How Doodle CEO Amit Shah grew to $750K revenue and 25K customers in 2018.

hello everyone my guest today is a Gabrielle Latino he joined doodle in 2016 to transform it into a sass business after studying physics he went to consulting on MBA at London Business School and joined doodles mother company to MIT to media Swiss and Italian he's a pilot and loves the Mediterranean and Swiss Alps seafood and Swiss cheese Gabrielle are you ready to take us to the top yeah sure okay so just I want to get one distinction oh you were not one of the founders of doodle but you joined in 2016 so what's that relationship like yeah exactly so so actually dude was founded 10 years ago actually 11 now already by 2 to PhD students at ETH in Zurich that's our Technical High Technical University here in Zurich and and so where was that what year they found out in 2007 ok it's been around for quite a while and we've grown to be yeah 200 million users in a year that our visiting doodle right now so so it's been around for a while and so it's it's pretty well known around the world as well you know I look I think all my audience probably use doodles especially you know I find them coming into my inbox when there's a team meeting where the email thread gets past 100 messages long and someone says screw this use doodle absolutely okay all right so I get that but I won't understand so did they per sure pursue you in 2016 or did you pursue them and what revenue model were they before turning to sass yeah so so what we've been what we've been doing is that two media the mother company of doodle has has owned doodle now for four years so in 2014 two media took one 100% stake of this and it you know grew steadily especially on the revenue side it grew nicely on the user side but on the revenue side it grew steadily and so the feeling of the commedia you know of the corporate was there is so much more potential in this yeah let's come let's do and change something and at that point in time when I came in we really would really were a task to say look what is what is going to be your growth strategy and so we looked at what we had been doing all of the years before which is advertising advertising business and we just saw that you know the growth trajectory there wouldn't be as interesting and also that you know given that this is a Productivity tool you really want to align you know your incentives with the incentive of your users and customers and so you know they come to you and and pay or what they they get and and so we're now really turning this into a subscription business where we are we're about enabling great meetings so really going into the scheduling full-on with with a suite of other tools as well not only the group scheduling you you know but also you know one-on-one scheduling integrations into your calendar smart scheduling as we do with our BOTS that we bought so we bought two years ago and Israeli startup that does that does a smart scheduling bot in slack called me Khan and so all of these pieces together we're really now putting together to a you know all-encompassing scheduling tool that you so can use to media per shoe you in 2016 or you pursued them I was I was in the media and they asked me to do this job well I see you were at the parent company and you said oh I want to go jump into that thing it looks fun yeah I am exactly I must be doing this now for for two years and we've changed quite a lot so we've grown from you know being 20 people to being about 60 people now where's everybody based we're based about half is based in Zurich about a quarter in Berlin a little bit less than a quarter in Tel Aviv and we have some people helping out from from an outsource or in Belgrade so we are spread across four offices in in Europe and Israel yeah and just be clear today now pure-play SAS company or do you still have a legacy trailing we have we have still we have still a large part of our four of our revenue still advertising so so we've we've spent the last year or so really to to get our technical house you know and and to really focus on on the premium product and now we're starting to monetize it so we're starting to be more aggressive monetizing the the premium premium business I want to focus the rest to show on the sassa business but again just before we do that just so people can understand what you mean when you say the advertising stuff like when I use doodle I can't remember when I saw advertising where our advertisers paying you to put them inside of the old tool so it's very often on the participation page so when you set out the link and your buddy's answer on that link so there's quite a lot of space around so that's also a lot of the traffic comes from the participants obviously right and when you send out the meeting it goes through several people so that's that's most of the traffic we got but also when you create a duel you can we we have been we have some advertising but they are around so it's the tool itself is is is you know well protected if you wish sure and so it's it's a the customer experience is not really you know compromised in the tool itself it's around know it makes good sense and and last question on this for move on on the advertising side you said it makes up the majority of revenue can you give me a percentage we talking seventy percent fifty percent up ninety percent it's about it's about eighty-five fifteen still so we want to flip that that's momently had like last month 85 yeah I'm just curious though if you're taking all the revenue over the past year just last month eighty-five percent was advertising 15% less ass yeah last month last month okay good okay so you're making the transition now so walk me through you come in and you go okay what do we price this thing at and you're going let me try and put some data behind this otherwise I'm just gonna basically pull this out of my ass how did you come up with a price point so we're still testing prices so we're we we actually had we've had a premium product for a while before it was just never into focus and has never been really worked on additional features and so on and so forth so for the time being we are we keeping that price and so there's a little rise point so we have for the for the private we call it it's it's $49 and for the for the business it's it's $69 for year and so the difference is that the private you get no ads and some additional features but you don't get the branding feature and in the business you get you get to brand doodle as you wanted with logo with the back background and so on and so forth and on the business side also you can add more in one user