, how we sell to customers, how we upgrade customers, how we cancel customers. So how can we charge customers and so on. But imagine you become a customer centric company and now we are talking about their processes, their journeys, we can call journeys. But in the end of the day, we're talking about processes. So what happened to a customer when they want to buy from you, when they want to churn, they want to cancel subscription, [07:58] >> when they need to upgrade or they need to save money and you need to offer something cheaper to them like a downgrade or maybe a coupon or so on. So, first of all, we have goals for departments. So, the marketing department has a goal to generate X number of leads. Sales has a goal to bring X number of MRR, ARR or whatever metric. [08:28] >> When we implement revenue operations, we are not talking exactly about each department, but we are talking about the company. So, if we bring to the company global goals, how is the growth rate And who is responsible for the growth rate? Probably all departments are responsible for that instead of each one of those departments. So if you can have monthly real time a dynamic vision of your whole company, probably you're gonna identify and fix all problems much [09:03] >> easier and quicker. What we did on our assessment was first take a deeper look into our customers. As I told you before, we were selling to everyone. Now I separated here only accountants. So when we sell to accountant offices, we have a LTV of $1,400. The payback of cost of acquisition is like four months, only four months. Our LTV per ARPU is 45 times, which means forty five months. We spend the first four months to pay [09:40] >> the acquisition and then forty months to make money with them, which is really good. And the churn in average 1.4% per month. But when we take a deeper look, now we separated all the accountants by group of users. All the accountants with one or two users have just thirty months. It's not bad. But if you take a look on this one, [10:07] >> it's the triple, you know. Look at the churn, 5.3% per month. So if we tell the marketing department that are generating leads not to generate this kind of company, so not qualify this kind of company, probably our metrics will be much better. And you know the problem? We had at the time much more, accountants with one and two than the other ones. [10:37] >> And what happens when you have this situation? Customer support was struggling with a lot of tickets. The product department was receiving a lot of requests for features that fit only small companies. So you change the whole company and probably in the future your product will not fit for those other better customers and also you need to be careful with that. So we cannot take a look on the average. So if you put your head on the [11:13] >> oven and your feet on the fridge, probably the average temperature good. And what I'm showing you that you don't need to take the KPIs for average as seriously as we used to take. And if you go to these regular [11:30] >> dashboards and KPI software such as ChartMogul, ProfitWell and so on, we use ProfitWell and we like them, but they don't show this kind of reality to us. They show the average only. So overall churn is not the most important KPI. We need to take a deeper look into the customer. There are many ways for us to predict customers or predict what they will do, their behavior based on engagement, based on the behavior, based on the number [12:05] >> of tickets, based on how they add or remove users to the platform, how they interact to the platform. So if we can put some KPIs on this behavior, we can identify, track and put some triggers on this behavior, we can predict problems like months before and then we can take actions. And this is going to save us a lot of money in the future. So the tip here is don't look at churn. Look at what we [12:36] >> call revenue leakage. Revenue leakage is everything that make us lose money. We can reduce sales. We can lose money. For instance, if I'm trying to charge a credit card, after five days we suspend the customer. After thirty days we cancel the subscription. It's a churn. So that's a financial problem. We're not talking about marketing. We're not talking about sales. And then we need to go to the financial department and set a goal for them. Probably they [13:06] >> need to change the payment processor or to add new payment methods or whatever. So we were selling in Brazil. Brazil accepts different payment methods. If we don't accept PIX or bank slip, for instance, probably we're not going to able to sell to all of B2B companies. In The US, it's a little bit different, but for larger accounts, we need ACH. If I'm just doing credit card, probably I'm gonna lose those customers, you know. [13:38] >> And to solve the problem, what we did was to first map all the processes, all the journeys of our customer. And after we met all of them, we had to understand if there is a standard procedure, but we can change that word procedure to behavior. Is there a standard behavior of our customers that we can identify what journey he is and what can we do with every journey? So can we control this journey or this trigger [14:12] >> or this KPI? Can we set triggers to it? Who is involved to solve this problem? Who is watching it? Because the guys from marketing are concerned about generating leads. The sales guys are concerned about selling. Who is taking care of our customer base? No one is. Customer support is struggling with a lot of tickets, so they don't have time to take a look on this. And we are not big enough to have like customer success department, [14:44] >> a support department, and someone, a revenue department. So we are in 12 guys, 1,000 customers, 12 guys only. So it's it or you automate this or you are really a big company and you establish like a department to take a look on all these KPIs. The second thing, you need to define a nice tech stack. Since the beginning, we used to start with the cheapest everything, And then we need to move, and then we need to [15:16] >> change, and then we need to adapt. Export all email addresses from like the cheaper sending email platform, and then import them to the automation software, to the marketing automation. We're going to lose all the history. We're going to lose all the metrics. We're going to start generating information from zero. So if we can choose, of course, we don't need to choose HubSpot from the beginning. It's expensive. [15:43] >> But we can use different platforms and we can generate information to a central platform. We choose Power BI to do that. So regardless the information we are using or the platform we are using, all of them generate information to Power BI. So we don't lose the history. Historic information are there. So we can generate KPIs and compare docsales now, docsales six months ago, a year ago, two years ago. And this is really, really important. And the [16:13] >> logos are our choice. So it's our own tech stack. Okay. [16:19] >> And the last thing, it's about culture. So we need to set global goals. And in order to set global goals, we need to have global KPIs. And this is really important because we need to bridge the chasm. And to bridge the chasm, we have to put all departments and all the team in the same page. We need an alignment from them. So, is our organizational structure. We have a matrix organizational structure. So, every department has its [16:52] >> own goals. For instance, sales need to generate more than five ks in new MRR. But we have global goals. The MRR growth rate should be more than 15%. The churn rate should be less than 2% per month. So, if sales department hit their goals, but the company doesn't hit other goals, they don't get the bonus. So everyone now is concerned about what's going on with the company. I don't mind if they are selling more or less [17:24] >> than five ks. I'm concerned about the 15% of growth because it doesn't matter from where at the first moment. It doesn't matter from where [17:36] >> coming the money. If we are reducing churn, if we are selling to new customer, if we are upgrading the customer base, the important thing is we cannot stop growing every month. And then, of course, we're going to fix problems individually with each department. [17:55] >> And the last thing is: what's the right moment for you to think about revenue operations? There are a lot of articles in the internet and most of them say that [18:07] >> you should be a big company after the Series A, after $2,000,000 in ARR. I don't agree with them. I think as soon as revenue operations is a culture thing, it's a mindset, we should think about it since the first day of the company, but we have to implement it after we reach the product market fit. Before product market fit, we don't have company. We don't know if there are customers to buy our product. But after we [18:39] >> reach it, then we need to start implementing step by step and generating information from different departments. But in terms of mindset of our corporate culture, we need to think about it since the first day, including the CTO, the head of sales, head of customer success. They should be very analytic. They should think about this kind of metric and they should be worried about the whole company instead of only their own department. Okay, guys, that's it. Thank [19:15] >> you so much.