How E-Days Absence Management CEO Jonathan Maddison grew E-Days Absence Management to $3.5M revenue and 1.4K customers in 2019.

hello everyone my guest today is steve arnold he's been working with the team growing it fast around his company called e days and absence management software they did leading the commercialization and growth of their award-winning global employee leave tracking and absent management solution uh he led them from startup phase to their current market leading position and securing private equity backing to further accelerate the growth steve ready to take it to the top yeah let's do it all right so just to be clear are you is this your baby did you found the company or you joined later yeah i joined um a friend of mine had a company that was specialized as a web agency um and i joined him in order to grow that company and then we started e-days as a product within that company so i've been with e-days from the start although there was a pre-existing company within which we incubated the product so what what was day one and for e days what year uh 2007. okay 2007. now today it's its own private company yeah yeah we carved it out in uh march 2016 as its own legal entity but we'd run it as a separate company division within this other parent company that we had at the time okay let's talk more about that later but first give us like product context what's the company doing how do you make money yeah sure so we're a specialist hr solution focused on absence management so that's leave tracking and absence management it's a business solution um in terms of how we make money it's a subscription model so it's per person per year um fee or per month fee but we built annually up front um the value proposition is really it helps companies be super efficient in this area which most companies need to run some sort of uh process to manage employee leave and and time off in absence um e-days does that really well it helps them be compliant the local rules it's used globally so it can be customized for different parts of a different company based on what requirements it might have and if used properly it'll reduce the absenteeism within a company so steve is this more kind of enterprise level what's the average company paying you per month for this well it's a real range um so we've got some companies that are paying us as little as 50 hundred dollars per month for the system but we've also got our larger sort of mid market enterprise i'd call them companies that are paying six and a half seven thousand pound uh dollars per month i'm using the numbers in dollars rather than pounds to make it already thanks for doing that yeah so so just because we don't have time to learn every cohort i mean so what would you say a fair averages if you look across your entire base right now a thousand a month yeah um customer has got about 150 employees and they're paid about 200 per month okay 200 per month and 150 employees so you're only only charging like a dollar 20 10 per employee something like that yeah interesting okay very good so launched in 2007 spun it out in 2016. walk me through that process is the parent company on the cap table of the new entity no no um so we in in march 2016 i basically sold my interest in the other company which um i had negotiated with the start founder founder of that company um i sold my interest in that and just retained e days um the the partner that i had at the time the founder of of the parent company um came with us to the new business the e-day's absence management solution uh system company um and then i bought him out in november 2017 um with private equity uh backing so um previous company is no longer on the scene okay interesting all right and so over the time period from 2007 all the way up to today how many customers have you scaled to we've got 1400 customers now okay and is there a free plan or no no free plan okay so 1400 at 200 bucks a month or do you know 280 grand a month in revenue yeah okay and where were you exactly a year ago so we understand growth rate so it was quite slow to begin with because we were incubating e-days within this other parent company and our focus really was on that other company at the time because that was the one that was making us the money we didn't get any outside investment bundy day so it was all organically funded it was quite slow to begin with i mean it took us about ten years or um nine to ten years to get to a thousand customers um and then over the last 12 months we've signed up another 330 odd customers and added about um a dollar value of about 600 000 pounds worth of uh recurring revenues business over the last 12 months okay so again if you're doing today 280 000 per month what were you doing a year ago was it 200 grand a month or what um yeah it would have been about that i'm trying to i'm trying to use uh convert to dollars again so yeah it would have been about that amount that you said so so that would have been about 180 000 pounds per month yeah something like that okay good so so not doubling your where you're about call up maybe 40 50 year over year growth that's kind of where you're at today yeah actually the numbers that you stay probably a little bit inflated so it's more about our arr has grown about 30 over the last 12 months okay and so where are you today in terms of run rate so our recurring revenue is um 2.7 million pounds okay two so we'll call about that's about three million bucks right divided by 12 months yeah about three and a half million dollars i think yeah about it good so yeah that's that's about uh oh three and a half yeah yeah yeah you're right yeah so about so i was right about 280 grand per month in revenue and then that's up from you said 30 so maybe you're doing about what's like two 230 000 bucks a month a year ago something like that that sounds about right yeah where's most the growth coming from what's the growth channel you're using so our um direct market uh model uh is all funded uh fueled by our followers fueled by digital marketing so we've got seo and pay-per-click strategies to get people to our website we get about 120 inquiries per month there's a bit of seasonality in there based on um on the months where we're a little bit busier sometimes towards the end of the calendar years and the beginning of calendar years um so we get these inquiries coming in and we convert 25 of those to customers that's our metric that we've we've kept pretty consistent okay so what do you do walk into the process 120 new leads come in every single month what's the next step between that and then writing a check or paying you for first the first month yeah yeah sure so we've got a team of six sales guys at the moment um they're split into enterprise and smes uh enterprise for us is kind of a mid-market company anything up from 500 people up to maybe 25 000 people in large companies though it's got 25 000 so we split the teams between sme and um and this sort of enterprise mid-market side um because there's a different sales process that you kind of need to go through but ultimately what we're trying to do is have a conversation once that inquiry comes in very quickly whilst people are still on the website if possible so we'll follow up a an email form that's come through our website with a phone call we'll engage with that customer understand what their starting position is what they're wanting and we'll try and get them onto a demo an online demo via screen share when we get them onto an online demo by screen share we've got a 50 conversion rate of people who see those to signing up in the system um so we run them through a demo it takes about 40 minutes normally we'll demo by by a user and an hr manager often our buyers are hr managers or um hrds or payroll or finance type people um and then following that demo they'll get access to a trial system which will put their logo on and we'll give them some pretend data in that trial system then we'll let them loose on it for a week or so and during that week we'll send them a few emails to try and trigger them to use the trial and see if they um can use some of the advanced features and then we'll get in touch with them during that week as well to try and see what they're doing and how they're finding it and then we'll try and sign them up this uh how many demos is the sales person doing each week on average um probably seven or eight demos it's about one a day yeah maybe it's a little bit it's a little bit um less for some of the enterprise guys because they yeah and and so walk me through kind of capital history today so have you raised any additional capital besides the private equity no okay um we all we have to do is raise funds to um buy out uh the the my partner previous partner essentially the business um and now we're just running uh into growth mode okay and so how much did you have to raise to do that um it was about 10 million okay about 10 to buy them out so your partner had what like 60 70 of the company he no he had more than that he had um well there were two there were two of them really one was a silent partner so one of them had in total they had 80 of the company yeah and then there's there's um there was another guy who was running it with me who's still here he's our cto uh chris and him and i shared the rest of the company and...