so you can have administrative rights and so you can have you know business package for 5 10 20 up to there is companies who have thousands of doodle seats so thousands of users can can actually use the premium doozie and grab real just to avoid going on every customer cohort will you say on average just on your site a customer's paying per year on average they're paying about 30 to 40 bucks because we have the big accounts are have quite an aggressive price market good so 30 bucks 30 bucks a year or call it maybe 3 bucks a month something like that yeah ok and and you can do they all have to pay annual or do you have a monthly plan we are introducing the monthly plan shortly but for now it's all annual okay and why not just stick all annual what did you see in your data that said hey we need a monthly option so it's a it's just the to to see another conversion point so to have to have a lower lower barrier of entry and and obviously as as most sales companies do that you know the monthly price will be higher if you you know multiply it up by 12 then then dandy annual so so we want to see how that how that works out and if we can get some more revenue growth out of having a monthly plan and I'm curious how it's you know how the experiment is gone so far so 2016 you join you thinking about price and you start transitioning to SAS and now except 15 percent of your revenue walk me through how many customers do you now have just on the SAS project nor your advertising side yeah so so so we are we have about between 25 and 30 thousand customers and do you feel like that is that's a good conversion rate from your 200 million free users or a bad conversion rate I mean how does that set you that's that's really low that's why I that's why we have that's why we have a huge potential in front of us so so and that's that's where really that's where really we are all totally convinced that we can conflict this over to a 90 to 10 business where 90 percent is subscription and actually keep the advertising growing so so if you so so so we really believe there's a huge potential in the in the south side of this business yeah and again this only Gabrielle speaking to the south side if I take that yeah those 25,000 customers times that call it $3 a month ish price point right I mean that puts you right now this revenue stream for you guys about sixty to sixty four grand per month something like that is that accurate um yeah it's actually a bit more okay like a bar you about have you broken 100 yet or no hundred grand a month um not yet okay cool um so what do you as you kind of balance these two very different revenue streams and you're setting goals with your team like what is the goal by the end of the year in terms of what ARR run right you want to hit on the side of the business so we want to get to to about to about 1.5 million ARR by the end of the year God to call it like 120 grand a month something like that you're at 62 now so doubling between the end of the year yeah as he looks to the sky and goes I hope we can do that right ah so it's like it though it's like looking to this guy and saying yeah yeah it's it's good French if you're if you're between 64 and a hundred grand today per month in revenue give me sense of growth where were you a year ago so so a year ago we were ah good question I have to take okay no I know though that that in that we're getting much much better month of a month so so our our cash collection and this month compared to last month has gone up more than 20 percent we are on on the you know in on a roll right now it's it's going really well we are we are on a roll to to be up about forty percent in cash collection and compared to last month that's where that's where I say right we have a huge potential because we we you know historically doodle hasn't really talked a lot or communicated a lot with with their users and customers to read them to a conversion because it's it's very Swiss it's very privacy and you know we don't want to bother our users too much and we're really changing that now and really doing all of the things we you know we could have should have done ages ago to really you know communicate with users having email sequences and so on and so forth all them Gabrielle churn churn is so critical in this kind of business of this price point what's your turn today and how do you manage that having only two months of of cohort data yeah um I mean that is that is exactly that exactly the the the hard part here I can't tell yet right so we've been we've been into this not long enough or at least not with this with this focus long enough and whatever I'd say now would be you know sort of sort of too early too early yeah absolutely let me let me ask how someone kind of the other economics here are all of these 25,000 paid they've come directly from you putting up a pop-up or something to your free user base or are you doing any kind of direct paid spend to acquire new customers do you attack right now we are right now the the performance or direct spend on marketing is very low as as we we're just testing outright with testing you know where where can we get our customer acquisition cost to go to on the marketing what do you think you can get that down to sorry what do you think it that down to where do you think you can take kak um I think I mean we need to take it we need to take it down to to about 8 to 10 dollars for a free trial at the most and why do you say that yeah I mean we we want to we want to run that at about you know spending not more than one year worth of revenue on a user so so so we really need to go down to that for the free trial but how many how many free trials do you need to get one new paid it's it's about at the moment we are at about 15 to 20 percent um converting to you paid yes if you spend ten bucks on a free trial and worst case you have to get five five free trials right that's fifty bucks for a $30 a year customer it's not horrible if you if your cash chance can handle it interesting now where where you spiff you do spend eight ten bucks for a free trial where are you spending that what made some of the tests that you're running right now so some of the tests we're I mean the it's the let's say the classical ones so it's a adwords facebook display ads on Google so we are which is that going through yeah testing testing out different retargeting as well how do you decide Gabriel on the first test on these things how much to test I mean do you just say okay spend a grand I don't care if I lose it all but that's that's what a test is worth spending a grand on Facebook this month let's see what happens yeah I mean the the team has some some some pretty clear goals right they say look this is what we where we can get to we can spend yeah we could spend several grant because I mean you need to get some volume first as well to to actually go get some some leads that actually goes through the free trial and then actually purchase so I mean in the end you need to go all the way through the funnel otherwise you can't really measure it and because I mean you can probably you know buy free trials that are cheaper but they're only you know valuable if they if they convert in the end no they they can't have a lower conversion rate in our organic users and and so yeah it's over the last I don't know the last month we've we haven't spent a lot but how much would you say you've spent on just testing across all these channels [Music] 10k maybe okay so that's nice so that's about what is that a little north of call it fifteen sixteen percent of the sixty two grand in revenue something like that that's not bad and then you double down on what works right yeah and I mean it's really we see we really see us as pest I mean we the most most part of our conversion really from from the from the organic and free traffic so has the company so so to media you know about 49% of my company back in 2011 and then it sounds like they bought the rest of it in 2014 they weren't happy with the growths they said we've got to get someone to jump in and you said I'll do it in 2016 are they alright have you raised additional capital for this part of the business or are you just trying to be you know breakeven right now without having asked more money from to media I mean what we've what we've done is we've we've gone twice to the to the board of directors of to meet yeah and and ask some some investment and and the first actually was you know doodle even though relatively small was nicely profitable so so the first one was like hey let's please allow us to not turn in any profit and you know with this money we will invest it and building building use this new product and then this year early this year we went back and said look this seems to be working please let us invest some more and and so so that's that's where we are now and how does that work there so if you asked for a million bucks will they just kind of write you a million bucks or do they actually put like a million on this cap table and you get diluted so I mean it's it's a hundred percent owned by two media anyway so basically it's just part of if you wish they're there about your thing but good really your CEO you're running this bad boy'll you have no equity well what the hell are you why not go start your own company good question next question is no seriously though I mean you seem like a talented guy why agree to do this with no equity that's yeah that's good it's it's really interesting I love this product I really love this product I love the the vision we have for this and and it's it's it's good it's a good gig really I'm I'm allowed to to grow a company are allowed to really you know make make it big in this thing and and so yeah that's do you have at least I mean have you negotiate some kind of performance where like if you guys have this much revenue then you're awarded this much we obviously have a bonus part of this and so on and so forth so there's it's not like I'm I'm totally yeah I'll just say there's gotta be some way you have some upside if you work really hard to grow this thing absolutely very good Gabrielle let's wrap up here with the famous five number one what's your favorite business book yeah I love the creativity age by Ed Catmull number two is there a CEO you're following our studying yeah I've met recently the CEO and co-founder of Monday comm I'm really impressed by what they're doing in there and their business and yeah there's a lot and guys we had we had Gillan those guys on there also a great sponsor of the show because we use them you can check them out on Monday calm /the top great 10% off just for the top listeners number Gabriel it's nice how that works isn't it we didn't even plan that good number three what is your favorite online tool for growing your business it's it's basically it's been slack at the moment it's really just for the communication of it growing the business you mean by you know leads growth and so on intercom we're using intercom right now for for all of our user communication great um yeah number four how many hours to sleep to get every night eight that's good and what's your situation I see a ring on so you're married how many kids yeah married and two girls nine kids alright and how are you I'm 41 41 our real take us home here last question what he was your 20 year old self new oh wow good question [Music] I don't know never ask myself this question what do you say little girls what what they should know yeah yeah what do you tell them like when you're when you talk to them about business or just you know doing what they love and life I mean what do you tell them what's advice you give them yeah I think I think I really tried to give them the advice that or what one of the things I really believe in is that that [Music] you you shouldn't use you shouldn't take yourself and all of the people around too seriously you should always be able to laugh about yourself and even when it's when it when the going goes tough so I think that really helps me to yeah to be kind of kind of healthy good guys don't take yourself too seriously doodle was founded in 2007 a company called Tim media bought 49% of it in 2011 and then in 2014 they bought the entire company Gabrielle who joined us today was a part of two media and in 2016 when they were not happy with the growth of butyl they said we need an executive me to jump in and run this thing Gabrielle said I'll do it looks exciting they now have over 200 million users again helping you more easily construct and get your friends or colleagues together to have meetings they've got twenty five thousand paying customers on their SAS product which makes about fifteen percent of the revenue today that's one five percent the other eighty five percent is advertising based revenue but again they want to flip that percentage they've got those twenty five thousand customers paying about three bucks a month so somewhere between sixty and a hundred Rand per month and revenue hoping to drive up to about 1.5 million bucks in ARR or run right by the end of this year December 2018 willing to pay eight ten bucks for a free trial with our team of sixty people based between Zurich Berlin and Tel Aviv Cabrillo thank you for taking us to the top thank you